Sluggish Economy, State Budget Outlook Has Counties Tightening Budgets

The sluggish economy and the State’s budget shortfall has many counties taking steps to tighten their budgets. As reported by the Baltimore Sun,

Government workers in Harford County are being encouraged to take early retirement. In Howard County, departments have been told to cut costs by 5 percent. Baltimore City officials are preparing to close a $15 million shortfall.

Some concerns stem from county officials not knowing how Governor-Elect Hogan plans to address the State’s $300 million deficit for fiscal 2015 and the $600 shortfall for fiscal 2016. Others are tied to lower than expected revenues.

Revenues are down in part because the sluggish economy is generating less in personal income taxes than expected. Baltimore is grappling with the bill for police overtime, while the new Horseshoe Casino has produced less money than officials expected.

Harford is running about $3.6 million short of its projections for its $588 million operating budget with about six months to go in the fiscal year because of lower-than-expected income tax collections.

In Howard County, low income tax collections have created a $14.2 million shortfall in the county’s nearly $1 billion budget.

However, not all jurisdictions are predicting difficulties with meeting their bottom line.

Even though Baltimore County has seen decreased revenue in the latest round of income tax collections, officials projected revenue conservatively and will be able to absorb the blow.

Carroll County also doesn’t need midyear adjustments to its $350 million budget, said county spokeswoman Roberta Windham, though she said next year’s revenue numbers are expected to be mostly flat.

Anne Arundel County officials are bucking the regional trend: They are slightly ahead of revenue predictions, according to Owen McEvoy, spokesman for new County Executive Steve Schuh.