Local leaders take budget concerns to the shore

County leaders head to Ocean City for the Maryland Association of Counties summer conference this week. It is often a table-setter for the upcoming legislative session, but will be dominated by budget concerns this year. Stock.adobe.com photo by Christopher Boswell .

County leaders say they will be packing their budget concerns rather than their beach blankets as they head to Ocean City this week for a convention that often sets the table for the coming legislative session.

The Maryland Association of Counties annual four-day summer convention that kicks off Wednesday is expected to draw roughly 3,000 elected officials and government workers from the state’s 24 political subdivisions.

Inside the Roland E. Powell Convention Center, there will be hours of sessions on issues ranging from artificial intelligence and behavioral health to education, energy and the environment. Local leaders will use the convention to meet with state officials, including Cabinet secretaries and the governor, who wraps up the conference with an address on Saturday.

But hanging over this year’s convention are billions in looming structural state budget deficits, driven by the costs of the ambitious Blueprint for Maryland’s Future education reforms. There are billions more in shortfalls in the Transportation Trust Fund that could stall some projects.

“More often than not, the interests and the concerns of large jurisdictions are the same as smaller jurisdictions, rural, urban, suburban, red, blue,” said Baltimore County Executive Johnny Olszewski Jr., the current president of MACO. “There are issues that affect all of our constituents fairly equally. A lot of what we’re hearing, and a lot of the conversations we’ve had really focused on budget concerns.”

Counties face their own budgetary problems as they look for ways to pay their share of the education reform plan, and grapple with Transportation Trust Fund revenues that are flowing to counties at a fraction of the levels of a decade ago.

Montgomery County Executive Marc Elrich (D) said he hopes Gov. Wes Moore (D) uses his speech to open a frank discussion about revenues, and offer local governments more budget and revenue flexibility.

“What I’d like to hear is a willingness to engage with people in discussions about how to deal with the revenue problem. It is a problem,” Elrich said. “It does not serve us well to decide that raising revenues is off the table.”

Elrich supported a proposal in the 2024 legislative session to raise $1.6 billion annually by implementing combined reporting on corporations. He and Anne Arundel County Executive Steuart Pittman (D) drew the ire of some lawmakers after they suggested the proposal stalled because lawmakers were beholden to corporate campaign donors.

Moore and Senate leaders have been reluctant to seek broad-based tax increases of any kind. But Elrich said he believes the discussion gets bogged down in, “Oh my God, you’re going to raise revenues on residents.”

“There are ways not to do that, and I hope we can all collectively develop the courage to do it,” Elrich said. “The governor needs to know there is support in the legislature, as well.”

Olszewski, who has visited about half of the state’s 24 jurisdictions since being sworn in as MACO president in December, said that “front and center” in his discussions with local leaders across the state have been concerns about the cost of the Blueprint for Maryland’s Future.

“There are concerns both present and looming for a lot of my peers in local government. I know the governor just recently mentioned that adjustments will be needed on the Blueprint,” he said.

“I think leaders at this conference will certainly be interested in hearing more of the governor’s thoughts, especially on Blueprint. Also, in the most recent budget we saw significant proposed cuts to community college funding,” Olszewski said,

He said local leaders are also concerned about how to pay for transportation projects.

“We still are reeling from the cuts of the Great Recession to highway user dollars, where counties effectively act as agents of the state to maintain our roadways,” he said. “We’re still getting pennies on the dollar relative to how the state used to support us prior to the Great Recession.”

Olszewski said he expects Moore will again praise the partnership between the state and the counties, highlighting the services provided by local governments — sometimes with dwindling state aid.

“But then also, I think, we look forward to hearing more details about how he and state leaders plan to support that work,” Olszewski said. “We are constantly asking, for example, for more flexibility in terms of how we manage our budgets, in terms of having additional state support for those critical services. I think some details on what the year ahead might look like the second piece of that.”

Wicomico County gets about $1 million a year now from the Highway User Revenue fund, compared to about $7 million a year it received before the recession, said Wicomico County Executive Julie Giordano (R).

“We obviously have absorbed that cost,” said Girodano, who added that she and her county will be advocating at the conference for restoring the road aid.

While critics criticize the convention as a taxpayer-funded beach junket, attendees see it as an important chance to network.

“We have meetings and things like that scheduled with state officials so we can show them specific things in our county because they’re down this way,” Giordano said. “We use that as a benefit.”

There is also a fair amount of politicking and frivolity.

There are at least two dozen fundraisers and receptions scheduled in Ocean City for the week. Olszewski, the Democratic nominee for the open 2nd Congressional District seat, has a $250-$1,000 event scheduled the night before the convention begins, while others from as far away as Western Maryland and Montgomery County will use the gathering to raise campaign funds.

Lobbying firms host their own receptions for attendees.

The convention closes Saturday with an address by Moore, his third to the group since he was sworn in.

In both previous speeches, Moore delivered sobering fiscal news. At last summer’s convention, the governor warned of tough fiscal decisions that lie ahead, and six months later he delivered more difficult news.

The state’s Transportation Trust Fund would need $3.1 billion to cover the costs of projects already in the pipeline. Failure to find the money would likely result in the delay of projects important to local governments.

In July, the Board of Public Works, which Moore chairs, approved $150 million in budget reductions in the current budget.

“I’m concerned,” said Elrich. “I mean, the cuts he made — they weren’t necessarily pure cuts. He redirected money to the things that had some urgency to him. But some of the cuts have an effect on us. They’re not huge, but it definitely means we’re going to have to figure out how to backfill or what we do in their place.”

Some will keep a watchful eye on state finances that will be updated next month by the Board of Revenue Estimates. Others worry that more bad news could lead to another round of budget reductions.

Moore’s office did not respond to a request for comment.

Elrich said that leaves counties to fend for themselves.

“I think everybody had this a-ha moment when the governor said there was no money. It was like everybody realized that we’re all on the hook,” Elrich said.

“Everybody’s waiting for the state to give us money. So, we know right now that’s not going to happen,” he said. “I don’t expect the governor to discover magic. He’s not going to come back and say, here’s some magical new way of getting money, because there isn’t any.”