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Fiscal Year 2020 Approved Budget

Last Updated on Jun 20, 2019 at 2:23pm | Board of Commissioners
To the citizens of Garrett County:
 
This budget has been one of the most difficult and challenging budgets we have faced during our tenure. As we began the fiscal year 2020 budget process, the Board was optimistic that revenues would increase slightly and we might be able to defer any possible tax increases for another year. Our initial projections indicated an increase in new revenue of approximately $757,000; however, with the announcement of Verso’s Luke Paper Mill closing by the end of June 2019, we readjusted our income tax figure downward until more data becomes available to calculate the potential economic impact this may have on Garrett County. With that, our initial new revenue was only $307,000 for a .39% increase. Factoring in and comparing reserves used in fiscal year 2019 to that of fiscal year 2020, the County was showing a loss of revenue of $1.8 million.
 
Fiscal year 2020 requests exceeded our initial revenue projections by over $12 million. Operations indicated increases of just under $3 million while increased capital requests made up the remaining $7.4. State mandates equated to over $1.7 million of the increased budget amounts. Taking the increase of State mandates alone and comparing those to our initial new revenue projections, it became increasingly evident that additional revenues would be required not only to balance the budget, but also address the structural deficit that the County was facing.
 
The Department of Financial Services met with the Board of County Commissioners to determine what revenue would be necessary for the next four to five years to maintain the same quality level of service of government. The goal was to increase revenue by $4.1 million and an analysis of four options to include the pros and cons of each were presented to us.
 
Option 1: Increase property tax by $0.082 from $0.99 to $1.072 Estimated impact to owner-occupied households = $122/year
 
Option 2: Increase property tax by $0.056 from $0.99 to $1.046 and income tax from 2.65% to 2.95% Estimated impact to owner-occupied households = $288/year
 
Option 3: Increase property tax by $0.04 from $0.99 to $1.03, income tax from 2.65% to 2.95%, and accommodation tax from 6% to 8%. Estimated impact to owner–occupied households = $204/year
 
Option 4: Increase property tax by $0.66 from $0.99 to $1.056 and accommodations tax from 6% to 8% Estimated impact to owner–occupied households = $98/year
 
After soliciting public comments and conducting a public hearing, the Board voted to increase the real property tax by $0.6610, from $0.9899 to $1.0560 per hundred dollars of assessed value and to increase the accommodations tax rate from 6% to 8% (Option 4).
 
The County’s primary source of income is property taxes. Real property tax is estimated at $46,114,355 (55% of total revenue) while personal property & public utilities tax is estimated at $6,350,835 (8% of total revenue) making up just over 63% of the total FY 2020 revenue budget. Increasing the real property tax rate to $1.0560 and the public utilities/personal property tax rate to $2.64 will generate an additional net revenue of just over $3.5 million.
 
Additional revenue was needed in order to balance the fiscal year 2020 operating ($78,528,454) and capital ($4,707,249) budget totaling $83,233,703. This represents an overall increase of 3.64% compared to FY 2019 or a 2.37% increase without reserves. We will use $800,000 of economic development capital reserves to fund two economic development capital projects; the McHenry Business Park shell building and the Keyser’s Ridge waste water project.
 
As mentioned earlier, this budget includes an additional $1.7 million of mandated operating expenses. Operating expense increases of $735,965 includes maintenance of effort for the public school system of $284,957, three school resource officers of $224,815, State Board of Elections salary and required election expenses of $49,932, Health Department salary adjustments of $46,370, and other mandated expenses such as the Maryland minimum wage bill that was passed to increase wages to $11 per hour effective on January 1, 2020. Mandated capital expenditures equate to $923,150 and include $100,000 for public safety radio upgrades and a new 911 console for compatibility to the NextGen 911 radio statewide initiative.
 
While Public Works (Roads and Engineering Divisions) make up the second largest function of government at 20% of the budget, Public Safety comes in a close third at just over 15%. General Government only totals just under 8% of the budget.
 
We would like to thank you for your comments and patience with us during this budget process as we were making some difficult decisions. These decisions are not always popular nor easy, but they must be made in order to provide the same level of quality service that taxpayers want and deserve. This Board is still committed to our overarching goal of exercising sound fiscal management. Now more than ever will we continue to closely monitor and manage County resources, reduce expenses where possible, improve efficiency, make sound capital investments, encourage innovation, and reward outstanding performance. We will do this with the help of our team of dedicated and proficient employees.
 
The Board of Garrett County Commissioners
Paul C. Edwards, Chairman
James C. Hinebaugh
S. Larry Tichnell
 
The approved budget details can be found here: Fiscal Year 2020 Approved Budget