To reconcile state cuts and falling revenue, Frederick County might freeze all planned capital projects.
Officials from the county's Finance Division made a presentation Tuesday to the Frederick County Commissioners, commencing consideration of the operating budget for fiscal 2011, which begins in July.
County finance officials think the county's revenue will continue to shrink over the next three years.
Revenue is expected to fall $4.3 million, or 1 percent, between fiscal 2010 and 2011 as the result of a combination of state cuts and lower income tax collections, investment income and other county revenue.
Officials estimate the deficit for fiscal 2011 will be $28.3 million, even after using a $10 million fund balance left over from fiscal 2010. The deficit will increase to $60.5 million in fiscal 2012 and $66.4 million in fiscal 2013, they said.
In 2011, they expect to take in about $427.7 million in revenue, compared with about $466.9 million in planned spending.
The planned spending does not include raises for county employees. A 1 percent raise for all employees would cost about $1.3 million.
The government can't skate by on one-time fixes this year, finance officials said.
For instance, every employee would have to take 60 days of unpaid leave to balance the budget through furloughs.
"Sustainable revenue enhancements or permanent cuts are necessary to get through the next three years," Mike Gastley, the county's budget officer, told the commissioners.
Commissioners President Jan Gardner said she thinks freezing all capital projects could cut the deficit by about half.
That freeze would not apply to projects already under way, such as the Citizens Care and Rehabilitation Center expansion.
It would apply to projects that have been designed but contracts have not been awarded. Frederick County Public Schools projects would also be affected.
Capital projects are funded through a combination of cash from the operating budget and debt.
In fiscal 2011, the county plans to spend $12.6 million in cash for capital projects. It expects to spend an additional $2.4 million in operating costs for new capital projects, such as staffing a new library.
Over the past year, the commissioners have defended their decision to move forward with capital projects, despite economic conditions, because construction bids have been coming in so low.
Several commissioners said they would support a suspension of capital projects, but no decision was made Tuesday.
All five commissioners are reviewing the entire budget for programs where they will suggest cuts.
Four commissioners have already submitted their lists. Commissioner Kai Hagen said he will submit his by the end of the week.
Hundreds of programs are expected to come under scrutiny, from small grants for arts organizations to the entire budget for Frederick Community College.
The budget will be discussed in January and February, and at least one commissioner has asked that the meetings not be televised because layoffs could be a topic.
It is standard practice for budget meetings to be televised. Commissioner Charles Jenkins said that they should be open to the public but not televised.
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