Area residents feel counties' budget pain

Montgomery to plan filling $1 billion hole this week. Washington-area residents will be greeted in coming months by higher property taxes, an abundance of new fees and fewer government services in the wake of budget talks winding down around the Beltway. Montgomery County, Exhibit A in budget pain, will hash out plans to meet the region's most glaring shortfall -- nearly $1 billion -- over the next few days.

Under current proposals and measures already passed, the average Montgomery homeowner would pay nearly $100 more in energy taxes, $55 more for water and sewer services each year and at least an additional $12 for their cell phones. The good news: Property taxes won't increase. But drivers will see higher parking fines and officials are weighing charges for ambulance use, causing some to question if taxpayers are being squeezed too much.

"I believe this will have a negative impact on residents," said Councilman Roger Berliner, D-Bethesda. "I really believe we should tax less and tighten our belts a little bit more."

The extent of the taxes will be determined largely by cuts to the county's school system, which accounts for about half of the county's $4.3 billion budget and could be slashed by nearly $170 million from last year. The more money cut from schools, officials say, the less reliant they will be on energy taxes -- the centerpiece of County Executive Ike Leggett's budget proposal.

Montgomery County recommended budget cuts
» Transportation: 24.8 percent
» Libraries: 24.2 percent
» Park and Planning Commission: 15.8 percent
» Recreation: 15.1 percent
» Health and Human Services: 10.9 percent
» Transit: 8.1 percent
» County government: 7.7 percent

However, school officials are threatening to sue if the County Council eliminates more from the school budget than Leggett proposed. Leggett has said energy tax increases, as opposed to property tax increases, will spare residents from footing too much of the bill. However, that is little consolation for businesses, particularly in the biotech industry, looking at hundreds of thousands of dollars in new taxes. Northern Virginia communities, which recently passed their budgets, have been hardly immune from funding issues. But their woes were tied mainly to dwindling property-tax revenue rather than income taxes. Fairfax County reinstated a $33 vehicle registration fee, raised property taxes and slashed library and park services. In a sign of the times, county leaders were cheering their $257 million budget shortfall.

"I think we fared exceptionally well," said Supervisor Jeff McKay, D-Lee. "When you look at some of our neighboring jurisdictions, we didn't come close to that."

While the Virginia counties mostly avoided severe service cuts, they ramped up property taxes to fill bare coffers. In Prince William County, homeowners will pay an average $74 more in property taxes next year, and Loudoun County homeowners will see a 5.5-cent increase per $100 of assessed value, despite already paying the most in the region in such taxes. And in Arlington County, the average property owner will pay about $346 more than fiscal 2010. The balance between tax increases and service cuts in Montgomery County will play out amid the backdrop of an election year, with constituencies vowing to mobilize voters if they bear to much of the financial burden.

Council members are expected to vote on the budget Thursday before adopting it the following week. Reflecting on what has become the new normal, Councilman Phil Andrews, D-Gaithersburg/Rockville, said he is no longer floored by the nearly $1 billion deficit.

"Well, not any more," he said. "It's a large gap, the largest the county has had to close. But we're going to have to find a way to do it." SOURCE: Washington Examiner