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Montco Facing $44 Million Budget Shortfall

Tax hike looms as axe hangs over county health department, community college funding

"We're not talking about cutting dessert here. We're talking about cutting meals."

Those were the words of Montgomery County Financial Director James Maza, as he briefed the county commissioners on what would need to occur in order to overcome a $44 million budget shortfall going into next year.

Joined by county CFO Randy Schaible and other finance department leaders, Maza presented the commissioners with ten possible options to help balance next year's budget, including the elimination of appropriation funding to the library, community college and mass transit, as well as the elimination of certain county departments including the parks and recreation deparment, the planning commission, the health department and courthouse security.

"We picked these departments to show the kind of damage that needs to be done to get to the numbers that Randy [Schaible] is suggesting," said Maza, as he addressed the commissioners. "The mandates and the loss of the quality suggest that it's unacceptable, but if it can't be paid for, it ends anyway."

Even if the specified departments were to be eliminated, the total savings would only be $12.8 million, and the county would still have to shave off another $31.2 million to balance the budget. Furloughs and salary reductions for county employees remain a possibility, as a 10 percent salary reduction would net $13 million and the county can save $425,000 for each furlough day.

The county currently has $24.5 million in capital reserves, but those reserves are needed to maintain the county's triple-A credit rating. One possibility would be to decrease the reserves to $10 million, but that would surely result in a credit downgrade by Moody's which would increase the cost of future borrowing.

"(Jerry) Sandusky will be on Sesame Street before I go through this crap," said Jim Matthews, chairman of the county commissioners, regarding the shutdown of departments and services. "It's not going to happen. I'm not going to shut it all down. I'm partly responsible for the holiday that the taxpayers have had from 2005 to—and including—this past year."

Matthews stated he was in favor of the option to increase taxes by 28.6 percent, which would average out to a $130 increase per homeowner.

"From my perspective, the one really gutless thing to do would be to pass this off to the next administration," said Matthews. "If I hand this off and pat myself on the back like a fool, it'll be like I didn't fulfill my oath."

"If I do go for the tax increase, then it's 'What are you getting from the next administration?'," Matthews continued. "Either way, if it's in favor of keeping these institutions going and the fine civil work that they do, I'm not going to cut them off at the knees."

Tax increases are never a popular decision, but Matthews points out that Montgomery County has the lowest tax rates—by far—when compared to the five surrounding counties.

According to Matthews, Montgomery County taxes are 33 percent lower than Lehigh County, 46 percent lower than Berks County, 52 percent lower than Delaware County, 54 percent lower than Bucks County and 58 percent lower than Chester County.

Matthews added that even with a 28.6 percent tax increase, they would still be lower than any surrounding counties, and the shortfall could be wiped out in one fell swoop without burdening the incoming commissioners.

"We've done nothing but shrink the size of our government over the past six years, but in retrospect, we shouldn't have provided the holiday over the last few years," said Matthews. "I've made my position clear. It's been a holiday, but the holiday is over."

Commissioners Hoeffel and Castor didn't agree.

"With all due respect, I don't think you have a second vote for a 28 percent increase in taxes," said Hoeffel, adding that the list of options allows for some flexibility outside of a large tax increase.

"I just went through an election where taxes were a critical issue," said Castor. "The results of the election tell me that the public does not want taxes raised, and that the public supported the position taken by the commissioners-elect."

"I think we have to take that into account when we are deciding what we're going to do," added Castor. "We are representatives for the people of Montgomery County, and they have spoken."

Noticeably absent from the meeting were commissioners-elect Josh Shapiro and Leslie Richards, with whom commissioner Castor said he would like to consult regarding the decisions for the upcoming budget.

"I believe that the incoming commissioners need to be consulted about what they think is important from the list of options that we have," said Castor. "I would be very reluctant to support any increases in taxes unless the commissioners-elect are to tell me that's what they want."

According to Hoeffel, both he and commissioner Matthews asked that the commissioners-elect attend the meeting, but they declined.

"The commissioners-elect and their staff were invited to be here today but they chose not to," said Hoeffel. "I think at least their staff should have been here."

The commissioners will post the proposed 2012 budget for public review on November 30th.

