1/25/2009
County budget shortfall likely by end of FY 2010 unless there are revenue or spending changes - Delaforum.com

At the midpoint in the fiscal year a torrent of red ink is flowing across county government ledgers, according to acting chief financial officer Ed Milowicki

The situation is "the worst I've seen" since coming to work as an accountant in the finance department 30 years ago, he told a recent meeting of County Council's finance committee. The Dec. 31 'checkbook report' showed every category of revenue lagging behind budget. The widest variance -- $13.3 million -- was in proceeds from the real estate transfer tax, which ranks second to property tax as a source of income. The total projection for the entire fiscal year, which ends June 30, is that revenue will fall short of the $159.4 million expected when Council enacted the budget ordinance last May.

Through December, $10.7 million in transfer tax, which the county shares with state government, was collected. The full-year projection is now $18.6 million, versus a budgeted $31.9 million. Milowicki warned, however, that that revenue could actually come in as low as $16 million. If the projections hold, the county will dip into budget reserves to the tune of $32 million, reducing the carryover to exactly half of what was in the kitty last July 1. In its other column, the 'checkbook' projects that county government spending in the full fiscal year will be $2.2 million below budget.

Milowicki reported that, if there are no changes in revenue or spending patterns, budget reserves will be all but depleted by the end of fiscal 2010 and the budget shortfall through fiscal 2012 will be $162.8 million.

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