County Report: May 22

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Montgomery County's Desperate Budget Gamble

Montgomery County’s budget crisis, exacerbated by a State Board of Education decision at the very end, is over for the moment. Or is it?

The County Council approved a new budget last week containing a 1.1% decrease in spending from FY 2009, the first drop since FY 1992. The last hurdle to that budget involved a state requirement for “Maintenance of Effort” (MOE) on school spending, which holds that counties must at least maintain their per-pupil spending on education to be eligible for increases in state aid. Montgomery County applied for a $79.5 million waiver from the State Board of Education, saying that the county’s poor economy and its anti-tax Ficker Amendment prevented it from meeting MOE. Moreover, the county argued that since federal stimulus money earmarked for schools would enable the county to meet Superintendent Jerry Weast’s budget request, its limited county funds would be better directed to other parts of the government.

The State Board of Education denied Montgomery’s waiver request on two grounds: first, it was not persuaded that the county’s economic problems were worse than the state’s other jurisdictions (of which only two others were asking for MOE waivers), and second, it said that the county’s Ficker Amendment was no excuse to avoid MOE. That provoked an angry response from County Executive Ike Leggett and County Council President Phil Andrews and created a thorny last-minute problem: the county would now have to figure out how to direct $79.5 million to the schools from the rest of the government. How could they do that in a matter of days, especially in the context of a $587 million deficit?

Based on a recommendation from the County Executive, the council adopted this budget resolution language to get around the MOE decision:

10. This resolution appropriates $79,537,322 for the payment of debt service due in FY10 for the construction of Montgomery County Public Schools facilities.

a) Montgomery County Public Schools must make payment for the debt service through the Montgomery County Government as provided in subparagraph 1O(c). These funds must not be spent for any other purpose.

b) The inclusion of this amount for debt service will be part ofthe County's Local Appropriation and part of the calculation of the FY11 Local Appropriation required to comply with the State maintenance of effort requirement.

c) Reimbursement must occur no less than five days before each applicable debt service payment.

In plain English, the county gave the money to the schools as required by the Board of Education decision. And then they took it back as a special “debt service” charge on school construction. So the county’s position is that we are meeting the state’s MOE requirement. Even though in terms of net real dollars we clearly are not.

So why is this a desperate gamble? The State Board of Education’s decision affirmed that local government financing of schools was a “cornerstone” of state education policy. It was a rigid statement of principle. Will they now sit back, ignore the county’s action and allow Montgomery to collect its state aid? The consequences of pushback from the Board are potentially immense. No one yet knows if they will take on that fight with the county government. Montgomery’s leaders are praying they do not.

There was another approach available, but it would have generated its own problems. The County Executive’s proposed budget added $119.6 million to the revenue stabilization fund, defined as “a special revenue fund that accounts for the accumulation of resources during periods of economic growth and prosperity when revenue collections exceed estimates. These funds may then be drawn upon during periods of economic slowdown when collections fall short of revenue estimates.” It’s true that drawing on this fund would have required some explaining to the county’s credit rating agencies. But it would not involve risking the wrath of a clearly hostile state agency that has already demonstrated its indifference to the county’s financial plight and controls hundreds of millions of dollars of aid.

The county rolled the dice and gambled that the State Board of Education would be less likely to twist a dagger into its back than Wall Street. For all our sakes, we hope they are right.

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County Council Approves Operating Budget

Following is the press release from the County Council.

Release ID: 09-077
Release Date: 5/21/2009
Contact: Neil H. Greenberger 240-777-7939 or Jean Arthur 240-777-7934
From: Council Office

Montgomery County Council Approves $3.73 Billion Operating Budget for FY 2010

County’s 1.1 Percent Decrease in Tax-Supported, All-Agencies Budget Is First Decrease Since Fiscal Year 1992

County Government Budget Decreases 2.2 Percent

Public Safety, Schools, ‘Safety Net’ Are Priorities; Property Tax Stays
Within Charter Limit; $690 Tax Credit for Homeowners

ROCKVILLE, Md., May 21, 2009—The Montgomery County Council today approved a $3.73 billion tax-supported, all-agencies operating budget for Fiscal Year 2010, which begins July 1. The budget is 1.1 percent less than the approved budget for FY09, marking the first decrease in a Montgomery budget since FY 1992.

The approved budget for County government, which includes the Police Department, the Fire and Rescue Service, and Health and Human Services, but does not include Montgomery County Public Schools (MCPS), is $1.25 billion—a decrease of $28 million (2.2 percent) from FY09.

In a budget year complicated by the national and regional economic downturn, the Council’s budget protects core services and “safety net” programs, but does not exceed the County’s Charter Limit on property tax revenue. The budget includes a $690 property tax credit for owner-occupants of principal residences and does not fund cost-of-living adjustments (COLAs) for 33,000 employees of County government, Montgomery County Public Schools, Montgomery College and the Maryland-National Capital Park and Planning Commission, saving $125 million. Employees agreed to forgo COLAs in FY10, recognizing that the County could not afford the increases.

The $3.73 tax-supported operating budget, as defined in the County Charter, excludes self-supported enterprise funds and specific grants from the Federal and State governments, but includes current revenue funding for capital projects. For comparative purposes, this figure does not include $79.5 in debt service for MCPS school construction that will be appropriated to the MCPS budget.

The approved total operating budget for FY10, without the MCPS-related debt service, is $4.394 billion, an increase of 1.2 percent from FY09. The total operating budget includes self-supported enterprise funds and specific grants from the Federal and State governments.

In March, County Executive Isiah Leggett submitted his recommended budget to the Council. In reviewing the budget over the past two months, the Council reduced funding in several areas—including technology, cable funds, utilities and leases—and redirected it to reflect the Council’s priorities in health and human services and public safety.

The Council adopted resolutions for the FY 2009-14 Capital Improvements Program that will keep all school construction projects on their current timetables, move ahead with funding for a new Silver Spring Library and continue plans for a North County Bus Maintenance Depot.

The Council also approved a down payment of $12.9 million for purchase of the GE Tech Building on Route 28. That property is a key element in the Executive’s Property Use/Smart Growth Initiative that would move numerous County operations from scattered locations, and some from rented space, into County-owned consolidated facilities. The new complex, whose overall cost is approximately $107 million, would include the Montgomery County Police Department’s headquarters, the 1st District Police Station, the Fire and Rescue Service, the Office of Emergency Management and various County offices. A new public safety memorial also would be located on the site.

Under the approved budget, property tax revenue will stay within the County’s Charter limit. The County exceeded the Charter limit—which requires that revenue from taxes on existing property not exceed the rate of inflation for the previous year—only four times since voters approved the provision in November 1990. In November 2008, County voters amended the Charter to require support of all nine Councilmembers to exceed the limit.

In addition, the County “circuit breaker” tax credit will provide more targeted property tax relief for households with incomes of $64,000 or less. And under a law the Council passed three years ago, eligible homeowners who are at least 70 years old will benefit from an added 25 percent circuit breaker credit.

The County entered the budget season facing a gap estimated at nearly $587 million. The budget adopted by the Council restored core services including police and fire and rescue services, addressed the health needs of the poor and disadvantaged and maintained facilities and programs that continue the quality of life expected by residents.

The budget emphasizes the Council’s priority focus on education, public safety and health and transportation programs that help the less fortunate during these difficult economic times.

The Council did not approve the Emergency Medical Services Transport (EMST) fee—generally known as an ambulance fee—recommended by the Executive. The fee would produce an estimated net of $12.5 million in revenue, which the Executive asserts would be paid primarily by insurance companies.

The Council’s budget preserved 18 bus routes that the Executive recommended be reduced or eliminated. The Council heard numerous concerns during budget public hearings about the impact of such cuts. The Council’s action helps many residents for whom transit is the only way to get to work or get around. The Council also provided for $1.8 million in community grants to non-profits in addition to about $2.5 million in grants recommended by the Executive and approved by the Council. Those grants will strengthen the safety net for the most vulnerable residents.

