Worcester County Budget

SNOW HILL – While the Worcester County Commissioners just passed the fiscal year 2008 (FY 2008) budget Tuesday, the looming state deficit may throw a wrench into the carefully balanced plan for the county’s finances.

The state of Maryland reportedly faces a $1.4 billion shortfall, with Governor Martin O’Malley directing that an initial cut of $200 million be made.

The Maryland Association of Counties (MACo) fears that those cuts will devolve onto Maryland’s 23 counties, said Worcester County staffer Phil Thompson. 

Thompson, Worcester County’s assistant finance officer, attended the second of a series of meetings to be held by MACo to analyze county vulnerability to possible state reductions. The organization will draft a fact sheet for state decision-makers on the counties’ position, hoping to soften the hit.

“Essentially, what we are dealing with is a political version of the old Pin-the-Tail on the donkey game,” Thompson told the county commissioners Tuesday.

MACo will lobby the legislature, he said, but “the bad news is, we’re still the donkey.”

There are four areas which could impact Worcester County’s finances. The county could suffer a  reduction in Project Open Space funding, with $1.3 million currently slated in FY 2008. Highway user revenue, also known as the gas tax, could be increased, and there is a possibility of income tax rate increases as well. The largest target may be the state’s contribution to teachers’ retirement funding, which came to $4.3 million in FY 2007.

“Those have come to the forefront at every meeting,” Thompson said. He added, “Those offer the greatest exposure for us.”

“It wouldn’t be anything new,” county chief administrator Gerry Mason said of the highway user revenue. 

Adding five or ten cents more to the gas tax would not be good, with gas prices continuing to rise, said Commissioner Virgil Shockley.

Putting more of the teachers retirement funding on the counties has been kicked around for years, Mason said.

“I could see the teachers retirement happening,” said Commissioner Louise Gulyas.

“That has come up very often,” Thompson said.

Commissioner Judy Boggs said that once the teacher retirement funding is put into the county’s hands, the state would never take it back. “It will be ours forever,” she said.

Cuts would likely be wealth based, so higher earning counties, like Worcester, would get less.

“So they’re not going to do it honestly,” said Gulyas.

“When the state is in trouble, they look for the low hanging fruit. The low hanging fruit is the counties,” Boggs said.

The specter of mid-year cuts also loomed. According to Thompson, talk in Annapolis has the Maryland General Assembly calling for a special session in the fall, well after all the counties have locked in their budgets. Cuts then could go into effect as early as January 2008.

Slot machine revenue, if passed by the legislature in 2008, would not be available until FY 2011, Boggs said.

The unwelcome news came shortly before the commissioners passed the fiscal year 2008 budget, which itself saw many cuts.

The commissioners passed a $175.6 million budget, having slashed nearly $22 million from requests, while tax rates remained the same despite tight revenues.

“Everyone took some hit but there was no particular point of pain,” said Boggs.

Capital spending was one target, she said, with items like a new $3 million storage building eliminated. Increases for supplies were kept to four percent, Boggs said.

“We focused primarily on people this year. We made people our priority,” she said.

All county employees will get a cost of living salary adjustment and steps, a seven and a half percent increase.

“We flatlined most requests at last year’s levels. We didn’t initiate any new programs,” Bogg said.

The Board of Education was allocated $69.5 million from the county, including five entirely new teachers, and the addition of 10 teacher salaries once handled by grant funds. Starting teacher pay rose to $40,390.

Half a million was allocated for school security upgrades and a new pool water heater at Cedar Chapel Special School, and another half million for foundation repairs at Berlin Intermediate School, and portable classrooms at Buckingham, Showell, and Snow Hill Elementaries.

The towns will not get all the funding they asked for, but Ocean City will receive $14.8 million, Berlin $1.4 million, Snow Hill $1.1 million, Pocomoke City $1.1 million. Ocean Pines will receive $1.5 million in public safety funding.

Atlantic General Hospital was allocated the final $250,000 for the expansion, while the Developmental Center will receive the same for its new building. Wor-Wic community College will also get $250,000, for Workforce Development Center equipment.

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