Cecil County Exec Moore Unveils Budget with Tax Freeze, Sheriff Staff Boost, Increase for Schools; Budget Magic Relies on $4 Million Hit on Reserve Fund

There were smiles in the room as Moore discussed her budget at a 3/1/13 afternoon press conference in Elkton attended by county law enforcement and school officials. They didn’t get everything they wanted, but there was much more joy than pain, unlike budget deliberations in the past few years under the former County Commissioners form of government.

One difficult choice in the package was Moore’s decision to insist on substantial increases in sewer usage fees paid by customers of the county-operated sewage treatment plants—a decision rejected in recent years by a majority of the Commissioners. Multiple consultant reports have warned that fees were too low to cover costs and that countywide taxpayers who were not served by the plants were being forced to pay tax dollars to subsidize residents who received such services. Moore’s budget proposal would phase in sewer fee increases over several years.

Overall, it was a feel good, something for almost everyone budget, financed in large measure by the largest hit in recent years, or ever, on the county’s “fund balance” or reserves accumulated over the years as a cushion for declining revenues or unforeseen emergencies. Moore’s budget would tap those reserve funds for $4 million, a significant boost from the current budget year’s allocation of just $612,000 from that account.

While a county commissioner, Moore voted against the Fiscal 2012 budget due to a $1.6 million draw from the “fund balance” and she fought successfully last year to scale back an initial $3 million proposed hit on the fund to just $612,000.

“We needed to be responsible,” Moore told Cecil Times last year, and avoid relying too much on the reserve account. “We don’t know what’s coming in the future” and the county faced “a lot of unknowns” as it transitions to Charter government, she added.

Asked Friday what had changed to make her willing to tap $4 million from those reserves in the new budget, Moore said her vote against the Fiscal 2012 budget was “not about the principle, but the way it was done.” In that budget, the then-ruling Three Amigos majority of the Commissioners pushed through a last-minute draw on the reserves to finance a so-called “Happy Meal” cut of a half-cent on the proposed property tax rate. At the time, Moore lashed out at then-Commissioners’ President James Mullin (R-1) for advancing a plan that was “foolish and irresponsible” to hit the reserve funds for short-term “political” gain.

On Friday, Moore said that at the close of the financial books on the FY 12 budget year last June 30, there was a larger than expected infusion of income tax and other revenues to the county, boosting reserves by about $9 million. She said that her decision to dip into the reserve account for the new FY 14 budget amounted to “less than half” of the windfall.

County Budget Manager Craig Whiteford said later that even after tapping the “fund balance” reserve account for Moore’s new budget, there would still be a cushion of more than $15 million in the fund.

Under Moore’s new budget proposal, the county property tax rate would be frozen at the current .9907 level, despite declining property values and ensuing drops in property tax revenues at that tax rate. (Assessed property values in the county are projected to decline in calendar year 2013 by 10.3 percent.)

The County’s new Director of Finance, Winston Robinson, said that the freeze on the tax rate was designed to give all taxpayers a break under the state’s staggered system of property value re-assessments. (One-third of the county is re-assessed each year, and it takes three years before the whole county is re-assessed by the state.)

Robinson noted that while two-thirds of properties had seen their values and assessments for tax purposes decline in recent years, some residents who had not yet been reassessed by the state could have faced a higher local tax bill if the local rate were not frozen.

“This is a cushion; this is not a permanent change,” Robinson said. So if property values rise in the future, homeowners could see their overall tax bill rise again.

Moore said that her budget “overcomes challenges and creates a foundation for our future.” She said it was her goal from the outset of the very compressed timetable to develop a budget under the new Charter government system to produce a budget that “reflects a balanced approach to meeting the many challenges that we face.”

Meanwhile, Sheriff Barry Janney, who is elected independently and is considered a state official but still must ask the county government for budget funds, was all smiles on Friday as Moore announced that she had granted his budget request for addition of five new Deputies to the law enforcement force. Moore also said that she had granted Janney’s request for $20,000 for new computer software to upgrade controls and tracking of DNA samples and evidence in the department’s property/evidence room.

However, Moore’s budget did not include some requested additions for the corrections/detention center component of the Sheriff’s budget request, including vehicles. It was unclear whether Janney would be able to re-instate a popular roadside trash pickup program using “trustee” inmates that he was forced to curtail due to past budget reductions.

[SEE detailed CECIL TIMES report on Sheriff Janney’s budget request and priorities here: http://ceciltimes.com/2013/02/cecil-county-sheriff-janney-asks-5-new-deputies-in-budget-moore-decision-due-friday/ ]

Moore also announced that she had approved a request to hire two additional paramedics. County Emergency Services Director Richard Brooks told Cecil Times that he had not yet decided where or how those additional paramedics would be deployed. The county operates, with paid county employees, three paramedic stations, in Elkton, Colora and Chesapeake City. Volunteer fire companies operate “basic life support” ambulance services throughout the county.

For the Cecil County Public Schools (CCPS), the new budget proposal was not a home run but it was at least a double.

Two years ago, the schools were cut back to the most basic state-mandated level of financial support from the county and as a result, the schools were the only entity in county government forced to lay-off staff. Last year, the schools fared somewhat better, getting a ‘flat funding’ allocation of the same amount as the previous year despite a decline in student enrollment.

For the new budget, a continuing decline in enrollment meant the schools faced a cut of $1.1 million in state aid and the county could have slashed its support as well. Instead, the new Moore budget provides a 3.8 percent increase to the schools over last year’s county allocation—and $3.7 million above the state-mandated bare minimum level of county aid. However, the county budget also reflects a $3.1 million mandated cost shift from the state to the county for teacher pension expenses that were previously paid by the state. The state first began the cost-shift to the counties last year and it will continue in rising increments in the future.

Programmatically, the new budget will support expansion of the pre-kindergarten program that Moore said “provides critical early identification for at-risk children, which significantly increases their chance for success in school.”

Various school maintenance and repair programs were also supported in the new budget, as well as the second year of planning activities for the long-delayed and much needed Perryville elementary school renovation project.

Moore’s budget now goes to the new County Council, which has limited powers under the new Charter form of government. The Council may cut proposed spending but may not reallocate or increase spending in various areas.

One key question will be the reception Moore’s budget gets from the Council for its reliance on tapping $4 million from the “fund balance” reserve funds. Council President Robert Hodge (R-5) was more willing in the past than Moore to tap those funds. But it is unclear how Councilor Diana Broomell (R-4)– who was willing to tap the reserves for tax cuts in the past—will respond to a much larger hit on the reserves for Moore’s budget. New Council members Alan McCarthy (R-1) and Joyce Bowlsbey (R-2) are in their first budget review on the Council.