Six weeks after the Montgomery County Council, in a dramatic election-year move, lowered the property tax rate and spent most of the current budget surplus, an analysis of the county budget shows that at least $25 million in services will have to be cut next year unless new revenue sources are found.
Calling the prospects for fiscal 1980, which starts next July 1, "quite forbiding," the report release yesterday also says the 1980 budget would have to be reduced at least another $26 million if voters approved a Proposition 13-like proposal to rollback property taxes in the county.
Council President Elizabeth Schull and County Vice President Neal Potter, who voted against the tax cut in June, said they issued the budget analysis yesterday to force the county government "to face up to the hard figures" for the first time.
The prediction was contained in a letter in which Scull and Potter asked County Executive James P. Gleason and heads of all county agencies to calculate by next the "minimum, least damaging loss of services and employment" for fiscal 1980 "in order to absorb the anticipated deficits.
In June, the council voted 5 to 2 to cut the basic property tax rate from $2.68 to $2.60 per $100 of assessed valuation. Because the $568 million operating budget for 1979 already had been adopted, the effect of the tax cut was to spend all but $3 million of the surplus.
The projected $25 million revenue gap would result from the difference between anticipated 3 1/3 per cent increase in revenues and an expected 8 1/4 per cent increase in costs by 1980, according to Scull and Potter.
That could force a reduction of as many as 1,200 jobs, mainly by attrition, since three quarters of the budget is spent on salaries and fringe [WORD ILLEGIBLE] tion, since three quarters of the gler, the council's fiscal expect.
A proposal inspired by the success of Proposition 13 approved by California voters to roll back the property tax there, would reduce the Montgomery tax rate further, to $2.25 per $100. If it is approved in a referendum in November. Potter said, the county's dilemma would be compounded and layoffs would be "certain."
Potter said the council probably will begin trimming unnessary services and unfilled jobs immediately to decrease the impact of the expected 1980 deficit.
When the council recovenses Aug. 15 after its vacation, councilman John Menke said he will propose that half the 325 new jobs that are funded - but unfilled - in the current budget be dropped. The next executive, he said, should freeze all hiring for two years.
Menke, who is seeking the Democratic nomination for county executive, proposed the tax cut in June. "One way to put enough pressure on the council to cut the growth rate in the county government is to put a squeeze on the dollar" he said, defending the tax reduction.
Curbing the budget has become a campaign issue in the executive race. All candidates say they will seek to eliminate waste in government spending. Republican Richmond M. Keeney says he will impose hiring freeze of up to 90 percent, while Republic Albert Ceccone said he will "possibly" stop filling job vacancies. The other Republican candidate, Gerald Warren, could be be reached.