You can find a list of sponsors here and of supporters here.
Showing posts with label Property Taxes. Show all posts
Showing posts with label Property Taxes. Show all posts
Wednesday, January 26, 2011
Saturday, November 20, 2010
Montgomery County's TRIM Amendment, 1978
Prince George's County is well-known for its TRIM amendment, a cap on property tax increases passed by referendum in 1978. Some blame TRIM for preventing the county from adequately funding schools and other basic services. MoCo also had a TRIM amendment on the ballot that same year, known as Question E. A giant coalition of unions, non-profits, civic groups and elected officials gathered to fight it. The anti-TRIM leadership included such notables as Council Members Norman Christeller, Neal Potter and Betty Scull; school board members Blair Ewing and Elizabeth Spencer; civic activist (and future Council Member) Don Praisner and MCEA's Hank Heller, who would later become a state Delegate. Question E lost on a 71,083-76,731 vote. There is no question that it would have changed MoCo history if it had passed.
Following are lit pieces from both sides.
Friday, October 29, 2010
Bob Ehrlich: The Anti-MoCo Candidate, Part Three
Bob Ehrlich depicts himself as a tax cutter. Isn’t that good for Montgomery County?
It depends on which taxes you’re talking about.
Taxes
Ehrlich has made criticism of Governor O’Malley’s 2007 special session tax package a centerpiece of his campaign. His primary tax proposal is to repeal the special session’s one-cent increase in the sales tax, which accounted for a majority of the tax package. Ehrlich characterizes the sales tax as regressive. It certainly is, but these are crocodile tears from the former Governor. He expressed his real feelings about the working class by closing the state office that enforced child labor, minimum wage and other labor standards in 2005.
If Ehrlich does repeal the sales tax increase, who would benefit the most? The following chart illustrates per capita sales tax payments for every Maryland county (as well as Baltimore City).
In FY 2009, the average Maryland sales tax paid per capita was $591. That amount was highest in tourist centers like Ocean City (in Worcester County) and Saint Michaels (in Talbot County) and in Central Maryland jurisdictions like Anne Arundel and Howard Counties. MoCo’s per capita sales tax payment ($543) is actually 8% less than the state average, so MoCo gets relatively little out of this tax cut – especially given how Ehrlich would pay for it. (More on that later.)
Ehrlich does not have much of a record of cutting taxes, but he does have a record of raising one tax in particular: the state property tax. In 2003, Ehrlich voted in favor of a property tax hike from 8.4 cents to 13.2 cents for every $100 in assessed value on the Board of Public Works. (The board cut the rate back to 11.2 cents in 2006.) That tax hike raised a net $692.9 million over four years. The state does not report its property tax revenues by county, but it does report each county’s assessable base, which drives property tax payments. Here is the estimated assessable base per capita for the tax year starting on 7/1/11.
MoCo accounts for one-sixth of the state’s population and one-quarter of its assessable property base. Its assessable base per capita (an estimated $188,910 next year) is 47% higher than the state average ($128,151). This is the major tax hike that Ehrlich chose in his first year in office – a tax hike that disproportionately hit MoCo.
So Ehrlich would cut the sales tax, which would primarily benefit other counties, but he raised the property tax, which primarily hit MoCo. How would Ehrlich pay for his sales tax cut? We learned the answer to that in Part Two: he would cut MoCo’s education funding and saddle MoCo with responsibility for teacher pension payments. This set of positions in addition to his throwing in the towel on the Purple Line and transportation funding is diametrically opposed to Montgomery County’s economic interests.
That’s why Bob Ehrlich is the Anti-MoCo candidate.
Thursday, February 19, 2009
Doug Duncan’s Budget Record
Former County Executive Doug Duncan’s call for zero-based budgeting reminds us that he had a substantial role in formulating county budget policy for a long time. From the county’s FY07 and FY09 budget reports, here is a history of government spending and employee work years from FY98 on. (Click on the images for larger views.)
The county’s property tax charter limit was broken in FY 2003, 2004, 2005 and 2009. The first three breaks occurred during the Duncan administration.
Friday, February 13, 2009
MoCo House Delegation Votes Down CARR Bill
By a 17-6 vote, the Montgomery County Delegation defeated the CARR bill, which would have given the Montgomery County government the ability to levy different property tax rates on residential and commercial property. Because the county delegation defeated it, the bill will not pass the General Assembly.
