FONDA — Montgomery County Executive Matthew Ossenfort has proposed a $126.7 million 2022 county budget that would increase the property tax levy by 2.69%.
Ossenfort released his budget proposal on Thursday following its submission to the Montgomery County Legislature on Tuesday. The $126.7 million executive budget draft would increase overall spending from the county’s approximately $120 million 2021 budget.
The proposed 2.69% property tax hike would increase the total levy by approximately $863,000 while remaining below the state tax cap. The tax levy would total approximately $31.8 million under the proposal.
The draft budget anticipates $68.5 million in general fund revenues, up from the $65.16 million anticipated in the current year’s budget. The budget would be balanced with a $3.7 million appropriation from the general fund, a $1.2 million increase from the allocation included in the 2021 adopted budget.
However, Ossenfort on Thursday said the county this year may not actually use any of the fund balance originally anticipated in the budget due to significant sales tax revenues that are on track to exceed the $31.5 million estimated in the 2021 budget. The county is projected to approach $40 million in sales tax revenues by the end of the fiscal year.
The same could happen next year if the Montgomery County Legislature maintains the conservative $32.75 million in anticipated sales tax revenues contained in the executive budget proposal, he added.
Regardless, Ossenfort indicated the county’s general fund balance is robust enough to carry the proposed $3.7 million appropriation. The fund balance was over $12 million at the end of last year and could reach as much as $15 million by the end of this year if revenues continue at their current pace.
Despite strong sales tax revenues this year that could easily continue into next year, Ossenfort said those revenues can be volatile in explaining his proposed inclusion of a property tax increase.
“The property tax levy is our one steady income area,” Ossenfort said. “I’ve always maintained and it’s been the board’s feeling that we always want to be right under the tax cap.”
If the budget was adopted with the proposed tax levy increase, Ossenfort estimated based on equalization rates the city of Amsterdam would experience a county property tax rate increase of about 1.86% and the town of Amsterdam’s rate would increase about .24%. Other municipalities would see modest increases and, in some cases, decreases.
Ossenfort indicated that much of the spending increase contained in the budget proposal accounts for unfunded state mandates the county must comply with and cover, as well as new spending the Legislature approved throughout the course of the current year that will become a regular part of next year’s budget.
“Oftentimes the budget for the following year reflects the changes that happened during the year. A good portion of the changes were already adopted by resolution by the board,” Ossenfort said.
The Legislature approved around 14 new positions and title changes throughout the year, Ossenfort estimated, that must be accounted for through budgetary increases next year. Otherwise, he said the proposal generally maintains current staffing with some minor additions or eliminations related to retirements.
The proposal does not include any funding related to new programs or initiatives, Ossenfort said. The largest change contained in the draft are proposed salary increases for positions the county has struggled to fill.
“It was made clear to me when I was meeting with department heads that retaining and attracting employees is our single greatest challenge,” Ossenfort explained.
The proposal would increase the salaries of caseworkers, case supervisors, nurses, dispatchers and motor equipment operators. The combined wage hikes total around $225,000.
“Everyone is having these problems,” Ossenfort said. “We’re looking at an approach of addressing things in the budget to put ourselves in a competitive position to attract and retain employees.”
Ossenfort indicated he intends to carry the same considerations into contract negotiations with union members that will likely lead to additional budgetary increases sometime next year.
He pointed to strong sales tax revenues and robust fund balance as positioning the county to show appreciation for staff members while beginning to address the wage gap between government positions and private sector jobs.
“Right now is the time where we need to make some changes we know have been needed for a long time,” Ossenfort said.
To further boost employee morale, Ossenfort is recommending the Legislature approve premium pay one-time payments for staff members using a portion of the $9.56 million in federal COVID-19 relief aid the county received through the American Rescue Plan.
Under the recommendation, full-time employees would receive $3,000 each, while part-time workers would receive $1,500 each with the payments to be prorated based on the number of hours staff worked during the pandemic.
Overall, Ossenfort said the proposal balances fiscal responsibility while maintaining services and supporting the county workforce.
“I think we put forward a budget addressing some big challenges and tried to be really very thoughtful in where we allocated funding for various positions,” Ossenfort said.
The 2022 executive budget proposal is now under review by the Legislature, which held its first budget workshop on Thursday.
“I’m looking forward to a productive budget process for 2022, in which we are able to prepare a well-balanced spending plan for the public,” Legislature Chairman and District 7 Legislator Michael Pepe said in a prepared statement.
“After the uncertainty we faced preparing for the 2021 budget due to the unpredictable nature of the pandemic, I’m hopeful our financial position will continue to strengthen in similar fashion to what’s occurred the last few years, the continued growth of the county’s sales tax income, in tandem with cost effective expense control,” he continued.
The next budget workshop is scheduled for Tuesday at 6 p.m. As legislators work through the process of revising the proposal, a pair of public hearings on the budget will be held on Oct. 19 and Nov. 3 followed by a special Legislature meeting to adopt the budget.
Reach Ashley Onyon at [email protected] or @AshleyOnyon on Twitter.
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