The budget continues the Council’s commitment to affordable housing. The Council approved $57.8 million for the Housing Initiative Fund (HIF) as recommended by the Executive. The Council allocated $8.9 million from the HIF for costs associated with Housing First, including rental assistance subsidy payments. Housing First seeks to find permanent homes for homeless individuals and families rather than keep them in a series of transitional housing.

The budget avoids layoffs through agreements with organizations that represent County employees that will have all employees forgo Cost of Living Adjustments (COLAs).

“We had a framework in approaching this most difficult budget year and we stuck to it,” said Council President Phil Andrews. “These are difficult times for our residents and for our County. We cut spending and produced the first Montgomery County budget in 18 years that is less than the previous year’s budget. We protected our residents by not exceeding the Charter limit, but we still preserved essential services and provided for our most vulnerable residents by making sure they will have access to health services and transportation.

“We did not approve an ambulance fee, which was recommended by the County Executive but is opposed by many residents. We restored funding to keep all police stations open all night to the public, and we will buy 14 new ambulances to keep our services state-of-the-art. And we have provided a $690 property tax credit for homeowners, which will be a significant help in this challenging year. The pain of a budget year like this is real for employees who won’t receive COLAs, for example, and for youth in recreational programs, some of which were eliminated. However, we have taken the steps that were necessary to balance the budget wisely in these very tough economic times.”

The FY10 approved total budget for Montgomery County Public Schools is $2.2 billion, fully funding the Board of Education’s request. Funding for Montgomery College will be $265.6 million, 99.5 percent of the College’s request. The budget provides for enrollment growth, the opening of the new Performing Arts Center at the Takoma Park/Silver Spring campus, and additional scholarship funds.

The $246.6 million for the Police Department includes $316,160 to restore 24-hour public access to the 2nd District (Bethesda area) and 6th District (Gaithersburg/Montgomery Village) police stations. The Executive proposed closing these stations to the public from 1-6 a.m. Police funding also includes $75,000 to keep the Piney Branch Satellite Station open and in its current location and $216,220 to add five recruits to the January 2010 police academy class. In addition, the Council approved funding to administer a program that will install video cameras in police cars. The cameras will be purchased with grant funds.

The budget includes $660,000 to add 12 recruits for the County Fire and Rescue Service that were not included in the Executive’s recommended budget. The additional employees will help keep up with increased staffing needs.

“The Council’s budget action this morning maintains property taxes at the Charter limit, spreads the property tax burden equitably among residents, preserves essential services for residents and eliminates planned cost of living increases for employees,” said Councilmember Valerie Ervin, who chairs the Council’s Education Committee and represents District 5, which includes Kensington, Silver Spring, Takoma Park and Wheaton. “The Council kept its commitment to fund core services that residents rely on each day. Education, public safety and safety net services were at the top of my list of priorities because these are issues that I hear about most in District 5.”

Councilmember Nancy Floreen, chair of the Council’s Transportation, Infrastructure, Energy and Environment Committee, said: “Fortunately, we were able to retain 18 Ride On bus routes that had been targeted for elimination or reduced service. Transit has a lot of benefits, like reducing congestion and mitigating climate change. But my most important consideration right now is that that Ride On is the only transportation option for many of our residents. I’m glad that during these difficult times we’ve been able to make sure the most vulnerable of our residents continue to have the tools they need for their health and safety.”

Councilmember George Leventhal, chair of the Council’s Health and Human Services Committee said: “This was the most challenging budget of my seven years on the Council. As chair of the Council’s Health and Human Services Committee, I am gratified that the Councilmembers worked together to protect the ‘safety net’ - the array of County services that support our most vulnerable residents. The economic recession has forced an unprecedented number of residents to seek relief from County government in the form of rental assistance, utility payments, advice and counseling on preventing home foreclosure, assistance finding employment, primary health care, mental health counseling and shelter from homelessness. The County Council is committed to helping our residents through these difficult financial times, and is working toward our economic recovery and a prosperous future for everyone who chooses to call Montgomery County home.”

Councilmember Duchy Trachtenberg, who chairs the Council’s Management and Fiscal Policy Committee, praised her colleagues for today’s vote.

“During this season of unparalleled budget pressure, I am particularly pleased that funding was preserved for vital preventive health and behavioral health care delivery programs,” said Councilmember Trachtenberg. “We prioritized funds for screening, assessment and wraparound services for youth. The Council made a commitment to the integration of primary care and behavioral health by supporting the Montgomery Cares Behavioral Health pilot program. We also increased our funding for the County’s STD/HIV core programming after I presented information to my colleagues on the current unmet reproductive health needs of women qualifying for publicly funded services.”

# # #

Highlights of the Fiscal Year 2010 Montgomery County Operating Budget:

Property Taxes

• The average tax rate will remain unchanged from FY09, resulting in an average tax rate of 90.3 cents per $100 of taxable value (there are 21 property tax rates in the County).
• Every owner-occupied principal residence will receive a $690 property tax credit.
• The County “circuit breaker” homeowners’ tax credit will provide significant property tax relief for homeowners of all ages with household incomes of $64,000 or less.
• Under a law the Council passed three years ago, eligible homeowners who are at least 70 years old will receive an added 25 percent circuit breaker credit.

Education

• $2.2 billion total budget for Montgomery County Public Schools (MCPS), fully funding the request of the Board of Education.
• MCPS Capital Improvements Program (CIP)
- Supports all of MCPS-requested CIP amendments for capacity projects and infrastructure maintenance.
- Includes funding requested by MCPS for work required to meet general discharge permit requirements, as well as planning requirements, associated with the new National Pollution Discharge Elimination System (NPDES) permit.
• $265.6 million for Montgomery College, 99.5 percent of the College’s request. The budget provides for enrollment growth, the opening of the new Performing Arts Center at the Takoma Park/Silver Spring campus, and additional scholarship funds.
• $745,000, plus a transfer of $43,000 from the Department of Health and Human Services, for the Montgomery Coalition for Adult English Literacy (MCAEL). The Coalition administers County grants for programs to improve adult literacy.
• Approved construction funds for the Bioscience Education Center at Montgomery College’s Germantown campus, including a new access road to serve the entire campus. Center is scheduled to open in January 2013.
• Created Workforce Investment Scholarship program to provide tuition funding assistance for undergraduate students at Montgomery College and the Universities at Shady Grove who are pursuing degrees in fields of significant occupational need in Montgomery County. It is estimated that in its first year, the program will provide 25 scholarships of $3,000 each.

Public Safety

- Police

• $246.6 million for the Police Department.
• $316,160 to restore 24 hour public access to the 2nd District (Bethesda area) and 6th District (Gaithersburg/Montgomery Village) police stations. The Executive had proposed closing these stations to the public from 1-6 a.m.
• $75,000 to keep the Piney Branch satellite station open and in its current location.
• $216,220 to add five recruits to the January 2010 police academy class.
• Approved funding to administer a program that will install video cameras in police cars. The cameras will be purchased with grant funds.

