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As Long as We Remember...

May 3, 2011

Repercussions for Tight Fiscal Fists

Earl 'Rocky' Mackintosh

"Heartless, inhumane, and cruel" are just a few of the words used to describe the Frederick Board of County Commissioners as they have come closer to finalizing the budget for fiscal year 2012.


For sure, our community has not seen the likes of this kind of crew for as long as I can remember.


Standing in the face of an $11.8 million deficit and a $31 million base structural deficit, they knew that they were destined to disappoint more than a few people.


Within one week after they were sworn into office, they went right to work with the leadership team of county staff in a two-day retreat at Pinecliff Park to identify goals and craft a strategic plan for their four-year terms. This effort resulted in six key goals:


1.      job growth;

2.      predictability for business;

3.      public safety;

4.      traffic;

5.      agricultural preservation/land use  and

6.      privatization and sharing of government services.


These core priorities set the framework for a fundamental redefinition of the role of government in Frederick County – at least for this board which is determined to get the county's financial house in order.


In the five months since they took office they have been able to slash the structural deficit by $12 million dollars, leaving a trail of unhappy people at Head Start, and over 100 county staff members who have been laid off through a massive departmental reorganization among others.


Over the last 10 years the structural deficit has averaged about $16,000,000. This is about $11 million more than the county is comfortable planning for, according to County Budget Officer Mike Gastley in a presentation he made to the commissioners at their April 5, 2011, public hearing on the Fiscal Year 2012 Budget at Thurmont’s Catoctin High School.


… But haven't we always had balanced budgets?


In a conversation last week with Commissioner Billy Shreve, he said while past boards have delivered balanced budgets over the last 10 years, each time the expenses have exceeded expected revenues. These negative scenarios have all been offset by raiding several of the county's special "savings accounts" such as the Fire & Rescue Tax District, Open Space and the county's Bond Enhancement Fund.


In the case of the latter, the balance dropped over the last several years from $4 million to about $100,000. Ironically this is the fund that Frederick County established to prove to the bond agencies that it is capable of saving money.


"Even though county revenues were rising each year for most of the last ten, past boards still approved budgets with higher spending levels," Commissioner Shreve said, "and today we don't have any more funds in those savings accounts to cover the excesses."


For Commissioner Shreve and a majority of his colleagues, the decisions on how to reign in the exponential rise in the structural deficit are tied directly to their campaign promises of no new taxes and restoring fiscal responsibility to government.


While it took less than five months to cut the projected 2012 structural deficit from $31 million to $19 million, numbers will not drop as fast from this point on. Projections into FY2013 show a $16 million deficit and $15 million in FY2014.


In addition to keeping the General Fund balanced, those raided savings accounts have to be replenished; or, in the case of the Fire & Rescue Tax Districts, it is likely that a major reorganization will have to be considered to make its sound financially, according the Mr. Shreve.


Redefining the role of government


With all the cutting and reorganization that is going on, one thing has been made clear. This board of commissioners is not about proportionality. Their focus is based upon those six core priorities that they established back in December.


For many local non-profit and religious based human service organizations, they're finding themselves high and dry.


Philosophically, while County Commissioner Blaine Young stated that the 2012 budget provides about $11 million to the low income population of the county, he does not believe that the county Government should be in the business of using taxpayer money to fund private, non-profit organizations such as the Big Brothers/Big Sisters, Mental Health Association, Heartly House and other such groups.


In an April 26 workshop, Commissioner C. Paul Smith, with support from Commissioner David Gray, made an unsuccessful plea to provide about $150,000 in the budget for the Community Action Agency. Commissioner Young made it clear that if the board is going to consider funding one such organization, then in order to be fair "we should have one day for a 'beg-a-thon' where all non-profits can come in here and make their cases."


Heartless, inhumane and cruel?


Like it or not, when there are limited funds and a multitude of demands for services, government must make tough choices, and Blaine Young and his slate are holding firm to their convictions.


The good news is that they are a rare breed of politician, who has the guts to tackle a serious financial problem that others before them only danced around the edges at best.


The bad news is that some terrific people, groups and causes that have depended upon Frederick County government for human services funding for the needy of our community are left scurrying elsewhere for financial assistance.


Rocky Mackintosh is president of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for the MacRo Report Blog.


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