The Montgomery County Council voted Tuesday to cut $54.2 million from the 2016 budget it approved just over two months ago and warned that more reductions may be on the horizon because of declining tax revenue.
“There is a chance we will be back with another savings plan. We don’t know what the future holds,” said council President George Leventhal (D-At Large), overseeing the panel’s final legislative session before a six-week summer break.
The council’s package of cuts is slightly larger than the $50.8 million proposed July 8 by County Executive Isiah Leggett (D). It also restores several of Leggett’s reductions in social-services programs by substituting trims of its own.
Either amount is a fraction of the county’s $5 billion operating budget. But it may be the leading edge of heavier reductions this year. Both branches of county government acknowledge that changes are necessary because of significant shifts in projected revenue.
On May 18, just four days after the council approved the operating budget for fiscal year 2016, the Supreme Court ruled Maryland’s income-tax law unconstitutional in the Wynne case. Changes in taxation triggered by the ruling could reduce the county’s revenue by more than $250 million through 2018. In addition, income-tax revenue in the spring was about $20 million short of projections.
“This is a consequential situation,” council administrator Stephen B. Farber told members in a briefing on the budget.
The reductions set the stage for a deeper fiscal discussion when the council returns in the fall. Leggett has said that a property-tax increase is all but inevitable next year. But Leventhal said he wants to have “a serious conversation about the cost of government,” and he urged Leggett to be prudent in upcoming contract negotiations with county unions and in salaries paid to new department heads.
The council accepted about $36 million of Leggett’s cuts, including $10 million from Montgomery County Public Schools and $2.5 million from Montgomery College. But it also restored about $2.5 million in executive reductions to salary supplements for aides to the developmentally disabled, and housing assistance for homeless veterans and families with children. The council also walked back cuts in library materials and in deep cleaning of libraries and recreation centers.
To get to the $54 million mark in cuts, the council voted to pull from the capital improvements plan more than $18 million in tax funds earmarked for certain projects. The projects have encountered delays, so the money will not be needed this year, officials said. A contract for renovations to the council’s Maryland Avenue office building ($14.3 million) is being rebid. Delays in approval of the proposed Purple Line have freed up money ($3.8 million) that would have gone to a new entrance connecting the street-level stop on the light-rail line in Bethesda with Metro ($3.8 million).
Leggett thanked the council for its actions Tuesday. “That’s going to make it easier to put together a credible plan for the challenges down the road,” he said.
In other business, the council approved a resolution asking the state legislature to partially privatize the council’s unusual liquor-control system, which is government-operated. Under the measure sponsored by council member Hans Riemer (D-At Large), bars and restaurants would be able to order certain specialty beers and wine from private wholesalers rather than from the county’s Department of Liquor Control.