A Perfect Storm Is Brewing for County Budgets

A panel of state and local fiscal leaders discussed several factors pointing to turbulent times ahead for county government budgets.

A storm is brewing. Rising costs, revenue write-downs, unfunded mandates, and greater demand for services all signal turbulent times ahead for county government budgets. Economic instability, shifting demographics, and a looming uncertainty around the ambitious, multi-billion-dollar overhaul of Maryland’s education system only exacerbate the growing pressure on county budgets.

At this year’s MACo Summer Conference, MACo’s Budget and Finance Affiliate hosted a panel discussion on the economy, best practices for planning, budgeting, and forecasting, and strategies for how counties can best prepare for future fiscal uncertainties.

Senator Adelaide Eckardt led the conversation in front of a standing-room-only crowd.

The panel speakers included:

  • Ted Zaleski, Director, Office of Management and Budget, Carroll County
  • Robert Sandlass, Treasurer, Harford County
  • Andrew Schaufele, Director, Bureau of Revenue Estimates, Maryland Comptroller’s Office

Sandlass expressed concerns about the fiscal impacts of the Kirwan Commission’s ambitious, but expensive goals.

From Maryland Matters:

“$2 billion is a lot of money – and it’s a lot of money we don’t have,” Robert Sandlass Jr. said. Using Harford as an example, Sandlass said the roughly $75 million the county would be required to cough up to meet new Kirwan mandates is roughly equivalent to the county’s annual budget for public safety, the community college and the public library system. The overall county budget is about $600 million annually.

Another way of considering the scale of expenditures, Sandlass said: When the state drastically cut the share of highway user revenues it passed along to local governments, the cost to counties was roughly $300 million; when the state required local school districts to pick up a higher share of teacher pension benefits, the price tag to the counties was roughly $200 million.

Schaufele said that existing federal, state, and local fiscal obligations are putting a significant strain on budgets. He also warned that a looming economic recession will impact all levels of government. “If you’re not planning for a recession, you’re wrong,” Schaufele said.

Zaleski explained that growing pressure on state and local budgets impedes efforts to repair, enhance, and modernize aging infrastructure – an essential function of county government. And while much of the focus is on the cost of implementing the recommendations of the Kirwan Commission – rising costs, unfunded mandates, and higher demand for services must also be addressed, according to Zaleski.

“If there was no Kirwan Commission coming, if we weren’t talking about any of this, I’d still be concerned,” Zaleski said.

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