[0:02] my name is Alan McCarthy and I would like to welcome everyone here tonight

[0:07] for a public citizens input on the annual operating capital budgets here in

[0:13] Cecil County it is important to me that I hear your comments your suggestions

[0:18] and your priorities at the early stage of the budget process for 2021 your

[0:25] suggestions will be incorporated whenever possible into the new budget

[0:29] which will be submitted at a County Council for consideration on April 1st

[0:33] of this year in advance of hearing your concerns our budget manager Miss Becky

[0:41] Anderson will present some preliminary information including financial data

[0:45] relating to years physical budgeting process I am certain that you will find

[0:51] her comments very interesting I appreciate and thank you for being here

[0:55] tonight and I'll now turn it over to Becky thank you dr. McCarthy good

[0:59] evening I would like to start off this year's presentation by reviewing where

[1:03] we last left the budget conversation with the approval of the FY 2020 budget

[1:08] the FY 2020 budget will impact how we review and evaluate what will continue

[1:13] to be funded and where there's room for improvement that is why we invited you

[1:17] here today to take part in the formation of the FY 2021 budget so know so in

[1:22] order to get an idea of exactly what we're working with I'm asking do you

[1:26] know what the total amount of the FY 2020 general fund budget was the general

[1:33] fund budget was approximately two hundred and two million eight hundred

[1:36] fifteen thousand which was an increase over 3.8 percent over the prior years

[1:41] approved budget so let's review how the county budgeted 202 million dollars how

[1:47] much of the FY 2020 budget was allocated for the educational needs of our

[1:51] citizens 103 million seven hundred ninety four thousand which includes

[1:57] funding for pre-k K through 12 education Cecil College and the Public Library

[2:01] System over half 51 percent of the budget goes to direct allocations to aid

[2:07] in educating Cecil County citizens the level to which these entities are funded

[2:11] includes a minimum threshold determined by the state that must be met

[2:15] with county revenues how much of the FY 2020 budget was allocated to protecting

[2:20] our citizens 20 percent or forty million seven hundred sixteen thousand was

[2:26] budgeted to address public safety concerns in Cecil County this includes

[2:30] everything from deputies on the street to animal enforcement officers how much

[2:35] of the FY 2020 budget was allocated to pay for death that was to help build new

[2:39] County schools libraries bridges communication systems and other capital

[2:43] improvement projects a little over 16 million or eight percent as capital

[2:49] projects are approved and construction begins the county has to borrow the

[2:53] funds to meet the capital demands of our county once borrowed the loan is

[2:57] normally paid back over 20 years I hope you're taking notes as we go along and

[3:02] keeping track of how much of our pie is left and thinking about the budget items

[3:07] you may be here tonight to support and where they fit in the county budget how

[3:11] much of the FY 2020 budget was needed to fund the county portion of state

[3:15] regulated functions that often the county does not have the discretion on

[3:19] how to fund and at what level a little over 11 million dollars or 6% of the

[3:26] county's general fund operating budget has to support state regulated items

[3:30] such as a circuit court system the office of the state's attorney and the

[3:34] Board of Elections often times the state set salary and

[3:38] fringe limits for some of those personnel employed by these offices that

[3:41] the county has little room to negotiate or change the budget has to support

[3:46] whatever payment is due to support the service in our County have you been

[3:50] keeping track of the pie chart are you thinking where are some of the items we

[3:54] have not even discussed like Public Works Parks and Rec and where do they

[3:58] fit in the budget as you can see on this slide 15 percent of the general fund

[4:03] operating budget consists of that entire list of departments Public Works alone

[4:07] is 40 percent are a little over 12 million of the remaining slice of the

[4:12] Cecil County operating pie remember the county roads division is responsible for

[4:17] the maintenance of all County bridges and approximately 615 miles of roads as

[4:21] state support for roads infrastructure continues to be minimal the county

[4:26] continues to face the chain challenge to find greater efficiencies

[4:28] within this small group of departments to make sure county roads are safe the

[4:33] rest of County's government functions have to provide the needed services with

[4:36] the remaining budget available the county executive has to make tough

[4:40] decisions in order to be certain there is enough pie in each area to provide