- Fire and Rescue

• $193,587,120 for the Montgomery County Fire and Rescue Service.
• Budget does not assume $12.5 million in net revenues from Emergency Medical Services Transport (EMST) fee that was proposed in County Executive’s recommended budget.
• Save $1.18 million by lease purchasing 14 new ambulances instead of County Executive’s recommended purchase of 30. The Council supported a staggered approach to purchasing vehicles rather than a lump sum approach.
• Lease purchase two engine body pump modules and one tanker, but save about $200,000 by not purchasing four all-wheel-drive engines and two light duty brush trucks also recommended by Executive.
• $439,330 in Consolidated Fire Tax funds and $100,000 in grant funds to open the new Milestone (East Germantown) Station in March 2010.
• Add matching funds for 12 new field positions to be partially funded through a Staffing for Adequate Fire and Emergency Response (SAFER) grant. Five positions will be assigned to the new Milestone Station. The others will be used to increase four-person staffing on fire engines around the County.
• Maintain funding for the new Kingsview (West Germantown) station that opened in March 2009 with one fire engine and one ambulance.
• Save $676,590 by delaying implementation of a second ambulance for the Kingsview (West Germantown) Station until FY11.
• $264,150 for a transition in the Emergency Communications Center that would return 10 uniformed firefighter/rescuer positions to the field and replace them with 10 civilian positions. After the first transitional year, this civilianization initiative is expected to produce cost savings.
• $157,500 for a transition in Fire Code Enforcement that would return six uniformed positions to the field and replace them with six civilian positions. After the first transitional year, this civilianization initiative is expected to produce cost savings.
• $660,000 to add 12 recruits to recruit class in February FY10.
• Save $216,000 by eliminating some daywork overtime for career positions at Bethesda-Chevy Chase Rescue Squad, Kensington Volunteer Fire Department, and Wheaton Volunteer Rescue Squad. The reduction will either be covered by volunteers, or by units from other nearby stations.
• $134,000 to restore a day position at Burtonsville Fire Station (funding was not included in Executive’s recommended budget).

- Correction and Rehabilitation

• $65.6 million to fund the Department of Correction and Rehabilitation.
• $72,140 to restore a laboratory assistant position in Pre-Trial Services that had been initially cut under the Executive’s recommended budget.

- Sheriff’s Office

• $21.2 million to fund operations of the Sheriff’s Office.
• $108,650 to restore a recruit class that had been eliminated under the Executive’s recommended budget. This will add three new officers over the next fiscal year. While attrition is currently low, the Maryland General Assembly recently created a new judgeship for Montgomery County Circuit Court. In the past, each new judgeship has warranted the addition of two officers to handle the resulting increased caseload.
• $88,460 to help support new Family Justice Center in Rockville. The center provides a coordinated team of professionals that provide a variety of services for victims of domestic abuse.

Transportation

• $189 million to fund the Department of Transportation.
• Retained the current service for 18 Ride On bus routes that were targeted for elimination or reduced service in the County Executive’s recommended budget. To offset the costs of retaining the bus routes, parking rates were increased in the Bethesda/North Bethesda area. Also restored weekday midday service (from 10 a.m. to 1:30 p.m.) on the Route 6 Ride On line that serves the Garrett Park area. That service was eliminated during a round of mid-year budget cuts in April. It is expected that service would be returned in September.
• Parking payment by cell phone will be piloted in Bethesda in the fall.
• Increased by 25 cents per hour all short-term spaces for public parking in the Bethesda Parking Lot District. Also increased long-term hourly rate, for a monthly Parking Convenience Sticker and for other associated fees. The parking fee changes include the following:
- Raised price of all short-term spaces from 75 cents to $1 per hour
- Raised price of long-term spaces from 50 cents to 65 cents per hour
- Raised the price of the Parking Convenience Sticker from $95 to $120 per month
- Raised price of a two-person carpool permit from $70 to $90 per month
- Raised price of a three-to-four-person carpool permit from $40 to $50 per month
- Raised price of a five-plus-person carpool permit from $10 to $13 per month
- Raised the price of the Daily Parking Permit and for the Daily Maximum and a Lost Ticket in Garage 49 from $8.25 to $10.50 per day
• Increased parking fees in the North Bethesda area, including:
- Short-term rate increased from 60 cents to 75 cents per hour
- Long-term rate increased from 45 cents to 50 cents per hour
- Monthly Parking Convenience Sticker increased from $85 to $95
• Increased the subsidy for the Call-’N-Ride program that supplies taxi coupons for economically disadvantaged seniors (age 67 or over) and disabled persons. The impact of those changes would be:
- An eligible person earning $14,001 to $17,000 who now pays $17.50 per coupon book per month will pay $10 in FY10. An individual can buy up to two coupon books each month. This measure could save an individual $15 per month.
- An individual earning $17,001 to $20,000 who now pays $26.25 per coupon book per month would pay $20 in FY10. This measure could save this person $12.50 per month.

Economic Development

• $10.3 million to fund the Department of Economic Development.
• $852,440 for the Economic Development Fund that loans funds to businesses and including funding for the impact assistance program which provides grants to small businesses impacted by County revitalization projects.
• $700,490 for the Conference and Visitor’s Bureau that promotes the County as a tourist destination.
• $1,339,860 will be added to the FY09 budget in federal economic stimulus aid for workforce development to focus on youth and on adult dislocated workers.
• $617,395 to fund the Montgomery County Conference Center.

Housing

• $57.8 million for the Housing Initiative Fund (HIF).
• $8.9 million from the HIF to be allocated for costs associated with Housing First, including rental assistance subsidy payments. Housing First seeks to find permanent homes for homeless individuals and families, rather than keep them in a series of transitional housing.
• The Department of Housing and Community Affairs has already made commitments to use a portion of the HIF for 13 identified projects to acquire, preserve and/or renovate affordable housing.
• $50,000 to enhance the County’s Clean and Lien program and outreach effort regarding code enforcement. The Clean and Lien program will address problems at vacant properties (such as uncut grass and weeds) and then require the property owner to repay the County.
• $4 million in Community Development Block Grant Funds, including $1.26 million for housing rehabilitation and $605,000 in grants to non-profit organizations.
• $226,875 in Federal Emergency Shelter Grants and $2.76 million in HOME Investment Partnership funding.

Health and Human Services

• $269.5 million in funding for the Department of Health and Human Services.
• $249,530 to fund a 1 percent inflationary adjustment for contracts with eligible health and human services providers.
• Restore $136,830 (funding was eliminating in County Executive’s recommended budget) for six Conservation Corps member slots and a Human Service Specialist who provides counseling, employment skills training and support services to out-of-school, at-risk youth ages 17-24.
• $10,000 for ESOL Silver Spring team
• $90,790 for a human services specialist for the Conservation Corps program
• $46,040 for six member slots for Conservation Corps program

- Public Health Services

• $10.16 million for the Montgomery Cares program, plus $117,000 to restore the Executive’s recommended funding reduction to the Montgomery Cares Behavioral Health Pilot program and to fund specialty care services as recommended by the Montgomery Cares Advisory Board. Montgomery Cares provides primary health care to low-income uninsured adults. More than 22,000 patients will be seen by the Montgomery Cares clinics in the current fiscal year and the Montgomery Cares Advisory Board projects that up to 28,000 may need services in FY10.
• $45,000 for smoking prevention programs for at-risk youth and young mothers. These programs were proposed to be eliminated because of the State’s reduction in Cigarette Restitution Funds for education and outreach.
• $100,000 to expand screening and treatment capacity for STDs and HIV to reduce the number of people who are turned away from the County’s STD/HIV clinic.
• $182,330 to restore funding for primary care for low income uninsured patients through Mobile Medical Care and Proyecto Salud.
• $100,000 for a nurse practitioner for the Mobile Medical Care service.
• $130,000 for special care and a volunteer coordinator for Mobile Medical Care.
• $50,000 to support clinic expansion through Mercy Health Clinic
- Behavioral Health and Crisis Services
• $70,000 to restore Level 1 Outpatient Treatment services to minimize acceptance time into treatment.
• $83,810 to restore Child Mental Health Care Coordination services. Funds were not included in the Executive’s recommended budget.
• $162,420 to expand the Public Inebriation Intervention Team to the Wheaton Central Business District.
• $4.2 million for 24-hour crisis services including telephone, walk-in, mobile crisis outreach and crisis residential services.

