Montgomery County Executive Ike Leggett has asked county agencies to cut $150 million from construction projects over the next six years to protect the county’s coveted AAA bond rating. The effort aims to reduce the county’s dependency on general obligation bonds — which account for about $1.8 billion of the county’s six-year, $2.24-billion capital improvements budget — to reduce the county’s overall debt.
Although no credit-rating agencies such as Moody’s or Standard and Poor’s has suggested that the county’s debt levels are too high, Department of Finance Director Joe Beach said, “it’s higher than we would like it to be.”
“Things have changed in the last few years, and certainly in the last few months,” said Office of Management and Budget Director Jennifer Hughes. “The expectations in terms of what we’re able to do in our building program have to change.”
The Montgomery County government is being asked to cut about $56 million, said Leggett’s spokesman, Patrick Lacefield. The cuts likely will affect a number of departments — libraries, the Department of Recreation, the Department of General Services, the Department of Transportation, Fire and Rescue Services, and the Montgomery County Police Department, to name a few.
Hughes emphasized that no program or department will be shielded from the cuts.
Montgomery County Public Schools will bear the second-largest cut. The school system has been asked to cut about $34 million of its $887 million capital budget. Chief Operating Officer Larry Bowers said it’s too early to say what will be most affected, especially because the school system receives funding from sources other than the county.
Montgomery College has been asked to cut about $6 million of its $196 million capital budget, and the county’s Park and Planning Commission has been asked to cut $3 million.
In letters to Montgomery College President DeRionne Pollard, Public Schools Superintendent Joshua Starr and Planning Board Chair Francoise Carrier, Leggett described a capital budget that has grown over the years while other budgets were slashed and revenues remained stagnant. He warned that this won’t be the case in coming years.
“While we are hopeful that the effects of this recession will begin to dissipate, the common wisdom is that the recovery will continue to be slow and uneven,” he said. “Without true cost reductions — either through cost savings or scope changes, we will not be able to make room to address important infrastructure needs.”
