General Fund Long-Term Outlook (FY 2020 to FY 2025)

Long Term Outlook FY 2020 to FY 2025

  • The Fiscal 2020 Spending Affordability Advisory Committee (SAAC) report SAAC Report states that "there is a significant and growing gap between revenues and spending requests" and the gap or shortfall in revenues needed to cover spending needs "will likely reach $275 million by FY2025 without corrective actions."
  • This structural gap is attributable to:
    • Expenditure growth (driven by service costs and rising service needs) continues to significantly outpace revenue growth, which has averaged less than 3% in recent years.
    • Impacts stemming from a potential economic recession and the Adequate Public Facilities Ordinance (APFO) legislation, which included a four-year moratorium for new development until adequate infrastructure or public services are in place. The legislation is expected to result in foregone revenues of $138 million in six years and $1.2 billion in 20 years, per a consultant study.

Available Options to Address Fiscal Challenges:

The SAAC report states that “Without changes to revenues or expenditures, current patterns of spending are unsustainable in the long-term."

Expenditures: Continue efforts to innovate and find long-term and permanents savings.
  • Transform business practices and seek innovative solutions to generate permanent savings and productivity.
  • Prioritize and balance all service needs to provide the full range of services demanded by residents.
Revenues: Explore new revenue sources while balancing tax burden.

The County recently increased the fire tax and trash fee, imposed a new ambulance fee (the revenues are restricted for specific uses), and increased the School Surcharge (restricted for school capital projects).

The County will continue to explore revenue options while balancing overall tax burdens.

Jurisdictions Real Property Tax Income Tax Recordation Tax Transfer Tax
Anne Arundel $0.9350 2.81% $3.50 1.00%
Baltimore City $2.2500 3.20% $5.00 1.50%
Baltimore County $1.1000 3.20% $2.50 1.50%
Harford $1.0420 3.06% $3.30 1.00%
Howard $1.2500 3.20%