Montgomery County’s 2011 Budget Will Require ‘Radical Changes’ – Is this Handwriting on the Wall for Chester County, and Specifically Tredyffrin Township?

I just read the following in  Norristown’s Times Herald referencing radical changes needed by Montgomery County government to either drastically cut expenses or increase revenue to fill the $22.5 million funding gap expected in their 2011 budget. 

 OK, I know that we are not in Montgomery County; and I understand that this is county government vs. township government.  But is it possible that the crisis facing our neighboring county’s budget for 2011 could be similarly recognized in Chester County, . . . and then ultimately Tredyffrin?

I don’t think it’s much of a stretch to suggest a correlation between Montgomery and Chester County government funding issues.  We can only hope that Chester County does not face the enormity of the budget gap for 2011 as forecasted by Montgomery County. 

There have been recent comments on Community Matters that Tredyffrin’s 2011 budget can (and some have suggested, should) wait until later in the year for discussion.  From my vantage point, postponing township 2011 budget discussion until November or December  is short-sighted and not fiscally responsible.

In my opinion, a mid-year discussion of 2010 budget (expenses and revenues to-date) and forecasting for the 2011 budget is a fiduciary responsibility.  My desire for a public 2010/11 township  budget discussion is not about  Warren Kampf’s political campaign or for that matter, ‘party politics’.   This country, state, county, and yes, Tredyffrin Township are struggling with finances — so instead of suggesting that supervisors and residents just wait until November or December for budget analysis,  I would simply ask why wait? 

By July of last year, the BAWG committee was well underway in their 2010 budget meetings.  Shouldn’t we review where we are with BAWG’s 2010 recommendations . . . have all the cost-saving suggestions been implemented?  I don’t know, but maybe if we started discussing the township budget situation now, there would still be time in the 2010 calendar year to correct or to implement some of the BAWG recommendations.  I just don’t understand how putting off the budget discussion helps anyone?

By KEITH PHUCAS
Times Herald Staff

COURTHOUSE — With economy still in the grips of a slowdown, Montgomery County government has to cut expenses or raise revenue to fill a $22.5 million funding gap for the 2011 budget, and officials are expected to discuss shrinking the size of government.

In a June letter to the commissioners from Chief Financial Officer Randy K. Schaible, the county can’t count on transferring funds as it did this year. For the 2010 budget, the county used $8 million from its capital reserve fund for the general fund.

Schaible said borrowing will increase the county’s debt service in next year’s budget. The county borrowed $35 million for open space in March 2010, which will push up debt by $2 million per year. As well, the government is expected to borrow for capital spending, which includes the recent prison expansion, and that will cost $4 million a year in debt service.

At the commissioners meeting Wednesday, Deputy Chief Operating Officer James Maza said officials would ask departments to draw up a proposed no-growth and no-tax budgets, and to avoid raising taxes could mean a 9 percent cut in departmental expenditures “across the board.”

“This gap contemplates that we’re going to have to make some radical changes from previous budget decision making,” he said. “We understand that’s going to call into question downsizing both the function and the size of government,” Maza said.

Also, in order to meet pensions, the county is considering issuing pension obligation bonds to fund the $20 million contribution, he said.

A major concern is state grant funding. Schaible estimates Pennsylvania is behind by $1 billion in its budget. Recently, Congress voted against sending more than $800 in Medicaid payments to the state. Officials hope the Obama administration will reconsider restoring the aid.

In December 2010, the commissioners voted 2-1 to adopt a $407.7 million budget and managed to avoid a tax increase. Commissioners’ Chairman Jim R. Matthews and Vice Chairman Joseph M. Hoeffel voted in favor; Commissioner Bruce L. Castor, Jr. voted against the spending plan.

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9 Comments

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  1. I think the most telling part of this article is that it is, primarily, pension costs driving massive deficits at the county (and lots of local and school district levels). Yes, that could happen in ChesCo as well, though they have been better than MontCo about funding their pension obligations, even in good times.

    It’s pretty clear that the old-days of defined benefit plans don’t work anymore.

    The second interesting part is where it states that the Commonwealth is a billion dollars behind (short). This has been true and known, yet the Governor and the Legislature passed a budget this year that raises spending, borrows more than half-a-billion dollars to do it and then calls their budget “balanced.” I am still not sure where they are making up the deficit from last year, much less increasing spending this year again.

    I think Tredyffrin was ahead of the curve in cutting spending last year while still holding reserves to help smooth out the bumps from this economy. I am sure that they, too, will have to get hit by pension obligations at some point.

  2. “primarily, pension costs driving massive deficits at the county (and lots of local and school district levels).”

    Why don’t you ask Mr. Drucker? PSEA gave $2500 and SEIU gave $500 to his campaign????

    1. You really think that a total of a $3000 contribution is going to influence Drucker’s agenda? I’m not saying I like either of those organizations but seriously….$3K in the grand scheme of things is really not that big a deal. It’s easy to sit behind your computer at home and play armchair quarterback, isn’t it?

      1. Considering that a measly $250 donation got Peter Monahan a check for $1,000,000…. seems pretty significant to me.

        1. That sounds like a fun game!
          My turn.

          Name the 157th candidate who is pictured handing a giant cardboard check for $1,000,000 to a man who donated directly to his campaign.

          Answer – Paul Drucker

          Aren’t appearances everything?

        2. I heard that a guy that donated to Drucker’s campaign knew a guy who had a brother that used to be roommates with a guy that went to jail for tax evasion. Perhaps Kampf should call for Drucker to resign from office. lol

          Drucker knows he is in trouble with this election, why else would he be going negative so early?

  3. I’ll ask this question in return: why would the PSEA give $2500 to Drucker, if not to try to influence his agenda? More broadly, why do organizations give to elected officials or candidates?

    BTW, $2500 may not be a big deal in the grand scheme of things, but, as of the last filing I saw, PSEA was Mr. Drucker’s largest contributor.

  4. “Sorry…but Paul didn’t vote to approve the teacher contract..” Nor did Mr. Kampf.

    Simply, PSEA sprinkled checks around Harrisburg, including $2500 to Mr. Drucker, in order to protect the PA teachers’ gold-plated defined-benefit pension plan, most recently in the June vote on House Bill 2497.

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