Cecil County Budget Warning: Casino $ to Decline, Schools Face Aid Cuts, Property Values Drop Could Prompt Tax Rate Boost
Local impact aid revenues from the Hollywood Casino in Perryville are likely to be lower than previously expected and Cecil County schools face new cuts in state aid in Fiscal 2013, the county’s budget director warned county Commissioners Tuesday.
Craig Whiteford, the budget director, outlined issues facing the county as Commissioners begin the budget process in the new year. The Fiscal 2013 budget year begins 7/1/12, but commissioners begin reviewing budget issues in earnest in February and the budget is usually adopted at the end of May.
Whiteford warned that lower property tax revenues, due to lower property values under state-rendered property assessments, means that just to keep the current “constant yield” of property tax revenues could mean a 2 ½ cent- increase in the current county tax rate. Constant yield means providing the same amount of overall property tax revenues to the county but if property values go down, it requires a higher tax rate for individual properties to generate the same amount of income as received in the previous budget year.
The current property tax rate is .9401 cents per $100 of assessed property value, a rate that is a half-cent below the “constant yield” figure for the current budget year. That figure, and the current Fiscal 2012 budget, came after a tug of war among the commissioners, with over $7.7 million in budget cuts and a last minute half-cent property tax rate cut by the current ruling majority of three commissioners on the five-member board. The current budget siphoned over $1.64 million from the county’s emergency reserves, or “fund balance,” to achieve the one-year tax breaks. [See past Cecil Times report here:
The upcoming budget will be affected by anticipated declines in local impact aid revenues from the Hollywood Casino in Perryville, which amounts to 5 percent of revenues, and that portion is shared 65 percent-35 percent by the county and the town of Perryville.
Whiteford said that two factors, apart from overall problems in the economy, are at play: the upcoming opening of the new casino at Arundel Mills in Anne Arundel County and a provision of state law that siphons revenues off-the-top for Baltimore City and Prince George’s County. The latter provision was buried in the enabling legislation and was not figured into revenue estimates last winter when the current budget was crafted, Whiteford said.
For the current fiscal year, Whiteford projected Cecil County would now receive a total of $2.96 million, while Perryville is estimated to get $1.59 million. Going forward, the opening of Arundel Mills could draw slots players away from Perryville, he warned. “It is trending somewhat downwards,” he commented.
“I predict that once the Arundel Mills Mall casino opens we’ll see a downward trend that is significant,” observed Commissioner Robert Hodge, (R-5). “Instead of paying the toll” on I-95 or the Hatem Bridge, slots players will go to Arundel Mills, he said, since “everyone wants to see the new place.” Cecil County should “downgrade our expectations” for revenues, Hodge said.
And in other bad budget news, Whiteford said the county public schools logged a 111 pupil decline in enrollment by a state deadline for such calculations, with the result that the state’s required “maintenance of effort” minimum for local school spending will drop by $485,000 over the current level.
County schools took a big hit in the current budget, and schools were the only county department that had to use layoffs of staff to cope with its reduced funding levels.
The county public schools are holding a public forum on Wednesday 12/14/11, at 6:30 PM at Elkton High, to discuss curricular changes as well as current and future budget issues and significant spending and staffing reductions already made to cope with the current budget problems.
Whiteford also pointed out to the Commissioners that county employees have not had a pay raise since Fiscal 2009—or three years. (In contrast, nearby Harford County employees are slated to get $1,250 bonuses this year under a proposal by County Executive David Craig.)