Still following the wake of a revenue shortfall from last fiscal year, Montgomery County Executive Marc Elrich released his savings plan last week.
The savings plan details a proposed $45.6 million in budget cuts to county agencies across the board, with the largest cut coming to Montgomery County Public Schools; $25 million in proposed cuts.
Elrich said the proposed cuts are necessary, given a revenue shortfall in the last fiscal year, when county officials incorrectly estimated the level of county income-tax revenue – blaming it on tax cuts Congress passed in late-2017, causing wealthy Montgomery County residents to file early to take advantage of.
In December, the newly elected Elrich warned that budget cuts were coming, directing all county agencies to propose 1.5 percent in cuts to their departments. While he admitted he regrets to begin his first term as county executive with sweeping budget cuts, he said they are necessary if the county wants to remain in good fiscal order.
“We pretty much hit the ground running,” Elrich said. “My second day I was told that I have a $50-million gap to fill, so we promptly went about trying to make sure we can find savings.”
Elrich said that his proposed cuts to the current budget, are not actually cuts but rather “savings,” saying that reductions in spending are from budget surpluses. He cited the $25-million reduction from MCPS’s budget as leftover money from the school system, which it planned to carry over to its next fiscal budget.
“This is normal; we just got this information early enough that we can make plans,” Elrich said.
Specifically , Elrich is proposing a $16.8-million cut to county department agencies, a $2.8-million cut to Montgomery College, a $1.8-million cut to Maryland-National Park Capital Park and Planning Commission and a $100,204 cut to the Housing Opportunities Commission.
Elrich said his staff is working on a savings plan for the capital budget, which likely will also include significant cuts for county projects.
However, the budget cuts will need to be approved by the county Council before they will take affect. As the legislative branch of the county, the Council has authority over how all revenue is spent. New Council President Nancy Navarro scheduled works session on the plan this week, where council members got their first opportunity to take a crack at the proposed cuts from the county executive.
“We need to take a hard look at expenses now, to prepare for next year’s budget, and to make sure that we are on track to reach our fiscal plan targets, which help the county maintain its triple-A bond rating,” Navarro said in a statement. “My main concerns continue to be that we maintain our essential services, such as public safety, education and programs that aid our most-vulnerable residents, while making strategic investments in economic development.”
Last year, County Executive Ike Leggett quickly proposed a $53-million savings after county finance officials warned him of a pending $120-million revenue shortfall. Still feeling the strains of the shortfall, Elrich has had to take steps in the first weeks of his term as County Executive to make large cuts to the county’s budget.
In last year’s fiscal plan, MCPS was also asked to cut $25 million, which, according to county staff, it was unable to do without hurting its operations.