Harford County Executive David Craig says he is expecting a difficult budget year ahead, and for the coming years, with only a small increase in revenue anticipated and the potential for the loss of hundreds of jobs at Aberdeen Proving Ground, the county's largest employer.
During a media briefing Tuesday afternoon, Craig presented his proposed $734.9 million combined operating and capital budget for the 2014-15 fiscal year, one that doesn't contain a tax increase and calls for a sharp reduction in capital spending and a minimal increase in spending for the local school system. The new budget was due to be introduced to the Harford County Council Tuesday evening.
Craig noted federal officials anticipate a loss of about 3,000 jobs at APG and Fort George G. Meade in Anne Arundel County with shrinking Defense Department budgets and a decrease in the size of the military.
"That would be a huge decrease in our income tax and probably more foreclosures and issues like that," he said during the briefing. "That's not a set thing, but we just want to be prepared for that."
The new budget includes $627 million for operations, a $13.4 million reduction from the current budget, and $107.9 million for capital expenses, a $66.1 million reduction. The combined budget for the 2013-14 fiscal year is $814.5 million, including $640.4 operating and $174.1 capital.
Craig and Treasurer Kathryn Hewitt stressed only small increases are projected in revenue from property and income taxes, the largest sources of revenue for the county.
The county anticipates receiving a slight increase in property tax revenue, less than 1 percent, while income tax revenue is projected to increase 4.3 percent.
"We finally are seeing the bottom to the property tax decreases and assessed values and we're starting to see them come up but they are increasing very slowly," Hewitt said.
She said income tax revenue is also increasing as the unemployment rate decreases.
Harford's property tax rates are $1.04.2 per $100 of assessed value for all properties outside the municipalities of Aberdeen, Bel Air and Havre de Grace. The rate for municipal properties is 89.6 cents per $100 of assessed value. The 14.6-cent difference is a dedicated tax to fund highway operations outside the municipalities.
The county's local income tax rate is 3.06 percent.
Hewitt and Craig noted the allocation from the county's fund balance, essentially its savings account built up with unspent revenue, will decrease from about $22 million for FY14 to $1.8 million for FY15.
"We're actually seeing a reduction in revenue by over 10 and a half million dollars," Craig said.
Few spending increases
Craig, a Republican, is seeking his party's nomination for governor. The budget he presented Tuesday is his ninth, a county record. He is term limited from running again for county executive.
The county executive said the county's funding for Harford Community College and volunteer fire companies will be "flat," and that total spending on general operations will decrease by 1.8 percent, or $8.9 million.
County employees, including sheriff's personnel and library system employees, won't be getting any raises in the new budget.
Spending will decrease in many areas of the general operating budget, including the county executive's office.
At least four areas will see increases in spending, including the county schools ($2.3 million), the human resources department ($1.1 million), information technology (about $600,000) and the Sheriff's Office (more than $162,000).
Craig noted the human resources increase is unusual, but necessary because 2014 is his last year as county executive, and the incoming executive could face a wave of employee retirements, resignations and terminations and the added expense of "payouts" for pensions, health care and accumulated leave.
He said the new executive would not be left with any "structural problems."
"If we had thrown in a 4 percent pay increase so we'd be loved and elected the next guy would have had a big problem," Craig remarked.
He said the potential payouts for departing employees, if a new sheriff is elected this year, could be covered by the increased funding for the Sheriff's Office, which he said is for general operations.
The increase in technology funding is to cover the county's new broadband Internet network, known as HMAN, or Harford Metro Area Network.
In the capital budget, $64 million will be spent for school projects, $27 million for public safety, $15 million for the community college, $13 million on highway projects and $6.8 million on parks and recreation projects.
State actions impact schools
Craig said the $2.3 million increase for the public school system includes $1.9 million for teacher salaries to mitigate cutbacks in state funding and $467,000 for a state-mandated increase in the county's contributions to teacher funding.
In all, Craig is proposing to give $223.7 million to the school system, considerably less than the $253.3 million school officials requested, which was almost a $32 million increase over this year's budget. He had warned earlier that the school system's request was out of line with what the county could provide.
"I know it's a lot short of what they asked for, but they're one of the only ones to get more," he said.
Craig said the increase in school funding was based on "how much the state had underfunded" the school system.
He also took to task Ryan Burbey, head of the Harford County Education Association, the local teachers union, for pushing for increased county funding for schools but not putting equal pressure on the state.
"If they had true guts they'd be fighting the state," Craig said of teachers' union officials. "[Asking] 'How come you're doing this to us; why aren't you helping us?' but no, they just want to blame us because they can get voices up here."
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The county executive, a former teacher and assistant principal, took an additional shot at Burbey, saying: "He's too lazy to go Annapolis and fight the fight, and he's too unintelligent to go to Annapolis and fight the fight and he's too fraudulent to go down there and talk about it. It's all about him, and I'll be very honest, he's a socialist; he is not a true teacher."