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Posted at 12:01 PM ET, 12/22/2010

Austerity measures for Pr. George's

By Miranda S. Spivack

Prince George's County is facing a $77 million spending gap next year, but County Executive Rushern L. Baker III says his new administration can plug it by spending cuts and cost savings, and will not have to tap the county's reserves left by his predecessor, Jack B. Johnson (D), except in special circumstances.

But in the next few years, the financial picture is expected to worsen, Baker (D) said Wednesday. His administration has to put in place a series of austerity measures -- including a freeze on employee pay, potential reductions in county take-home cars, a review of all county contracts and limits on county credit card use -- to help close the budget gap.

"As we look at the overall fiscal picture ... yes, in 2012 we are going to have a budget deficit ... but clearly we are in a better situation than our neighbors around us," Baker said during a news conference at the county administration building in Upper Marlboro. "Closing the gap will be a manageable challenge, but it will not be easy."

The Baker administration, in office for two weeks, is also projecting a gap of about $132 million for fiscal 2013. That estimate does not include a potential shift of millions of dollars to the county in teacher pension costs to help Gov. Martin O'Malley solve the state's looming $1.5 billion budget deficit.

When compared to some of its regional counterparts, Prince George's appears to be in better financial shape. Montgomery County, which has a much larger budget than Prince George's, is facing a $300 million spending gap in its $4.7 billion budget, and has ordered significant cuts in county spending.

But Prince George's, which has a voter-imposed property tax cap that limits its ability to raise revenues, also faces big challenges: improving its ailing school system, and encouraging more businesses to locate in the county.

Baker's financial report, which he released Wednesday, is the first in recent months to give a detailed accounting of county spending and revenues, which are expected to be flat in the next few years unless new revenue sources are tapped and the county's commercial tax base is expanded, something he promised he would do during his campaign.

Johnson had declined to explain the county's overall fiscal condition, saying at the time that the finances were too fluid to give a detailed accounting. Johnson, who left office this month after serving eight years, and his wife, council member Leslie Johnson (D), have been charged with evidence tampering and destruction of evidence in a sweeping federal corruption probe.

Baker's administration will tap county reserves only for one-time costs, such as infrastructure, officials say. The remainder of the budget gap will be filled by spending cuts and looking for savings throughout the county budget, officials say.

This post has been updated since it was first published.

By Miranda S. Spivack  | December 22, 2010; 12:01 PM ET
Categories:  Maryland  
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