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St. Mary’s County finance office briefs commissioners on reserves, income-tax windfall and how it affects FY2023 budget
Summary
The county finance chief reviewed FY2021 audited fund balance, reserve policy and updated income-tax and property-tax estimates; commissioners discussed using one-time revenue for nonrecurring needs while preserving reserve targets.
Miss Cudmore, the county chief financial officer, told the St. Mary’s County Commissioners at their May 10 budget work session that the county’s audited fund balance for fiscal 2021 was $88.1 million and that commissioners had used $21.1 million of that balance for the FY2023 recommended budget.
The presentation outlined how the $88.1 million breaks down into nonspendable, restricted, committed, assigned and unassigned components; Miss Cudmore said the unassigned portion in the FY2021 audit was $51.1 million. She told the panel the county maintains a formal reserve policy and “we put in a policy a number of years ago to have a fund balance of 15%.”
Why it matters: county leaders said maintaining reserves matters for solvency, operations and credit ratings. Miss Cudmore said the post‑audit calculation of total reserves as a percent of revenues was 24%, well above the county’s 15% target, and that the ratio of total fund balance to revenues was about 30% for FY2021 — figures she said are viewed favorably by rating agencies.
Details from the briefing: Miss Cudmore reviewed how revenue timing and recent state reconciliations changed estimates used in the FY2023 budget. She said the county received an additional, unexpected distribution tied to tax year 2020 and that staff used updated income‑tax projections and recent assessment data to raise the FY2023 tax‑revenue estimate included in the package.
Commissioner discussion focused on tradeoffs between returning money to taxpayers and protecting the county’s long‑term fiscal position. Several commissioners said the new revenue should be used prudently and that recurring spending should be avoided when revenue sources are not certain year to year. One commissioner noted federal and state tax policy (SALT) could change long‑term receipts, and others pointed out that rising interest rates or weaker property‑market activity could reduce some future collections.
Miss Cudmore closed by noting the figures in the recommended budget reflect the March constant‑yield/assessment updates and that staff will update the numbers after the FY2022 audit is complete.
Ending note: Commissioners directed staff to proceed with the debrief and appeals review, emphasizing a preference for funding nonrecurring needs from one‑time revenue and protecting the county’s reserve policy while recognizing near‑term needs for public safety and infrastructure.
