2013 Budget Message
April 12, 2012
- Refine the Way County Government Works
- Fiscal Discipline
- Reduction of Employee Positions
- Use of Technology
- Live Within Our Means
- Priority of Public Education
- Commitment to Infrastructure
- Our Future
Chairwoman Almond and members of the County Council, ladies and gentlemen of our county, thank you for the continued honor to serve as your 12th County Executive and to appear with you today to present Baltimore County’s proposed operating and capital budgets for Fiscal Year 2013.
When we were elected 17 months ago we faced a sluggish economy and a county that for the first time in our modern history had declining revenues, all while serving the largest population our county has ever seen.
Facing this reality, we immediately set upon a path to refine the way county government works, by consolidating multiple agencies and introducing modern technologies to make us not only more efficient, but to save taxpayer dollars as well. Our approach is an ongoing one, analyzing government functions to determine whether a consolidation can be both innovative and efficient. Our approach is designed to give our citizens the services they need with the kind of responsibility that they deserve. I thank the Council for being partners in this important effort.
We have also continued to work with our employee groups, seeking significant savings to the County's health care and retirement expense. No doubt these are tough decisions, but I am proud to note that these agreements are one of the many factors that have helped Baltimore County avoid any furloughs or firings of our employees, avoid any increase in tax rates, while still fully funding education at Maintenance of Effort levels, and retaining our coveted Triple AAA bond rating.
I am especially proud of the many labor groups that have reached multi-year extension agreements with us. I particularly want to recognize the President of the Firefighter’s Union, Mike Day, and President of the Teachers’ Association, Abby Beytin, for their efforts on behalf of their members. Their partnership has been invaluable in our efforts to develop this budget...
Frankly, it would be nice to tell you that the most difficult times are behind us, but that is simply not true. In order to avoid raising tax rates upon those we represent, we must continue to make tough decisions to fulfill our obligation to our county's 805,000 residents. Many of the decisions that lie ahead will not always be popular, but they are necessary if we are to secure a solid fiscal foundation for Baltimore County in the 21st century.
I say this because, although the economy appears to have begun the long climb toward recovery, there are still mixed economic forecasts for the remainder of the decade. Baltimore County’s pension fund is certainly not immune to these difficulties. We must continue to make appropriate adjustments to protect both the fund and our employees. In the very near future, the county must reexamine both its valuation rate and the relationship of that rate to the Post Retirement Increase Fund (PRIF). Baltimore County government is obligated to make further down payments to fund the Other Post Employment Benefits (OPEB) category — a liability that now totals $3 billion. And we must continue close scrutiny of the rising costs of employee health care, including retiree costs. None of these decisions are easy. But they are in furtherance of our goal to protect both our employees and our taxpayers. We will not saddle our employees with a broken promise, nor will we burden our taxpayers with an unpaid bill. These changes are necessary to ensure that our county employees have a sustainable pension when they retire.
A key component of our plan to maintain county services, avoid increases in the tax rates, and protect our employees from furloughs or firings has been a voluntary reduction in the gross number of county employees. Earlier this year, in an effort to reduce our workforce in a way that was both evaluative and humane, we offered an early retirement incentive to eligible county employees, anticipating a savings of $14 million. All told, 310 government employees qualified for this program, saving the County an estimated $21 million, each and every year. Through attrition and retirement incentive, we have been able to reduce the total number of non-public safety, general government employees to 3,340 positions. In 1987 Baltimore County had 4,043 general government employees. The budget that I am submitting to the Council today has 7 percent fewer employees than last year’s budget and a 17.4 percent reduction compared to 25 years ago.
I thank each and every member of Baltimore County government, from our department heads to our newest employees, for the way they have embraced and implemented our vision. Their efforts to streamline operations without diminishing services, while submitting budgets that reflect our commitment to the taxpayers, demonstrates why we have the finest public servants in the nation. As both County Executive and a resident of Baltimore County, I cannot thank all of you enough for what you have done.