Supporters of the bill cite the historical shift of property taxes towards homeowners, the fact that the bill would only grant tax-raising authority and would not itself directly raise taxes, and the desperate condition of county revenues. Opponents question the wisdom of raising taxes on businesses that create jobs in the middle of a recession. The bill enjoyed support from many labor organizations but not the County Council, which took no position on it.
Voting in Favor:
Al Carr (D-18), the lead sponsor
Karen Montgomery (D-14), a co-sponsor
Jeff Waldstreicher (D-18), a co-sponsor
Saqib Ali (D-39)
Susan Lee (D-16)
Herman Taylor (D-14)
Voting Against:
Charles Barkley (D-39)
Kumar Barve (D-17)
Bill Bronrott (D-16)
Kathleen Dumais (D-15)
Brian Feldman (D-15)
Bill Frick (D-16)
Jim Gilchrist (D-17)
Henry Heller (D-19)
Sheila Hixson (D-20)
Tom Hucker (D-20)
Anne Kaiser (D-14)
Ben Kramer (D-19)
Heather Mizeur (D-20)
Roger Manno (D-19)
Kirill Reznik (D-39)
Craig Rice (D-15)
Luiz Simmons (D-17)
Delegate Ana Sol Gutierrez (D-18), a co-sponsor, did not vote.
Many of the Delegates who voted against the bill have outstanding labor records, especially Hucker, Manno, Mizeur, Kaiser and Hixson. Manno was a former co-sponsor of the bill.
Wednesday, December 24, 2008
Bad Boy Barve Gets a Lump of Coal
After the last few weeks, we may as well just rename this blog Maryland Politics Watch with Kathleen Miller. With the Examiner’s trouble-making reporter grabbing scoops left and right, how is an underpaid blogger supposed to compete? This time Ms. Miller’s target was MoCo’s wisecracking Bad Boy, House Majority Leader Kumar Barve (D-17).
The basic story in Ms. Miller’s article is that Barve and his wife, attorney Maureen Quinn, each purchased homes before they married and received principal residence designations on them from the State’s Department of Assessment and Taxation (SDAT). Principal residence status is important because it confers tax credits from the state and county. Barve and Quinn kept those designations after they married, earning credits on both properties.
The timing of the transactions is important. Ms. Quinn bought her home in Annapolis on 12/22/03. Barve bought his home in Gaithersburg on 8/4/04. The couple married in September 2004. Ever since, SDAT has applied principal residence status to both properties, triggering credits estimated by the Examiner at $5,844.88 on the Annapolis home and $3,575.13 on the Gaithersburg home.
The House Majority Leader (who is also the Chair of the House Revenues Subcommittee) provided this statement to us:Before we got married, my wife and I bought homes and each of us filled out the form saying that the home was our primary residence – which was true. Everybody does this at settlement. We then got married and decided to keep both homes because we could afford both mortgages. We never changed the titles of the properties into joint names because the paperwork seemed unnecessary. If I died, she would get my property and vice versa. We occupy both homes (we live in Annapolis during session – thereby saving the taxpayers the cost of paying for a hotel room for me).
Barve should fire his accountant. When I Googled “Maryland principal residence,” the very first search result was this SDAT regulation, which states in part:
Three years later, our accountant said we would have to fill out a form to declare our Gaithersburg home as our primary residence so that we would get the Homestead credit for the property. We did this. Period.
There are some people who deliberately apply for the credit for investment properties illegally and we wrote the law with them in mind. The situation of a married couple not selling one home was not what we considered. If you recall, there was a news article last year about other legislators from both parties in this situation. Even when reading that article it never occurred to us that we might be in a similar situation.
Maureen and I have tried to be very diligent about NOT getting special treatment of any kind. And, we do whatever our accountant tells us to do.In cases where spouses own two dwellings and claim each occupies one of the residences, the credit will be granted only on the one property used as the principal residence unless the couple is legally separated. There have been several court cases involving tax credits as well as Internal Revenue Service Regulations holding that the “notion of marriage” would be contravened to allow more than one residence.
In his statement, Barve references a law that was passed in 2007 by the General Assembly. That law, which Barve co-sponsored, was spurred by the work of tax activist Louis Wilen and was intended to crack down on landlords who illegally claimed principal residence status for properties they rented out. But the law’s requirement that citizens apply for renewals of their principal residence also ensnared many non-landlords, including several state legislators. In any case, the SDAT regulation prohibiting dual principal residence for married couples predates this law. The Examiner quoted an SDAT manager who said the prohibition “had been that way forever.”
