Anne Arundel County Executive John R. Leopold unveiled Friday his proposed budget for the next fiscal year at a time of slumping revenue and rising costs, calling for the first layoffs in nearly 20 years, 12 employee furlough days, a property tax increase and higher school spending to abide by state law.
The $1.2 billion budget for county and school operations would boost spending 1.5 percent while closing a nearly $80 million gap between expenses and revenue through cuts and the tax increase. The plan would cut 35 employee positions that are vacant and 14 that are now filled, but Leopold and budget officer John R. Hammond said the county would make every effort to find new jobs for those 14 people in county government, where about 4,100 people work.
"It's highly unlikely anyone will lose his or her job by the end of the fiscal year," Leopold, a Republican serving his second term, said in an interview before presenting the budget to the seven-member County Council at the Arundel Center in Annapolis. He said "the depth of this recession has made this the most difficult and the most challenging" of the five budgets he has presented since taking office in 2006.
Like many other Maryland counties, Anne Arundel's financial fortunes have followed the recession, as revenue from real estate transfer and recordation taxes, income taxes and state aid for road repairs and other activities have fallen.
Hammond said the 14 occupied positions are "spread out through county government" at different levels of the bureaucracy in six or seven departments. The last time the county laid off employees was in the milder recession of 1992, Hammond said, the same year voters approved an annual cap on property tax revenue increases.
The proposal would make the 2012 fiscal year the second straight in which the county has furloughed for 12 days all county and library employees, amounting to a 4.6 percent pay cut. Public safety, public school and community college employees are not included in the furlough. Police and firefighters will be given an equivalent cut in pay, however.
Mike Akers, president of Local 582 of the American Federation of State, County and Municipal Employees, which represents about 750 employees in nine departments, said the budget is about what he had expected, given economic conditions. In his 25 years in county government, he said this is "the worst we've ever had."
He said the executive and council "share the same frustrations we do. The money's just not there."
Skip Auld, Anne Arundel County library's administrator, said the proposal is not as bad as it could have been for his department. Under the proposal, the department would have its materials budget restored to where it was before a 33 percent cut two years ago, and the 15 library branches won't have to change their hours.
The proposal would maintain the "core functions" of the county's 24 agencies, Leopold said, and a few programs would get more money. Those include school nurses, police officers for middle schools and Sarah's House, a shelter and transitional housing program for homeless people.
On Friday, Leopold also presented a $311 million capital budget, including money for an array of new construction and renovation projects for schools, police, fire, Anne Arundel Community College and the Jennifer Road Detention Center.
Leopold said the proposals hinge on the council agreeing to raise the property tax 3 cents, to 91 cents per $100 of assessed value. That translates to $30 more on annual bills per $100,000 of property value.
Leopold was quick to note that the county's property tax rate with the increase would still be lower than it was when he took office, and the combined property and income tax burden is the lowest of the seven jurisdictions in the Baltimore-Washington area. The proposed increase in property tax revenue would not exceed the voter-approved cap.
The council can cut the proposal but not add to it, and now has until the end of May to adopt a budget. If members reject the tax increase entirely, council members would have to find about $20 million in cuts, Leopold said.
Much of the $17.9 million increase in the operating budget comes in rising costs over which the county has no control, Leopold said. That includes pensions, health insurance, administrative expenses for the Maryland Department of Assessments and Taxation required by a new state law and "maintenance of effort" school spending required by state law.
It will cost the county roughly $6 million more to sustain per-pupil spending at the 2011 level, as the law requires.
In late March, Leopold had applied to the Maryland State Department of Education for a waiver from "maintenance of effort," but said he recently withdrew the application. He said the county is fulfilling its obligation under the law, but county schools spokesman Bob Mosier said his department disagrees.
Mosier said the county for the first time included debt service on school construction projects as part of the operating budget, and counted that sum toward "maintenance of effort." He said his department and the executive differ on interpretation of an Maryland attorney general's opinion on this accounting move, and this will have to be decided by state education officials.
Leopold's buudget proposal cuts the county's 24 department budgets as much as 12 percent, with the Department of Aging taking a 10 percent hit and Recreation and Parks falling 5 percent. Hammond said the cuts are mostly in employees.