- Aging and Disability Services

• $4 million for services that help seniors remain independent in the community including an increase of $154,010 for senior transportation services.
• $4.62 million for in-home aide services.
• $2.3 million to support the senior food program, an increase of $600,000 over the previous year.

- Children, Youth and Family Services

• $291,210 for the Neighborhood Network initiative to provide emergency food and housing stabilization services to neighborhoods most impacted by the recession. These funds will be combined with grants to non-profits and funding from the Community Foundation.
• Restore $50,000 (funding was eliminating in County Executive’s recommended budget) for intensive individualized, coordinated, and multi-agency support services for children and youth who are gang-involved or at risk of becoming gang involved.
• $22.1 million for Child Welfare Services.
• $10.7 million for Child Care Subsidies.
• $20.3 million for School Health services, an increase of $500,000 from the FY09 approved budget).
• $2.4 million to fund an initiative that addresses high risk youth behaviors including gang involvement, violent behavior, substance abuse, and teen pregnancy. Services are delivered through the Youth Opportunity Center in Langley Park, the Wellness Center at Northwood High School and the Street Outreach Network, a cadre of outreach workers, who connect with and provide support to gang involved youth.
• $2.85 million for services focused on increasing the quality early care and education programs available to young children, including restoration of $17,000 for training incentives for new child care providers.
• $3.5 million for evaluation, assessment, and early intervention services to families with children under age three when there is a concern about development, including a $1.3 million increase in federal and state funding.
• $5.2 million for Linkages to Learning, an increase of $26,850.
• $340,000 to support community-based pre-kindergarten services for 40 children provided by Centro Nia.
• $17,000 for incentives for new child care program.

Libraries

• $37.9 million for the Department of Public Libraries.
• Maintains current hours at all libraries.
• A decrease of 53 positions (most were already vacant).
• 10 percent reduction in purchase of new materials.

Technology

• $31.8 million to fund the Department of Technology Services to continue support a multitude of resident and County services on the web, as well as provide an infrastructure for County business applications, data storage, and information sharing in a secure and reliable manner for all county departments.
• $14.9 million to continue technology modernization initiatives that are expected to streamline County processes and make it easier for residents to reach the County and receive services.
• Many aging Finance, Procurement and Human Resource systems are being replaced and the many call taking operations in multiple departments will be consolidated into a single MC311 call center ensuring prompt and coordinated response. In addition, this effort will result in long term operational savings of $7.5 million annually, with the first such savings being realized in the last quarter of FY10 equaling an estimated $1.875 million.
• $6.8 million for desktop computer modernization, a program that refreshes a schedule of outdated desktops / laptops and provides a responsive Help Desk function for all County departments.
• $15.5 million of Cable Fund revenues to a variety of programs including the Office of Cable and Communications Services that assists residents with cable and broadband service complaints, enforces cable and other telecommunication franchises, and reviews all telecommunications tower and antenna siting requests.
• Funding provided to support cable programming produced by community, government and educational organizations and to support of expansion of the FiberNet system that permits cost-effective, fast, secure broadband communications between public safety agencies, educational facilities, government service centers and much more.

Arts and Humanities

• $5,069,380 for Arts and Humanities.
• $3,963,130 for Arts and Humanities Council includes:
- $3 million for operating support for large organizations.
- $492,930 for grants to small and mid-size organizations, program and arts education grants, and individual artist/scholar grants (a 5 percent reduction from FY09)
- $375,000 for administration and related functions (about the same as FY09)
- For operating support, the Council requested that the Arts and Humanities Council adjust the formula for allocation of grants to avoid large percentage increases or decreases for organizations between FY09 and FY10. The Arts and Humanities Council revised the formula so that an organization’s FY10 grant would not increase or decrease by more than 11 percent of the organization’s FY09 grant award.
• Assistance to individual organizations
- $506,250 for American Film Institute (Silver Theatre operating support)
- $75,000 for Heritage Tourism Alliance (operating support – match for State funds)
- $400,000 for Imagination Stage (facility debt service and/or debt retirement)
- $50,000 for Pyramid Atlantic (facility debt payment)
- $75,000 for Round House Theatre (Bethesda facility maintenance and utilities)

Environment

• Initiated a plan to reduce energy consumption in County government facilities by four percent in FY10. Meeting the goal would save an estimated $1.1 million in the next fiscal year.
- WSSC
• Reached agreement with the Prince George’s County Council for a 9 percent rate increase that will provide additional funding for large diameter pipe inspections, fiber optic monitoring, and repairs as well as an increased pace of small diameter water main replacement.
- Department of Environmental Protection
• $11.7 million to fund the Department of Environmental Protection including $8.9 million for the Water Quality Protection Fund.
• Added $270,000 for the staffing of the State of Maryland’s new Clean Energy Center, which is to be located at the Universities of Shady Grove.
• Added $90,000 for a storm drain inventory of Montgomery County Public Schools facilities as required under the County’s new National Pollution Discharge Elimination System (NPDES) permit.
• Approved four additional positions in DEP for planning and capital work associated with the new National Pollution Discharge Elimination System (NPDES) permit.
• Supported an additional $192,000 for the maintenance of 70 stormwater management facilities (new or recently transferred to DEP for maintenance). DEP inspects all stormwater management facilities in the County (more than 4,000) and currently maintains more than 1,400 stormwater facilities.
- Department of Environmental Protection-Solid Waste
• $102.5 million for Solid Waste Collection and Solid Waste Disposal, fully funding the Executive’s recommended budget.
• Approved modest increases in Solid Waste charges. Single-family residences will see increases of 3.5 percent or less depending on the subdistrict (A or B) in which they reside. Multi-family residences will see virtually no increase (increase of .1 percent)
• Maintains tipping fee at Shady Grove Transfer Station at $56 per ton for non-residential and multi-family transfers.
• Supports the Executive’s recommendation to close the Damascus “Beauty Spot” because of environmental compliance issues at the site.
- Climate Change Implementation
• $30,000 to the Office of Consumer Protection to continue advocacy at the State and Federal levels on energy issues affecting Montgomery County residents.
• $518,000 to continue the Clean Energy Rewards program.

Maryland-National Capital Park and Planning Commission

• $135 million for M-NCPPC budget.
• $83 million to maintain current level of staffing for parks.
• $19 million to fund planning initiatives including master plans, environmental and transportation analyses, and the development review process.
• A summer study to examine the efficiency of administrative services within the Commission and consider restructuring options.
• New funding for a parking management study to be conducted jointly with County government.

Recreation

• $30.96 million to fund the Montgomery County Recreation Department.
• Restored three out of the 13 RecExtra after-school program sites recommended for elimination, providing for the continued operation of a total 28 program sites for FY10.
• $80,000 for youth programming to be disbursed to the four recreation regions.
• Increase financial assistance by $100,000 for low-income families to take part in fee-based Recreation Department activities.
• Provide funding to continue the operation of the Piney Branch Elementary School pool.
• $417,000 for operating the Wisconsin Place Community Recreation Center, scheduled to open in July 2009.
• $551,170 for operating the Mid-County Community Recreation Center, scheduled to open in November 2009.
• $24,000 to operate the Randolph Road Theater.
• $5.6 million for aquatics programs, including recreational, fitness, instructional, competitive, therapeutic and rehabilitative water activities.
• $2.6 million for camps, classes, and sports programs.
• $11 million for services provided by the Department’s Recreation Regions and Centers.
• $1.7 million for senior adult programs, which include senior centers, neighborhood programs, classes, sports and fitness, trips, and special programs for frail and isolated seniors.
• $534,000 to support land acquisition costs for the Wheaton Community Recreation Center – Rafferty.

Liquor Control

• $44.4 million to fund the Department of Liquor Control (an increase of 13.4 percent over FY09).
• $5.3 million in debt service from the Liquor fund for state transportation projects
• Approval for the liquor warehouse to move to the Finnmark property in Gaithersburg to meet industry storage and other safety standards.

