Maryland Senate (Partially) Bails Out Wicomico County

ANNAPOLIS, MD – By a vote of 33 – 13, the Maryland Senate has passed SB 1301, the Budget Reconciliation and Financing Act of 2012.  If the bill passes the House today Wicomico taxpayers can breath a partial sigh of relief.

The maintenance of effort (MOE) reset is gone.  Taxpayers don’t have to worry about coming up with $14 million extra this year.  Of course, they never really had to worry about it anyway.  The option to let the BOE keep the county’s $36 million in income tax revenue remained the most cost effective option.

While Wicomico County Executive Rick Pollitt will claim that the legislature followed through with all of their promises, that is not quite true.  Pollitt stated that the pension reset would not come out of the county’s budget.  Technically this is true, however the bill requires that counties now must meet MOE plus the cost of pensions.  For Wicomico this amounts to $2.17 million for FY 2013.  The state is providing a disparity grant of $1.57 million, but the county’s taxpayers will still need to fund an additional $603,756 for this coming year.  The legislation also requires that the county will have to fund:

$2.76 million FY 2014
$2.72 million FY 2015
$3.24 million FY 2016

There is no guarantee of state funding for those years.

On the Eastern Shore only Caroline, Dorchester, Wicomico, and Somerset counties are receiving any help from the state in meeting their pension obligations.  The net amounts each county will have to appropriate for FY 2013 are:

Cecil $2.46 million
Kent $366,147
Queen Anne’s $1.10 million
Caroline $108,826
Talbot $628,456
Dorchester $347,630
Wicomico $603,756
Somerset $  98,125
Worcester $1.27 million

In addition to the pension re-set, Wicomico County will be required to keep a 3.2% income tax rate AND charge a the maximum allowable rate under the revenue cap.  While the revenue cap is still in place, the county council will no longer have a choice in charging any rate below that maximum.

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