The darkening economy is cutting into Howard County's revenue projections, producing what county officials now see as a potential $5 million shortfall that could grow larger by the end of this fiscal year June 30.
County Budget Director Raymond S. Wacks has told the County Council that sharp drops in projected revenues from development-related activity and investment income have pushed his estimates of a fiscal year-end shortfall. The projection has risen from an estimate of $1.8 million calculated in October to just less than $5 million based on figures from the end of December.
"I don't think anyone projected this kind of drop-off," Wacks said, referring to the stock market crash followed by steep job losses and reductions in consumer spending.
Still, the county is prepared to handle an increased shortfall, Wacks said, as County Executive Ken Ulman has set aside enough money and held open enough jobs to produce $10 million to $15 million in savings.
"We anticipate finishing the year with a balanced budget," Wacks told the five-member council Monday.
But he also warned of an expected drop in income tax collections. If that expectation comes to pass, the revenue outlook could get worse. At the same time, a federal stimulus package could improve the picture.