Counties Will Be Looming Budget Battleground
Counties are already laying the groundwork for tax hikes related to the COVID-19 pandemic.
Baltimore County Executive Johnny Olszewski Jr. says his administration projects that the county’s local revenues will drop by “tens of millions of dollars” next year as businesses suspend operations and furlough or lay off workers during the coronavirus pandemic.
Adding to the problem, Olszewski said, expenses directly tied to COVID-19 also will amount to “tens of millions” of dollars.
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Olszewski addressed budget projections during a virtual town hall Tuesday night, saying the county is “in uncharted territory.” The Democrat said the county will have to focus on the “basics” to ensure residents continue to receive the essential public services required to “weather this storm.”
“We will have to make some difficult decisions, but I remain optimistic that the steps we have taken to date and those we will continue to take will allow us to remain focused on our priorities while we manage our way through this crisis together,” Olszewski said.
Baltimore officials on Tuesday held a Virtual Taxpayers’ Night to solicit residents’ feedback on the proposed 2021 budget but acknowledged that the plan will have to be almost entirely reworked to account for the economic disruptions caused by the coronavirus pandemic.
Under normal circumstances, people would gather at the War Memorial building downtown to testify on what should be included in the upcoming fiscal year’s budget. But given the restrictions on large gatherings intended to slow the spread of the virus, such a meeting was deemed impossible.
Residents instead called into a virtual meeting, though it was sparsely “attended.” There were roughly 20 minutes of public testimony, much of it questioning why Baltimore continues to allocate so much of its budget to its police department….
….Budget director Bob Cenname cautioned that the proposal was preliminary, and didn’t take into account coronavirus-related projections. The budget plan will have to be almost completely reworked by the time it’s voted on by the Board of Estimates in early May.
“The preliminary budget plan we have released was unfortunately outdated the minute it hit the press,” Cenname said. Still, officials wanted to make it public so that people could offer feedback anyway.
The pandemic, and the measures imposed to try to stop it from spreading, have upended economic activity and crushed the city’s usual revenue streams. Officials say the city will bring in far less money tied to tourism, transportation and income taxes.
Cenname expects Baltimore will end the fiscal year with a $42.3 million deficit.
It’s clear at least in these two county-level jurisdictions that they are not going to meet their revenue projections and we all know what that will mean: it means that Democratically-controlled counties are going to start having to choose between budget cuts or tax hikes. We already know that certain Democratic executives are loathe to even consider budget cuts, so tax hikes will be the likely order of the day.
That doesn’t mean such tax hikes will actually happen though.
Left-wing Montgomery County Executive Marc Elrich had proposed a 4.5% increase in property tax hikes for Montgomery County residents. This tax hike was proposed after the COVID-19 State of Emergency was already declared, showing you how out of touch Elrich and his team are. But residents in Montgomery County have again rebelled against property tax hikes:
A proposed property tax rate hike in Montgomery County Executive Marc Elrich’s budget has been shelved after backlash from residents and council members as governments at all levels around the DMV swivel to combat the coronavirus threat.
Eight of nine council members say the timing of the proposal is bad.
The proposal included a 4.5 percent property tax hike.
Think about how far out to lunch Elrich and his massive tax hike were when fellow left-wing Democrats on the Montgomery County Council thought it was a bridge too far?
With county budget seasons starting to heat up in May, county governments are going to be given a choice: are they going to try to raise taxes and raise the ire of local taxpayers who are already finding it hard to keep food on the table and make ends meet? Or are they going to do what many of these Democratically-controlled governments hate to do; cut non-essential government spending? We have years of evidence of county governments funding non-essential things, particularly ridiculous capital projects like horse arenas and tennis courts.
In addition to all of the statewide regulations related to business and the COVID-19 pandemic, county budgets will be the political story to watch over the next six weeks.