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Montgomery County Executive Elrich Announces FY 2021 Revised Spending Plan That Calls for More Than $66 million in Reduced Spending; No Reductions for MCPS at This Stage

For Immediate Release: Wednesday, July 8, 2020

Montgomery County Executive Marc Elrich this week transmitted to the County Council a revised operating budget spending plan that calls for more than $66 million in reduced spending, including $38.7 million in reductions from the Fiscal Year 2021 Operating Budget and $27.5 million in reductions from the FY21-26 Capital Improvements Program (CIP).

The County Executive had asked all department and agency directors to submit suggested reductions to their budgets of at least six percent, but his budget reduction plan did not make across the board cuts. At this stage, the reductions do not include Montgomery County Public Schools (MCPS), which is still assessing potential cost reductions as it works toward finalizing plans for the coming school year.

“As we move forward, we must recognize there are still several unknown variables that will impact County government finances, including the lasting impact of COVID-19 on the County’s economy and our tax revenues, the need to maintain funds in reserve to address another potential wave of COVID-19 and whether there will be additional relief from the Federal government,” said County Executive Elrich. “While departments did submit reductions totaling six percent of their budgets, I did not accept all of those reductions. I did not make 'across-the-board' cuts, but instead, I carefully reviewed all of the suggestions and chose the ones that I believe would have the least service impact on our residents. I did not suggest equal cuts for each department for that reason. Given the ongoing and unpredictable impacts of COVID-19 on the public health and economic vitality of our community, it is likely that we will need to enact additional spending revisions throughout the fiscal year to respond to these challenges.”

The reductions, when approved by the Council, would come from the $5.8 billion operating budget and the $4.4 billion six-year CIP that went into effect on July 1. The Council approved the budgets after reviewing the recommended operating budget the County Executive presented on March 16.

“There are no reductions included for the Montgomery County Public Schools at this time,” said County Executive Elrich. “Working with the school system’s leadership, I have determined that it would be premature to identify savings from our public schools. Once MCPS has determined the plan for the next school year, we will work with it to determine what savings might be possible given the operational changes it is making.”

An article in today’s Wall Street Journal reported: “The Democratic-led House in May passed a bill that included $1 trillion to help state and local governments. But Republican senators have paused discussion on another fiscal package until later this month.”

County Executive Elrich said local governments and people who have lost their jobs need help to overcome the impact created by the COVID-19 health crisis.

“Our current fiscal uncertainty has been exacerbated by the unwillingness of President Trump and the Republican leadership in the U.S. Senate to act,” said County Executive Elrich. “We need the Federal government to provide additional relief for State and local governments and to extend unemployment benefits for those most impacted by this crisis.” 

At the July 1 meeting of the Maryland Board of Public Works, Governor Larry Hogan proposed $672 million in FY21 reductions to the State budget. The board approved $413 million in reductions. Governor Hogan also presented an additional $844.9 million in reductions for future spending, including $724.6 million that will require the approval of the General Assembly. 

“Many of Governor Hogan’s proposed reductions carry significant service impacts and jeopardize aid to local governments, community colleges and school systems,” said County Executive Elrich.

In response to the proposed reductions, U.S. Senators Ben Cardin and Chris Van Hollen wrote to the Governor, Comptroller and Treasurer to urge caution in adopting the State budget cuts as they are hopeful additional aid will pass the Senate.

“I applaud the work of our Federal delegation to push for more Federal support,” said County Executive Elrich. “It is imperative that State and local governments receive additional Federal funding going forward and I urge Congress to approve this funding now.”

Responding to the Senators’ advice, the County Executive said that, at this time, he is recommending only minor reductions to the Department of Health and Human Services budget. 

“This department is on the front lines in responding to the health crisis, and it will need as much flexibility as possible to respond to this public health emergency,” said County Executive Elrich. “Again, our residents should be advised that unless more aid comes from the Federal government in the near future, deep and draconian reductions may become necessary for many County government functions, including health and human services.”

County Executive Elrich said the hiring freeze and procurement freeze exemption process that he instituted on March 18 will continue for the duration of the health crisis. 

“I will provide the Council with additional revised spending plans in the future—as our fiscal situation necessitates,” said County Executive Elrich. 

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Release ID: 20-367
Media Contact: Barry Hudson 240-300-7348