In the wake of a state audit criticizing Montgomery County’s use of reserve funds, county Treasurer Shawn Bowerman has produced a tentative 2014 budget that would pull another $2.3 million from the county’s already-depleted fund balance.
“We have a limited number of revenue streams,” he said Thursday.
He finished drafting the tentative budget and handed it over to the Finance Committee earlier this month. Some of the specifics will likely change during the review process, but the current document has the county spending $101 million in 2014, $3 million more than in 2013.
The increase in spending, Bowerman said, comes from a number of big-ticket items. Fringe benefits and salaries are up this year, along with Medicaid expenses and capital projects at Fulton-Montgomery Community College.
“We’re also paying more for our government,” he said.
On Jan. 1, 2014, Montgomery County’s new government will take effect. The current board of 15 town and city ward supervisors will be replaced by a nine-member legislature and elected county executive. Bowerman said the current board costs the county $155,000. The new legislature will cost $95,000 and the executive will get $85,000. The increase is only $25,000, but it adds to the general rise in spending.
To pay for the increases, Bowerman said, the county had to disregard recommendations from the state Comptroller’s Office and pull $2.3 million from the fund balance — the county’s rainy day fund.
“We need to stop relying on our fund balance to balance the budget,” he said, adding that the county has budgeted large chunks of the fund balance for a number of years, depleting its savings from $20 million to the current $7.3 million.
Bowerman is proposing a 2.1 percent increase in the tax levy, which would net the county an extra $550,000 and allow current services to continue.
“We actually lowered the tax levy last year,” he said. “That’s unheard of. Most other counties don’t do that. We can’t keep it up.”
He said the county has four main revenue streams: state and federal aid, and sales and property taxes. State and federal aid, he said, are on a slow decline. Raising the sales tax rate requires authorization from the state Legislature, which generally is reluctant to grant such permission, thus leaving only one other option.
“We have to raise property taxes,” he said.
Property owners in the city of Amsterdam and town of Mohawk, he said, would see a slight decrease in their tax rates, while those in other towns will see an increase.
Bowerman was careful to point out the Finance Committee could change much of his draft before the board approves the final spending plan.