As Income Tax Revenue Falls Short, County Imposes Savings Plan

County Executive Ike Leggett, at left, and County Council President Roger Berliner

Montgomery County Executive Ike Leggett said Monday he would have a “savings plan” to send the County Council in about two weeks, an effort to overcome a shortfall in income tax revenue.

“The thing to do is to stop the potential deficit from getting worse,” Leggett said in an interview with MyMCMedia.

Total tax collections are falling short about $120 million for fiscal 2018, the county’s current financial year. As a result, Leggett has asked executive branch departments to “identify savings” of 2 percent of their approved 2018 budgets, according to a memo Leggett sent the council Friday.

In the memo, Leggett said the shortfall seems to contradict economic indicators that suggest a more robust economy. He said the county’s Department of Finance is analyzing the data.

“However, discussions with State revenue officials indicate the estimates are accurate. Therefore, we cannot wait to act,” he said.

The county has faced similar shortfalls in revenue before, most notably during the 2008 recession when the county cut its workforce by 10 percent.

Leggett said Monday that by acting now, he could avoid such drastic measures.

In the interview, Leggett said he hadn’t laid out the specific areas to cut, and that 2 percent would be an average with some departments taking harder and lesser cuts.

The shortfall was discussed at Council President Roger Berliner’s meeting with reporters.

“We know how to do this work,” Berliner said. After Leggett sends over his recommendations, the council’s committees will consider them, probably starting in January when the council returns from its winter break. Berliner anticipated the work would be complete in January.

“This is hard work, unpleasant work because you are having to go back and reduce dollars that we appropriated for legitimate public purposes that we believe in,” Berliner said. “And now we’ll have to go back and make tough decisions.”

Here is Leggett’s memo to the council:

About Douglas Tallman

Reporter with 35 years experience throughout Maryland. Reach me at dtallman@mymcmedia.org or via Twitter at @MCM-Doug

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