Coronavirus: Montgomery County slashes $17.9M in spending

Montgomery County commissioners declared a fiscal emergency Tuesday and voted to slice the current general fund budget $17.9 million to get ahead of an expected loss of $20 million in tax revenues caused by the coronavirus pandemic.

“We’ve been through this before in 2007 and 2008 when we had a great tsunami that hit us with the Great Recession,” Montgomery County Commission President Judy Dodge said.

“We’re all struggling, but we’re all working hard and we’re just going to get through this,” she said speaking at the weekly county commission meeting held for the first time by video conference.

Cascading business shutdowns and decreased economic activity will blunt tax revenues that normally fill county coffers a few months after they’re collected, Montgomery County Administrator Michael Colbert said.

“This is in response to loss of sales (taxes), real estate (taxes), fees and casino (taxes) and other revenues due to the COVID-19 pandemic,” he said.

Cuts will come from the county’s $181 million general fund budget. The county’s overall approved 2020 budget was set at $914 million.

A hiring freeze will absorb about $7 million of the total expected shortfall, according to the resolution passed Tuesday.

The resolution shows nearly $11 million in budget cuts in the following areas:

  • Strategic community projects/grants, $1 million.
  • Alternatives to incarceration, $1 million.
  • Economic Development and Government Equity program grants, $1.25 million.
  • Security and improvements, $2 million.
  • County Jail and improvements, $2 million.
  • Building improvements, $3.4 million.

Passage of the resolution also temporarily freezes travel, saving $250,000.

MORE: Montgomery County budget tops $900M for 2020

Sales tax revenues typically bring in $8.5 million a month, or a little more than $100 million a year, Colbert said earlier this month as the county mulled cuts.

“We know the March sales tax, the April sales tax are going to be drastically hit,” he said.

Tax revenues generally reach the county about three months after collected, Colbert said.

More cuts could be on the near horizon, Dodge said last week.

“This could just be a temporary $20 million … But in another couple of months, it could be more and more millions of dollars. So we’re just going to have to tighten our belts,” she said. “Whether you’re a business or government, we’re all faced with very difficult decisions coming at us.”

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The county will hold future meetings on the Zoom video conferencing platform and live-stream those via Facebook until normal meetings can resume. The next scheduled meeting is at 1:30 p.m. April 28.

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