The new year has greeted County Executive Jim Smith with a county budget gap projected to be as much as $138 million.

The deficit, attributed to declining revenues, is part of budget analysis released Friday by County Auditor Mary Allen, who discussed the revenue shortfall last month during a briefing with the County Council’s Spending Affordability Committee.

Allen said recently in an interview that shortfalls in state income tax disbursements and property transfer taxes mean county revenues are on track to be $138 million less  than expected in the county general fund budget approved by the council last year.

When reduced state aid is taken into account, that figure climbs to $152 million.

“What we said (in December) was that some actions would need to be taken,” Allen said. “As far as to what extent, (members of) the administration would be the ones to know what those actions would be.”

County Council leaders said they are unclear as to how the administration will resolve the deficit.

“I know as much about it as you do,” council Chairman John Olszewski Sr. said in response to a reporter’s question. “I’m wondering how this is going to be addressed.”

Council member Joseph Bartenfelder, current chairman of the Spending Affordability Committee, also said he was unclear how the deficit would be erased.

“If there is a plan, we’d like to hear it,” Bartenfelder said.

Council member Kevin Kamenetz, who served as chairman of the committee last year, said he was not re-appointed to the committee last month by Bartenfelder and was not present during the briefing. He declined to comment, saying the full report had not yet been released to him.

Don Mohler, a spokesman for the county executive, acknowledged that part of the shortfall is due to an income tax disbursement from the state that was nearly $85 million less than expected.

Still, Mohler said there is little reason to panic.

“We will end the year with a balanced budget,” he said.

Mohler did not provide specifics on how the county would reduce costs before the budget year ends June 30, but said Smith will not resort to measures taken by some other jurisdictions to resolve shortfalls.

“The county executive is committed to resolving this without cuts in services and will keep his promise that there will be no furloughs or layoffs,” Mohler said.

Baltimore City is facing a $60 million shortfall and has resorted to a hiring freeze and furloughing employees, as well as rolling firehouse closures to close its gap.

The state has furloughed its 67,000 employees twice in the last year. Last August, it was announced that state workers would have to take five to nine days in unpaid leave.

Over the last two years, Anne Arundel, Montgomery and Prince George’s counties have all furloughed employees to balance their budgets. Some of those counties are warning that layoffs could also come in the next budget year.

Allen said that during her briefing last month, she made recommendations to the committee on how to reduce the projected deficit — including elimination of overpayments to the county’s self-insurance fund and payments to the county’s retirement fund. The payment into the retirement fund was made this year in advance of expected increased payments that will be needed in next year, she said.

But savings from those moves would only total about $61 million, Allen said.

“That gets you part of the way,” she said, adding that some additional savings could be found in holding off on some capital projects which the county had planned to pay for with cash reserves.

But she noted those recommendations are not binding, and the County Council cannot act to cut spending independent of the county executive.

This story has been updated.

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