[4:44] the services that County citizens need now I'm not sure if you're asking

[4:48] yourself but where does Cecil County get 202

[4:51] million dollars the number one revenue source for Cecil County is real and

[4:56] personal property tax revenue in FY 2020 the county county is expecting to

[5:01] receive a little over a hundred eighteen millions in property tax the current

[5:06] real property tax rate was set back in FY 2018 at one point zero four one four

[5:11] per $100 of assessed property value the county rate continues to be below the

[5:16] state average the rate has only been increased one time in the last eight

[5:20] fiscal years as this administration needed to address the declining county

[5:24] reserve fund and the underfunded critical needs in our County such as

[5:28] deteriorating roads infrastructure and public safety needs operating revenues

[5:33] meeting or exceeding current operating expenditures was a priority that needed

[5:37] to be addressed as balancing the budget with unassigned fund balance or this

[5:42] County savings account was a policy decision that needed to be changed and

[5:46] it were to provide the fiscal stability necessary for the future of Cecil County

[5:50] another question we often receive as why has my real estate tax bill continued to

[5:55] increase if the tax rate has only changed once in the last eight fiscal

[5:59] years the answer is simple the value of your property has changed based on state

[6:04] assessments the State Department of assessments performs evaluation of your

[6:08] property each county is divided into tier groups and assessments occur every

[6:13] three years within a different tier if your property tax bill is more your

[6:17] property is worth more the most recent assessments and Cecil occurred in area

[6:21] two which can be seen in yellow on this map the number two source of revenue in

[6:27] Cecil County is income tax a little over 63 million is anticipated to be received

[6:32] in FY 2020 from income tax today the income tax rate has only increased once

[6:38] in the last 19 fiscal years can be seen on this slide there are 12

[6:42] counties with an income tax rate higher than that of Cecil County and eight

[6:46] counties have already met are at the maximum rate allowed under Maryland

[6:50] state statute have you been keeping track property and income tax account

[6:55] for ninety percent of the county's revenue to provide all the funding

[6:58] necessary for education Public Safety etc before we move on in the

[7:04] presentation for just a moment let's stop and review fiscal responsibility

[7:09] from a couple different perspectives the term deficit by definition is an

[7:13] amount by which a resource especially money fall short of what is required a

[7:18] deficit occurs when expenses exceed revenues the current federal deficit for

[7:24] FY 2019 was 984 billion dollars it's estimated that it'll reach one trillion

[7:30] in FY 2020 a structural deficit by definition is when a budget deficit

[7:36] persists for some time and eventually pose a problem when budgeted revenues do

[7:41] not perform at a level to afford the expenditures funded at the mandated

[7:45] levels the structural deficit outlook for the state of Maryland according to

[7:50] the recent calculations put together by the American Association of counties for

[7:54] the proposed FY 21 governor's budget is 37 million with large expenditure bills

[8:00] now being introduced and discussed in Annapolis such as Kerwin and House bill

[8:04] 1 school construction the deficit outlook for Maryland will continue to

[8:08] grow the focus of the county executive and the administration should be and

[8:13] always has been Cecil County Cecil County curly does not have a deficit or

[8:18] a structural deficit in today's world you should all realize this is a big

[8:22] deal our county's approach to fiscal

[8:24] stability and the conservative spending of county government have poised it for

[8:28] future fiscal success as long as we continue to be cognizant that our

[8:32] spending has to be supported by what we bring in in revenue the county savings

[8:37] account or fund balance is shown for the past five years the fund balance has

[8:42] increased in recent years as the county has witnessed new business investment

[8:46] and sound fiscal management and enhancement to our reserve policy was

[8:51] passed to support this administration's number-one goal

[8:54] fiscal stability as outlined in the strategic plan in previous years when

[8:59] the county leadership saw dips in revenues and increase in expenditures it

[9:03] became the normal strategy to use unassigned fund balance to fill the gap

[9:06] instead of raising additional revenues to meet the need

[9:09] although improvements to the reserves have been accomplished the county still

[9:14] fall short of the national reserve median of thirty four point two percent

[9:17] dr. McCarthy continues to be adamant that we must face the reality of what

[9:22] the cost of doing business is and then fund it without using the county savings

