New Cecil County Budget Freezes Property, Income Tax Rates; Boosts School $, Sewer Fees

March 31, 2018

Cecil County Executive Alan McCarthy unveiled his new Fiscal 2019 budget plan on Friday (3/30/2018), freezing property and income tax rates at current levels, boosting school spending slightly, and calling for a major increase in sewage treatment fees in order to balance the wastewater fund.

The budget now goes to the County Council, which cannot increase spending but can make spending cuts or reduce proposed fees. The most controversial proposal in McCarthy’s budget will likely be a major boost in sewage fees, steps that the Council and its predecessor County Commissioners have resisted for years. That resistance persisted even as public works officials warned that costs, especially for state-mandated environmental upgrades, exceeded the revenues from fees paid by users of the services.

In unveiling his budget, McCarthy said that despite an improving local economy, with the recent addition of over 1,500 jobs and major new employers such as Amazon, TruAir, Fortress Steel and the forthcoming Lidl warehouse operation, the county is still feeling lingering effects of the sluggish state economy. The local unemployment rate is down, he said, but still higher than the state average.

There was “a total lack of economic growth in Cecil County” when he came into office, McCarthy said. But in the past year or so there has been “a half billion dollars in new investment” in the county and addition of 4 million square feet of commercial business space, he said.

McCarthy took a lot of heat last year by proposing a five-cent increase on the local property tax rate, with the result that the tax bill on a house assessed at $200,000 rose by $100. He also boosted the local “piggyback” income tax rate from 2.8 percent to 3 percent. Those steps produced the first fully balanced county budget in over two decades, with spending and revenues balanced without dipping into emergency reserve funds. Those tax rates will remain unchanged in McCarthy’s new budget for Fiscal 2019, which begins on 7/1/2018.

Spending on general county operations would total $195.3 million, a 3 percent increase over the current Fiscal 2018 budget year, or a $5.6 million spending rise. The county’s Capital Improvement Plan (capital budget), which covers major construction projects expected to have a life expectancy of 10 years or more, totals $32.2 million.

The capital budget includes the first year of construction work on the long-anticipated new library in North East ($7.6 million) and continuation of the multi-year “P25” project ($3.7 million) to upgrade and overhaul emergency communications systems covering law enforcement and emergency services. Capital projects also include continued work on the new Gilpin Manor Elementary School ($8.8 million) and roof replacement at Bohemia Manor middle/High School ($1.3 million.)

McCarthy said that departments and agencies sought spending increases of over $17 million, but revenues to the county are only projected to rise by $5 million so his administration had to make many “tough choices” to keep spending in line with available revenues. He said his budget’s overall 3 percent spending rise was close to the inflation rate and was necessary to cover rising costs of state “mandates,” such as requiring local counties to pick up the costs of teachers’ pensions and half the cost of local offices of the State Department of Assessments and Taxation.

As he did in his first budget last year, McCarthy continued to refuse to tap the “unassigned fund balance” or emergency reserve funds, unlike his predecessor as county executive who depleted the reserves that had been accumulated over many years.

That reserve fund stood at $15 million when Tari Moore took office as the first County Executive and dropped steadily after Moore sought up to $14 million in withdrawals from the account so as to boost spending while freezing tax rates for several years. Some County Council spending cuts, other cost savings and some accounting changes brought the account back up to about $6 million when she left office.

When he presented his first budget last year, McCarthy said the “pillaging” of the fund balance account must stop and vowed to end deficit-financing of operating costs with a “pay as you go” budget while also trying to replenish the reserve fund to safeguard against sudden costs of weather or disaster emergencies. County budget aides estimate that goal has partially been achieved, with a projected unassigned fund balance of $11.2 million forecast for when the current budget year ends on 6/30/2018.

In the new budget year, the largest county-funded program, Cecil County Public Schools (CCPS), sought a 5.2 percent increase, or $4.2 million more, in county appropriations for school operations. But McCarthy’s budget trims that request to a 1.5 percent rise, with an increase of $1.2 million, including budget transfer funds. McCarthy pointed out that his budget proposal of $82.4 million in county funds was still $1.8 million above the state-mandated “maintenance of effort” level of local aid.

