The Montgomery County executive called yesterday for a $5 million cut in spending plans, citing a predicted slump in housing sales that is expected to sharply reduce revenues from the county's real estate transfer tax.
Executive Charlies W. Gilchrist called the recommended cuts "stringent but not destructive" and said the county has a basic choice: to raise taxes more than he has already proposed or to curb expenditures and increase fees. Gilchrist has already called for a 14-cent increase in the real estate tax rate, which would raise the average homeowner's tax by about $57.
He called on the County Council to cut $3 million from the school budget by reducing the number of school employes through attrition and decreasing the contribution to an employe health insurance program. Those suggestions were promptly and vigorously proested by school officials.
Gilchrist also recommended that the council cut at least $2 million from the budget he proposed in February by freezing hiring in all departments except police, decreasing overtime pay for county workers, reducing out-of-town travel and trimming several programs.
County officials expect that only 10,000 homes will be sold in the county in fiscal 1981, which starts July 1, instead of the 14,000 previously forecast. The officials cited economic conditions, in particular the difficulty of obtaining mortgage loans, as the reason for the slump.
The decrease in sales is expected to result in the loss of $5.6 million in revenue from the real estate transfer tax, which ranges from a quarter of 1 percent to 1 percent, depending on the price of the property.
The new projection is based on a 37 percent drop in housing sales in Montgomery during the last quarter of 1979 and first quarter of 1980.
The school spending cuts the executive recommended are:
$1 million from the school board's Employe Benefit Trust Fund, which covers health expenses incurred by school employes. This is in addition to a $2.2 million cut in contribution Gilchrist proposed earlier this month.
Another $2 million by reducing the number of employes in the school system plus Montgomery College by 100. This is in addition to a 200-position cut Gilchrist recommended be added to a cut of 215 positions proposed by school Superintendent Edward Andrews.
School officials had already expressed dismay at cuts Gilchrist previously proposed. School spokesman Ken Muir said yesterday the new proposals "may very well result in some layoffs."
Gilchrist said he wanted to "avoid the level of rhetoric we've had with the educational system" over budget cuts and added: "We've got to stop this belief that if you cut a nickel out of the Board of Education budget you're anti-Board of Education."
In addition to imposing a hiring freeze and cutting overtime and travel for county government workers, Gilchrist called for cutting funds earmarked for helping elderly and handicapped persons whose apartments are converted to condominiums and raising by 10 percent fees charged for building permits and sewer inspections.
The $5 million in requested cuts, to be reviewed now by the council, would hold the total spending for county government and schools in the 1981 fiscal year to $659.8 million.