Bob Guzzardi November 20, 2011 at 04:12 PM
Eliminating Prevailing Wage laws would reduce cost of County construction from 5% to 30%.
Curmudgeon November 20, 2011 at 07:22 PM
Marc, all I was saying is that this shortfall has been a problem for the last 2-3 years. I did not say it was quid pro quo, but questioned why the tax issue was not raised two years ago, when the county started to borrow $$ to meet its obligations. Fiscal responsibilty (I think I spelt it write) also includes raising taxes when needed, not copping out when you are leaving office. I don't think lame ducks should be doing this (not legal but moral). The incoming Commissioners, who pledged "no tax increase" should be the ones to handle the problem. They might not have BS'ed us with theire pledge. By the way, not everyone is a gen Yer. Some of us do not have Ipads, Iphones, etc., we don't text, but actually make phone calls and talk to people. But I'm just sayin.
Bill Lipp November 21, 2011 at 12:28 AM
No one has commented on the fact that neither the commissioners-elect nor their staffs have been attending these commissioner meetings. That being said, why in the world would the current commissioners let the commissioners-elect off the hook, especially in light of their "no tax increase" pledge during the campaign which was so effective that the electorate swept them into office. Josh and Leslie wouldn't answer the reporter's question asking for one example of a program they would cut to balance the budget. Well, it's now time to pay the piper. But for God's sake current commissioners, don't let these two off the hook. Their non-attendence at these meetings is most telling.
patchifier November 21, 2011 at 01:39 AM
See, commissioners, this is why you don't ever run on a "no tax increase" campaign. At least not without consulting the budget of the government you're about to inherit first. Now you just look like idiots that would do anything for a vote. Admit your error, save face, raise taxes, and start actually working for your reelection. And if we have to clear out our reserves to pay our bills, do we not perhaps deserve the reduced credit rating that would accompany such a move? The rating agencies would be failing their job if they didn't downgrade a county that was struggling to pay its bills.
danny roturra November 21, 2011 at 04:07 AM
everyone before me has covered the essence the the exercise in arrogance by the local ruling class. they never have any liability for any erroneous decisions or political quid pro quo. every level of government has deemed themselves the ultimate authority on all aspects of our lives. cost? irrelevant.....it's not their money and it's very easy to spend other peoples money. the democratic party has made tremendous inroads as witnessed by the last election. the local newspaper lauded their victory and refused to publish an examination of their overt bias. the democratic party poured millions into the election and it will amount to money well spent for it will increase the liberal creep. this equates to more spending, more taxes and, most of all, more control. it may sound bizarre but at times it appears that they won't be satisfied until they control all the money and dole it out as they see fit. the voices on this page express well deserved outrage. the opposing party is silent. the medium we're on is not mainstream and kind of trite, but isn't it pathetic that's all we have to vent. we need to unite and propagate the message for we are witnessing the decline of our community and we are being forced to pay extra for it.
Azaz Leforte November 21, 2011 at 03:43 PM
Really? This has been brewing through many republican administrations. How much of the current shortfall is tied to Mario Melle's bond issuances to buy open space? This fiscal genius said "The county is in great financial health, look at our bond rating." So quit lambasting the democrats...this has been under republican control. On campaigning on "no new tax"...this is a tried and true failure as proven by Bush Sr. It was stupid to run on such a platform for Shapiro and Richards.
Bob Guzzardi November 21, 2011 at 03:48 PM
Mario Mele allied himself with the Democrat minority commission to elevate himself to chair just as Matthew did. In doing so, both adopted Democrats spending practices. Liberal Big Government Union Financed ShapiroRichards record is clear: More Spending; More Borrowing; More Taxes and More Unionization. The Unions will become to claim more and more of The Forgotten Taxpayer's money.
Ruthiness November 21, 2011 at 04:03 PM
Well.. this Montco taxpayer is done with Montco.Born and raised here and lived here most of my life - I see the creep of Norristown and Philadelphia liberals making it out to the suburbs now so it's time to go. The people who vote in tax and spend liberals can suffer the consequences of their ignorance - I am voting with my feet.
Bob Guzzardi November 21, 2011 at 04:07 PM
My daughter moved to Texas which is growing before her eyes. She lives north of Dallas. The cost of living is a lot less and there are opportunities and freedom. Rick Perry is Governor and the Texas Model is the American Model. The Democrats are consolidating power in a few and driving us toward the Bankrupt European Social Welfare Model.
Ruthiness November 21, 2011 at 04:20 PM
We are first going to Florida then considering Texas as second choice for sure. Cost of living in both places is WAY less and it seems sanity is still in charge in both locations. Not all of Florida is good but there are still places that look and act like America there. I'm willing to bet there are less liberals living coastally because they actually believe AlGore and the climate warming nonsense.. hahahaha Good! More room for sane people!
Bob Guzzardi November 21, 2011 at 04:26 PM
My ex lives in West Palm and housing very, very inexpensive. Now is the time to buy. Unbelievable deals. Twice the value of house in Abington. Ocean view. AND more Republicans.
