Tag: FY2011 budget

Being the press

For those of you on the western portions of Wicomico County you may or may not be familiar with Chris Jakubiak; he’s one of three Democrats trying to unseat longtime State Senator Richard Colburn in District 37. That unfamiliarity may well extend to a lack of interest from the press in his candidacy – his press conference in Salisbury last Friday apparently merited the presence of exactly one member of the media, and that was me.

But leave it to Jakubiak to somewhat mess up my exclusive by sending out a press release entitled, “Jakubiak Holds Press Conference on Fiscal Responsibility.” After going through the fact that he held the press conference, Jakubiak noted in the release that:

“Our State budget should reflect the values that we share in Maryland, and especially here in District 37,” said Jakubiak. The candidate outlined the budget’s everyday impacts on infrastructure, education, healthcare, and economic development/recovery.

Jakubiak once again drew attention to the startling structural deficit of the Maryland Budget. “The General Assembly finished 2010 without fixing the ongoing gap between mandated spending and revenue. They plugged the $2 billion hole in the current year’s budget with temporary fixes and federal funds. Every tax dollar borrowed or transferred to close the deficit is a dollar not invested.”

Jakubiak outlined the economic principles that he would encourage the General Assembly to follow. First, spending mandates must be tied to revenue. This is more commonly known as pay-go. Second, dedicated funds, such as those for transportation and farm conservation, must be protected. Third, the costs of pensions and health insurance must be reduced. Fourth, there must be dedicated revenues for K-12 education. For the Eastern Shore, this must also include changing the State allocation formulas to provide more funding for school districts that lack a supportive tax base. Fifth, cuts in discretionary spending, excluding veterans’ services and public safety, must be on the table. Finally, taxation and spending reforms must expand economic growth, not contract it.

“We must put this structural deficit behind us so we can look to build a better future,” stressed Jakubiak.

The Wicomico County event will be followed in next two weeks with events in the Talbot and Dorchester Counties, focusing on restoring the health of the Bay, and economic development and recovery/job creation.

Fair enough, although I personally would have slotted the economic recovery release first, followed by the fiscal responsibility one. Education and the environment are secondary issues to me, although education takes up a large share of the state’s budget. In my view, we definitely lack the bang for the buck in that department.

Having the opportunity to discuss the budget with Chris at some length, I focused in on a few areas of the statement he passed out Friday. One area was setting regional priorities, which Jakubiak saw as “critically important”; for example his statement discussed how “highway funds have been misappropriated and the Dover Bridge (between Easton and Preston) remains dangerous.” That bridge hasn’t received the attention it deserves because it’s not on a highway commonly used for tourism, Chris claimed.

Another priority item for Jakubiak would be putting money into the Rural Maryland Prosperity Investment Fund. Created in 2006 through bipartisan effort, the fund had the “objective…to help raise the overall standard of living in rural areas to a level that meets or exceeds statewide benchmark averages by 2020, while preserving the best aspects of a pastoral heritage and rural way of life.” But Governor O’Malley has chosen not to fund this effort despite near-unanimous support in the General Assembly. Rather, Jakubiak claimed the state “is pouring millions of our tax dollars into bio tech business parks in the the metro areas.”

And the fact that Chris has (and presumably supports) a governor of his own party in power wasn’t lost on me because I pointed out his priorities seemingly weren’t in line with Governor O’Malley’s. Yet Chris replied, “a legislator will have the governor’s ear if he’s doing his job” and pointed out his “track record of consensus” in working with municipalities doing urban planning.

Another difference in opinion occurred when I asked him about prioritizing dedicated funds such as the Bay Restoration Fund, the Transportation Trust Fund, and Program Open Space. Obviously these money pots become piggy banks for balancing the budget and, aside from the TTF,  given this repeated usage they may not be as much of a priority as people think. I especially disagree with the premise of Program Open Space because taking land off the tax rolls affects counties adversely.

More controversial may be two planks in the Jakubiak budgetary reform plan – increasing the pension-eligible age and retiree contributions for health insurance and dedicating revenues for K-12 education – an “essential priority” in Chris’s view. The former will likely raise the ire of state workers and their unions while the latter has been tried through a number of funding sources – even a proposal for confiscating the value of unused gift cards. And adding school days, part of Jakubiak’s educational wish list, won’t be done for free.

It’s obvious that fiscal responsibility is a prime issue when even a Democrat makes it a priority. Pledging that “cuts in discretionary spending, excluding veteran services and public safety, must be on the table” while simultaneously claiming that “tax increases that contract growth are counter-productive” makes me wonder how Chris can pull the Houdini act off. But given the apparent disinterest in his campaign we may never find out anyway.

Wicomico’s budget crunch

Clocking in at over 2 1/2 hours and plagued by technical difficulties, the public had its say regarding Wicomico County’s FY2011 budget last night.

The first 45 minutes of the show were spent by County Executive Rick Pollitt, our first County Executive – although as he joked, “if things keep going the way they are I might be your only County Executive” explaining the budget process. And it is still “a work in progress,” explained Pollitt.

Wicomico County Executive Rick Pollitt debuts the 'perfect storm' slide in his budget presentation, April 8, 2010.

Rick explained the county’s budget was the casualty of a “perfect storm” of  “three serious fronts” – the recession, state funding cuts, and the revenue cap. But we were “not here to debate the revenue cap” and, besides, “objecting to taxes is as American as apple pie.”

Pollitt’s view is that “government exists to do that which we can’t do for ourselves.” But the budgetary troubles created by our situation placed the county in “extreme financial distress” to a point where we can’t make the Maintenance of Effort educational funding guidelines of the state. “I think that’s a tragedy,” said Rick.

