The Budget--What's In and What's Out

In an austere year caused by the deep recession, we approved a $4.3 billion total County operating budget for Fiscal Year 2011, which begins July 1. The total budget is 4.5 percent less than the approved budget for FY10, marking the first decrease in a total budget since the adoption of the current County Charter in 1968.

The overall tax-supported budget of $3.66 billion reflects a decrease of $191 million from the FY10 adopted budget, a decrease of 5 percent. This is the second consecutive year the tax-supported portion of the budget has decreased. Since March 15, when the County Executive presented his recommended budget, we have worked to achieve equity in the allocation of limited funds. One way we did this was to reduce spending for Montgomery County Public Schools (MCPS) by $24.4 million, 1.1 percent less than proposed by the Executive. These funds will be used to mitigate deep cuts in the safety net and other vital services, including Montgomery College.

In a budget year complicated by the national and regional economic downturn, our budget protects core services and programs for the most vulnerable, but does not exceed the County's Charter Limit on property tax revenue. The budget includes a $692 property tax credit for owner-occupants of principal residences. It freezes pay for employees of County government, Montgomery College, the Maryland-National Capital Park and Planning Commission (M-NCPPC) and MCPS.

Employees at all agencies except MCPS will be asked to take unpaid furlough days in FY11. Furloughs for County Government employees, including elected officials, will be progressive: three days for employees whose salaries are less than $50,000; five days for those with salaries of $50,000 to $100,000; and eight days for those with salaries greater than $100,000.

The budget includes a plan to consolidate recreation facility and athletic field permitting, class/program registration and additional recreation programs into County Government from the Department of Parks to create a more streamlined and user-friendly system for County residents. The Council believes this consolidation, over time, will lead to budget savings and operational efficiencies.

The budget re-establishes the reserve at 6 percent, which should help maintain the County's AAA bond rating. The reserve had been reduced to 5 percent in FY10.

On the revenue side, although we chose not to exceed the Charter Limit on property tax this year, some other taxes and fees will go up. The energy tax will increase by 85 percent with the increase split between residential and commercial users, and the tax on wireless phones will increase from $2 to $3.50 per month. In this difficult budget year, we are all in this together.

Despite a record drop in revenue, we have worked to develop a budget that is fair--fair to our residents who rely on County services, fair to taxpayers and fair to employees. In allocating sharply reduced resources, we have given top priority to our school children--the MCPS share of total agency spending is 57 percent, up from 55 percent in FY10 and over the last decade--as well as Montgomery College, public safety and the safety net.

For more details, see the press release