Worcester Expects End To Financial Slump Soon
SNOW HILL — There might be a light at the end of the tunnel — recent projections by Worcester County predict that stuttering revenue estimates could begin once again to climb by fiscal year 2015, a year earlier than anticipated. However, whether that jump is the beginnings of a trend or just a flash in the pan is unclear.
“It appears we have reached the bottom of the trough,” Finance Officer Harold Higgins told the Worcester County Commissioners this week.
In detailing revenue projections, Higgins reported that the county is expected to see another revenue dip in fiscal year 2014, which is consistent with the last five years since the national recession began. Though there have been a few minor boosts from year to year during that period, overall revenue has fallen steadily from $186.1 million in fiscal year 2009 to $165.9 in fiscal year 2013, the current fiscal year. The county’s assessable tax base has also shrunk across the board.
From fiscal year 2014 to fiscal 2015, however, a $2,939,319 revenue increase is being anticipated, with overall revenue estimated at $166,758,162 in fiscal year 2014 up to $169,697,481 in fiscal year 2015. There are three reasons for the climb, according to Higgins.
Building permit activity is up in both the county at large and Ocean City so the assessable base is likely to increase. Indicators also point to those assessment values beginning to rise due to a generally improving housing market where they had been declining for several years. Finally, the assessment map has been updated putting roughly 5,000 properties on a different assessment cycle meaning they will be reviewed a year earlier.
“It appears again that we’ve reached the bottom of that trough a year earlier than we had anticipated,” said Higgins. “Even though revenue projections are better, we still feel there’s a need and we will use budget stabilizations as required for FY14 and FY15.”
Higgins admitted that the county will likely use most of the available stabilization funds in the next few years. Even with revenue projected to increase, there are still a lot of expenditures, including new items like increased school security.
“Again, we’re seeing pressures on the expenditures side,” he said.
For example, the new projections show about $853,000 in unexpected revenue for the current budget year. With things like school security costs and employee raises still unknowns, Higgins currently predicts a multi-million dollar shortfall for the budget. “So right now I think we’re safe to say that we’re about $7 million short,” he said.
Another point Higgins made is that it’s still too early to say for sure what revenue will do after fiscal year 2015. While the expected increases might be the start of a trend, Higgins wasn’t willing to forecast any further.
“There’s nothing historically that tells me what could happen,” he explained.
All things considered the increased revenue projections are good news. When questioned on how accurate the figures will be, Higgins told the commission that his office had “received numbers that were even significantly better than what we’re showing you.”
Commission President Bud Church thanked Higgins for the estimates and said he was willing to take the numbers at face value.
“I have a lot of confidence in you and your staff because you’ve been on the mark almost every single year,” said Church.