Howard County could see a slight revenue shortfall this fiscal year instead of the $12 million surplus predicted a year ago, but the worst news may yet be coming, officials say.
With state budget cuts looming amid a struggling economy, county budget director Raymond S. Wacks described an uncertain revenue picture to the County Council in a briefing this week.
"It's been a roller coaster of a summer," Wacks said. "Who knows how many more bumps in the road are facing us?"
Wacks spoke to the council Tuesday morning - its last meeting in the George Howard Building before renovations prompt relocation to rented space in a Columbia office building.
For the current fiscal year, which ends next June 30, the county is expected to be close to the "break-even point," Wacks said. The county is facing a potential $1.8 million revenue shortfall out of an $850 million locally funded budget, though the final outcome is still uncertain.
Property tax revenues are $10 million higher than expected so far this fiscal year, Wacks said, but real estate and income tax revenues are lower than predicted.
"We obviously are not satisfied," he said.
To prepare, County Executive Ken Ulman is holding back $6 million in capital budget cash and is holding open 24 jobs, a move that would save $1.7 million. He's also asked department heads to slow spending where possible, and Wacks said he's talking to school officials about doing the same. No unpaid employee furloughs are under consideration, Wacks said.
In addition, the county has $10 million of the fiscal 2007 surplus that was to go toward a payment for future retiree health care costs that could be used to balance the budget in a pinch. Officials are still calculating the revenues from fiscal 2008 that ended June 30, but Wacks said $5 million or more should be left unspent.
"We are trying to walk a narrow line between cutting back on spending that will not have a dramatic impact on services," Wacks said.
The big unknown involves income tax revenues.
Wacks said he has halved the county's projection from last spring, when the current budget was crafted, from 4 percent growth to 2 percent. Still, he won't get updated collection figures from the state until late November, he said.
In addition, state cuts to schools and community colleges could cost an additional $2.8 million.
During the briefing, council Chairman Courtney Watson, an Ellicott City Democrat, said her father, former County Executive Edward Cochran, told her that he has strong faith in Wacks' ability to steer a prudent course. But both she and Republican Greg Fox said they'd feel better if Ulman made more cuts now, rather than using money designated for retiree health benefits or waiting for more bad news.
"I'm always looking at worst-case scenarios," Watson said. "We haven't seen 80 percent of what's going to hit us. Should we be taking more aggressive steps?"
Wacks responded that the administration already has made reductions, including cutting the use of take-home vehicles by county employees.
"We were concerned," he said. "We did take steps."
Fox questioned Ulman's hiring of a new Annapolis lobbyist and his use of county police officers as drivers/bodyguards.
"Could this be the time for the county executive to drop the protection officers and drive his hybrid to work?" Fox asked.
Wacks replied that there are pros and cons to every move. Ulman often has one officer in a county police car drive him. At other times, he drives himself in a county-owned Ford Escape SUV Hybrid. Executives in several Maryland counties have police drivers who also provide security, though the practice is new with Ulman in Howard County.
"I think this is a scary situation for all of us," Wacks said. "It could get even worse."
Wacks said property assessments may decline in the one-third of the county covering Elkridge and parts of east Columbia. The state will reassess for next fiscal year, but years of previous growth in values should keep property tax revenues growing for a time. Builders are postponing projects, however, he said, and if conditions worsen, so could the revenue picture.
"It's clear to most people we're heading into a deep recession," Wacks said.