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FROSTBURG – One day after its city administrator almost went into shock at word of potential budget cuts that turned out to be false, the Frostburg Mayor and City Council moved to begin the budget formulation process with an unprecedented public outreach to educate citizens about the budget situation, and solicit ideas for addressing it.
The Council is hosting the Special Budget Meeting at 2 PM Saturday in the Community Center on Water Street. It is billed as an informal gathering, similar to a work session, where residents will sit at tables to facilitate a collaborative approach to a historically challenging budget.
“We hope it will put people at ease…,” City Administrator John Kirby said at Thursday night’s monthly Council meeting. “It will be a true work session, where people will work with the mayor and council.”
The special budget session was initiated by Finance Commissioner Richard Weimer, who takes the lead in developing the fiscal year spending plan that takes effect July 1. Having absorbed a $340,000 mid-year cut in state funding this fall, and acutely concerned about what lies in store with the fiscal 2011 spending plan, Weimer wanted to inform residents about the funding situation, and more actively bring them into the months-long budget formulation process.
“At each stage, we’d like to involve the community as much as possible,” he said.
Like their counterparts in municipalities across the Old Line State, city staff are watching the 90 day session of the Maryland General Assembly with keen interest, as the state deals with its own funding crisis spurred by the national recession. The governor this week presented a preliminary budget, but the final spending plan won’t be approved until the end of the legislative session, which wraps up April 12.
“We’ve got that long to monitor and manage” the events coming out of Annapolis, Kirby said.
The city administrator had an early ride on that roller coaster Wednesday night, while attending a meeting of the Western Maryland membership of the Maryland Municipal League, which drew officials from cities and towns in Allegany and Garrett counties. Kirby had already been advised that the cuts in Highway and Police grants that represented the $340,000 reduction in the current year, will be carried over into the new fiscal year. At the meeting, though, a representative from the governor’s office advised municipal officials that the state would also eliminate the municipalities’ share of income tax revenue. For Frostburg, that would be an additional $400,000 in lost funding, for total hit of nearly three-quarters of a million dollars. For smaller towns, like many of Garrett’s eight municipalities, it could be the death knell of municipal government.
“We’re close to shutting down,” Kirby said of the impact of such a cut on Frostburg. “Some (towns) are insolvent.”
Kirby returned to City Hall immediately after the dinner meeting, summoning other staff to a furious round of “what-ifs” in the face of the devastating news.
The first thing Thursday morning, he was on the phone with a senior member of the governor’s budget staff, who investigated the matter, and eventually advised Kirby that the state official had misinformed the MML membership. The state would use a rarely tapped reserve fund to cover the income tax revenue for this year. However, the reserve fund would have to be restored next year – another example of accounting maneuvers that delay the day of reckoning without directly resolving the funding shortfall.
Nevertheless, it was the first bullet, and the first bullet dodged.
In his discussions with state staff, Kirby actually received a bit of rare good budget news. He was told that the governor had included $500,000 apiece in his capital budget for a new raw water line from Piney Reservoir along Route 40, and for combined-sewer separation projects in the town. Like the operating budget, though, the capital spending plan isn’t final until the end of the session.
“It could be very good news if it holds up,” Kirby said.
That may promise to be a big “if.” The administrator noted that a recent Baltimore Sun article reported that the governor’s spending plan includes $300 million in revenue from a second federal stimulus plan. Such a plan was always in doubt, now even more so with the political shockwave of the Tuesday Massachusetts election. If stimulus funding doesn’t come through, the state will have to find that revenue elsewhere, or cut spending.
Mayor Arthur Bond noted his concern about the impact of such cuts on town governments. “The state budget proposals we are hearing from Annapolis would, if approved, forever change the way we serve our citizens here at the local level…,” he said at the Council meeting. “Communities might be faced with eliminating long-standing local services or, in the worst cases, giving up their municipal charters and fading into history.”
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