HOLLYWOOD, Md.—In just three years the Calvert County Boards of County Commissioners have spent $20.1 million of the county's fund balance and according to the staff recommended budget for fiscal 2017, they plan to spend $8.8 million more.
In four years, this totals to an expense of $29 million and leaves only $3.8 million in the fund balance, otherwise known as the county's savings account.
The $8.8 million from the savings account would be taken to balance fiscal 2017 Calvert County total budget of $284.9 million dollars.
According to Commissioner President Evan Slaughenhoupt, during the years of growth in the county, previous boards set money aside for years of crisis and that is the money they have been using to help get through the rough economic times the county is facing.
"It's been going on about five years I believe," said Commissioner Mike Hart about the use of the fund balance. "It started basically when the bubble popped and everything crashed. Property taxes went lower, the county has been bringing in less than its expenses are, so it has been balancing the budget with the fund balance," he said.
According to Slaughenhoupt, there has been talk of raising taxes.
"We are totally dependent upon two revenue streams, that being the income tax and the other being the property tax," he said.
However he told the County Times that, "I think somebody would have a hard case to sell for raising taxes on the citizens when so many people are still hurting so much."
Hart agreed. "My personal opinion is that you don't raise taxes until you've cut everything that should be cut… I don't raise taxes just to fill a hole in the dam," said Hart. "If taxes are raised you should be asking what shortfalls are affecting 92,000 people."
Slaughenhoupt, who has been on the board since 2010, said that the previous board has already done a lot of cutting. He said they cut the operating expense by five percent one year, sliced it another five percent the following year, and the year after that, they sliced another two percent, making a total of 12 percent cut out of the operating expenses. He added that any further cuts would have to come out of one of their largest expense- salaries.
"We are at a point now that anymore cutting will actually be a cut in services or functions that we provide to the citizens, and/or cutting the staff that provide those services and functions," said Slaughenhoupt.
Although the previous board did do a lot of cutting, Slaughenhoupt said that it did not help that much.
"We cut and we cut and we cut and had it been a normal economic recovery, that cutting would have been sufficient and the economy would have rebounded and we would have been able to continue on our merry way. But instead, the economy was held down, flattened, and has remained flat for all these years and that's what caused us to go into the fund balance," he said.
Slaughenhoupt told the County Times that fiscal 2017 should be the last year they dip into savings.
"This coming year, fiscal year 2017, should be the last year of taking money from the fund balance because come fiscal 2018, we are looking at a substantial increase of revenue and that's largely because of Dominion," said Slaughenhoupt.
Hart agreed. "When Dominion comes online in 2018, it won't be a game changer so to speak where now all of a sudden we have money, but we are going to stop taking from the fund balance," he said.
Come fiscal 2018, Slaughenhoupt said that they are looking at $25 million more in taxes from Dominion to be added to the operating budget.
Slaughenhoupt said that the increase in fiscal 2017 budget is largely due to increased costs and long overdue projects.
He said there has been a higher cost for health insurance for employees, they have been putting money into OPEB Fund (Other Post Employment Benefits) which is health insurance promised by the county to those who have retired, and they are paving roads that can no longer be put off.
Hart added that they have also been paying teacher pensions, which they had never done before, and said they paid about $4.5 million this year and next year he believes it will be about $6 million.
Hart explained that the two big expenses, roads and pensions, were pushed down on them from the state. In previous years, the county used to receive $6 million in highway user fees that were used to pave roads. Recently that number was cut to just half a million. They were also forced to take on the responsibility of paying teacher pensions.
"If the state was paying the pensions and paving the roads, we'd be flat," said Hart.
Hart did add that Governor Larry Hogan is working to get some of the highway user fees back to the county for future years.
The projected $8.8 million might be brought down, however.
Tuesday night, the Board of County Commissioners formally received the staff recommended budget and this, Hart said, is where the county commissioners will look over and make the necessary cuts.
"I think this is the best approach Calvert has ever had with its budget because it broke it down into so many small pieces that you can really look at it and say, 'okay, is this a need or a want?'…The way it's broken down, the five of us are going to able to look at it and say maybe something needs to get pushed to 2019 or 2020," said Hart.
Hart said he considers himself a very conservative person.
"My goal, and it has been very difficult, is at the end of my four years I want for us to have lesser in bonds then when I walked in and to start putting money back into the fund balance… the goal should be if you can't live within your means, you don't need it. It is completely, completely reckless and irresponsible for us to put debt on the next generation," Hart said.
He added, "Using the fund balance is like the Titanic, you know it's going to hit that iceberg. It's not a matter of if, it's when."
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