Ruthiness November 21, 2011 at 04:31 PM
North Texas might not be a good location though - see this Blaze article http://www.theblaze.com/stories/tx-homeowner-fined-7000-for-displaying-sign-associated-with-glenn-beck/comment-page-4/#comment-2296207 And we are focusing on the gulf coast of Florida - also lots of conservative Americans there and beautiful homes on the cheap...
Mr Frank Emele November 21, 2011 at 04:36 PM
If I can sell my home I would be out of here. This is not the Norristown I knew growing up.Shopping downtown? It was wonderful in the 60's with Gilberts's Mens Shop and Martins and other family owned business. Now you need a degree in spanish to read some of the storefronts. Not interested in selling any gold either. Add another steak or taco shop too. I remember Linfanti's on East main street when a zep was 1.00 and Lou's was the competitor.Sorry folks just cannot see where things are going the more I know.Southern California real nice..I know it is! and cheaper depending on your lifestyle. No more houses for me! I am finished with home ownership. I do not want to be house poor with another tax looming. Everyone wants more...for what.??????
Ruthiness November 21, 2011 at 04:47 PM
Agree with most of what you say Frank - I remember Chatlin's and I had a relative who owned a store in Norristown - now it is not a safe place to have a store unless you have the Mexican gangs protecting you. With that being said - the liberals want you to give up home ownership and that is exactly what you should not do! Just downsize and get something you can afford. I will never again live under a roof that is owned by someone else - you have to live by their rules. Home ownership will ALWAYS be a good investment if you buy sensibly and don't use up all of your equity. Rent your current house out. Did you know that in many places - especially in the south - you can buy a 1600 square foot house for around $100k? I will laugh my butt off if most of the productive in the northeast leave for better places to live and then the liberals will be left only with their dependents... HAHA
Marc Lombardi November 21, 2011 at 04:53 PM
Danny: Can you clarify a few things for me because I think I understand most of your comment but cannot be sure: 1) Who exactly is the local ruling class? 2) Which 'local newspaper' are you referencing, and do you mean the newspaper's 'overt bias' or do you mean the democratic party's own bias? 3) Do you actually believe that the Democratic Party as a whole wants to conteoll all aspects of spending, regardless of the opinion of their very own constituents? 4) In your last paragraph you refer to the 'opposing party' -- who is that? The Democrats? If that's the case then you need to either clarify that not EVERYONE who has responded here has had the same ideas or mindset, so not everyone here would view either party as the 'opposing party.'
Mr Frank Emele November 21, 2011 at 04:59 PM
Thank You Ruthiness. My home is a single dwelling ..I forgot all about Chatlins and we could go on and on.....I love that so called farmers market. That's a real joke! More hassle to stop if you can. Produce does not look good. They should have a street Market with food /vedg/fruit vendors and other merchandisers to give the public some real fun ......................Oh I forgot only in southern California! Glad someone remembers the good times and never heard about the conflict and fiscal gargage that we have to be confronted with each day. They sound like warring factions or is it a political power play?
Victor B. Krievins November 21, 2011 at 06:40 PM
Several Years ago, the then Chairman of Chrysler Lee Iacocca was faced with the Company going under. He made the bold move to receive only $ 1.00 per year until the Company turned itself around. Lee was able to turn around the Company and received full compensation. How many Commissioners would be willing to do the same? Will the Row Officers be willing to take a 10% pay cut just like the working stiffs? I doubt it. The typical County Employee is hard working and loyal and now has their pension fund in jeopardy because of inadequate funding. And we want to take 10% away from the very people who are earning less than they could in the private sector. I am sure such actions will result in a new level of Employee Morale (EXTREMELY LOW). There has been a hiring freeze in force for a long time. I am confident that there are other areas which can be cut. What about those Political patronage Jobs (and you thought they only happened in Philadelphia)?
Bob Guzzardi November 21, 2011 at 06:44 PM
Bill, it seems apparent a deal was cut. the out commissioners will take the fall and leave the new Big Government team with plenty of money to increase spending and unionize MontCo.
Scott Johnson November 21, 2011 at 07:27 PM
Hey Ruthiness, since you are in a rush to get out, You'll give a good price on your house right? I'm in the market.
Francine Graglia November 21, 2011 at 11:51 PM
http://plymouthwhitemarsh.patch.com/articles/county-commissioner-we-are-the-rock-of-gibraltar What happened to The Rock of Gibraltar??
Dr Steven Greene November 22, 2011 at 03:02 AM
you know I go away a few days for a soccer tournament and all heck breaks loose. :) this is not a new problem and not a problem unique to our county. years and decades of mismanagement and lack of foresight leads to these types of problems.... on all scales of government. The fed is what 5 trillion is debt? Wouldn't it be nice if individuals could spend like the government and then just figure out a way to pay the bill later... How many candidates run on 'no new taxes' platforms... pretty much all of them... but it seems that taxes go up.
Bill Lipp November 22, 2011 at 03:12 AM
