Kevin Kamenetz
Budget Message
April 14, 2011
Speech Highlights
- Innovative, Responsible, and Efficient
- Fiscal Discipline
- Reduction of Employee Positions
- Potential of Technology
- Priority of Education
- Focus on Job Creation
- Investment in Infrastructure
- Our Future
Budget Details (PDF)
Chairman Olszewski, members of the County Council, my fellow County employees, and to the citizens of our great County, it is an honor to join you today to present Baltimore County’s proposed operating and capital budgets for Fiscal Year 2012.
For 16 years I sat upon this very dais absorbing an annual summary of where we would map the course of the County. We managed our budgets through mostly good times, and some tough times. But at no time in those 16 years did we face difficulties that equaled the magnitude of the declining revenues and increasing costs of today. All this is happening at a time when this government must provide essential services to the largest population this County has ever seen, 805,000 residents. Still, we have an obligation to protect our citizens, educate them, and maintain their quality of life.
Innovative, Responsible, and Efficient
Baltimore County has a duty to deliver these services responsibly. On this subject, Abraham Lincoln once wrote, “You cannot evade the responsibility of the future by evading it today.” Responsible fiscal discipline has defined Baltimore County government for almost two decades, and I renew that commitment with this budget.
Like many a household in this County, this government is faced with extraordinary burdens and financial pressures. While these demands are formidable, they also provide us with opportunities for creative solutions. In times such as these, we must seize the initiative and reexamine the way we operate government. We must refine how we go about our business. We must look for ways to better serve the people who have given us their trust.
Simply put, our County government must be innovative, responsible, and efficient. Since my first day in office, I have been committed to reshaping County government around these three principles. By consolidating resources and applying innovative technology, we can increase efficiencies that will create additional savings in this budget, and budgets in the years to come. Every employee in every agency will all have to work harder and smarter to maintain the high standards that the people of this County expect.
Fiscal Discipline
The budget I am presenting today will both support the needs of our growing population and continue to fund essential government services within a sustainable fiscally prudent environment.
Like those of my predecessors, this budget complies with the Spending Affordability guidelines established by the County Council. However, in light of the challenges posed by the current economic environment, this year’s budget draws on $60.8 million of Baltimore County’s reserve funds. These reserves exist to help balance the budget in difficult times, and we are utilizing them this year to do just that. These funds will not only help us navigate this economy, but will also prevent us from compromising core government services. In order to retain our Triple A bond rating, this budget still maintains 9.9 percent in cash reserves for future “rainy days.” Most importantly, it also maintains the existing income tax rate and property tax rate. I am pleased to note that there have been no increases in the income tax rate for 19 years in a row and no increase in the property tax rate for 23 years in a row.
Yet, fixed costs continue to rise. During the past year, fuel for our County vehicles increased by 15.5 percent. Healthcare, payroll costs, and retirement benefits for County employees demand an increasingly larger share of our budget, now approximately 70 cents of every county tax dollar. And one fourth of County employees are eligible for step and longevity increases that we are contractually obligated to pay. At the same time, State government continues to pass along costs that we are now mandated to pay. Despite these increased expenses the general government budget rises by a minimal two tenths of one percent over last year’s budget.
Reduction of Employee Positions
Anticipating this year’s fiscal reality, in just my first week in office, I eliminated 143 positions in County Government and consolidated four agencies into existing departments, resulting in taxpayer savings of $8 million annually. With today's budget, I will eliminate an additional 41 positions, removing a total of 184 positions. These reductions lower the total number of general government employees by 2.8 percent from last year. This brings the total number of general government employees the lowest it has been in the past 25 years. Yet, at the same time we are taking these important steps, through attrition and job reassignment, we have been able to ensure that County employees will experience no furloughs and no lay offs in the upcoming year.
By utilizing innovation, consolidation, and efficiency, I am confident that a reduction in employee positions will not result in a reduction in core services. For example, because we want to keep our crime rate low, it is critical that we get more police officers back on the streets. Implementation of our automated court reporter system has allowed us to reallocate those courthouse positions to the police department, where these civilian employees will replace sworn personnel to help transcribe data for DNA analysis and other clerical functions. Reassigning the Police Athletic League function back to the Department of Recreation and Parks allows trained recreational leaders to work with our youth, and makes it possible to put more police officers back on our neighborhood streets. We will continue to implement more efficient and innovative consolidations in the months and years ahead.
Potential of Technology
If we are to maintain 21st century standards of government service, it is essential that we leverage the potential of technology. Last year, I asked Rob Stradling and our terrific Office of Information Technology, to identify specific operations in County government that could be enhanced through a more effective use of technology. We are now beginning the implementation of 23 technology initiatives that will reduce costs, improve efficiency, and enhance customer service.
