Montgomery Council Tentatively Approves Use of Reserve Funds in FY 2016 Budget

In a preliminary vote, the Montgomery County Council approved using $15 million from the county’s reserve fund to increase spending in the proposed FY 2016 budget. The additional funding will be used to fund a series of items including low-income child care, sidewalk repair, publicly financed elections and Montgomery College.

As reported by the Washington Post,

The $5 billion operating budget, effective July 1, holds overall spending close to current levels. It provides $2.3 billion for Montgomery County Public Schools, which meets minimum state funding requirements but falls $54 million short of the school system’s original request.

The budget also pays for raises negotiated with the county’s unionized police, fire and non-uniformed employees. The deal includes wage increases of 2 percent and annual longevity hikes of 3.5 percent for eligible workers.

The entire plan represents a 1.7 percent increase in spending, or about $90 million, slightly above County Executive Isiah Leggett’s (D) proposed budget, which offered a 1.4 percent hike.

County Executive Leggett expressed concern with the Council’s decision.

Leggett said Thursday he was “disappointed” with the council’s decision to fund new ongoing costs with reserve funds. “That trend . . . is something I have a problem with,” he said.

In an e-mail to council members Wednesday evening, management and budget director Jennifer Hughes and finance director Joseph Beach said the fund is intended for emergencies. To use it for other purposes, they said, breaks assurances made to Wall Street rating agencies that establish the county’s creditworthiness.

The Council is scheduled to take a final vote on the budget on May 21.

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