We have also made a significant commitment to use technology to help us move the County forward. Through the hard work and talent of our top-notch Office of Information Technology, Baltimore County has 24 technology initiatives underway that streamline operations and improve delivery of services. There is no better example of this than our Police Department’s online reporting tool, which will enable residents to directly report minor crimes. These initiatives have also made access to County resources easier to use. For instance, the updated “My Neighborhood” tool streamlines our GIS map information and eases citizens’ access to a variety of requested data, such as zoning, school districts, voting districts, tax information, and more.
All told, 15 of these projects are now complete and another two will be completed this spring. The remaining seven are underway and expected to be completed within target dates. These initiatives have had an effect on almost every agency of county government.
This budget continues our commitment to use technology to become more efficient and save taxpayer dollars. An additional $5 million will fund 14 new technology initiatives over the next two years, ranging from installation of GPS units into county vehicles to an improved work order system for the Department of Public Works.
We are also taking significant steps to ensure that government service is efficient through the consolidation of the Department of Health and the Department of Social Services into a single Department of Health and Human Services. This streamlining will enable us to not only deliver more effective and integrated services, but to do so for those most in need. I thank Dr. Gregory Branch, our uniquely appointed Health Officer and Social Services Director for taking on the responsibility of managing this new agency.
While we must have the courage to make the tough fiscal decisions necessary to run our government, we will not lose focus as to the role of our government. We don't make change in a vacuum, but to achieve a goal - to continue to deliver core services to the people of Baltimore County. In these challenging times, our budgetary focus will prioritize three core functions- public education, public safety, and the rebuilding of our aging infrastructure. In providing basic services to our citizens, we will be innovative, responsible, and efficient.
We approach today’s budget no differently than every family in this county – we live within our means. As before, this budget falls beneath the spending affordability guidelines established by the County Council. Significantly, and thanks to the hard work of all of our county employees, we propose no increase in the property tax rate for the 24th year in a row, and no increase in the income tax rate for the 20th year in a row. That is a record that we can proudly put up against any subdivision in this state or for that matter, the nation.
The general fund budget of $1.6 billion is essentially a baseline with an increase of only 2.8 percent above last year. But in actuality, there is no increase at all. If you disregard the $15.7 million transfer of the teacher pension system, along with the $20 million OPEB contribution, this year’s base spending actually decreases by $3 million from last year. The budget includes nearly $85 million in the stabilization reserve fund and an additional $130 million in fund balance which is necessary to manage the county’s finances as we approach further economic uncertainty in the months and years ahead.
This past Monday night, the General Assembly failed to reach a budget agreement and we await their further action. For budgetary purposes we will allocate funding for teacher pension and other state obligations in a contingency fund.
Even during tough times, Baltimore County has always funded the school system at maintenance of effort level. This budget continues that important commitment. This year’s school budget, excluding food services and capital related items, is $1.33 billion, which accounts for 52 percent of the county’s operating budget.
We can be extremely proud of the county’s support for education, and extremely proud of the performance of the Baltimore County Public Schools. As Dr. Joe Hairston prepares to move on to the next phase of his career, I thank him for all of his effort on behalf of the students in Baltimore County. His achievements speak for themselves. He dramatically improved technology in the schools, increased participation and pass rates in Advanced Placement programs in an increasingly diverse school system, and is recognized for having the highest graduation rates in the nation for African American males.
In last year’s budget message I asked Dr. Hairston and his staff to carefully review the budget for efficiencies and consolidations in our ongoing effort to direct more resources to the classroom. The budget that I submit today reflects Dr. Hairston’s serious approach to last year’s request. It includes an additional 124 teaching positions while eliminating 50 non-classroom positions. Once again, please join me in thanking Dr. Joe Hairston for 12 years of service to the boys and girls of the Baltimore County Public Schools
As one of our core priorities, schools will be the centerpiece of our capital program. This year, the State of Maryland has allocated $42 million for school renovation and construction for Baltimore County, a $10 million increase from the previous year, and we intend to pursue additional funding from the state. I want to thank Baltimore County’s House and Senate delegation, including delegation chairs, Senator Kathy Klausmeier and Delegate John Olszewski Jr. as well as Governor Martin O’Malley for their support of Baltimore County’s school renovation and construction program. I also want to particularly recognize Speaker Pro-Tem Adrienne Jones and Budget and Taxation Chair Ed Kasemeyer for their continuing efforts on behalf of Baltimore County.
