The took the first step Tuesday to cutting the 2013 and 2014 Capital Improvement Program budget, which funds large projects around the county, including school improvements.
The council voted 5-4 to slash the spending affordability guidelines for next fiscal year by $25 million.
Councilmember Nancy Navarro (D-District 4), chair of the Government Operations and Fiscal Policy Committee, said that given the sluggish economy and county revenue, the council should err on the side of caution and set guidelines at $295 million rather than the current $320 million, and revisit the numbers should the economy improve.
"I would rather we come back in February and add a little bit, and bring good news [than] setting high expectations now," Navarro said.
The council has until Feb. 7 to adjust the numbers, and can increase the guidelines by 10 percent, up to $324 million, if economic indicators improve, before approving a budget by June 1.
Analysts say the cuts will save the county $39 million in debt servicing costs over the next six years, making more money available to operating budgets over that time.
The decision goes against the recommendations of the Board of Education and the Planning Board, both of which had hoped to at least maintain current levels, although the county's revenue from property taxes and personal income are growing slower than expected.
"Indicators are down, not up, and that's the reality," said Councilmember Phil Andrews (D-District 3). "Our decision has to be based on what's affordable, not what's desirable."
Council President and committee member Valerie Ervin (D-District 5) supported maintaining higher spending levels, saying that the county has already set aside money as part of a fiscal protection package to keep future budgets sustainable, including $31 million cash to replace bonds in the capital construction program.
Councilmember Craig Rice (D-District 2) was optimistic that help would come from the state for capital projects.
"I'd like to err on the side of hope that we might be able to work with Annapolis to get additional revenue from the state," Rice said.
"I've never been one to believe in legislating by hope," said Councilmember Marc Elrich (D-At Large), saying that revenue from Washington could be further slashed during the budget battles. "You have to have a plan."
Councilmember Roger Berliner (D-District 1), who voted against the cut, said he would be proposing a hybrid approach, spending at higher levels for the next two years to take advantage of lower construction costs, and cutting funding later.
Committee member Hans Riemer (D-At Large) was also in favor of maintaining current spending levels.
A public hearing on the proposed guidelines will be held Nov. 1.
