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The Repercussions of Addressing Frederick County’s Structural Deficit

Real estate tax rates will not be increasing anytime soon, but tempers are rising, that’s for sure… and where did our farmland preservation money go?

Frederick County Government Historical Net Structural deficit“Heartless”, “inhumane” and “cruel” are just a few of the words used to describe the Frederick County Board of County Commissioners as they have come closer to finalizing the budget for fiscal year 2012.

Without a doubt, our community has not seen the likes of this kind of crew for as long as I can remember.

Standing in the face of an $11.8 million deficit and a $31 million base structural deficit, they knew that they were destined to disappoint more than a few people.

Within one week after being sworn into office they went right to work with the leadership team of county staff in a two-day retreat at Pinecliff Park to identify goals and craft a strategic plan for their four-year terms.  This effort resulted in six key goals:

  1. Job growth
  2. Predictability for business
  3. Public safety
  4. Traffic
  5. Agricultural preservation/land use
  6. Privatization and sharing of government services

These core priorities have set the framework for a fundamental redefinition of the role of government in Frederick County… at least for this board, which is determined to get the County”s financial house in order.

In the five months since this board took office they have been able to slash the structural deficit by $12 million dollars, leaving a trail of unhappy people at Head Start, over 100 county staff members who have been laid off through a massive departmental reorganization among others.

Over the last ten years the structural deficit has averaged about $16 million.  This is about $11 million more than the county is comfortable planning for according to County Budget Officer Mike Gastley in a presentation he made to the County Commissioners at their .

…But haven’t we always had balanced budgets?

In a conversation last week with County Commissioner Billy Shreve, he said while past boards have delivered balanced budgets over the last 10 years, each time the expenses have exceeded expected revenues.  These negative scenarios have all been offset by raiding several of the county’s special “savings accounts” such as the Fire & Rescue Tax District, Open Space and the County”s Bond Enhancement Fund.

In the case of the latter the balance dropped over the last several years from $4 million to about $100,000.  Ironically, this is the fund that Frederick County established to prove to the bond agencies that it is capable of saving money.

… and the local farming community has been wondering where their local agricultural land preservation dollars went out the Open Space Fund from recordation taxes.

“Even though county revenues were rising each year for most of the last ten, past boards still approved budgets with higher spending levels,” Shreve said, “and today we don”t have any more funds in those savings accounts to cover the excesses.”

For Shreve, and the majority of his four comrades, the decisions on how to reign in the exponential rise in the structural deficit are tied directly to their campaign promises of no new taxes and restoring fiscal responsibility to government.

While it took less than 5 months to cut the projected 2012 structural deficit from $31 million to $19 million, numbers will not drop as fast from this point on.  Projections into F.Y. 2013 show a $16 million deficit and $15 million in F.Y. 2014.

In addition to keeping the General Fund balanced, those raided savings accounts have to be replenished, or in the case of the Fire & District Tax Districts it is likely that a major reorganization will have to be considered to make its fund sound, according to Shreve.

Redefining the role of government

With all the cutting and reorganization that is going on, one thing has been made clear, this board of commissioners is not about proportionality.   Their focus is based upon those six core priorities that they established back in December.

For many local non-profit and religious based human service organizations in Frederick County, they”re finding themselves being left high and dry.

Philosophically, while County Commissioner Blaine Young stated that the 2012 budget provides about $11 million to the low income population of the county, he does not believe that the Frederick County Government should be in the business of using taxpayer money to fund private non-profit organizations such as the Community Action Agency, Mental Health Association, Heartly House and other such groups.

In an to provide about $150,000 in the budget for the Community Action Agency.  Young made it clear if the board is going to consider funding one such organization, then in order to be fair “we should have one day for a “beg-a-thon” where all non-profits can come in here and make their cases.”

Heartless, inhumane and cruel?

Like it or not when there are limited funds and a multitude of demands for services, government must make tough choices, and Young and his slate are holding firm to their convictions.

The good news is that they are a rare breed of politicians who have the guts to tackle a serious financial problem rather than avoid them.

The bad news is that some terrific people, groups and causes that have depended upon Frederick County Government for human services funding for the needy of our community are left looking elsewhere for financial assistance.

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The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He is an appointed member of the Frederick County Charter Board.  He also writes for

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