WASHINGTON – The struggling economy and budget cuts on the federal and state level have left nearly 72 percent of the nation’s counties strapped for cash, according to a report released Thursday by the National Association of Counties.
That problem has trickled down to Maryland as well, where counties that participated in the study said they face problems ranging from lower-than- expected income tax collections, an increase in health costs and stock market uncertainty.
“We raised income taxes two years ago, and we’re not going to do that again, and are in no position to increase property taxes,” said Cecil County Budget Manager Craig Whiteford.
Cecil County income tax projections are $2 million below estimates and health insurance costs are up 17 percent in the last year, said Whiteford, adding that the county may raise licensing fees and trim some services to make ends meet.
In Washington County, where state funds that help pay for roads and bridges were cut by 43 percent, the cost of snow removal has pushed the roads department $600,000 over budget.
“We are not having any problems getting the snow off the roads, but the money is slowly going away,” said Norman Basset, county spokesman. “I’ve been telling folks to love their local potholes — it’s going to be awhile.”
He said that it could take his county two to three years to recover. For a county that devotes 68 percent of its budget to education, Washington is looking at some programs that might be cut.
“I’m all for slot machines if it gives more money for schools, and I’m not running for office,” Bassett said. “Any revenue stream that we find out there, would be positive for this county.”
Montgomery County faces an estimated $330 million gap between revenues and expenses for fiscal 2004, said county Finance Director Timothy Firestine. He said the county is looking to “share the pain” between tax increases, services reductions and “employees taking a reduction in what they are expecting.”
Nine Maryland counties responded to the survey: Carroll, Cecil, Dorchester, Frederick, Montgomery, Queen Anne’s, Washington, Wicomico and Worcester. Some were facing shortfalls for fiscal 2003, but all said they expected even tougher times in fiscal 2004 because of likely General Assembly budget cuts.
Queen Anne’s County is on budget for this year, but “next year remains a mystery,” said Joe Zimmerman, finance director.
Worcester County, too, is OK for now, said Gerald Mason, a Worcester County administrator.
“We have assessed property values that are moving up and we have people moving in” to the ocean resort county, Mason said. He added that there is financial pressure on infrastructure, schools and public safety, but the county is managing to deal with it.
Income taxes and healthcare costs also have Dorchester County concerned as it examines options for next year’s budget, said Michael Spears, the county’s director of finance. “Right now what we have facing us an estimated $500,000 in income shortfall that will continue into next year,” Spears said.
The national association’s report surveyed the financial status of 715 of the 3,066 counties in the country. Of the 72 percent of counties that said they are facing budget shortfalls, 25 percent said they plan to cut health services. Of the 56 percent that are threatened with reductions in state funding for mandated programs, 37 percent said they will likely reduce services as a result.
“America’s counties are facing difficult decisions,” said association President Ken Mayfield.
He said the association is not asking the federal government to “bail out counties,” but to “cushion the blow for counties.”
“By being forced to consider increasing taxes, in order to provide essential services to the American people, countries are stuck in a no-win situation. They need help because the demand for services continues to rise,” Mayfield said.
“The federal government can provide that help and ease the strain on local property taxpayers,” he said.