While we had bridged the gaps in prior years by the usage of fund balances (nearly $12 million in the last two years) there is a dwindling pot to dip into, but how much remained wasn’t made clear in the presentation. Still, Pollitt stated, “we don’t spend everything we get our hands on.” To his credit (and certainly mindful that we’re in an election year), Pollitt ruled out a number of tax increases in his draft budget. There will be no increase in the recordation tax rate, enactment of a transfer tax, or raising of income or property tax rates. Keeping the property tax rate the same even though legally it could be increased even with the revenue cap saves taxpayers $400,000. Still, Pollitt asked about the revenue cap “at what point do we look at the cost of it?”

Wicomico County Executive Rick Pollitt explains the county's share of its expenditures at a public budget meeting, April 8, 2010.

A closer look at the expenditures pie.

Looking at expenditures, Rick told us that “when we started the process we knew we would be in trouble.” Department heads were told to submit the bare minimum needed to run their departments by law, but the county was $22 million short after those requests were submitted. So cuts were inevitable, particularly in education, public safety and health, roads, and school construction. Even more troubling was Pollitt’s expectation that the maintenance of effort waiver would be turned down, leaving less room to cut education.

Pollitt seemed a bit emotional as he delivered the bad news. “We need a reason for people to want to come here,” he said. But the quality of life was affected by budget cuts and there “shouldn’t be a cavalier response to our budget crisis…we will have employees lose their jobs this year.”

Overall, Rick posed it as a question that we as a community need to answer: what services do we demand from county government and what are we willing to pay for them?

Over 200 people jammed the Flanders Rooms of the Wicomico County Youth and Civic Center to have a say.

Then the public had their turn – over 30 stepped to the microphone of the 200 or so filling the room. Five of the seven members of County Council were among them – Gail Bartkovich and Stevie Prettyman were the absent pair, at least when the event started.

In what seemed like a well-coordinated effort, about 1/3 of those who had their say were either in education or worked with the library. Needless to say, their goal was to prevent their ox from being gored. Mark Thompson of the Board of Education was quite succinct in his appeal, daring those attending that “if you can’t fix the problem – shut up.” School superintendent John Fredericksen also was “very concerned about the massive cuts we’re going through.” Similarly, a representative of the county volunteer firefighters warned that funding was “already inadequate” and a parks and recreation supporter called cutting that department “a grave mistake.”

The AFP had a presence at the meeting too. Something tells me the teachers aren't jumping to become members of this organization advocating limited government.

But that’s what I’ve come to expect at these meetings – even Pollitt mentioned to a citizen afterward that no one came up to the microphone and said “cut me.”

In fact, there were some interesting ideas for cuts and efficiency brought forth.

  • Marc Kilmer made several good points, pondering if department heads are the best judges for cutting spending to their departments and the “need to get a hold of” our pension system.
  • We all liked Brad Gillis’s description of the 2003-07 era as “a really good party” but now we’re enduring the hangover.
  • Matt Tremka again raised the suggestions of eliminating the two at-large County Council positions and the public information officer. But Pollitt took eliminating the PIO off the table since many of those commenting wanted to have more information about the budgetary process.
  • John Palmer stressed the need for a county auditor.
  • Ken Nichols probably didn’t make many friends in the audience when he suggested teachers take a 10% pay cut. Of course, with education being a labor-intensive field that could make a serious dent in the deficit.
  • Donnie Waters asked if we could “distribute the tax load” by raising taxes on tourism-related items and getting enabling legislation to allow us to keep tax revenues here. To him this annual budget process was “organized political insanity.”
  • G.A. Harrison pointed out that there were “no reductions in spending until revenue dropped” in the last couple years and that educational money spent doesn’t equate to quality – would you send your child to D.C. schools?
  • Fran Reed, a “new kid on the block” (having been here only 3 years) suggested ending the “gotta spend it all” mentality of government.

In his closing comments, Pollitt told those remaining that the county had been deemed efficient in previous studies but perhaps (if the money could be found) it was time for another study. He was considering appointing a volunteer group to determine the scope of that work. He also pointed out that the county has a speaker’s bureau to help answer some of the questions about county operations and spoke about creating two committees to serve as brain trusts – the Council of Economic Advisors and the Debt Affordability Study.

Mike Brewington made the point that our agriculture industry needs to prosper in order for the county to do so.

One comment I have about the process as a whole, though, is that it’s incomplete. While the county is projecting revenues of $108.5 million for FY2011, this only includes money raised locally. As I understand it, the TOTAL budget for the Board of Education dwarfs the county’s overall budget, but that’s not something we were made aware of in this meeting. State and federal funding to the county wasn’t really discussed except in passing.

But if we’re interested in discussing the entire financial situation these are numbers we need. One thing I noted when I said my piece is that there are a number of unfunded mandates and strings in our budget which we’re not aware of. Perhaps a better way of stating this is that when we take the federal or state grant there are always some restrictions on how we spend it, but these may not necessarily be limited to the subject of the grant. For example, the state of Maryland recently had to pass several new regulations regarding unemployment insurance in order to secure an infusion of funding. Getting a grant for police officers requires a municipality to maintain their employment beyond the length of the federal funding, so in the out years the city or county assumes the burden of paying for the officer’s salary and benefits – money which must be budgeted.

I also noted that it’s not in government’s interest to solve problems – to do so would be to remove the program or agency’s reason for being. If crime was down we would need fewer police officers, or if we figured out how to prevent a special-needs child from becoming so we wouldn’t need those teachers. Perhaps these are poor analogies, but if you have a philosophy that “government exists to do that which we can’t do for ourselves” wouldn’t that make the best interest of government at odds with self-interest? It’s incentive for them to tell us that we can’t do it for ourselves.

We are supposed to have a clear picture of Pollitt’s intent next week when he reveals his version of the FY2011 budget.