Among those recommendations is the purchase of an online educational system that will allow us to eliminate one third of the overtime expense for our police officers who are currently mandated to participate in an annual two-day in-service training regimen. The new system will reduce the time required for training by a full day, and officers will be able to complete their online course work during their downtime, throughout the year, at their own pace. The cost of the software is $500,000, which is matched by annual savings of the same amount. Consequently, we will recoup our investment in the first year, and save half a million dollars every year thereafter. Other technological changes that are being implemented will allow us to perform similar county services more efficiently while also saving taxpayer dollars.
Priority of Education
Given diminishing revenues and a bleak economic outlook, we must target our money to those areas where it will do the most good. Providing for a quality education is an essential part of Baltimore County’s future and a priority in this budget. Over the past three months, I have spent much time in Annapolis, working with our County’s legislative delegation and State leaders to fight for more education funding and avoid reductions in aid. In my many meetings with county executives around our State, I have learned that because of the reduction in State aid, some counties intend to submit education budgets at levels below current funding. Please know that we are committed to meeting our obligations to the Baltimore County Public Schools by fully funding maintenance of effort. We do so despite an increase in student population and a mere 1 percent increase in State Aid over last year’s funding. This year’s school budget, excluding food services, is $1.35 billion, which accounts for 51 percent of the County’s Operating budget.
Well aware of the challenges facing local government, Superintendent Dr. Joe Hairston and the Board of Education presented a fiscally responsible budget for consideration. I appreciate their recognition of the County’s economic outlook. The Board’s budget does include an increase in the teacher/student ratio. While that budgetary reality is unfortunate, Baltimore County will continue to have smaller class sizes than nearly every other major jurisdiction in Maryland and a smaller ratio than Harford, Carroll, Montgomery, Prince George’s, and Anne Arundel Counties, as well as Baltimore City.
Regrettably, there are insufficient funds to maintain last year's teacher/student ratio. However, I have identified some areas in the administrative functions of the school budget that can be reallocated to restore some teaching positions.
In my conversations with education stakeholders, there appears to be a desire to reduce the level of non-classroom administrators and shift their responsibilities to classroom functions. As the educational experts, it is incumbent upon the Superintendent and the Board to be proactive and apply the concepts of efficiency, consolidation, and innovation that we are attempting to accomplish in general government. I strongly encourage Dr. Hairston to not merely accept this budget as the status quo, but to reexamine the administrative functions of Greenwood to ensure that our students are best served by the capable employees, teachers, and administrators that constitute our school system. I am grateful, therefore, that Dr. Hairston has assured me that he will continue to work with his budget team to identify further administrative efficiencies during the current fiscal year. Baltimore County has an outstanding school system. I applaud them for a job well done.
Focus on Job Creation
Though recovering, our economy is far from robust, and the business community needs our support if we are to protect the jobs that our schools’ graduates will need if they are to raise their families here. That is why Baltimore County’s Department of Economic Development will initiate a refined focus to work with businesses to create new jobs. In Randallstown, we just opened the Liberty Center, a County government complex with classrooms for the Community College of Baltimore County and offices for a Workforce Development Career Center. We are also working to build on the success of Northwest Hospital to create new jobs and business opportunities. And after years of delay, Walmart will open a Supercenter on the Liberty Road corridor bringing 350 jobs to the region.
We are also filing an application with the State to create the Federal Center at Woodlawn Enterprise Zone, allowing us to capitalize on the opportunities available to us from the presence of federal agencies such as the Social Security Administration, the Centers for Medicare and Medicaid, and the FBI. Hunt Valley is quickly becoming Baltimore County’s high tech corridor with major employers in technology research and development, engineering, and manufacturing. The recent sale of Sparrows Point to Renco Group will encourage more manufacturing and port-related activities in our eastside industrial center. Despite the persistent challenges in our economy, we can all be confident that Baltimore County is poised to become an economic engine that can fuel the growth and resurgence of this entire region.
Investment in Infrastructure
The $659 million Capital Budget also reflects the ongoing economic challenges we face today by targeting funding to our most essential priorities. Clearly, the maintenance of this county’s infrastructure cannot be ignored. We have allocated $25 million for roadway resurfacing, $5 million for curb, gutter, and sidewalk repair, and $9.6 million for bridge repair. Ongoing maintenance of Baltimore County’s infrastructure is essential, and this budget makes an important investment in our future. We are also committing to $104.5 million for capital projects to maintain and preserve our schools.
Our Future
The last few years have not been easy and the next few years are projected to be just as challenging. Fortunately Baltimore County’s longstanding commitment to fiscal responsibility has insulated it from many of the difficulties that jurisdictions around the State and across the country face today. This budget continues that tradition of fiscal prudence that has served us well for many years. I assure you that Baltimore County will weather the difficulties that we will undoubtedly face in the future.
George Bernard Shaw once said, “We are made wise not by the recollection of our past, but by the responsibility for our future.” Now, in the face of great challenge, let us have the wisdom and the responsibility to create the prosperity of tomorrow, today.
Respectfully Submitted,
Kevin Kamenetz
County Executive