The $149 million FY 14 school referendum request that will be voted on in November of this year includes a 36 percent increase in bond funds dedicated to school construction over last year’s capital improvement program and represents nearly 60 percent of the total bond referendum.
In recognition of the projected overcrowding of every central corridor elementary school from the city line to the Pennsylvania border, we will proactively allocate funding to solve this issue. Accordingly, in addition to completing construction of the Hampton Elementary addition, we will fully fund the systemic renovation and addition at Stoneleigh Elementary. We will also allocate funding of $4.2 million for a 200 seat addition to Sparks Elementary School and $18 million for a new 700 seat Mays Chapel Elementary School. This budget also includes $34 million for an addition to and systemic renovation of one of our oldest schools, Hereford High School, as well as $18.5 million for an elementary school in the northwest area of the county.
When I began my term of office in December 2010, I was well aware that over 50 percent of Baltimore County’s 164 schools did not have air conditioning. I am committed to addressing this issue, but in a fiscally responsible manner. This November’s referendum, which will be allocated for FY 14, will include $32.5 million for air conditioning of 10 schools countywide. In addition, two more schools will be funded as part of their systemic renovations, for a total of 12 additional schools that will be receiving air conditioning:
- Catonsville Elementary
- Fort Garrison Elementary
- Sudbrook Magnet Middle
- Timonium Elementary
- Franklin Elementary
- Hebbville Elementary
- Woodmoor Elementary
- Middleborough Elementary
- Middlesex Elementary
- Sussex Elementary
- Hereford High School (systemic renovation)
- Stoneleigh Elementary School (systemic renovation)
As a result, we will have installed or funded air conditioning of 25 schools in 14 months. That means that since December of 2010, we have reduced the percentage of schools without air conditioning from 54 percent to 36 percent. Our goal will be to continue this steady progress with each referendum until we complete the job.
In addition to our efforts to air condition our schools, we are also supportive of the pilot energy performance contracts that will be presented to the Board of Education later this spring. This public - private partnership represents an opportunity to bring down energy costs, and I applaud the board’s willingness to explore a creative approach to this important issue.
We are extremely proud of our Baltimore County Public Schools, but we recognize that education in this county doesn’t stop after graduation from high school. We are fortunate to have some of the finest institutions of higher learning from across the entire region in our county, including the Community College of Baltimore County. We are particularly proud that CCBC has the largest enrollment of any Community College in the State of Maryland. Dr. Sandra Kurtinitis and everyone at CCBC do an incredible job that enriches all of our communities. This year, we will continue to meet our maintenance of effort for CCBC to ensure that it has the resources it needs to prepare their students for success.
In addition to our core function of education, our capital budget will focus on maintaining the county infrastructure. In this proposed budget, I am submitting a six-year capital improvement request of $2 billion. Included in that request is current expense funding of $5 million for additional technology projects, $6 million for major school maintenance, and nearly $3 million for school roof repairs. The request before the council today also includes nearly $20 million for road resurfacing projects across the county in FY 13 and an additional $20 million is programmed for FY 14.
In addition, we are committed to ensuring that our public servants have the resources and equipment they need to serve our communities. That is why we are supporting our county workers with a $73 million allocation for capital acquisitions. This includes $13 million for the Baltimore County Fire Department to purchase new breathing apparatus, 21 medic units, 12 engines, and two ladder trucks. Of the remaining $60 million, $26 million will be used to purchase new heavy equipment for the Department of Public Works Solid Waste, Utilities, and snow removal operations. $34 million will be used to purchase new technology and equipment for use throughout county government.
We have made some difficult decisions in this budget, and in the years to come we are going to have to make many more. But in the words of a successful American entrepreneur, “It's not hard to make decisions when you know what your values are.” Over 350 years ago, the first settlers arrived in Baltimore County. With only themselves to rely on, they built a better, enduring community for everyone who lived here. Three and a half centuries later, their values of hard work, responsibility, and community are still with us. They guide us and shape the place we all call home.
If we remain committed to those values, I am confident that we are more than equal to any challenge, any pitfall that comes our way. Together, on a path of innovation, responsibility, and efficiency, I am confident that we can build the kind of future that everyone who calls this place home deserves.