FY25 Preliminary Budget Progress
It’s budget season here in Allegany County, and our staff has been hard at work to deliver a balanced budget for the upcoming fiscal year. Year to year, there are many outside factors that affect a budget, some within our influence and some beyond. This year, due to a myriad of reasons, we are facing a $13 million budget deficit. (More on that later, if you are interested.)
At first glance, that number may seem alarming, but the good news is that we are planning for the future to prevent overspending. While we may have to make some tough decisions now, it's all part of maintaining our commitment to fiscal responsibility. This deficit means that our projected expenditures for the upcoming year are $13 million higher than our projected income. (Projected expenditures reflect the “wish list” requests from all departments that our General Fund serves, along with their operating costs.) Just like budgeting at home, this means we have to make some changes. We have to save some money where we can, delay some plans, and maybe even find ways to increase revenue to offset the difference.
The County Finance team, Department Heads, and the Commissioners have been hard at work to make these changes. While still working through them, they have made several suggestions that have significantly decreased the $13 million gap. Several iterations of the budget have already occurred, with a few more to come. The next draft will be publicly presented at the Commissioners Business Meeting on May 16th. The plan is then to present the final budget for approval at the May 30th Meeting.
Here is a summary of the changes suggested (and agreed upon) so far:
Pass Credit Card Fees on to Customers: The County has been paying the processing fees for citizens who used credit cards to pay utility or tax bills. By passing it on, this will account for about $500,000 in new revenue for the budget.
Removing ALL Capital Outlay Requests: Any new, large capital projects requested for the upcoming year have been put on hold. This decreases the projected expenditures by about $1,946,926.
Decrease Department Budgets by 10%: All County Departments have been tasked with cutting their requested budgets by at least 10%. This will decrease the projected expenditures by about $1,200,000.
Decrease Outside Agency Funding by 10%: In line with what County Departments are being asked to do, Commissioners will also cut the budget allocations for the outside agencies we fund. This 10% decrease will be applied to the amounts they were funded for FY24, and will account for a reduction in projected expenditures of about $1,100,000. *The Board of Education is exempt from this decrease due to State mandates on budget funding.
Cut Overtime Requests by 50%: Halving the projected overtime for County staff will reduce projected expenditures by about $850,000.
Freeze Open Positions: Effective May 1st, by not filling current open positions that were budgeted and estimating turnover in the upcoming year without refilling roles (approximately 20 positions), this will reduce projected expenditures by about $2,616,656. Reminder that this accounts for not only salaries but also benefits and fringe costs. *There is a SMALL number of positions that legally must be staffed and will be considered for an exception on an as-needed basis.
Increase 911 Fees on Cell Phone Bills: Each line is currently charged $0.75 monthly. Cell providers collect this fee and transfer it to the County. By raising it to $2.00, this will increase revenue by approximately $750,000. This amount is in line with the average across all Counties in Maryland.
Increase Trash Sticker Price: Trash sticker costs have remained flat for about a decade. The program currently runs in the negative, costing the County more than comes in. Increasing the sticker fee from $1 to $2 will increase projected revenue by about $250,000.
Reducing the Emergency Medical Services (EMS) Budget by $2 Million: As one of the largest budgetary departments, the Commissioners have requested the Department of Emergency Services to revise their projections and plans for the upcoming year to operate within this new amount.
Other ideas that were presented but NOT agreed upon:
Initiating a Public Safety Tax: $0.05 per $100 assessment would increase revenue by approximately $2,400,000.
Increasing the Income Tax Rate
Increasing the Property Tax Rate
Now, what are some of the outside factors that got us here? We’ll recap some of the larger items below:
Decreased Revenues: Totaling approximately $2.7 million less in revenue than last year.
Changes in the real estate market: The spike in the market in recent years supplemented us in both tax and fee revenue, and that has started to drop off.
Decrease in corporate personal property tax revenue: This is the tax amount that some of our larger local businesses were paying before they closed.
A downward trend in income taxes collected from residents: This one is puzzling for us but is on trend with what the State of Maryland is experiencing as well.
Increased Expenditures:
The economy: Just about every budget request made this year included a significant increase.
Changes in services that we are now being asked to provide: This includes the ever-increasing need to replace lost volunteers from our volunteer EMS community with county-paid providers.
While budgeting to address a deficit isn’t a ton of fun, it’s essential to understand that this is not an insurmountable challenge; rather, it’s a call to action for all of us to work together to address it responsibly.
Our staff is prepared to exercise additional prudence in our spending and to be more mindful of our budgetary constraints. It’s also crucial to emphasize that while the situation may seem daunting, it’s not unique to our county. Budgetary challenges are being faced by organizations across the country, and we are not alone in this endeavor.
You can follow along with the budget process by tuning in to a live stream of the Commissioners Public Business Meeting on Thursday, May 16th at 5 PM. The link will be available at www.alleganygov.org/454/Agendas-Minutes. You may also view the preliminary budget presentation document on our website at https://alleganygov.org/191/Budget-Financial-Reports.