St. Mary’s County finance staff say income tax distribution close to projection; fund-balance options on table

St. Mary’s County finance staff told commissioners that the county received an income tax distribution of $33,800,000 this cycle and that their baseline revenue projection remains roughly 3.8% growth for the next fiscal year.

The county’s finance director team, led in the presentation by Vanetta Van Cleef, CFO, explained the two-line presentation in the packet: a broad total that includes nonrecurring fund-balance uses from FY25 and a bottom-line projection that reflects recurring revenue increases. "It came in at $33,800,000," Van Cleef said when announcing the distribution, and later the team reiterated that the projected recurring revenue increase used for budget basics is 3.8%.

Why it matters: commissioners are setting priorities ahead of the March 25 scheduled approval of a recommended budget. Staff flagged $8,200,000 in nonrecurring purchase requests (capital and one-time items) across general and enterprise funds that could be paid from fund balance, and described a five‑year financing alternative whose debt service would add roughly $1.7 million per year to ongoing costs.

Finance staff said the packet shows a difference between a total increase that includes last year’s fund balance and the smaller recurring revenue increase. Joyce Sapp, Deputy Director of Finance, clarified that the line for “total other financing sources” is fund balance and that fund‑balance accounting frequently plugs in after year‑end clarity. Commissioners asked staff for sensitivity scenarios: several requested a model showing revenue outcomes at different growth rates (e.g., 4.5% or 5%), and staff agreed to provide range analyses for income and property tax estimates.

Staff also warned that some federal actions—most notably a potential sequestration affecting Department of Defense contractors—are not quantifiable now and therefore are not included in the open‑item reserve. "Any potential risk from that out there are not quantified in this open item line," Van Cleef said.

Next steps: staff will return with (a) a scenario model requested by commissioners that shows revenue outcomes under higher and lower growth rates and (b) a fuller fund‑balance proposal that identifies which one‑time items could be funded from undesignated reserves. Commissioners plan another budget workshop before the March 25 recommended‑budget approval date.

Ending: The finance presentation closes the preliminary revenue picture but keeps the central questions open: how much of the $8.2 million in nonrecurring requests should be paid from fund balance and how to preserve a policy reserve while addressing one‑time capital needs.