Cecil Co Council Rejects Budget, Walks Away from Spending Cuts; McCarthy Budget Heads to AutoPilot Adoption Via Charter

June 6, 2017

The Cecil County Council refused to adopt a Fiscal 2018 budget Tuesday night, voting 3-2 against the budget even after members adopted a package of over $422,000 in spending cuts. As a result, the budget originally proposed by County Executive Alan McCarthy appears headed for automatic adoption, without the spending cuts, under a Charter amendment approved by voters in 2014.

Unless the Council adopts a budget by June 15, the County Executive’s original budget becomes law. The Council has a scheduled worksession on Tuesday 6/13/2017 and an evening legislative session that night that would be the last opportunity to act on a budget before the deadline. But Council President Joyce Bowlsbey (R-2), said she would not schedule any meetings on the budget before the deadline, and if the three budget dissidents tried to meet on their own to hammer out a last-minute deal they could be in violation of the state’s Open Meetings law.

A surprised McCarthy commented after the Council meeting that he was “pleased” that his original budget appeared to be headed to de-facto adoption. “I think we will have a good budget that will serve the county, its residents and its economic future,” he said. McCarthy fought very hard for his budget, taking personal responsibility for tax increases he proposed and sending multiple letters and public messages to the Council during the budget process to defend his proposals.

The Council decision to walk away from the budget Tuesday night hinged on the “No” vote of Councilor George Patchell (R-4), who was The Quiet Man of this year’s budget deliberations—barely saying a word, offering no spending cuts of his own during two lengthy worksession on the budget, and not saying a word Tuesday night during a Council members’ comment period before the decisive vote was cast. He darted out a side door immediately after the meeting ended in a shocked buzz in the room and did not make himself available to the press or public for questions. Patchell’s Council term ends in 2018 and he has not yet announced if he is a candidate for re-election next year.

The only inkling of Patchell’s overall view of the budget came after it was first introduced on 4/1/2017, when he said that he would not support the budget as presented by the executive if he had to vote on it “today.” But the Council had labored for well over a month, listening to department heads explain their budget proposals and programs and then reviewing possible spending cuts that were primarily proposed by Councilor Jackie Gregory (R-5), a new Council member in her first budget review, and in part by veteran Councilor Dan Schneckenburger (R-3).

As expected, Gregory voted against final passage of the budget Tuesday night. Schneckenburger, who recently announced his plans to run for re-election to his Council seat in the 2018 election, was critical of McCarthy throughout the budget review worksessions, so his NO vote on the final budget passage was not entirely unexpected. (Schneckenburger ran against McCarthy last year for county executive in the GOP primary and lost overwhelmingly.)

Voting for the revised budget Tuesday night were Council President Joyce Bowlsbey (R-2), who had strongly supported the original budget proposal, and Councilor Bob Meffley (R-1), who had endorsed multiple proposed budget cuts during worksessions.

Meffley explained his final vote to support the Council-revised budget Tuesday night, saying, “I will take a chance on this budget.” He adding that he had spoken with many county residents “over their kitchen tables” and concluded that most residents felt the budget reflected the needs of the county now and to support investment in the future.

Under an amendment to the county Charter proposed by former County Executive Tari Moore and ratified by voters in 2014, if the County Council does not pass its own version of the budget by June 15, then the executive’s original budget proposal automatically becomes law. A package of four Charter amendments proposed by Moore and endorsed by voters shifted even more power to the County Executive than the original Charter enacted in 2010.

The budget deadline amendment set up a virtual political hammer, threatening that if the Council members cannot do their jobs and come to an agreement on a budget, the County Executive gets her/his way completely. But the deadline for Council action also guards against the potential local equivalent of a government shutdown—all too reminiscent of federal gridlock in Washington—under which there could be inadequate local funds to pay for essential services such as law enforcement if no budget was in place.

On Tuesday night before the critical “NO” majority vote on final passage of the operating budget, the Council approved 18 amendments to McCarthy’s proposed operating budget, ratifying decisions made in two informal Council worksessions on the budget, to cut $422,741— a slight boost over an earlier tentative calculation of Council spending cut decisions.

But those spending reductions were not enough to block the tax boosts proposed by McCarthy and had been expected to be applied to the county’s greatly depleted “unassigned fund balance” emergency reserves fund.

The county’s current property tax rate is 0.9914 per $100 of assessed property value and would rise to $1.0414 under McCarthy’s budget. For a home valued at $200,000, the 5-cent increase on the tax rate would add about $100 a year to the property tax bill. The property tax rate has essentially been frozen for the past four years.

The executive’s budget also provides for an increase in the local “piggyback” income tax rate from 2.8 percent to 3 percent. His budget plan would raise revenues by $5.2 million through property taxes and $2 million from income taxes. He also proposed a hike in the hotel room tax for transient guests of major hotel properties that would raise an extra $100,000 in annual revenues.

To prevent the tax increases from taking effect, the Council would have had to cut $7.3 million from the proposed budget. The Council only agreed on $422,741—a slight recalculation of the figure counted last week- in spending reductions, accepted the income tax rise, and ratified the hotel tax boost. The spending cuts were approved on a unanimous vote Tuesday night in a single package of 18 amendments. But all the Council’s labors were for naught when the majority of members voted down the revised budget Tuesday night.

