Nearly half the $20 million budget surplus anticipated by defeated Prince George's County Executive Winfield Kelly Jr. when he endorsed the voter-imposed TRIM property tax revenue ceiling may evaporate, county officials told dismayed members of the County Council yesterday.
A coucil staff analysis of the effects of TRIM now shows, in fact, that incoming executive Lawrence J. Hogan may have to prepare next year's budget with $11 million less than Kelly said was necessary to continue "the delivery of basic services."
Assistant council administrator Gene Lauer told council members that budget growth next year may be limited to $6 million over the present $443 million budget - compared to a $29 million increase this year. Despite this the county must negotiate new contracts with 11 of its 29 unions, absorb the loss of about 850 federally-funded CETA employes, and cover a school budget that, officials have said, must rise by $20 million to maintain existing services.
Lauer also pointed out that the county will have to pay at least $2 million next year in Metro subsidies, and will face an inflation rate of 6 to 7 percent.
"We don't mean to alarm anyone." Lauser said, "but this may explain why the budget will look like it will when it comes down to you."
Several council members were visibly alarmed. "I don't know how we'll deal with it all," council member Floyd Wilson said after the orientation session had ended. "We are going to have to start from ground zero and completely reevaluate every program."
"There will be very little new legislation passed that has anything to do with spending," council member Frank Casula said. "We may have to go as far as repealing laws so that the cuts can be made."
"If I were Hogan," Casula said. "I would order an immediate freeze on everything - all hiring. He's going to have to do something quickly."
Hogan, who promised during the campaign that he would slash more than $30 million from the county budget by consolidating departments and reducing waste, did not attend the council session yesterday.
Kelly said during his heated election campaign against Hogan that the county's growth rate would produce a revenue surplus from tax collections this year equal to last year's combined county-school board figure of $20 million.
Laurer said yesterday, however that last year's growth rate - and surplus - had been "unusually large" and that the surplus this year was likely to amount to about $11.5 million.
That figure may fluctuate even further downward, council members were told, depending on legal interpretations of the exact application of TRIM to the county's complex system of revenue collection.
The charter amendment freezes [WORD ILLEGIBLE] annual property tax collections which make up one-third of the county's revenues - at this year's [WORD ILLEGIBLE] once projected to be $140 million, now estimated to be closer to [WORD ILLEGIBLE] million.
Because the county uses "accrual" accounting system based, in part, on estimates of future property tax revenues, the $132 million figure includes some funds that will not be collected this year, and does not include some funds that formed part of previous budgets, but will be actually received by Prince George's this year.
It is as yet unclear, Lauer said whether TRIM requires the county to freeze its collections at the amount actually collected this year, or at [WORD ILLEGIBLE] on-paper amount including future accruals.