Lower Than Expected Revenues May Indicate Montgomery County Budget Troubles

Lower than expected revenues may indicate budget troubles for fiscal 2017 according to Montgomery County budget officials.  As reported by the Washington Post,

Every November the county gets its largest chunk of income tax payments from the state. This year’s distribution was expected to increase by 16 percent over November 2014. Instead it grew just 2 percent, said management and budget director Jennifer Hughes. As a result, the county has lowered estimated revenues by $37 million in the current fiscal year and $98 million for FY 2017, which begins July 1.

If trends continue, Hughes said, county agencies will have to reduce spending by 11.5 percent to balance the 2017 budget, according to a memo she sent to the County Council on Wednesday.

This trend is troubling however, as state and local economic conditions are improving.

Unemployment and inflation are down; home sales are up. Officials estimate that 523,400 Montgomery residents are working, an all-time high. Hughes said the disconnect is puzzling.

“Based on the apparent disparity between the county’s distribution and the State’s receipts, the Department of Finance is requesting more information from the state,” Hughes said in her memo.

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