Fleet Management Services

• Reduced the County CarShare fleet from 28 vehicles to 18. MC CarShare is a pilot program (began Jan. 1, 2009) where County employees rent hybrid vehicles by the hour instead of using administrative fleet vehicles or traditional rentals. While the Council actively supports the use of this program, it is currently being underutilized. The Council therefore decided that 18 was a more appropriate and cost-effective fleet size while the program is in its infancy.
• Reduced the number of administrative fleet vehicles, saving approximately $1.5 million. In order to achieve this reduction, fleet users will be shifted from administrative fleet vehicles to the MC CarShare program.
• Reduced Enterprise rental expenditures by $100,000. FY09 rentals are projected to cost more than $300,000.

Regional Services Centers

• $4.2 million to fund the East County, Mid-County, Bethesda-Chevy Chase, Upcounty and Silver Spring regional centers.
• $125,000 for Emerging Communities Initiative for small community development projects in commercial areas that are not in Urban Districts.

Other Notable Items

• $1.8 million for a total of 47 grants to nonprofit organizations to support a variety of programs and services, including food, eviction prevention, utility assistance and other safety net services to help low income families facing severe economic hardships.
• Funded several youth development proposals from community nonprofit organizations working to provide needed after school programs for County youth.
• $48.6 million for the Division of Risk Management, the self-insurance component of the Department of Finance.
• $8.6 million to fund the Office of Human Resources.
• $2.4 million to fund the Office of Consumer Protection.
• $9.2 million for Community Use of Public Facilities.
• $27.1 million for the Department of Permitting Services.
• $2.2 million to fund the Office of Human Rights, including an increase of $3,000 in administrative expenses for the Human Right Commission.
• $1.2 million to fund the Commission for Women.
• $64,500 for the Montgomery County Historical Society.

Programs Eliminated or Significantly Reduced

• The Teen Club program was totally eliminated from the Recreation Department budget for savings of $595,240 (net savings $184,240 because of lost revenues of $461,000). The program included activities and trips for middle and high school students.
• RecExtra programs offered by the Recreation Department are reduced from 38 to 28 schools for savings of $158,350. Program funding overall was reduced by 57 percent of FY09 levels.
• SHARP Street Suspension Program budget was cut by $342,980, a 75 percent reduction from FY09 approved levels, due to restructuring of the program. Four of the seven existing sites will receive some level of funding to support operations. The other three sites will continue only if the churches and volunteers can sustain programming.
• Implementation of a second ambulance for the recently opened Kingsview (West Germantown) Fire Station will be delayed until FY11, saving $676,590.
• Police staffing reduced by six non-sworn positions in the administration, personnel and crime analysis sections and five vacant positions were eliminated in the Security Services section.
• Only one police recruit class will be held in the upcoming fiscal year. Because there will be only one class in January 2010, four background investigator, two recruiter and a field training coordinator positions were eliminated.
• Save $724,000 by eliminating 10 positions at Montgomery College.
• The Office of Zoning and Administrative Hearings was reduced 58 percent (total reduction of $21,510 from the FY09 appropriation of $36,500) in the area of legal and attorney services. This area is for contract attorneys that assist in hearings to maintain a hearing schedule that does not have significant delays. The hearing examiner believes this reduction could delay hearings in some cases.
• Save $150,000 in funding for Chore Services, which provided assistance to elderly or disabled persons who need assistance with heavy housework and trash removal. The program was eliminated because of budget constraints, but had assisted 30 people before it ended. At the time the program ended there were 71 people on the waiting list for these services.
• Saved $135,000 by reducing maximum hours of Respite Care, which provides family caregivers of disabled persons with up to 164 hours of respite services per year. In order to reduce expenditures, the maximum hours will be reduced to 140 per year. While this is the average number of hours used, many families will experience a reduction in this very important service.
• The State reduced the Hepatitis B grant to the County by $161,000 and the County has eliminated a Community Health Nurse in the immunization program. This will impact the County’s ability to provide outreach, education and immunization clinics.
• The State has reduced Cigarette Restitution Funds for prevention, outreach and education by $734,900. This will result in the elimination of three positions in the Department of Health and Human Services and more than $400,000 of contractual services.
• Redistribute/increase the workload for existing analysts in the Office of Management and Budget (OMB) and abolish a vacant budget specialist position to save $135,000.
• Fill several analyst positions at OMB with interns to save $104,000 (assuming that some of the analyst positions become vacant during the year).
• Save $27,000 by reducing the number of County budget books printed (they are available online).
• Save $122,000 in the Department of General Services (DGS) for the cost of various supplies, reflecting lower prices and reduced use.
• Save $235,000 by reducing miscellaneous maintenance operating expenses in DGS.
• Save $442,000 by assuming efficiencies in administration in DGS from digitizing the work processes. Savings will come in form of paper, toner, copier use, paper storage, filing space (cabinets and floor space for them) and general administrative costs
• Save $1.4 million by assuming that the cost of the various service contracts for maintaining County facilities can be reduced 11.2 percent without reducing the level of service. This seems reasonable due to the fact that the economic recession has reduced the demand for such services and the contractors must reduce their prices to attract customers.
• Eliminated three positions in the Department of Finance: one in Treasury, one in Payroll and one in IT. Total savings of $273,340.
• Phase out mailing of tax bills to homeowners whose mortgage company pays the property tax bill to save $42,950. Savings will come from printing, postage, and handling. Finance explained that the service impact would occur in FY11, not FY10, because it will still mail the FY10 bills, but on or before the end of FY09, using appropriation in the FY09 budget. The savings in FY10 would result from not mailing the FY11 bills in FY10. Instead, Finance would mail a postcard informing residents that they can view and print their bill from Finance’s web site. The FY12 bills (July 2011) will be available only online.

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Leggett and Andrews Slam State Board of Education

You better hide the kids and shield your eyes before reading this press release, folks!

Statement by County Executive Isiah Leggett and County Council President Phil Andrews on the Decision of the State Board of Education on the County’s Maintenance of Effort Waiver

“The last-minute decision by the Maryland State Board of Education to deny Montgomery County a one-time waiver of the Maintenance of Effort funding requirement is totally unjustified.

“This is a classic example of state bureaucrats second-guessing an agreement reached on the local level by Montgomery County and the Montgomery County Public Schools to fully fund County school programs.

“This waiver request was fully supported by the Montgomery County Board of Education – those in closest touch with the needs of County schoolchildren and their families.

“Given the County’s long history of unparalleled local funding for our public schools and the strong case Montgomery County has made for the existing fiscal difficulties, it is difficult to understand how any waiver for any jurisdiction at any time could ever be approved by this State Board of Education.

“This decision actually harms school kids and the Montgomery community as a whole. It potentially forces even further cuts in critical services such as public safety, positive youth programs, libraries, and help to the most vulnerable County residents – or reductions in public school spending.

“During the past decade, MCPS enrollment has risen by 5.4 percent while our local contribution to the schools increased 75 percent. Montgomery County has gone far above and beyond what is required by the State of Maryland in funding our schools with local dollars from local taxpayers. For the past two years, even with fiscal challenges, we have significantly reduced both the overall capital and operating budgets to ensure that our schools had the resources necessary. For example, last year, the County raised property taxes by $130 million, again, in part to help fund our public schools.

“Only the severity of the economic downturn and the dire consequences for the County’s overall budget caused us to request a waiver this year. Despite these challenging conditions, we still funded 99 percent of our school system’s request.

“Montgomery County requested this waiver in order to continue to support our world-class school system while, at the same time, sustain critical programs in public safety, help for the most vulnerable County residents, and other important initiatives in the County budget that support our children and youth.

“As a result of this unwarranted decision by the State Board of Education, we will work together on a plan to resolve this unacceptable denial in a manner which we believe will be in the best interests of the County and its taxpayers.”

