Anne Arundel County?s budget might be going on a diet in 2007 as county leaders attempt to find enough money to fund some big-ticket items.
In his first budget as county executive, John Leopold faces the challenges of funding renewed agreements with 10 labor unions that represent county employees and funding the second year of a three-year, 6 percent annual salary increase for the county?s public school teachers.
New guidelines also require local governments to set aside money annually to pay for retired employee health benefits or else record the cost of those benefits as a liability.
In 2007, the county is also expected to set aside money to pay for federally mandated upgrades to the county?s storm-water management systems as a way to cut down on water pollution.
During last fall?s campaign, Leopold rejected the idea of creating a dedicated fee to raise money for storm-water upgrades, and instead suggested cutting county bureaucracy and forming partnerships with the state as ways to fund the projects.
Former County Executive Janet Owens proposed a county operating budget of about $1.1 billion for fiscal year 2007 that began
July 1.
While the details of the renegotiated labor contracts have not yet been finalized, County Budget Director John Hammond said a minimum 1 percent pay increase for all county employees would cost the county $7.5 million.
And the second year of a teacher salary increase, something Leopold pledged to support during the campaign, will cost the county another $19.5 million, according to Hammond. Another $75 million would be needed to begin saving for retired employee health benefits, but the county could choose to set aside more or less money.
If the benefit costs are listed as a liability for the county, the accumulating cost could endanger the county?s AA+ bond rating.
As a tax-capped county, Anne Arundel is limited in what it can bring in annually from property taxes, but County Budget Director John Hammond said the county has collected the maximum amount allowed under the cap in the last five years.
A 20 percent decrease in recordation and transfer taxes, fees collected during the purchase or sale of homes and real estate, was budgeted in the 2007 budget.
“We wouldn?t be looking for any great increase in 2008,” Hammond said. “That?s just going to make 2008 even tighter. Revenue growth will be minimal if there?s any at all.”
Hammond said county revenues from income taxes and property taxes were also expected to remain stable.
