Steadily rising property values, along with new jobs and higher incomes, have made Charles County's fiscal forecast for the coming year balmy and bright, county officials said last week.
The Fiscal Services Department estimated that revenue will increase in fiscal 2006 by 8.6 percent, or $18.3 million, to a total of $231.8 million. This year, revenue grew by $16.1 million. More than half of the new revenue will come from county property taxes; collections are rising because land values are appreciating by more than 20 percent a year. In addition, the job market grew at a rate of 2.4 percent in the first eight months of this year, and wages rose by 5 percent in the year's first quarter, officials said.
"If the economy and the market stays stable like it has been, it's going to be a good year," said Commissioner Wayne Cooper (D-White Plains). "Real estate is good, jobs are good, a lot of things are looking up."
Still, the county's financial forecasts are clouded by issues such as the bankruptcy proceedings of Mirant Corp., the energy firm that owns the Morgantown Electric Generating Plant on the Potomac River in southern Charles. Mirant filed for bankruptcy protection in July and missed a year of property tax payments on its four plants in the Washington region. The company paid back more than $12 million of missed taxes in Charles this year, but it also filed to have the assessed value of the Morgantown power plant reduced. To accommodate this possible reassessment, the county projected Mirant's tax payments will drop by 15 percent in the next fiscal year.
"Certainly the Mirant situation has not been solved; that is a big question mark for us, even if they come out of bankruptcy," said Commissioner W. Daniel Mayer (R-La Plata).
The positive predictions could also be undermined if the state does not find new funding sources to overcome its projected revenue shortfall in the upcoming session of the General Assembly. Mayer said funding for the Rural Legacy Program and Program Open Space, which pay for agricultural and environmental preservation as well as parks, could be cut without a resolution of the lingering state budget crisis.
"One day they're going to have to face their budget woes," Mayer said. "It's just built into their system; they have allocated more money than they have revenue to pay for it."
Charles is also predicted to face a relatively small shortfall of $217,000 in the next fiscal year. But county officials predicted this will move toward a surplus by the end of the decade.
Such a deficit -- one-tenth of 1 percent of revenue -- "means very little in having to do things in the way of balancing the budget," said county budget director David Eicholtz. "We're really performing a lot better than anticipated."