County Financial Worries Called A Perfect Storm’

SNOW HILL – Changes in revenue flow and expenditures over the next few years have caused some worry amongst the Worcester County Commissioners.

In a report titled, “Managing Fiscal Realities and the Tough Times Ahead,” Assistant Finance Officer Phil Thompson outlined some of the issues that the county will have to deal with between now and 2013. The biggest concerns were transfers of state obligations to the county and a noticeable loss of revenue in nearly every category.

“It’s like the perfect storm,” said Chief Administrative Officer Gerald Mason. “What else can go wrong?”

The revenue estimates from 2010 to 2013 certainly raised some eyebrows. Between 2009 and 2013, Thompson projected a loss of over $30 million with the biggest hits coming from losing property taxes and Homestead Tax credits.

“I’m really nervous about 2013,” said Mason.

Commission President Bud Church agreed, saying, “I’ll tell you what’s really frightening…what’s the state going to do to us in 2013? They’ll be in even worse shape.”

Besides a drying revenue stream, Maryland has already hinted that it might be transferring some of the obligations it has traditionally handled back to the county, including teacher pensions and retirement, which would place millions of dollars’ worth of stress on the local economy.

“That’s the one we’re most fearful of at this stage of the game,” Thompson said.

Those transfer obligations are just one of the problems that might trickle down from the state into Worcester County. Since 2008, the nationwide economy has been on a down turn, with unemployment ballooning. The state of Maryland has made drastic budget cuts and financial changes to compensate, much of which has not been popular in the county, especially Worcester losing its highway revenue to the state.

When the next round of state cuts drop, county officials are worried that Worcester will get some of the worst of it based on the formula the state uses to determine wealth.

The current formula calculates county wealth based largely on real estate values. Because Worcester contains Ocean City and a large amount of beach property, it is consistently ranked the wealthiest county in Maryland by the formula, though the county unemployment rate is above both the state and national average.

“When you look at the big picture … it’s skewed,” said Thompson, referring to the wealth calculating formula.

Some commissioners questioned the current projections and whether or not they might change drastically between now and when the budget is finalized.

“It’s so out of whack from what they [the state] proposed last year,” said Commissioner Virgil Shockley. “Somebody pick a number.”

Shockley referred to some of the state’s fiscal policies in regards to Worcester County as arbitrary.

“It’s like asking a condemned man if you want chicken or fish. You’re still condemned either way,” said Shockley, adding that the state would likely change their projections 25 times between now and when they’re finalized.

“We’ll all be selling apples and pencils at the corner,” joked Church.
“I’m surely depressed,” agreed Shockley.