# # #

Contact: Patrick Lacefield 301-919-9372, 240-777-6528

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State Board of Education: Local Tax Caps Are No Grounds for Waivers

The State Board of Education denied the Maintenance of Effort (MOE) waivers for school funding for all three counties (Montgomery, Prince George’s and Wicomico) that applied. And contrary to what we were hearing, former Montgomery County Council Member Blair Ewing supported Montgomery’s request and dissented from the State Board’s decision.

In its decision for Montgomery County, the State Board cites state law holding that a county may obtain a waiver if the board determines “that the county’s fiscal condition significantly impedes the county’s ability to fund the maintenance of effort requirement.” The Board’s regulations list four factors it would consider in deciding on a waiver:

(a). External environmental factors such as a loss of major industry or business;
(b). Tax bases;
(c). Rate of inflation to growth of student population;
(d). The maintenance of effort requirement relative to the county’s statutory ability to raise revenues.

Moreover, a county asking for a waiver bears a burden of proof that the above factors prevent it from maintaining its current level of per-pupil school spending, thus requiring a waiver. Should a county not receive a waiver and fail to meet its MOE requirement, its increase of state aid would be at risk.

On Montgomery, the Board found the following:

(a). While the county is suffering an economic downturn, it has not lost a major industry or business. The Board noted that 21 of the other 24 counties also suffered from the recession and did not request waivers.

(b). The Board found that while Montgomery had revenue reductions, it did not have an erosion of its tax base. It cited the county’s relatively low unemployment rate and the presence of the federal government as protecting its tax base relative to the rest of the state.

(c). The Board stated that Montgomery’s student population had grown by just 1,424 in the year ending September 30, 2008 so inflation or student growth was not an issue.

(d). The Board differentiated between two limitations on the county’s ability to raise revenues: the income tax cap and the Ficker Amendment. Both were cited by the county as reasons it could not raise more money and was thus compelled to seek an MOE waiver.

State law limits income tax rates charged by the counties to 3.2%. Montgomery is already at that limit. The Board said, “We give great weight to the fact that the county is prohibited by State law from increasing the income tax rate.”

The Ficker Amendment, passed by Montgomery voters last November, requires a unanimous vote by nine County Council Members to raise property taxes by an amount exceeding the rate of inflation. The Board dismissed that as a reason for the MOE waiver, saying, “We give little weight to the need for a unanimous vote to raise property taxes.”

Why?

The Board said this about local tax caps:

In some counties in Maryland there are locally imposed caps on taxes and/or other significant locally imposed impediments to increasing taxes. We do not opine on the propriety of those locally imposed prohibitions or impediments. We do opine, however, that based on our understanding of the State/local share requirements contained in Maryland’s education funding formula, when we consider a county’s ability to raise revenue we will give locally imposed prohibitions little weight in the balance.

We adopt this position because each county and its voters are free to restrict tax increases, but in our view, each is not free to abdicate its responsibility to fund its minimum local share of education costs. If we gave locally imposed prohibitions great weight in our analysis, we envision legal and public policy consequences that could destroy the cornerstone of the education funding formula because any county in Maryland can, by referendum or otherwise, cap its property or other tax bases at a level that would ultimately preclude the county from raising sufficient taxes to fund MOE in full. That is not an outcome this Board could sanction by interpretation of our regulation.

Translation: you may pass the Ficker Amendment or any other tax caps, but you may not escape your responsibility to educate your kids. Prince George’s and Wicomico Counties were also denied waivers because the Board gave “little weight” to their own local tax caps.

Our spies were dead wrong about Blair Ewing. He offered this dissent from the Montgomery decision:

The Montgomery County case is a unique one. The initial problem was that there was adequate money to fund the schools, but not adequate money to fund both the schools and the county government operations. The local school board, the county executive and the county council have now all agreed on adequate funding for both the schools and the county government operations, but need the waiver they have requested to make the agreement effective. This is an example of good government at work. It ought to be encouraged and supported. The waiver should be granted.

State Board Member Donna Hill Staton also dissented.

So now Montgomery is obligated to divert $79 million of county money from non-school programs to the schools to maintain its per-pupil education spending. That is money the schools do not need because they are receiving federal stimulus funding. Police service, fire service, health and human services programs, transportation – all are at risk because of the Ficker Amendment.

And this is just the beginning.

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Will Montgomery Get its School Funding Waiver?

A major part of Montgomery County’s $587 million budget crisis is not under the control of the County Executive, the County Council or anyone else in Rockville. In fact, a decision affecting $79 million of county money will actually be made in Baltimore – the home of Maryland’s State Board of Education.

Maryland state law contains a “Maintenance of Effort” (MOE) requirement for counties stating that they must at least maintain their per-pupil county spending on education before receiving state school aid increases. The goal of the law is to prevent counties from diverting their own school spending while accepting state school money.

Montgomery County is suffering its worst budget problems since at least the early 1990s. The crisis could have been a lot worse if the state did not receive federal stimulus money. Much of the stimulus money was earmarked for schools, and the Governor used part of it to fully fund the state’s Geographic Cost of Education Index (GCEI) program. That meant Montgomery could fund almost its entire education budget request but still faced problems in the rest of its county government. And so the county applied for an MOE waiver from the State Board of Education, claiming that it had more than met its responsibility for education but had needs elsewhere. Specifically, the county asked to use $95 million (later revised down to $79 million) required for school funding to finance other parts of the government, arguing that federal aid would keep the schools whole. Both the Montgomery County Board of Education and MCPS Superintendent Jerry Weast supported the request.

The State Board of Education, however, may not go along. It is taking its sweet time in making its decision, waiting to release its position until May 15. (The County Council’s first vote on the budget, originally scheduled for May 14, has been postponed until next Tuesday.) If the State Board does not grant the county’s request, all or part of the $79 million will have to be transferred from the police, fire service, public works, transportation, health and human services or other government functions to MCPS. Policy makers worry that would damage non-school services and create significant inequities between non-school employees and MCPS personnel.

Rumors are careening all over Rockville even as we write this. Everyone is speculating about what the State Board will do, but very few people claim to know the outcome. (Those who do are probably lying!) Here are a few factors.

1. Precedent
The State Board is full of business people and school activists who are deeply invested in the state’s educational system. They do not want to make it easy for the counties to evade their MOE obligations. In FY 1992, the state gave a blanket waiver to the counties allowing non-compliance with MOE but that idea did not go anywhere this year. It is likely that the State Board will want to keep waivers available only for genuine emergencies.

2. Nancy Grasmick
The state’s Superintendent of Schools is the ultimate survivor of Maryland politics. Even the Governor had to make his peace with her. Part of Grasmick’s power derives from the state’s strong educational performance. What happens if the State Board approves MOE waivers and test scores go down? One more thing: Grasmick and Weast are not the best of friends.

3. Prince George’s County
Two other counties are applying for MOE waivers: Wicomico and Prince George’s. While Montgomery’s leaders are cooperating, Prince George’s County Executive Jack Johnson and his Board of Education are in open conflict over their waiver request. Would the State Board approve Montgomery’s request but deny Prince George’s? How would that be perceived? What would the blowback be from Prince George’s politicians against the O’Malley administration? All of the above may be an issue, but why should one county’s request have anything to do with the other’s?

One of our best-connected spies is convinced Montgomery will not get the waiver. Two spies report that State Board member Blair Ewing - a former Montgomery County Council Member and county Board of Education Member - is working against the request. Our other informants make no predictions and are on the edge of their seats. The State Board will likely show its hand tomorrow and Montgomery officials – and the rest of us – will learn our fate.

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Minority Community Fights Back Against Budget Cuts

A diverse coalition of minority groups rallied at the County Council building today against cuts to health programs. We reprint their press release below. Maryland Moment has coverage of the event.