Nice catch Francine! How could the county go from the Rock of Gibralter to Dire Straits in 90 days....bottom line is we didn't. All that bravado was either intentionally misleading or flat-out stupidity/incompetence. Less than sixty days until those two can't hurt us anymore....it will be a LONG 60 days!
Azaz Leforte November 22, 2011 at 04:36 AM
Victor, that was over 25 years ago. Iacocca went on to earn over $20m the subsequent year and ultimately became the highest paid auto CEO. This is a silly comparison. A fiscally prudent individual can see that the payoff to a commissioner is not worth the risk of foregoing a salary. This sort of behviour would promote patronage and kick backs. Noble notion, dangerous results. You post leads me to believe you may be a county employee. As far as the county employee compensation being below market, go get another job. The defined benefit pension plan should go anyway. Give the taxpayers a break. So, lay your cards on the table. What are the patronage jobs and where can cuts be done most effectively? Maybe a way to fix the employee morale is to offer a share of the savings when these things are detected by the employees. Now that would align the goals of the taxpayers and the frontline employees.
fmrRPRez November 22, 2011 at 08:03 AM
Bill, You're asking why? But, why not? Neither of them have anything to lose, and by hiking taxes, Hoeffel can ingratiate himself to his party, and Matthews can get his last jabs in at the MCRC that he's so clearly sought to destroy. And don't forget, sometimes good boys get rewards.
Dr Steven Greene November 22, 2011 at 11:56 AM
@ Bill.. rhetoric... it all sounds good at the time. I side with your analysis... "intentionally misleading" ,... now...lame duck political candidates are in a very precarious spot. They know they are going out.. yet still have some control but very little accountability. (PS see you at MGCA today.. we have our big election)
Victor B. Krievins November 22, 2011 at 03:01 PM
Azaz, Rest assured that I am not a County Employee or have I been in a past life. I know many people who are and take great pride in their work product. With regard to Lee Iacocca, what he accomplished 25 years ago should serve as a valuable lesson. He turned Chrysler around and saw to it that their loan was not only repaid but repaid early. History does repeat itself and should function as a valuable learning tool While you feel that Lee Iacocca received too much compensation after his great feat, I wonder how you feel about the sports figures who receive sinful salaries. People who work for the County or for that matter any Government Agency should not be penalized year after year simply because those officials who we trusted to lead us have done less than a stellar job.
Azaz Leforte November 22, 2011 at 04:50 PM
Well, I did not say he was excessively compensated. I am simply pointing out that the risk/reward proposition was available him - thus nullifying the comparison. What is important is the aligning of interests - company success led to his personal success. Similarly, I mentioned aligning county employee interests with those of the taxpayers. You mentioned patronage - please elaborate so maybe a fervor and demand for reform could occur.
Jimmy February 26, 2012 at 12:46 AM
I can't believe that the voters/tax payers voted for this clown. (Matthews) Reading this article infuriates me. Matthews puts so much emphasis on the next administration instead of the tax payers. It takes a savvy, ballsy, intellectual person to come up with unique and creative ways to balance the budget. Why should the tax payers pay more? What other counties are paying for tax rates should be irrelevant. Obviously Matthews in his crude language has expressed that his concern is the next administration. What about the tax payers Jim? I hope he gets indited and goes down. What goes around comes around old man. Even his son is crude and a creep. (Keegan Mortagage- Jim Matthews=CREEP) They claim to specialize in helping Veterans. He is there to screw over Veterans. FYI Why not give the county employees a reduction in pay. Look at the County Court House and how many officers are sitting around not doing much. It took two county officers to root through my wife's purse just because. Found nothing, they just seemed bored and nosy. To top it off most of these public servants are rude and lazy. Just my opinion.
Mr Frank Emele February 26, 2012 at 01:07 PM
Sounds like a game of monoply. Where is Park Place? Another tax? Please ! Better yet, sounds like a game of Chess. Look at the poor pawns?
Mike Shortall Sr February 28, 2012 at 03:00 PM
It's really Joe Hoeffel - with a self-castrated (politically) Matthews as his lap dog - that had his way with the MontCo budget for four years. Just look at the way the two violated the County's contracting guidelines to throw no-bid contracts to "friends", put unqualified allies in positions of import, and generally LIED for months as to the true fiscal health of the COunty. The problem is so few voters really paid attention or cared. In any case, Shapiro and Richards definitely got two gifts from the sleaze couple of Hoeffel-Matthews. They were handed an election where they could proclaim "No new taxes!" Then Hoeffel - again with the unic, Matthews help - could attempt to save Shapiro-Richards from IMMEDIATELY having to betray their campaign promise by raising taxes themselves. The lone consolation here is that I doubt the County Commissioners are completely off the hook. They will eventually have to make some difficult budget choices. And I can't see them getting away with painful cuts without raising taxes too. It would have been a much more interesting COunty election in November had the TRUTH about the County budget been known! I doubt Shapiro and Richards would have been able to maintain their No Tax promise. And this is the reason BOTH Hoeffel and Matthews should be vilified, if not outright charged with malfeasance in office, for hiding the truth from MontCo voters.

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