[9:26] account now let's move on to the FY 2021 budget the outline on the screen follows

[9:32] the budget development process as it is specifically written in the county's

[9:36] Charter section 504 no later than April 1st the county executive shall prepare

[9:41] and submit a budget to Council for the ensuing year based upon the rules we

[9:46] have developed this calendar to guide the executive departments and outside

[9:50] agencies of key dates in order to meet the budget deadline of no later than

[9:54] April 1st as you can see on this slide dr. McCarthy's intention is that the FY

[9:59] 2012 but 2021 budget will be submitted to Council on April 1 the final approved

[10:05] budget must be passed by council on or before June 15th or the budget reverts

[10:09] to the executives proposed budget the budget for Cecil County is directly

[10:14] impacted by the state budget which is being reviewed by the General Assembly

[10:18] the governor presents a proposed budget much like that seen between the

[10:23] executive here and our county council many of the county's revenue streams are

[10:28] directly affected by the decisions made in Annapolis the state budget process

[10:32] presents a challenge for us as the portions impacting Cecil County can

[10:36] change while we're building our own budget we must constantly monitor the

[10:40] budget approval process in Annapolis and adjust accordingly shown on the screen

[10:45] are some of the estimated impacts of the governor's budget for 2021 I will

[10:50] highlight just a few of them although the governor's budget seeks to

[10:54] fund highway user revenues formula for maintenance of county roads the increase

[10:58] is estimated to just be a little over 46,000 dollars for FY 2012 2020 let's

[11:05] not lose sight of the fact that the county used to receive over

[11:08] million dollars annually from the state that went directly to roads maintenance

[11:11] the county continues to struggle to keep up with the road maintenance needs which

[11:15] sucks with such little support from the state there is a proposed increase in

[11:20] the county's disparity grant of 340 mm this grant was enacted to help counties

[11:25] receiving less per capita income tax revenues as compared to wealthier

[11:29] counties in Maryland of course the governor's budget will

[11:32] continue to fund educate education according to mandated funding formulas

[11:36] however especially here in Cecil County we know the funding formulas continue to

[11:41] fall short of the need the next two slides sum up what we feel are the

[11:46] realities as we put together the FY 2021 budget the county executive has already

[11:51] made the decision that he will not support a property tax or income tax

[11:55] increase for the FY 2021 budget and knowing that he will not allow us to use

[12:00] the unassigned fund balance to make up any shortfalls it means this budget is

[12:04] tied to the estimating operating revenues that we are estimating for FY

[12:08] 2021 even though property assessments are up

[12:12] in area two by 9% this increase is phased over a three-year period thus the

[12:18] increase is spread over the next three fiscal years the possibility of a

[12:23] recession continues to be on the minds of many economists as they try to figure

[12:27] out when it will hit before it happens in the FY 2012 budget adding anything

[12:32] new is always risky if you believe your revenue sources have the positive

[12:35] ability of being less in the not-too-distant future there is

[12:41] increasing difficulty to build and retain a quality workforce especially

[12:46] within the public safety sector we continue to compete with other

[12:49] jurisdictions in the area to be the employer of choice the substance abuse

[12:54] issue is a problem for our entire nation trying to find meaningful solutions

[12:59] within our County will take efforts across all of our respective communities

[13:02] to rewrite the script the reality is that state funding formulas for public

[13:07] education continue to be inadequate to meet the challenges schools face in our

[13:11] changing world the county becomes the only source of additional support when

[13:16] the state passes down and ever-increasing education burden on the

[13:20] county's Reese sponsible growth in this county will

[13:23] require additional infrastructure to compete having the necessary resources

[13:27] in place will continue to attract new investments and residents to our County

[13:32] the county is facing many challenges in the upcoming fiscal year it's not an

[13:37] easy task to determine at what level some of these most critical functions of

[13:40] the counties should be funded our challenge is to craft a budget that will

[13:45] deliver in the most efficient and effective manner the services Cecil

[13:49] County citizens expect and deserve while preserving our strong fiscal position

[13:54] Thank You dr. McCarthy thank you very much mrs. Anderson

FY2021 Citizen Input Meeting 1280x720

Transcript