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Report: Prince George’s needs new ways to bridge budget gap Report: Prince George’s needs new ways to bridge budget gap
(about 2 hours later)
Lagging tax revenues are failing to keep up with expenses in Prince George’s County, according to a report released Tuesday, and if nothing is done to fix it, the government could face a $250-million budget hole by 2022. Lagging tax revenue is failing to keep up with expenses in Prince George’s County, according to a report released Tuesday, and if nothing is done to fix it, the government could face a $250 million budget hole by 2022.
One week before County Executive Rushern L. Baker III (D) is expected to present his proposed 2017 budget to the Council, a preliminary report from a blue-ribbon commission says that years of tax caps, expensive labor agreements and a reluctance to raise fees has left the county with a worsening structural deficit. One week before County Executive Rushern L. Baker III (D) is expected to present his proposed 2017 budget to the council, a preliminary report from a blue-ribbon commission says that years of tax caps, expensive labor agreements and a reluctance to raise fees have left the county with a worsening structural deficit.
Baker and lawmakers have cut some spending, incrementally raised taxes and used rainy day funds to shore up budget gaps in recent years. But the report suggests that more drastic changes are needed.Baker and lawmakers have cut some spending, incrementally raised taxes and used rainy day funds to shore up budget gaps in recent years. But the report suggests that more drastic changes are needed.
“Without affirmative steps, the county’s fiscal health is in jeopardy,” commission chair Earl Adams Jr. said following a presentation to the county council on Tuesday. “It’s a dire situation that needs to be dealt with. We have a hole, it’s got to be filled and we’ve got to come up with solutions.” “Without affirmative steps, the county’s fiscal health is in jeopardy,” commission chair Earl Adams Jr. said after a presentation to the county council Tuesday. “It’s a dire situation that needs to be dealt with. We have a hole, it’s got to be filled and we’ve got to come up with solutions.”
The report cited rising personnel and public education costs, lagging income tax revenues and mandated limits on the county’s ability to raise revenue as factors that contribute to the budget challenge. The report cited rising personnel and public education costs, lagging income-tax revenue, and mandated limits on the county’s ability to raise revenue as factors that contribute to the budget challenge.
“The County is not as wealthy as it may appear,,” the report said, noting that Prince George’s collects about $800 less per capita in income tax than neighboring Montgomery County.“The County is not as wealthy as it may appear,,” the report said, noting that Prince George’s collects about $800 less per capita in income tax than neighboring Montgomery County.
That means Prince George’s draws millions less in revenue and depends much more heavily on state government funding.That means Prince George’s draws millions less in revenue and depends much more heavily on state government funding.
“We are relying on outside aid at twice the level we did in 1975,” said commissioner John Tabori, a political economist and former mayor of University Park. “That means we are at the mercy of what happens in Annapolis.”“We are relying on outside aid at twice the level we did in 1975,” said commissioner John Tabori, a political economist and former mayor of University Park. “That means we are at the mercy of what happens in Annapolis.”
Council Chairman Derrick L. Davis (D-Mitchellville) said “the perception of affluence” in Prince George’s “does not match reality.”Council Chairman Derrick L. Davis (D-Mitchellville) said “the perception of affluence” in Prince George’s “does not match reality.”
The financial crisis of 2008, federal sequestration and the foreclosure epidemic in Prince George’s had a deeper effect on wealth than estimated, Davis said. . The financial crisis of 2008, federal sequestration and the foreclosure epidemic in Prince George’s had a deeper effect on wealth than estimated, Davis said.
[African Americans who bought homes in Pr. George’s watched wealth vanish][African Americans who bought homes in Pr. George’s watched wealth vanish]
The Baker administration has been focused on expanding the commercial tax base through economic development so it can reduce the county’s reliance on residential property taxes. The MGM casino project is expected to open this summer, for example, and is supposed to inject $30 million to $40 million a year into the local economy. The Baker administration has been focused on expanding the commercial tax base through economic development so it can reduce the county’s reliance on residential property taxes. The MGM National Harbor casino is expected to open this summer, for example, and is projected to inject $30 million to $40 million a year into the local economy.
But “new projects coming online will not do it,” Adams said. “It’s a big piece but alone, it’s not going to do it.” But “new projects coming online will not do it,” Adams said. “It’s a big piece, but alone it’s not going to do it.”
The report looked at lost revenues from the application of the county’s homestead tax credit — a tool to prevent tax bills from rising quickly. Though housing assessments are improving, revenue — because of how the credit is calculated — has remained flat, the report said, resulting in more than $215 million less revenue for the county over the last four years. The report looked at lost revenue from the application of the county’s homestead tax credit — a tool to prevent property-tax bills from rising quickly. Although housing assessments are increasing, revenue — because of how the credit is calculated — has remained flat, the report said, resulting in more than $215 million less revenue for the county over the past four years.
The commission is about half-way through its assessment of county finances and does not plan on making specific recommendations until that work is done. Adams said the panel is exploring ways the county could increase its commercial revenue streamand make government more efficient and less expensive. The commission is about half-way through its assessment of county finances and does not plan on making specific recommendations until that work is done. Adams said the panel is exploring ways the county could increase its commercial revenue stream and make government more efficient and less expensive.
“There can’t be any sacred cows,” he said.“There can’t be any sacred cows,” he said.