SALISBURY – A discussion on the financial impacts of the COVID-19 pandemic and various state mandates highlighted a public hearing on the fiscal year 2021 budget last week.
Using a video conferencing program, Wicomico County Executive Bob Culver presented the public with a proposed operating budget of $153,250,029 for fiscal year 2021.
“If anything can be said about this year it’s different than any other year we’ve had in the past, and it’s going to continue on that way for a while,” he said.
The spending plan for fiscal year 2021 includes a $607,537 increase in maintenance of effort funding for the Wicomico County Board of Education, a $828,345 increase for volunteer ambulance services, a $302,089 increase for volunteer fire services, and a $288,904 increase for the Wicomico Public Library.
“This year we actually have money set aside to renovate a building and to go ahead and move into a building for the Pittsville library,” Culver said. “This will be on a lease basis, much like the one that’s there now. But it’s a much better building.”
Culver, however, noted that this year’s budget development came with several challenges.
“There will be some disappointment to some people on certain items, and I’m sorry to say that,” he said. “So much is facing us this year.”
Officials noted the COVID-19 crisis could impact local tax revenue in the coming fiscal years. Director of Administration Wayne Strausburg said he anticipated local income tax revenue to “flatten out” in late fiscal year 2021 and early fiscal year 2022.
“We anticipate that the economic impacts of COVID-19 are going to negatively impact local income taxes, which in the past several years have been increasing rather nicely,” he said. “However, because of the timing of state income tax distributions we expect that any downturn in receipts would occur in late fiscal 2021 into fiscal 2022. We also anticipate weakening of investment income given the current market dynamics.”
Officials also highlighted the challenge of funding the state’s plan for improving the public education system.
“On the spending side, the Kirwan mandate will increase the board of education’s 2022 board of education operating appropriation by $2.6 million,” Strausburg said. “That’s coinciding with the anticipated lessening of local income tax receipts. For those reasons, we are being conservative with spending and any utilization of reserves.”
On the revenue side, Strausburg said the county anticipates an increase in property tax revenue for the coming fiscal year.
“Without the revenue cap, our real property taxes would rise 2.65% in 2021 because of the increase in the real property base,” he said. “However, because of the revenue cap of 2%, that increase will be limited to $1,174,000, or $382,000 less than what would have been available otherwise. Our property tax rate for the current year we’re in is .9346 cents. We are proposing a revenue cap rate of .9284 for fiscal 2021.”
On the spending side, Strausburg said 80% of the county’s budget is earmarked for education, health and public safety. This year, for example, major expenses include $57.6 million for the board of education, $18 million for the department of corrections, $13 million for the sheriff’s office and $9.1 million for the roads division.
Strausburg also provided an explanation for the increase in this year’s spending plan, which is roughly $4.8 million more than last year’s budget.
“You will see here that our year over year proposed spending is going to increase somewhat, and that might strike you as a bit odd,” he said. “But the reason that’s increasing is because we are anticipating using a bit more of our savings account, our reserve fund, for one-time capital projects.”
Strausburg said new capital spending would be closely reviewed in the first quarter of 2021, but added that ongoing projects would continue.
“We are not going to make any firm commitments on new capital projects until we have a better understanding of the environment we are going to be in during the first quarter of 2021,” he said.
The coming year’s budget also proposes a 16.5% increase in health insurance premiums, a 6.34% increase in worker’s compensation and a 5% salary increase for eligible employees.
“The state minimum wage is increasing to a maximum of $15 an hour,” Strausburg said. “That is causing what is called wage scale compression, so we are attempting to address that wage scale compression through a 5% salary increase.”
During the public hearing, officials read questions and comments submitted by the public. Wicomico County resident Diane Raubenstine urged county officials to include the Mardela Middle and High School renovation and improvement project in the capital improvement plan.
“I understand we are certainly in uncertain times, but what better time than now to take advantage of all the opportunities Governor Hogan is making available along with his commitment to the allocation of funding for school construction,” she wrote. “The time for us to act is now.”
Superintendent Donna Hanlin also offered her support for the Mardela project.
“We look forward to continued collaboration with the county as we learn what the county considers an appropriate plan for Mardela,” she wrote. “The Board of Education and Wicomico County Public Schools remains committed to the building and maintaining of appropriate facilities to support optimal levels of student learning and safety.”
The Wicomico County Executive’s Office will continue to take comments from the public. To view the county’s budget presentation, visit www.wicomicocounty.org.