For immediate release. Contact: Anna Maria Izquierdo consejo.salud@gmail.com; 443-655-0101

Grace Rivera Oven grace.rivera@comcast.com; 301-367-2158

Montgomery County Proposes Severe Funding Cuts Disproportionately Impacting Minority Communities

Leaders join to oppose budget cuts to Health Programs

What: Press Conference to Demand that County Council Maintain the County Executive’s Support of his Minority Health Initiatives

When: Thursday, May 7, 2009 2:00 PM

Where: County Office Building-101 Maryland Avenue, Rockville MD (front steps)

Who: African American Health Advisory Committee, Asian Health Steering Committee of Montgomery County, Care for Your Health, Inc., CASA de Maryland, Inc, County Executive’s Latin-American Advisory Group, EVS Communications, Identity Inc., Latino Health Steering Committee of Montgomery County, Montgomery County Latino Lions Club, Proyecto Salud.

Rockville, MD – Diverse community leaders will hold a press conference this Thursday calling on the County Council to deal with minority communities equitably during this period of budget cutbacks. This action is being taken in response to a recommendation by the Health and Human Services Subcommittee of the County Council that proposes an additional 10% cut to the minority health initiative programs of the County. This significant cut from the County Executive’s 2010 County Budget would further increase the adverse impact of budget cuts experienced by the minority health initiative programs when the County Executive 2010 budget called for a 2% across-the board reductions. All of these budget cuts are particularly damaging to minority communities given the overwhelming evidence of pre-existing racial disparities in health care provision and outcomes.

“In a time when the economic situation has made the direct services provided by these Minority Initiatives more crucial than ever, the recommendation from the Health and Human Services Subcommittee to further cut these programs in a significant manner is unacceptable to us.” states Dr. Anna Maria Izquierdo, Co-chair of the Latino Health Steering Committee of Montgomery County.

Altogether the County Council’s recommendation will adversely impact 16,000 members of the minority communities in Montgomery County if adopted. The services impacted are varied and cut across cultural groups and their needs. They include: Hypertension Education and Awareness Link (African American Health Program – 3,600 individuals will not be served), HIV outreach and education (African American Health Program – 500 individuals will not be served), Diabetic programs (African American Health Program – 105 individuals will not be served), SMILE breast pump loan program (African American Health Program – 86 individuals will not be served including both mother and child), Mini-grant for supporting education and outreach done through community based organizations (African American Health Program – 400 individuals will not be served), Bilingual Health Services Line/Interpreter Program (Latino Health Initiative – 3,043 individuals will not be served), Latino Youth Wellness Program at Einstein High, Wheaton High and Gaithersburg Middle Schools (Latino Health Initiative – 160 high risk youth and their families will not be served), Ama tu Vida Health and Screening Program (Latino Health Initiative – 3,000 individuals will not be served), Latino Health Initiative Health Promoter Program (Latino Health Initiative – 2,500 individuals will not be served mainly in Upper County), Outreach and Health education services (Asian American Health Initiative – 900 individuals will not be served), Screening Services (Asian American Health Initiative – 300 individuals will not be served), and the AAHI Navigator Program (Asian American Health Initiative – 900 individuals will not be served).

“The loss of these dollars will set back the work of those hoping to highlight the value of preventive health care, especially for those populations where treatment is sought in emergency rooms-and is often too little too late,” states Arva Jackson, Chair of the African American Health Program. “We hope it is neither too late to restore the funding, nor to the slow the loss of faith in the County Council’s judgment by the adoption of this 10% solution. I encourage them to restore the funding before the budget release slated for May 15th”.

Health and Human Services subcommittee members that approved the cuts are George Leventhal, Chair, Duchy Trachtenberg, and Roger Berliner. The Montgomery County Council will be meeting in the next few days to vote on the proposed cuts.

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Fire Fighters and Leggett Strike Deal

County Executive Ike Leggett and the Montgomery County Career Fire Fighters Association have reached a Memorandum of Agreement amending the union’s contract. Here are the key provisions.

1. The union’s 4 percent wage increase is “postponed” and will not be effective in Fiscal Year 2010. Salary-based benefits, like pensions, will not be affected by the postponement and will be calculated as if the postponement had not taken place. (This provision will require legislation to be submitted by the Executive.) The agreement does not specify when the postponed wage increase will take effect.

2. The contract will include new provisions laying out personal leave and compensatory leave credits.

3. Members will be permitted to wear union logos on their uniforms and helmets.

4. The County Executive and the union will jointly seek to vacate the Labor Relations Administrator’s decision that the Executive need not include salary increases for the Fire Fighters in his proposed budget. We suggested this deal could be made weeks ago. The memorandum says:

The Union has filed an appeal of LRA Strongin’s March 28, 2009 Decision and Award. The parties shall file a joint motion and proposed Order (attached as Exhibit A) with LRA Strongin asking him to vacate the March, 28 2009 Decision and Award. If he signs the Order vacating the Decision and Award, the Union will voluntarily dismiss its appeal. The parties agree that they will neither cite nor attempt to rely on the vacated decision in any way. In the event that LRA Strongin does not issue an Order vacating the March 28, 2009 Decision and Award, the parties shall file a joint motion and proposed Order (attached as Exhibit B) with the Circuit Court requesting the Court to vacate the LRA Decision and Award and to dismiss the appeal. In the event that the Circuit Court does not enter the Order, the Union will pursue the appeal.

5. The memorandum contains this statement on County Council and senior management pay:

The parties recognize the economic situation facing the County, particularly the shortfall in projected revenues for FY10. The County is calling on all of its employees to come together to deal with this grave situation. The Union and the County Executive, on his own behalf and on behalf of the non-represented employees in County leadership positions, are willing to make financial sacrifices in FY10, and the parties call on each member of the County Council to make similar sacrifices. Postponement of the general wage increase described in Paragraph 1 above shall be rescinded and the County Executive agrees to promptly seek funding from the County Council to retroactively pay such general wage increase unless (a) the County Executive returns to the County the net mandated pay increase required to go into effect in December 2009 under Section Sec. 1A-106 of the Code and (b) no general wage adjustment is given in FY10 to any appointed member of the Senior Management Team. The Parties recognize and agree that this provision does not impact salary schedule step increases.

Politicians’ pay raises are an increasingly dicey subject. According to the Post, D.C. Council Members and Fairfax Supervisors decided not to take raises in Fiscal 2010, but Calvert County Commissioners and Prince William Supervisors will get them. Raises for Prince George’s County politicians are up in the air. Baltimore Mayor Sheila Dixon and City Council Members received a 2.5 percent raise last December, but the Mayor donated her increase to charity. Many state legislators chose to give part of their salaries back to the state to match state employee furloughs. If Montgomery County Council Members are required to accept their pay by law (as are state legislators), will they follow the example of the state legislators or Mayor Dixon?

Following are the memorandums of agreement between the County Executive and the Fire Fighters, the Fraternal Order of Police and MCGEO.

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How State Budget Cuts Hit MoCo

Here's the latest on how much Montgomery County will suffer because of state budget cuts.

Total state aid is up 3.1%. Education did well (up 9.9%) because of federal funds and repayment of aid not transmitted to the county last year, but transportation and Program Open Space were devastated.


State aid will be $42.2 million less than assumed by the county under state formulas. The biggest cutbacks will be in transportation and jail support.


On the capital budget side, Montgomery is scheduled to receive $26 million for school construction. Because not all construction money has been allocated, the county could eventually get $30 million or more. But that is far short of the $46 million goal set by Senator Rich Madaleno (D-18), the county's Senate Delegation chair.


On the bright side, Big Daddy's push to send teacher pensions down to the counties did not succeed. But there's always next year!

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County Report: April 17

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How Hard Will MoCo be Hit by State Cuts?

