Baltimore County expects to lose more than $172 million in local revenues as a result of the COVID-19 pandemic.
Baltimore County Executive Johnny Olszewski yesterday submitted to the County Council a revised revenue forecast in order to reflect a significant deterioration in local revenues amid the evolving COVID-19 public health crisis.
As previously reported on Conduit Street, Olszewski last month submitted a $3.9 billion budget proposal for fiscal 2021 that included an approximate $40 million write-down from earlier revenue estimates, due to the growing economic impact of the pandemic.
But Director of Budget and Finance, Ed Blades, said the administration now expects revenues will fall $63.2 million short of projections for fiscal 20 and $69.3 million short of projections in fiscal 21. In total, the administration is planning for local revenues to miss projections by more than $172 million over the next 14 months.
The County expects to lose approximately $94 million in local income tax revenue and $32 million in transfer and recordation tax revenue. Blades also anticipates sharp reductions in investment income, motel/hotel tax revenue, and admissions/amusement tax revenue.
According to the letter:
We based our income tax assumptions on forecasts provided by Moody’s Analytics for previous tax years, numerous discussions among Budget and Finance Affiliate members coordinated by the Maryland Association of Counties, and on revenue forecast information provided by the State Comptroller’s Office and the Bureau of Revenue Estimates in April.
Moreover, we compared our revised forecasts to personal income growth assumptions released by the Spending Affordability Committee’s Economic Advisor, Sage Policy Group, on April 15, 2020. Our comparison showed that our total revised income tax projections for Fiscal Year 2020 and Fiscal Year 2021, while slightly lower, were consistent with the Sage Policy Group income growth forecast.
In total our new recommendations for Fiscal Year 2021 represent only a 0.25% increase over the Fiscal Year 2020 revenue budget. We will continue to monitor changes and update our forecasts accordingly.
The Baltimore County Council is scheduled to vote on the budget on May 21.
Stay tuned to Conduit Street for more information.