Most of my informants declined to comment on this even on an anonymous basis. Two of them joked that Barve’s real problem is that his partner is of the opposite sex. One spy laughed, “Hey, if they had been an unmarried same-sex couple, this would all be legal!”
Kumar Barve has a lot going for him. He is whip-smart, wickedly funny, has a long institutional memory of the House as a fifth-term Delegate and holds a position of substantial influence. All of these things make him potentially a great asset for Montgomery County in Annapolis. But on the heels of his DUI guilty plea, he is now in the midst of his second negative story in a year. MoCo’s Bad Boy must stay out of more trouble. Can he do it?
Friday, December 12, 2008
Thursday Night Smackdown!
Last night, business and labor squared off on the CARR bill in one of the more entertaining bouts of the state hearing season. But there is a lot more to this story than the controversy over just one bill. Tensions are on the rise between two of the county’s most influential groups as Budget Armageddon builds steadily to its bloody climax.
Delegates Susan Lee (D-16), Brian Feldman (D-15), Anne Kaiser (D-14), Roger Manno (D-19) and Bill Bronrott (D-16)
But first, supporters and opponents of the CARR bill made their case at the House Delegation’s hearing on local bills. Five supporters testified, including three from labor: Bonnie Cullison, President of MCEA; Bob Stewart, Executive Director of MCGEO and Sean Dobson, Executive Director of Progressive Maryland. Their main points were:
1. The bill authorizes commercial property tax hikes by the County Council but does not mandate them.
2. The residential share of the county’s assessable property base has been climbing steadily for many years.
3. Splitting the residential from the commercial property tax rates would make it easier for the County Council to raise taxes without incurring a homeowner property tax revolt.
Sean Dobson, Delegate Al Carr (D-18), Bob Stewart and Bonnie Cullison
Nine opponents testified, including representatives from four Chambers of Commerce, one trade association and four businesses. Their main points were:
1. Residential property owners benefit from the homeowners property tax credit and the 10% annual cap in principal residence tax bill increases, neither of which are available to business.
2. The cumulative impacts of the special session tax hikes and county commercial property tax increase under the CARR bill would put the county at a crippling disadvantage.
3. Businesses are reeling under the terrible economy and further cost increases will put some of them over the edge.
The arguments on both sides have some merit and mirror my blog posts on the issue. But politicians are creatures of the moment. They want to know why something must be passed now. While the supporters talk about correcting what they see as historical inequities, opponents talk about the devastating consequences of tax hikes in the current environment. Alexandra Whitaker’s Get Real Consulting was named the Emerging Business of the Year when it was in the Rockville incubator. Shortly after leaving, Ms. Whitaker claims that her business is in a “delicate state of growth” and would lose customers if they must pass on the cost of a lease increase. David Fraser Hidalgo of Sandglass Systems in Kensington said, “Any increase in property taxes would have a devastating impact on our margins and our employees.” These arguments are particularly strong in a bad economic climate and are reinforced by an anti-tax disposition among the state’s politicians. The supporters find it difficult to counter them and as a result, none of our sources believe the bill will pass next year.
Alexandra Whitaker from Get Real Consulting, Kathleen Kittrick from Verizon, MoCo Chamber VP Lisa Fadden, Joshua Bokee from Comcast
But the CARR bill debate has illuminated a number of changes in Montgomery’s body politic. Three of them are:
1. The Re-Emergence of Business
Labor is a long-time power center in the county. Of the eighteen most-influential non-elected citizens in our recent poll, six are active in the labor movement. The leaders of MCEA, MCGEO and SEIU are especially visible. But last night spotlighted an increasingly important hidden hand in the county’s policy debates: Montgomery County Chamber of Commerce Vice-President Lisa Fadden. Brainy, relentless and occasionally combustible, Ms. Fadden attracts many comments from our spies.
“Smart and talented,” says one. “I think she's an intelligent advocate for the business community,” says another. One old hand comments, “She’s more effective than most lobbyists many years her senior.” And one particularly effusive spy gushed:Lisa Fadden is young, smart (really smart), brash, cute and knows what she thinks. She has no fear. She is not cut out of the old mold, in fact she represents what the future for leaders in this county look like. They are not waiting for anybody to give them permission to do or say what they think. Look out – the future has arrived.
