Gap Now Estimated at $761 Million

Today we met with the County Executive for a fiscal update that set the stage for the upcoming budget season. I have been advocating for communication and collaboration between the Executive and Legislative branches, and I thank the County Executive and his staff for providing an extensive preview into his upcoming budget. By law, the County Executive transmits his proposed budget to the County Council on March 15. We hold hearings and work sessions, and then we pass a final budget at the end of May. The budget takes effect on July 1.

We knew the news would not be good. Our last fiscal update projected a gap of $608 million for FY11. Now, because of decreases in state aid, fees and taxes, the gap has grown to $761 million. The biggest contributing factor is the unprecedented 15 percent drop in income tax revenue as a result of decreases in both the number of taxpayers and the incomes of those taxpayers. The snowstorms also took a big bite.

In anticipation of next year’s budget crisis, County government already has instituted a hiring freeze and a procurement freeze. We have liquidated selected outstanding contracts and slashed spending across the board.

Still, the County Executive told us today his budget will aim to reduce public safety, health and human services, and transit spending by seven percent. He plans to reduce spending in the remaining departments and agencies by 20 percent. The Executive made it clear that significant layoffs, furloughs and service reductions likely will be required.

Although the details of the proposed budget won’t be available until March 15, I appreciate the advance information.