County revenues generally come from property and income taxes – but how much should an administrator, elected official or budget officer expect to receive each year? This question has become increasingly difficult as counties still recover from the Great Recession, tax reform leads to uncertainty, and growth trends shift with an aging population and changing income sources. Even the State has modified its revenue projection processes, accounting for increased volatility. What’s a county to do?
MACo Summer Conference attendees learned how state revenue estimators and county budget officers predict the future in unpredictable environments at the session, “Navigating Murky Waters: Predicting Unpredictable Revenue Streams,” on Friday, August 17, 2018 at 2:15 pm.
The session began with Andrew Schaufele, Director of Bureau of the Revenue Estimates from the State Comptroller’s Office showing how his office anticipates state revenues during volatile times, and how he provides counties valuable information about county income tax revenues.
He spoke at length about the structural change that occurred to our economy after the Great Recession – and how his office quickly had to adjust its revenue estimating models to accommodate for this permanent change.
John Hammond, longtime Budget Officer for Anne Arundel County showed how he uses his magical crystal ball to inform county officials about how much revenue they can expect to receive in future years. He stressed the importance of maintaining a reserve fund balance to guard against volatility, and applying one-time revenue sources to capital expenditures, rather than operating.
Finally, Jonathan R. Seeman, Director, Budget, Finance & Information Technology, Queen Anne’s County provided perspective on how smaller counties must provide revenue projections with limited resources. He demonstrated how Eastern Shore counties experience some of the most volatile income tax receipts in the state- and why the November distribution of local income taxes is so important.
The session was moderated by The Honorable Kevin Hornberger of Maryland House of Delegates.
MACo’s 2018 Summer Conference was held August 15-18 at the Roland Powell Convention Center, in Ocean City, MD.