From the outset of the budget process, which began on 4/1/2017 when he presented his budget proposal, McCarthy insisted that his budget was, for the first time in nearly two decades, a “pay-as-you go” budget that rejected the past county practices of deficit-funding current programs by depleting the county’s emergency reserve funds. Raids on the reserve funds were “not sustainable” and “the pillaging of reserve funds…must stop,” McCarthy said in introducing his budget. “The well will run dry,” especially as the state and federal governments have shifted costs to local governments, he added.

Despite its tax increases, McCarthy’s budget had drawn support from the Cecil Business Leaders (CBL) group and statements of support were circulated by the local Republican Club of Cecil County. Opposition to the budget was led by the local Campaign for Liberty group, which created an automated email program to send anti-budget emails to County Council members and also used the budget issue in an appeal for monetary donations to that organization.

During the council’s worksessions, Schneckenburger tried repeatedly, but failed, to shift several major spending items out of the operating budget into the long-term projects financed through bonds in the capital budget—including $288,000 for computers at Cecil College, $733,000 for asphalt overlay repairs to county roads, and $567,000 from a grant matching requirement for stormwater runoff mandated environmental projects. That gimmick was an attempt to shift the spending into long-term capital budget costs that are not counted in calculating the current property tax rate.
County officials pointed out that such tactics would violate the Charter and potentially cause problems with county bonds and bond ratings, since long-term capital projects are supposed to be only for improvements that would last more than 10 years. The computers at Cecil College would become obsolete and need new replacements even as county taxpayers were still paying them off and paying interest on long-term bonds under Schneckenburger’s proposals.

On the grant match question, county officials and Bowlsbey warned that such a device could jeopardize millions of dollars in grant aid for a short-term local budget gimmick, which Bowlsbey compared to “smoke and mirrors.”

At one point, Schneckenburger threatened that he was willing to shut down all asphalt resurfacing of county roads as a way to push his argument that such road repairs should be counted in the long-term capital budget. McCarthy held firm against that demand, as administration officials pointed out that the road repairs would not survive more than a few winters and did not meet the long-term improvements criteria for projects financed by capital bonds. Moreover, the county would have to pay interest costs to use bond funds to pay for projects that would be obsolete even while taxpayers were still paying for them.

During the Council’s worksessions on the budget, the most significant proposed spending cut was a more than $1 million slash of the Cecil County Public Schools (CCPS) budget advocated by Councilor Gregory, who wanted to “flat fund” CCPS at the current level—which in the current year was the bare minimum “maintenance of effort” level of county spending mandated by state law. She said that enrollment had declined so the schools would actually get a bit more in per-pupil support even if the total county aid level was frozen.

Schneckenburger declined to go along with her on that one, but he wanted to cut $191,000 from CCPS because Gov. Larry Hogan had come up with a late education aid package that had not been accounted for in the county budget. But his assertion was contradicted by Tom Kappra, the CCPS finance director, who told the Council that McCarthy was aware of the Hogan plan—which was subsequently reduced to $183,000 for Cecil County– and the executive had taken it into account when he decided to cut over $2 million from the CCPS spending request. (Gregory’s proposal was rejected, 4-1, by the Council and Schneckenburger’s cut was also turned down, 3-2, with Councilors Bowlsbey, George Patchell (R-4), and Bob Meffley (R-1) voting no.)

Even after he scaled back the CCPS budget request by $2 million, McCarthy’s budget provided $1.7 million above the state-mandated minimum for spending at the “maintenance of effort” level. Total county support for CCPS operations in Fiscal 2018 is $81.6 million—the largest single spending item in the total county budget.

In past budget years, the Cecil County Sheriff’s Office had been subjected to many significant last-minute spending cuts and two uniformed senior members of that office nervously sat in the front row of Tuesday night’s Council session, providing a physical presence just in case anyone tried to sneak in a last-minute cops cut. No one did.

In worksessions, a brief discussion of a Gregory proposal for delaying the hiring of three new deputies for six months went nowher. The new budget will permit hiring a deputy to provide security at the county administration building; an additional deputy to monitor registered sex offenders; and to add a deputy to the street-level crime unit. In addition, the budget provides for expanding a pilot program to use electronic home monitoring of some community corrections offenders, instead of housing them at the detention center at a much higher cost.

For emergency services, the new budget will support the hiring of two additional 911 dispatchers and two additional paramedics to be deployed throughout the county at the advanced life support ambulance stations operated by the county government.

For the county’s volunteer fire companies that provide fire-fighting and basic life support ambulance services, the county budget will provide a total of $325,000 in matching funds for vehicle replacements. Ambulance grants of $100,000 each were awarded to Perryville, North East and Singerly companies while the Water Witch company in Port Deposit will get $25,000 toward purchase of a new tanker.

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One Response to Cecil Co Council Rejects Budget, Walks Away from Spending Cuts; McCarthy Budget Heads to AutoPilot Adoption Via Charter

  1. Mr Falcon on June 7, 2017 at 11:17 am

    Knowing that a budget not passed by the council would go right back to the original by the exec makes you wonder why they couldn’t agree on just a little common sense. But, oh I forgot we are dealing with politicians. But that is okay, at least the schools got their $81+ million. Hope they can survive without the extra $2 mill.

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