State Budget Creates Budget Uncertainty for Counties

Following the close of the General Assembly session and the speculation of a special session in the near future,  counties are facing much uncertainty  as they work to submit their budgets for the upcoming fiscal year.  Most counties must have their budgets approved by early June.

This uncertainty results from the passage of a “doomsday” budget, not the budget plan that had been adopted by House and Senate Budget Conferees.  It seems that time ran out on the passage of  the accompanying legislation that would have shifted teacher pension costs to county governments or enacted a number of revenue measures to fund certain priorities in the FY 2013 budget.   Time also ran out on the passage of legislation that would have allowed a sixth casino to operate in Maryland and provide for the operation of table games.  Now a special session may be called to adopt these measures.

As reported by the Baltimore Sun (limited free views available):

A state budget analysis estimated that Maryland’s 23 counties and Baltimore City stand to lose a total of about $262 million, with the impact expected to hit especially hard in the city, where schools depend on the state for 70 percent of their revenue.

Though many believe the state will resolve the impasse over the budget before the cuts can take effect, the uncertainty over how and when means officials have to make decisions without necessary information about state aid. School administrators in particular face deadlines for hiring teachers and figuring out course schedules.

In Prince George’s County, County Executive Baker has begun to work on a “doomsday” budget of his own.  As reported by the Washington Post:

Prince George’s County Executive Rushern L. Baker III had hoped to wake up Tuesday morning with a big victory in hand. Instead, he was spending much of his day working out a “doomsday” budget that he says the county will put in place if the General Assembly doesn’t move quickly to resolve an impasse that has ensnared his proposal for statewide referendum in November to allow a $1 billion casino at National Harbor.

In Frederick County, the “doomsday’ budget would cut almost $10 million in aid from the Frederick County Schools and libraries.  In Baltimore City, the reduction would be almost $49 million to the school system.

The reductions to local aid in the “doomsday” budget would take the place of the teacher pension shift.  Whereas, the identified reductions and the full phase-in of the teacher pension shift are comparable in cost, the “doomsday” reductions are only for one-year.  The teacher pension shift is a permanent, ongoing cost shift, which will significantly increase the per-pupil foundation amount when fully phased in.

The reduction in the per pupil foundation amount identified in the “doomsday” budget from $6,694 to $6,650 would result in a $44 reduction in the per pupil foundation amount below the fiscal 2012 level while still allowing for enrollment growth.  However, the Department of Budget and Management has said that the reduction to the per pupil amount cannot be made since the corresponding statutory changes were not approved by the General Assembly.  Other actions taken through the “doomsday” budget are currently under review.

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