Long-Term Financial Challenges Loom For Howard County: Report

Ellicott City MD

02 March, 2022

2:28 PM

Description

HOWARD COUNTY, MD — A report released by Howard County's spending affordability advisory committee for fiscal year 2023 highlights some of the long-term fiscal challenges Howard County faces. "Howard County has weathered the significant economic impact of this pandemic in part due to our fiscal responsibility and prudent management," Howard County Executive Calvin Ball said. "However, there are still challenges on the horizon ... We face critical decisions about our shared priorities as a community in the upcoming budget cycle and we look forward to using these SAAC recommendations as a blueprint for our budget choices over the next few months." Requested funding increases in fiscal year 2023 by all agencies and entities supported by the county government equals 250 percent of projected revenue growth. Funding requests for capital projects for fiscal year 2023-2028 are approximately $20 to $25 million higher than projected new debt capacity over the same period. Ball noted that all entities, including the Howard County Public School System, should "prioritize needs and develop annual and long-term plans based on fiscal reality and focus on results rather than the amount spent." "The board of education's fiscal year 2023 budget proposal requested a county funding increase to HCPSS of $129.1 million in fiscal year 2023, more than 1.7 times the total projected revenue growth available to support all public services in the county," Ball noted. During the last two months, the committee has listened to more than two dozen presentations by multiple entities, agencies and experts on economic outlook, revenue projects, capital needs and operating budget requests. Based on such information, the committee has recommended the following: Developing a budget below projected general fund revenues of $1.28 billion, excluding one-time resources, for fiscal year 2023. New authorized bonds in fiscal year 2023 total no more than $65 million. A revenue projection of 3.4 percent growth on average during fiscal year 2024-2028 "Howard County has economically survived the worst of the pandemic, but there are still long-term challenges such as a slowdown of multi-year revenue growth," SAAC Member Todd Arterburn said. In the report, the committee urged elected officials to "make hard choices" in collaboration with stakeholders to match expenditures with resources and develop a balanced and sustainable budget. Key recommended strategies include: Limit above-MOE-level funding to HCPSS Use one-time funding only for non-recurring expenditures or to generate long-term savings Balance service needs as a full-service county Explore revenue options while managing tax burden and county competitiveness Promote the commercial base Increase county fund balance to 15 percent or more "The SAAC took to heart the warning inherent in S&P's rationale in assigning this year's AAA bond rating - as they acknowledged the strength of past fiscal prudence and highlighted the county's charge to 'continue to monitor and adjust as they prepare for potential anticipated multiyear revenue loss,'" said SAAC Member Ellen Giles.