The Perfect Storm for County Budgets… Part Deux

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

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

Delegate Susan Krebs led the conversation in front of a standing-room-only crowd. Delegate Krebs expressed the importance of “getting it right” when it comes to implementing the recommendations of the Kirwan Commission. She also explained why state lawmakers will need to strike a balance between raising revenues and maintaining certainty and stability for business owners.

The panel speakers included:

  • Ted Zaleski, Director, Office of Management and Budget, Carroll County
  • Robert Sandlass, Treasurer, Harford County

Zaleski warned that much of the growth in FY 2019 was temporary, driven by tax planning incentives resulting from federal tax reform as well as the systematic changes to the federal income tax that resulted in higher tax bills for many Marylanders. Zaleski said that weak wage growth, tepid Sales and Use Tax (SUT) collections, labor churn, and signs of a looming recession all signal tough times ahead for state and local budgets.

Sandlass explained that the cost of Kirwan (roughly $4 billion) will only exacerbate the growing pressure on state and local budgets. But while much of the focus is on the cost of statewide education reform – rising costs, unfunded mandates, and higher demand for services must also be addressed, according to Sandlass.

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

The 2019 MACo Winter Conference, Building for the Future,” was held on December 4-6, 2019, at the Hyatt Regency Chesapeake Bay Hotel in Cambridge, Maryland. This year’s conference focused on county governance challenges and best practices – from the foundation to the rooftop – that will decide Maryland’s future.

More about the MACo Winter Conference: