County staff warns governor’s budget leaves Allegany County facing major hits on disparity grant and flood reimbursement
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Summary
Staff briefed commissioners that the governor’s proposed budget includes $12 million in flood relief but would not reimburse the county for $8M+ already spent, and that the disparity grant was frozen—creating an estimated $6M shortfall tied to prior income‑tax choices; additional pension and reserve transfers heighten fiscal risk.
County staff gave commissioners a first‑pass assessment of the Governor’s proposed budget and flagged several items that, as drafted, would worsen Allegany County’s fiscal position.
The staff presenter said the budget includes an itemized $12 million for flood relief (including amounts for infrastructure and stream restoration) but, crucially, "none of that money is reimbursement money for us," meaning the county’s $8 million‑plus of flood spending to date would not be reimbursed under the current draft. The presenter also reported that the Governor froze the disparity grant at last year’s level; because Allegany County had previously increased its local income tax rate (to generate a larger disparity grant under the formula), staff estimate the county could lose roughly $6 million relative to the formula‑based expectation.
Staff warned that teacher pension costs shifted to counties last year remain and are growing, that a large portion of local income tax reserve funds have been drawn down at the state level, and that highway user revenue poses a steep "cliff" next fiscal year if the state does not act. Commissioners heard that these combined effects create limited budget flexibility for the coming year and will require either expenditure cuts, revenue increases, or both.
What happens next: staff will obtain the full DLS (Department of Legislative Services) breakdown when available, continue analysis with the county’s lobbyists and delegation, and return budget recommendations for adjustments or contingency planning.
