Montgomery Proposed Budget Restrains Spending, But Funds COLAs

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Despite a projected budget shortfall, Montgomery County Executive Ike Leggett has introduced a proposed budget for FY 2016 which (under the requirements of the charter tax cap) reduces the property tax by 1 cent for each $100 of assessed value and provides a 2 percent Cost of Living Adjustment (COLA) for employees. The $5.1 billion budget increases spending by only 1.4 percent from the current year.

As reported by the Gazette,

The shortfall — due to lower-than-expected income-tax revenues and property sales — led to a midyear hiring freeze and forced a spending reduction in the current fiscal year of 3 percent for every county department. The hiring freeze is expected to end July 1.

…Leggett’s proposed budget — through savings, spending reductions and set-asides — meets state requirements for education funding and gives all county employees a 2 percent raise. It also keeps taxes at the charter limit of inflation and increases funding for priorities such as libraries.

The County Executive indicated that not everyone would be pleased with the budget plan.

As proposed, the spending plan provides only 97.6 percent of the money the Montgomery County Board of Education requested. It provides only $3 million for Montgomery College and recommends that the college increase tuition.

It also falls short of his campaign promise to use 2.5 percent of total property tax revenue on building new affordable housing.

Coverage on the Washington Post highlights the struggles embodied in the FY16 decisions, and suggests that the cutbacks may not continue:

Leggett said he was “tempted” to propose a major property tax hike this year. He added that declining income tax revenues, a sluggish economic recovery and possible cuts in anticipated state funding will make an increase almost unavoidable next year.

“We’ve used all of our options to not do it this year,” he said at his annual budget announcement.