“Keep the Lights on Budget”
Originally Published: November 8, 2023
CFO Cudmore Previews Financial Decisions
At the 10/24 Commissioners meeting, Chief Financial Officer Jeanette Cudmore provided a briefing on the upcoming budget. Each year the Commissioners work through a budget process to allocate funding to various county departments, capital improvement projects, outside agencies like the Sheriff’s Office and the Library, non-profit grants, and more. Decisions made during the budget process have an everyday impact on your life. CFO Cudmore’s overall recommendation is for a “keep the lights on” budget to maintain funding at levels equal to last year.
Revenue is up by $1.1M over projections due to excess interest income received. Major revenue streams funding the budget are property and income taxes, which Cudmore noted have been down compared to FY22. Home sale prices have increased, with an average $382K selling price, but the amount of homes for sale has decreased. Income from the recordation tax (a fee imposed on recording the sale of property) is down by $1.4M, with transfer tax collection (a fee imposed to transfer the ownership of a property) down by $2.9M compared to last year. The recently approved Excise Tax has only netted $285K since its implementation in July.
Fund balances were also discussed. The County has a policy of keeping a fund balance equal to at least 15% of revenue. The current fund balance is $77.6M, of which $33.8M is committed, $14.9M is assigned, and $26.6M is unassigned (not being used). The fund balance is down to 15.92%, close to the 15% policy floor, so no fund balance will be available to use in the next budget according to Cudmore. In past years, the Commissioners have been pressured to use unassigned fund balance to make up budget shortfalls and provide more funding for public services.
Commissioners have said funding nonprofits directs funding in specific ways to address community issues, like homelessness, mentoring programs, food banks, and the arts. Last year, just over 1M in non-profit grants were included in the budget. Groups like the 7th District Optimist Club, Unified Committee for Afro-American Contributions, Watermen’s Association, Feed St. Mary’s, Three Oaks, SOMD Center for Family Advocacy, and more all receive non-profit funding. Commissioner Guy said the sports leagues should go through non-profit funding if they need additional funds to pay for Recreation & Parks fees. There has been information regarding the potential of raising these fees exceptionally because of funding shortfalls for staff. Non-profit grants are paid 100% from fund balance, so if there is no fund balance to use there’s a chance of zero non-profit grants.
The Commissioners have added 185 new positions to county government over 3 years. The new positions are part of recurring expenses which must be budgeted for each year. At the end of the year, if the positions aren’t filled, the salary funding is reallocated to the Commissioners reserve fund for future use. Presently, there are well over 100 vacant positions in county government.
Based on the information presented, there is a high probability county departments will receive flat funding equal to last year. It is likely the Board of Education will receive only Maintenance of Effort funding, also equal to the previous year. The budget cycle begins with the first budget work session on November 26th. Multiple work sessions will occur over subsequent months, until a finalized budget is presented to the public at a public forum on April 23, 2024. The final budget approval will come a month later, on May 21, 2024.
