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Prince George’s County employees can expect to go another year without pay raises as the county faces a $125.7 million budget shortfall next fiscal year, county officials said.
While no layoffs or furloughs are anticipated, county agencies have been instructed to plan for the worst — departments must make several budget proposals, including one in which agencies’ budgets are slashed by 5 percent, according to Thomas Himler, the county’s deputy chief administrator for budget, finance and administration.
County employees haven’t received merit raises or cost-of-living increases since fiscal 2009, Himler said.
However, a countywide hiring freeze will be partially lifted, allowing departments to fill empty positions as deemed necessary by the county executive’s office.
County revenue is projected to fall 2.7 percent from fiscal 2012, from $2.65 billion to $2.58 billion, according to new estimates by the county’s Spending Affordability Committee. Combined with rising expenses, County Executive Rushern Baker faces a bigger budget gap in the year starting July 1 than the $77 million shortfall he inherited in 2011.
Officials had projected a $132 million hole in December 2010.
“We’re about $6 million, a little bit better this year, than what we thought a year ago,” Himler said.
Prince George’s budget outlook is slightly better than neighboring Montgomery County, which expects to face a $134.5 million gap in fiscal 2013.
The outlook includes between $12 million to $15 million in expenses for merit pay raises, but the county executive’s office has no intention of giving the raises, said spokesman Scott Peterson.
The county is still negotiating union contracts, Himler said.
The poor revenue forecast is mainly caused by the county’s struggling real estate market. Roughly one-third of property values in Prince George’s fell by an average 24.8 percent on Jan. 1, the highest drop of any county in Maryland.
The decline marked the third consecutive year of negative property value assessments for the county.
Overall, the value of Prince George’s County properties is projected to drop by $6.8 billion in fiscal 2013.
Changes at the state and federal levels could make the county’s fiscal situation even worse — Maryland politicians are considering a shift in teacher retirement costs that could push between $20 million to $70 million in teacher retirement costs onto the county from the state.
And any further dip in the housing market would be disastrous for Prince George’s, Himler said.