That “MOE” mandate means that for every year that the schools get an increased allocation from the county, that level becomes the new “base” of funding that must be replicated in subsequent years. So the current Fiscal 2018 county allocation to the schools was a $1.1 million boost over the previous year, and the new budget would add another $1.2 million over that.

Cecil College would get a 3.2 percent boost, or $350,000, plus $1.2 million in capital budget funds for ongoing mechanical infrastructure improvements at the college.

The Cecil County Public Library would get a 4.5 percent increase in the new budget, or $243,200, to cover rising costs in library materials and other fees. The library would establish a $40,000 pilot program to open the Elkton library on Sunday afternoons during the school year, so that children can work on homework assignments and working adults can access Internet and other services at a more convenient time. No libraries in the county are now open on Sundays. During the current budget year, the library system also expanded services at the Cecilton branch, opening to patrons on Fridays, when in the past the branch was closed.

The county Parks capital budget is absorbing a more than $1 million cost for construction of an artificial turf field at Bohemia Manor High in Chesapeake City, after the first turf field was built last year at Perryville High at a similar cost. A recent agreement between the county and CCPS turns over funding and maintenance responsibility for school playing fields to the county in return for allowing non-school groups to use the fields, too.

The Cecil County Sheriff’s Office would get a 5.6 percent increase, or a $1.2 million boost, over the current budget. Much of the increase would go to support a new three-year collective bargaining agreement with deputies that would establish a new competitive pay scale based on years of service. Attrition has been a chronic problem at the agency, as more experienced law enforcement officers leave the county to accept higher paying jobs in other jurisdictions.

The new budget calls for hiring two additional paramedics, on top of the two additional paramedic slots approved in the current budget year. County officials said the long-range goal is to build up the paramedic staffing to the point that a fourth paramedic station could be opened in the future.

The budget also calls for hiring a cybersecurity expert in the county’s Information Technology department, after an outside expert said such a position was needed to bolster security; an additional animal care attendant at the county-owned and operated animal shelter; and a “recreation specialist” to work with youths in the Parks and Recreation programs.

The controversial sewage fee proposal would phase in over three years an increase from $10.32 to $15.70 per 1,000 gallons. McCarthy said the current shortfalls were “decades in the making” because fees had not kept pace with rising expenditures. In particular, the county had to upgrade the Seneca Point wastewater treatment plan in North East under state orders that, if not obeyed, could have resulted in millions of dollars in fines levied against the county for pollution of the North East River and tributaries.

After county lawmakers repeatedly refused to raise fees in the past, “fund balance” money was shifted into the wastewater “enterprise fund” to balance the books. But McCarthy wants to make county services pay for themselves without raiding fund balance accounts. “Enterprise funds” are supposed to be revenue neutral in the overall budget, with expenses paid by users of the services.

Sewer services have been a bone of contention recently as the county has sought to comply with a state requirement that properties using septic systems must hook into sewer services when they become available in their community. The county has offered financial assistance and long time periods before hook-ups would be required for a small number of residential properties in the growth corridor where sewage services have been expanded.

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One Response to New Cecil County Budget Freezes Property, Income Tax Rates; Boosts School $, Sewer Fees

  1. Vince Pfeiffer on April 2, 2018 at 11:49 am

    With county roads in such poor shape, county wide, one expects from their local jurisdiction having authority over such matters, to place a higher level of importance on our infrastucture. Looking at budget highlights, one does not see where road improvements or repairs, are listed or even considered. What am I missing? Our roads are awful county wide, and becoming more dangerous. We can delay spending on wishful projects, as having them is nice; but broken automobiles caused by bad roads are not. This is no idle statement, but one of fact.

    My taxes are already ridiculously high, as professing conservatives, this county authority seems to continually spend money we don’t, have for projects we can ill afford. When getting to work becomes impossible, because roads are impassable, we the county citizens will be hard pressed to even afford to pay you. FIX THE ROADS FIRST.

    This is not about political agendas, or finger pointing. You all represent us. Please consider acting like you do.

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