FY 24 APPROVED OPERATING BUDGET

GENERAL FUND

FINANCIAL NOTES:

FY 23

FY 24

CHANGE EXPLANATION OF INCREASE/DECREASE - REVENUES

299,775,000 311,000,000 11,225,000 INCOME TAXES

of the FY 24 General Fund of the FY 23 General Fund

FY 24 Approved Budget

311,000,000

40.47 %

FY 23 Approved Budget

299,775,000 11,225,000

39.83 %

$ increase % increase

3.74 %

Each jurisdiction in Maryland is required to set a local Income Tax rate to be applied to the net taxable personal income on an annual basis. Harford County's rate is 3.06% which was established in calendar year 2001. The State of Maryland collects all Income Taxes and distributes to each local subdivision its share of the annual revenues. Although Income Taxes are imposed and collected on a calendar year basis, the State distributes the funds to the counties over a 21 month period, spreading Harford County's receipts over three fiscal years. We receive approximately 90% of Income Tax in quarterly distributions of withholdings and estimated payments. The County is expecting very limited growth in income tax for FY 24 over our revised FY 23 estimate as the economy is expected to cool and most likely enter recession. FY 23 income tax estimated at $310.0 million, which is $10.2 million over our adopted budget; however, FY 24 is only expected to yield $311.0 million. Quarterly distributions are expected to grow by 4% as inflationary wage growth continues, but that growth will be almost entirely offset by a drop in reconciling and final payments from non-wage income. Nevertheless, FY 24 should still mark our fourteenth year of positive growth in income tax, a testament to the County's resilient economy and skilled workforce.

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