Cecil County Budget Warning: Casino $ to Decline, Schools Face Aid Cuts, Property Values Drop Could Prompt Tax Rate Boost

December 13, 2011

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:
http://ceciltimes.com/2011/05/cecil-county-commissioners-adopt-budget-3-2-moore-blasts-political-bs-mullin-says-gop-should-fight-in-private/ ]

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.)

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9 Responses to Cecil County Budget Warning: Casino $ to Decline, Schools Face Aid Cuts, Property Values Drop Could Prompt Tax Rate Boost

  1. Tidewater on December 14, 2011 at 3:15 pm

    Maintenance of effort and constant yield equal legalized stealing which guarantees government will continue to get bigger and bigger regardless who the people elect. Bigger government equals less freedom and these laws need to be ripped out of the law books immediately.

    The school board can and should reduce the amount of money they spend since there are less and less students year after year. We are going to go broke funding the fat pensions and benefits of school employees.

    The school board gets too much money for the product they produce. I hope the Commissioners can put some real cuts in the school budget since they really don’t need more money to work with less students.

    • Ed Burke on December 15, 2011 at 12:08 am

      Even though maintenance of effort is required by law, should we still reduce school spending? Constant yield is a simple formula: assessed value x proposed tax rate = $ yield. Why is that wrong?

      • Arley Meadows on January 15, 2012 at 5:28 pm

        Constant yield is not that simple. It is an excuse used by the commissioners to increase the property tax RATE when assessments go down and pretend that they are not increasing taxes because the new higher rate times the new lower assessment equals the same amount of tax as was paid by the property owner the previous year. But since they are charging the SAME TAX on a property that is WORTH LESS they are indeed INCREASING taxes. That is like putting 16 ounces of soda in a 20 ounce bottle, selling it for the 20 ounce price, and saying it is not a price increase.

  2. Marta on December 14, 2011 at 4:13 pm

    Tidewater, or is it Ted P,
    Check your grammar– fewer students, not “less and less students.” And the county budget is not (yet) funding teacher pensions, but your friend, Sen. Pipkin, wants to dump the cost on local, rural counties with limited tax bases. You think the county “school board gets too much money for the product they produce.” Uh, check the grammar again: should be “it produces.” So I guess that you are not a product of Cecil County schools, given your grammatical challenges.

  3. Tidewater on December 14, 2011 at 6:48 pm

    Hey Marta,

    Tanks fer curectig my grammer. Now how about getttin me a beer.

    • Joe on January 16, 2012 at 12:19 pm

      Tidewater, Do you want Natty Bo or Smipkin Dark Ale??

      • Alexis on January 17, 2012 at 8:20 am

        Smipkin Lite.

        • Joe on January 18, 2012 at 6:59 am

          Sorry Alexis,
          There is no such thing as lite on Smipkin Island, only dark and heavy!

  4. carol on January 19, 2012 at 4:48 pm

    To increase property taxes when so few have jobs is ridiculous. We don’t fund pension funds for the teachers and they deserve every dollar they earn. They work hard to teach these children how to function in the real world, so leave them alone.

    What we really need to do is cut government spending. How can they justify making the salary they earn, when they don’t really work for the people. They take care of themselves and could care less about the general population. We need to get rid of crooked politics and cut their salaries; after all, it’s the people that pay their salary and the only way to get them out is to vote them out. Our government needs to do away with a pension for one term senators and house reps. That money could go to the states for relief. I never thought that I would live long enough to see this great country sold out.

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