Weak tax revenue has exposed gaps in Prince George’s County’s annual budget that have triggered modest hiring and funding freezes across the government, officials said Tuesday.
Prince George’s is facing a $59 million deficit that, if left unchecked, could swell and jeopardize the county’s bond rating, budget administrator Thomas Himler said during a briefing Tuesday with the County Council.
The administration has begun to reduce overtime for emergency workers, withhold funding for various programs and cancel recruitment classes for the county’s police and fire departments. Those measures could save $18 million by the end of fiscal year 2015.
“We consistently spend more than what we bring in,” said Himler, who reports to County Executive Rushern L. Baker III (D). “Right now, we are not seeing the light at the end of the tunnel.” He added that the budget cuts are temporary and could be modified if future revenue provides a clearer picture of the county’s fiscal health.
Historically, revenue from income taxes and from transfer and recordation taxes are higher than the amount in administration budgets. But this year’s revenue has been significantly lower than expected, Himler said.
“It went the other way,” he said, adding that unemployment, slow wage growth and high mortgage foreclosure rates have contributed to the shortfall in Prince George’s.
Council members had earlier advocated for the programs that face cuts, tacking on $11 million of funding in the budget that was signed this year.
Prince George’s Community College, the Alice Ferguson Foundation, summer youth programs and the county’s food-assistance program will see their promised funding increases deferred to help offset the deficit.
County Council members indicated they will work more closely with the Baker administration to renegotiate some cuts.
“The council is not going to cooperate with this list,” said chairman Mel Franklin (D-Upper Marlboro). “If we have to make tough choices together, this is not a great way to start.”
Distressed council members peppered Himler with questions about the administration’s choices and timing, and complained about a perceived lack of transparency.
Council member Karen R. Toles (D-Suitland) said she and her colleagues had allocated the funds for the fire and police services because those departments are understaffed and running up huge overtime bills. Delaying recruitment, she said, seems counterproductive.
“If you guys have any ideas, please share them,” Himler started to say.
“You have to call us back!” interjected council member Andrea Harrison (D-Springdale).
The county has been here before. Five months ago, Himler told the council that the county needed to plug a $65.2 million deficit. The solution then was to dip into the county’s reserve fund.
Using that money came with a risk. Although credit rating agencies Moody’s Investors Service, Fitch Ratings and Standard & Poor’s maintained the county’s AAA bond rating in August, they cautioned the county government against repeated budget shortfalls.