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The newest Harford County budget includes nearly $75 million in spending reductions, no tax increases and furloughs for government workers that may be the first in history.

In unveiling the proposed budget for the 2009-10 fiscal year at a press conference Tuesday afternoon, County Executive David Craig said the cuts he proposed in general spending are the sharpest in 25 years, if not longer.

“Developing the FY 2010 budget has been a big challenge,” Craig said. “It’s been an all-consuming process since October. This is definitely the most challenging budget we’ve had.”

Craig said Harford is not in as bad fiscal shape as many other counties. Across from him stood a placard on an easel that read: “Harford County remains financially sound.”

The proposed budget includes a $23 million reduction to the general fund and a $37 million cut in the capital budget compared to fiscal year 2009.

While the proposed fiscal year 2010 budget does not include any increase in taxes for county citizens, it does include a five-day furlough for all county employees, including elected officials. There won’t be any pay increases for government employees, either.

“In creating the FY ’10 budget, we had to say everything’s on the table,” Craig said. “Raising revenue is not an option, raising taxes is not an option for us.”

According to Craig, the furlough will not affect public safety and public education employees but will include elected officials. Craig said the two unions that represent county employees will have to agree, and he is optimistic they will.

“We’ll have to shut the government down for five days,” Craig said. “This is real.”

The total fiscal year 2010 budget, including all funds, is $811,556,090, a decrease of $74,488,052 from the current fiscal year 2009 budget of $886,044,142. This includes operating and capital budgets.

The total proposed operating budget is $579,350,687, a decrease of $37,757,912 from the current fiscal year 2009 operating budget of $617,108,599.

The biggest chunk of the operating budget is the general fund which pays for police, government services, libraries and the local portion of the school budget.

Craig approved almost $211 million for the school system, which he said is what was requested, and almost $16 million for Harford Community College and $16.1 million for the library system.

The sheriff’s budget is $63.7 million, compared to $62.6 million this year.

Craig said a check of records back to 1983 showed only two other times was the general fund budget proposed smaller than the year before, both times by about $3 million less.

Craig said the county expects reductions in local income tax revenue because of people being out of work and the state taking a bigger cut to help out what he called “its own fiscal mess.” The reduction will be almost $23 million to $155 million.

Property recordation and transfer taxes and impact fees, which are all sensitive to the real estate sales and housing construction markets, are also expected to decline.

Property taxes, the single largest operating revenue, will increase $20 million to $286 million, because of higher assessments.

The property tax rates of $1.082 cents per $100 of assessed value for county residents and 92.6 cents for residents of Aberdeen, Bel Air and Havre de Grace will not change. The higher rate contains a differential for road maintenance and construction that the municipalities handle through their own taxes.

Craig said there will be no increase in county fees, including the landfill tipping fee that figures into people’s trash collection bills.

“We’re looking at every way to save money,” Craig said.

Some of the initiatives to save money include a reduction in take-home vehicles, changes in post-retirement health care benefits, restricting training funds, restrictions on overtime and the suspension of the county’s tuition reimbursement program and a uniform allowance.

“We’re thinking of going paperless in as many ways as we can,” Craig added, saying one plan is to eliminate payroll checks and facsimiles, letting employees go on line for their pay records.

“It saves about $6,000,” Craig said. “Six thousand dollars is $6,000.”

Craig also said the county is looking at an information technology program that would shut down all computers in the government buildings at a certain time to save energy.

“If it’s going to save money, we’re going to look at changing it,” Craig said.

In the $232,206,403 capital budget, a decrease of $36,730,140 from the current fiscal year, a number of projects are being pushed back indefinitely, Craig said. Only those which have construction contracts let or are nearing design completion are funded.

The funded group includes the Bel Air High School replacement, Edgewood High School replacement and Deerfield Elementary renovation, the Veronica Chenowith Fallston Activity Center and the southern precinct police station in Edgewood.

“Other projects are moved back,” Craig said. “You’ll see it reflected in the budget.”

During the news conference, Craig also mentioned how state budget cuts that will affect the county.

“The state continues to act in a bewildered fashion on how to handle its own fiscal mess,” he said.

According to Craig, the state is taking away $106 million of highway user revenue — gasoline tax revenue — from local governments and another $40 million in Program Open Space money. Harford’s reduction in highway revenue will be about $4 million.

Craig also said the state has passed along the costs of local tax assessment employees to the county, even though they work for the state Department of Assessments and Taxation.

“It’s wrong,” he said following the press conference, explaining the employees who set property valuations upon which local taxes are based shouldn’t be paid by the county.

Craig also said the state is eliminating its reimbursement for prisoner costs in the local jail.

In the middle of the current fiscal year, Craig asked all government departments and agencies, including the library, school system sheriff’s office, to give back 5 percent of the operating budget, which amounted to around $13 million in savings.

“Really we’re in the middle of a three-year cycle right now,” Craig said. “Hopefully, we’ll rebound in FY 12.”

“We’re not alone in this. Every other county is facing a similar situation,” Craig said about the budget cuts. “Harford County is blessed with employees who do a good job for our citizens.”

After the conference, the budget books were sent to the Harford County Council building, where the council will begin its review next week. The council must authorize the approved budget and tax rates by May 31.

Toward the end of the press conference, Craig offered some words of hope and caution.

“We will get through this,” Craig said. “The year ahead is equally challenging.”

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