The state’s budget crisis will inevitably impact state aid to counties. What will it cost Montgomery?

At the moment, the House and the Senate’s Budget and Taxation Committee (B&T) have passed different versions of the state’s FY10 budget. Each version contains different sets of cuts. Here’s how they would affect Montgomery County:


There are three principal differences between the budgets. The House budget cuts transportation aid to Montgomery by $11.2 million while the Senate cuts $24 million. The House withholds $12.1 million in local income taxes collected by the state but due to the county while the Senate does not do that. Those two items largely negate each other. But the Senate proposes to reduce Geographic Cost of Education Index (GCEI) funding, which steers extra education aid to expensive jurisdictions, by $12.4 million while the House does not. GCEI is one of the few programs in the state budget that disproportionately benefits Montgomery (along with Baltimore City and Prince George’s County). The Senate is making that cut, along with other items, because it would like to leave a larger general fund reserve than the House in case the Board of Public Works has to make more cuts after the General Assembly session ends.

So the overall impact of state aid cuts will cost Montgomery County $40.9-54.8 million. In his proposed budget, County Executive Ike Leggett did not assume any cuts in state aid. One of my Rockville sources defended that decision, saying, “To do otherwise would have been akin to placing a ‘kick me’ sign on the County’s backside.” Such is the gamesmanship played between the county and the state on all budgetary matters. But the fact remains that the County Council will now have to cut more money from somewhere.

Our prediction is that a new fight between the council and the county’s public employee unions will now ensue. In the recent contract renegotiations, most of the unions gave up their cost-of-living increases but not the step increases earned by employees who gain seniority. Those increases are mostly in the 1-2% range and account for an amount that may be in the low tens of millions. Some County Council Members will want to take them back while the unions will say they have given up enough.

Looks like we may be headed for another revolt.

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Ike Leggett, Fiscal Conservative

Budget documents are not merely financial statements. They are also political statements. And County Executive Ike Leggett’s FY 2010 budget recommendation states quite clearly that he is running for re-election as a fiscal conservative.

Most politicians hate tight budgets. They tend to interfere with one of their highest priorities: handing out goodies to supporters and contributors. So when tough times come, many politicians become cranky and defensive. They will claim that they cannot be held responsible for the poor state of the economy and their opponents could not do better anyway.

Ike Leggett has done no such thing. The wily old pro has been around a long time and knows how to convert challenges into political opportunities. By law, he is required to submit balanced budget recommendations to the County Council. But he has done much better than that: he has wrapped himself in the flag of fiscal conservatism because he has calculated that that is what the voters want.

Consider this excerpt from his press release on the budget:

Leggett’s budget brings the County government’s tax-supported growth rate down from a 14.1 percent increase in FY07, the year before he took office, to less than zero – an actual decrease of 0.4 percent for the coming fiscal year – the lowest level in18 years.

In the three budgets Leggett has prepared, he has closed nearly $1.2 billion in shortfalls, which is unprecedented in County history.

“When I first took office, Montgomery County’s spending was out of control and unsustainable,” said Leggett. “And that was before the economic downturn.

“It was clear that we had been living beyond our means. Over the last three years, I have been aggressively working to restore fiscal prudence to our County government by dramatically slowing the rate of growth of both the operating and capital budgets. As the economic news has worsened, I have continued to press ahead on long-term cost savings that minimize the future burden on taxpayers while preserving public safety, education, and our safety net for the most vulnerable.

“In my first budget as County Executive in FY08, we faced a $200 million budget shortfall, so I reduced the tax supported rate of increase in spending by the County government from 14.1 percent to 6.9 percent. In FY09, the projected shortfall increased to $401 million, so we imposed a hiring freeze, produced mid-year savings of more than $30 million, abolished over 225 positions, implemented a retirement incentive program, and slowed the rate of growth to 1.6 percent. This year, we face a daunting gap of $587 million that my recommended FY10 budget successfully closes.”

Consider these charts in his transmittal letter to County Council President Phil Andrews:




Leggett is constructing a political narrative that fits with his emerging record, a record that has been largely imposed on him by a failing economy. He is claiming that his budget restraint is not a necessary evil, but a positive good. His administration represents a sober, prudent break with the free-spending past. Ike Leggett, a responsible and trustworthy leader, is a careful custodian of the people’s money.

Let’s put aside the fact that Leggett recommended breaking the property tax charter limit last year. And let’s also forget that Leggett himself voted in favor of several much more generous budgets while he was on the County Council in the 1990s. Leggett is developing his message for an electorate that sent thousands of angry emails over last year’s tax hikes, voted for the Ficker Amendment and voted for slots (an issue on which Leggett changed his position). No sitting county politician has a better instinctual sense for where the voters are headed than Ike Leggett. Past records do not count for much compared to future positioning. After all, Leggett is a politician who voted for the pro-development Pay and Go policy in 1997, was embraced by both pro-growth and anti-development at-large County Council candidates in 1998 and ran as a slow-growth County Executive candidate against Steve Silverman in 2006. Ike Leggett is a master of the political black arts.

In addition, it’s difficult to look at the above rhetoric and charts and not think of former County Executive Doug Duncan. Ever since Duncan released a blistering Op-Ed criticizing Maryland’s leaders for their lack of vision and failure to embrace “zero-based budgeting” (which Duncan himself never did), speculation has swirled around his possible return to politics. Leggett is sending a signal to Duncan or any Duncan ally that is thinking of challenging him in 2010: I know where the voters are and I am closer to them than you are.

Last summer, we christened Ike Leggett “the great chess master” and quoted a politician who said, “He’s over in his office, moving his pieces around the board. He’s one step ahead of everyone else and only he knows where he’s going.” Indeed, the cunning old player has begun to set up the board for next year.

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Two County Executives, Two Budgets

Montgomery County Executive Ike Leggett and Prince George’s County Executive Jack Johnson both submitted tight FY 2010 budget recommendations to their County Councils. Both men had formidable challenges and dealt with them differently.

At first glance, Leggett’s job seems harder because he has to close a $587 million deficit while Johnson confronts a $113 million gap. But Montgomery County is projecting a slight revenue increase from $4.385 billion in FY 09 to $4.436 billion in FY 10 (up 1.2%) while Prince George’s is projecting a revenue drop from $3.182 billion to $3.068 billion (down 3.6%). This enables Leggett to close his deficit with a small increase in spending while Johnson has no choice but to impose absolute cuts.

We looked at thirteen line items in the two counties’ budgets that were roughly comparable to examine the choices made by the County Executives. (We also included debt service, which is a significant cost but not one over which the counties have much discretion.) These items comprise more than three-quarters of each county’s budget. Here are the changes from FY 09’s budget recommended by the County Executives:


Johnson’s greater difficulty can be seen right away: he has recommended an absolute decrease for every one of the above items except debt service. Leggett cut six items and was also able to cut debt service. But the difference in their relative priorities for targeting and protection is even more interesting.

Johnson’s cuts concentrate on health & human services (-11.5%), environmental protection (-8.8%), the sheriff’s office (-8.2%) and the corrections department (-6.7%). He spared (relatively speaking) the circuit court (-0.9%), the community college (-2.0%), fire & rescue (-3.1%) and libraries (-3.4%). Leggett’s targets are libraries (-6.1%), the state’s attorney (-1.8%), the circuit court (-1.3%) and health & human services (-0.7%). He spared the public schools (+3.0%), fire & rescue (+2.7%), Montgomery College (+2.7%) and the police (+2.7%). Leggett’s funding for fire & rescue depends on the County Council’s approval of an ambulance fee, a tactic he was warned not to employ by seven council members. Both County Executives cut their own budgets as well as their County Councils’ funding.

The two County Councils will, of course, have the final word on the budgets. But these sets of recommendations say a lot about what is really important to both Ike Leggett and Jack Johnson.

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