"It's not the situation that we want to be in and (fiscal year) 2010 looks like it's going to be worse," Mr. Hammond said, adding it's too early to tell if the gap will widen. Most of the gap was caused by the sluggish housing market and declining income tax revenue, and it is the largest hole the county has seen in more than a decade.

Governments across Maryland are grappling with large budget shortfalls as the weakening economy takes its toll on government coffers.

According to reports, Montgomery County faces a $250 million shortfall for 2010. Prince George's County ordered its 6,000 workers to take two weeks of unpaid leave to help close a $67 million hole.

The state government faces up to a $1 billion hole next year, and this week will consider up to $400 million in cuts that could have large ramifications on county governments.

Mr. Hammond and other county officials this morning did not offer specific ways to close all of Anne Arundel's gap, which represents less than 2 percent of the county budget.

Last year the county overcame a $5 million shortfall and has $11 million in savings to plug some holes this year. County Executive John R. Leopold already has instituted the third hiring freeze of his administration and curbed the use of take-home cars, among other cost-saving measures.

Mr. Leopold has announced that department heads will not get raises this year, only a cost-of-living increase.

The stagnant housing market caused a dramatic drop in the taxes the county levies when property changes hands; the declining revenue from transfer taxes caused $10 million of Anne Arundel's gap. About $2.9 million of the shortfall comes from announced or anticipated cuts in state aid. And declining income taxes punched another $6.5 million hole into the county's $1.22 billion spending plan.

Mr. Leopold has said he would considered unpaid leave for the county's 6,000-employee workforce as a last resort. This morning, he repeated his campaign promise not to raise income or property taxes.

"That commitment will be kept," he said, later adding, "Any opportunity to utilize corporate methods of efficiency, we're going to use."

Mr. Leopold has sought to increase a wide range of fees, from hotel bed taxes to the charge for well inspections and ambulance rides. Not all of his proposals have been adopted by the County Council.

The financial picture in Anne Arundel, while not rosy, is not as dire as some other governments that had large spending increases during the housing boom. Partly because of the tax cap that limits revenue the county can collect from property taxes, Anne Arundel's budget increases have been relatively modest.

For example, Montgomery County's average annual budget growth for the past 10 years was about 8 percent. Last year, Anne Arundel grew by 4.5 percent.

Mr. Hammond said that county intends to absorb any cuts within county government and will not ask the school system for help.