Montgomery's Leggett tries to find hundreds of millions in new budget cuts
Montgomery officials on Tuesday released new figures showing a continued hemorrhaging of tax revenue, and pointed to painful pending cuts and a vast budget shortfall they're still not sure how they will fix.
In recent days Montgomery took another recession-related hit, with tax revenues projected to drop $55 million more following an already precipitous decline. Other state and local revenues are also down more than expected. Even after factoring in $70 million in mid-year budget cuts approved earlier this month, the county still faces a budget gap of roughly $600 million, officials said.
Montgomery officials are considering 20 percent cuts in most departments. Public safety, health and human services and transit were given targets of 7 percent. Making most of those reductions would save about $100 million, and cut about 250 county workers, officials said. Possible retirement incentives to reach that number are under discussion.
But even if those and other cuts were made, the county would still have more than $300 million to go, officials said. That has shifted focus to the county's school system, which recently requested a budget increase. Officials said cutting back on school funding is necessary but politically fraught, given the priority many residents give to education and an ongoing struggle between the county and state over required spending levels.
Speaking in a near-whisper at a somber session with council members Tuesday, county executive Isiah Leggett used his characteristically understated delivery to try to communicate the depth of the problem facing the county as he crafts a budget due three weeks from now. "Remember what I said years ago," Leggett said. "This is a structural deficit. Structural."
What that means is that after a long period of government growth, county revenues have been dropping faster than officials have cut spending.
Income tax revenues are down sharply in Montgomery, especially from those earning more than $1 million a year. Fewer are in that bracket now, and others responded to a higher tax rate approved in 2008 by leaving the state, officials said. Total income tax revenues in Montgomery rose 40 percent from 2005 to 2007, but dropped 13 percent between 2008 and 2010, they said.
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