FY 23 Approved Budget Book

Executive Summary

The Spending Affordability Advisory Committee (“Committee”) has concluded that the local economy continues to improve and we expect this will have a positive impact on the revenues of the County. The County should expect a positive change in the Net Adjusted General Fund Budget from FY 2022 to FY 2023 as the Committee projects growth of 9.2%. The Committee has projected Income Tax revenue to increase 5.0% from FY 2022 budgeted estimate, which is down 1.7% over the FY 2021 actual. The slight drop in the current year is not indicative of the economy, but it is a result of how the County receives its income tax revenue from the State. As property values are continuing to rise in the County, the Committee believes Property Tax revenues should increase 3.7% from FY 2022 budget to FY 2023. The County executive indicated in his State of the County Address that he is exploring a property tax cut. Any such change in the new rate or new credits would reduce this projection. The Committee considered any significant exogenous factors in rendering its recommendations, and concluded inflation could have a significant impact on County revenues. The Consumer Price Index grew by 7% in CY 2021 and all indications for CY 2022 and beyond are for continuing price pressure. The war in Ukraine is compounding inflationary pressures as sanctions on Russia push energy costs up. Initial forecasts by economists that inflation was transitory or temporary due to supply chain issues are no longer valid. The Committee spent considerable time weighing the effect of inflation on County revenues. All indications are the Federal Reserve will significantly increase interest rates over the next two years. That dampening of monetary policy combined with higher energy costs and lingering supply chain issues from Coronavirus could have a negative economic impact. However, the tight labor market that is forcing up wages will accelerate

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