Montgomery County commissioners approve $403 million budget

Montgomery County's battling Board of Commissioners approved a 2011 budget of $403 million on Wednesday, averting a looming stalemate over how to balance the books.

The compromise holds the line on property taxes, cuts spending for the third year in a row, and could eliminate up to 15 jobs. It also dips drastically into reserve funds already receiving scrutiny from municipal bond-rating agencies.

"I'm not as proud of the resulting government-service ability as I could be," Commissioners Chairman James R. Matthews said. "But I'm pleased that there were minor concessions made to keep government functioning."

Matthews had said he did not want to be a part of any government that would cut services or dip significantly into savings. He urged his fellow commissioners to consider the county's first tax hike in five years.

But, as usual with this contentious three-man panel, nothing about the final vote came easily.

Commissioner Joseph M. Hoeffel 3d, a Democrat preparing for a 2011 reelection bid, instead suggested a plan to cut 5 percent from nearly all departments.

Bruce L. Castor Jr., the board's resident contrarian since being edged out by a power-sharing agreement struck by his colleagues, said he would consider a tax hike only if the others would agree to a moratorium on many of the policies that have become linchpins of the Matthews-Hoeffel partnership, including planned spending on economic development and open-space preservation.

"Mr. Matthews and Mr. Hoeffel have a responsibility to come up with a balanced budget," Castor said. "They assumed that responsibility freely, and, in fact, sought out that responsibility exclusive of me."

At one point, all three appeared so set in their positions it appeared unlikely any would give up the ground necessary for a vote. But after several breaks, the trio returned with Matthews agreeing to draw on the reserve funds and Hoeffel willing to limit his requested cuts.

Underlying Wednesday's wrangling, Montgomery County for the first time in recent memory stands in jeopardy of losing its AAA bond rating - which allows it to borrow money at the lowest interest rates available to government entities.

Moody's Investors Service gave the county's rating a "negative outlook" last month - a warning shot before analysts decide on a downgrade.

The 2011 budget will leave the county with a $24.5 million fund balance, equal to about 6 percent of the operating budget and significantly below the 10 percent sought for the rating agency's highest evaluation.

"It is egregiously lower than what the bond boys would like to see, but that rating is [ultimately] arbitrary," Matthews said, striking a different tone after Wednesday's vote. "What is not arbitrary is, the courts must open, the courts must operate, and the elderly must be fed."