With businesses having closed their doors and unemployment rising due to the coronavirus, Carroll County’s budget director’s latest prediction is that the county will lose millions of dollars per month in revenue if trends continue.
Ted Zaleski, director of management and budget, met remotely via video stream with the Board of County Commissioners on Tuesday afternoon in a budget work session. The commissioners are tasked with balancing a fiscal year 2021 budget and a five-year operating plan amid a pandemic that has led to Gov. Larry Hogan issuing a stay-at-home order for all Marylanders and ordering the closure of nonessential businesses.
Budget concerns are not limited to the future, though. Zaleski painted a bleak picture for the end of the current fiscal year.
Zaleski spent part of the day April 3 on a call with the head of the state Board of Revenue Estimates, which performs revenue projections at the state level. At least one startling prediction emerged from that discussion.
“We (the county budget office) believe that as long as we remain in this shutdown period, we could be losing something like $4 million a month of revenue,” Zaleski told the commissioners. “I don’t want you to think that I know that number … but I think that’s a reasonable estimate of the kind of impact that we might be facing.”
If closures continue through June, the end of the fiscal year, Zaleski projects revenues will be more than $15 million under budget. He also expects about $8 million to go unspent this year.
“Unemployment claims continue to climb rapidly,” he said, in turn affecting income tax revenues.
Even after the pandemic subsides, Zaleski questions whether all businesses will reopen or if people who lost their jobs will get them back.
All of this will influence the county’s income tax revenue, he said, its second largest source of revenue.
Zaleski suggested the commissioners give “serious consideration” to adopting a fiscal year 2021 budget that is smaller than the current budget. The county’s fiscal year 2020 operating budget is just over $418 million.
“The longer this goes on, the greater the risk to the ’21 budget, whatever we adopt,” Zaleski said.
At the board’s previous budget work session on April 2, the commissioners voted to raise a number of fees to bring additional revenue to the county.
On Tuesday, the commissioners debated how to go about cutting costs in the fiscal year 2021 budget.
Several ideas were floated, including reducing recycling to meet the bare minimum requirement, going back on a decision to lengthen Carroll Transit hours, making a percentage cut to funding across the board, reducing money for agricultural preservation, and allocating less money to the Department of Economic Development for infrastructure.
Commissioner Richard Weaver, R-District 2, asked the budget staff to develop a list of services the county chooses to provide but is not mandated to offer.
“If we’re trying to cut places in the budget we have to look at all the items and then make decisions,” Weaver said.
Commissioner Stephen Wantz, R-District 1, said the board tried this approach about four years ago and could not agree on which services to cut.
“If you’re going to slice and dice, then you all better be prepared to slice and dice it all,” Wantz said. “I’m not going to pick winners and losers here.”
The next budget meeting is scheduled for April 9 at 9 a.m.