Council Approves $54 Million Budget Savings Plan

In response to projected revenue shortfalls, we reduced the FY16 budget by $54 million. Although we have had to make mid-year cuts before, this is the first time we have approved a savings plan so early in the fiscal year. Here's the full press release:

ROCKVILLE, Md., July 28, 2015—The Montgomery County Council today unanimously approved a plan to produce savings of $54.0 million in the County’s Fiscal Year 2016 budget. On July 8, County Executive Isiah Leggett proposed a $50.8 million savings plan in response to a decline in the County’s projected income tax revenue.

The Executive’s plan was in two parts. One part included $40.7 million in operating budget reductions. The other part included $10.1 million in capital budget current revenue reductions. The Council approved FY16 savings of $54.0 million. This consists of $35.8 million of the $50.8 million in reductions proposed by the Executive and $18.2 million from additional adjustments to the FY15-20 Capital Improvements Program.

Both County Executive Leggett and Council President George Leventhal had said a savings plan is needed now because there has been a major change in the County's revenue picture since the Council agreed on the County's operating budget for FY16. The 5-4 decision by the U.S. Supreme Court in the Wynne case on May 18, combined with the impact of a shortfall in the County's estimated income tax revenue for FY15 that became clear in late May and June, could reduce the County's revenue by more than $150 million in FY15-17 and $250 million in FY15-18. 

Although the Council's approved reserves for FY16 are at their highest level ever at $383 million (8.2 percent of adjusted governmental revenues), achieving savings now in FY16 will help meet the County's serious revenue challenge in FY17. Further steps in FY16 may also be required.

Among the items that the Executive recommended be reduced, but the Council preserved, were funds to provide permanent housing and needed supports for homeless veterans; to supplement the salaries of workers who help the developmentally disabled; to implement the Child Care Expansion and Quality Enhancement program; for positive youth programming services for the Wheaton High School Wellness Center; increase library materials and increase hours at two libraries; for scholarship awards at Montgomery College; to support the operation of the Piney Branch Elementary School pool; to support pedestrian safety initiatives including raised pavement markings; to fund Fire and Rescue Service operations for Hyattstown Engine 709, Kensington Ambulance 705 and paramedics in Kensington; for removal of tree stumps on public property; and to expand the Bethesda Circulator bus service.

Detailed information about the budget savings plan is available at: http://tinyurl.com/nmtkdsq.