It’s been interesting to observe local governments work through their budget review processes this month.
Though each is different with their specifics, most governments are working with a reduction in revenues associated with the pandemic coupled with decreases in expenses, also a result of reduced operations due to restrictions from COVID-19.
Worcester County government and Ocean City are each proposing keeping their respective property tax rates the same as last year. Maintaining the constant tax rate will still bring in more money for the governments as a result of increasing property values. In Berlin, a small property tax increase is likely with the town also benefiting from higher property valuations.
Throughout budget talks, the elephant in the room has been the impact of the federal government’s American Rescue Plan. Governments across the country will soon be getting an influx of funding from the federal government as part of the COVID-19 relief measures. It’s unclear how much specifically and when it will arrive. It’s such a mystery there are no budget ramifications.
While funding will be welcomed, like the $10 million proposed for Worcester County and the $5.8 million for Ocean City, the problem is the timing and what mandates will come with the allocations. During local budget discussions this month, there have been several references to federal aid coming to municipalities and counties. Since the dollar amounts fluctuate depending on the source and unclear rules on how the money must be spent, governments are not including them in their budget as a line item.
In the case of small towns like Berlin, which is slated to receive about $4 million, any new funding will carry significant weight, especially when line items, like cellphone allowances, are evaluated extensively.
Local school systems are also in line for serious funding. For example, Worcester County Public Schools received a $1 million grant through the state’s Coronavirus Response and Relief Supplementary Appropriations Act. The grant was a result of the school system specifically outlining unique ways to reach students who have been negatively impacted by the pandemic. The school system is using the funding to purchase two 31-foot customized recreational vehicles for teachers to bring mobile classrooms into neighborhoods in the south-end of the county.
These funding allocations are all positives, but the mysterious nature behind when they will be distributed and what they can be spent on is a constant source of anxiety for budget decision makers. Only time will tell how it will all play out, but the questions do little to help with ongoing budget deliberations.