Your author would not go that far, though we certainly enjoy covering brash characters on this blog. But Ms. Fadden is part of a youth movement that is slowly infiltrating many parts of the county’s political life. Business is one example. The Chamber of Commerce was once personified by its brilliant and imperious former CEO Rich Parsons and was thought to be primarily interested in development and the ICC. But the Chamber has diversified its interests over the last two years and is starting to mobilize its membership in ways reminiscent of civic associations. (See their revolt against Nancy Floreen’s parking space tax.) The economy is damaging the business community, but it is as politically relevant as ever.
2. Distrust is Building Between Business and Labor
The business and labor communities have a common interest in pursuing a revitalized economy. Labor in both the public and private sectors benefits from job creation, and job creation only happens when businesses are profitable. But the CARR bill dispute has interfered with their ability to work together.
Last spring, labor’s top priority was defending its cost-of-living adjustments. Many individuals inside the business world grumbled about those raises, but the business associations stayed out of the COLA debate. And none of the county’s major business associations opposed the recently-passed prevailing wage law. That silence benefited labor and isolated its opponents. But in advocating for the CARR bill, labor is pushing a measure that business considers “discriminatory” and “punitive.” Business feels the same outrage that labor would have felt had business opposed their COLAs.
School Board President Nancy Navarro offered substantial appeal to both business and labor during the County District 4 Special Election. Her campaign combined dozens of union member volunteer canvassers with influential business fundraisers. In the current atmosphere, that level of cooperation would be unlikely to occur if such an election were held today. Both business and labor may pay the price if an opening is created for candidates hostile to both of them.
3. Distraction from Armageddon
Even if passed, the CARR bill would not offer a total solution for the county’s budget problems. Judging from Senate President Mike Miller’s comments at the Committee for Montgomery breakfast on Monday, those problems are about to get a lot worse. Ann Marimow scooped the room in obtaining this post-speech quote from Big Daddy, which warrants repeating here:“There are going to have to be some adjustments,” Miller said after his formal remarks. “The county that gives big salaries and big benefits is going to have to make some adjustments.”
This is an existential and naked threat to labor, and not just in Montgomery County. Baltimore City and Prince George’s County also benefit from the Geographic Cost of Education Index (GCEI), which directs education aid to jurisdictions with higher schooling costs. All counties benefit from the state’s assumption of teacher pension liabilities. Both of these items are now at risk. If they are cut by the state, the public employee unions will be hit with layoffs and permanent budget difficulties in addition to the loss of their COLAs.
Labor’s political capital is limited. The more that is spent on the CARR bill, the less will be available for more important items. Refocusing on the priorities that really matter may be the only way to fend off Budget Armageddon.
Monday, December 08, 2008
Is Now the Time for the CARR Bill?
Last February, I wrote in favor of a property tax bill proposed by Delegate Al Carr (D-18), commonly known as the Commercial Assessment Rate Review (CARR) bill. The CARR bill would allow county governments to establish different property tax rates for residential and commercial property, as is the case in both the District of Columbia and Northern Virginia. The bill died in the Ways and Means Committee in the last general session, but Delegate Carr has now reintroduced it as a local bill applying only to Montgomery County. Is this still a good idea?
In supporting the bill, I noted how the residential share of assessed property value in Montgomery County had climbed from 69.6% in 1991 to 76.8% in 2007. The commercial share of assessed value fell from 30.4% to 23.2% over the same period. I also noted how the District of Columbia charged more than double the tax rate for commercial over residential property but still had a relatively low vacancy rate in its office market. Those facts remain true. And overall, the notion that property used for profit generation should be taxed at a different rate than property used to raise children and create nest eggs has as much merit now as it did then.
But a lot has happened over the last ten months. Consider the following:
1. The Economy Has Collapsed
Montgomery County’s residential construction industry has crashed. The region’s commercial office market is following suit. Credit for development projects of all kinds is drying up. Maryland’s hotel industry is suffering, including companies like Bethesda-headquartered J.W. Marriott and Silver Spring-based Choice Hotels International. Seventy percent of Maryland retailers expect their sales to fall this month and next from last year. Business bankruptcies in Maryland increased by 11 percent during the first half of this year over the same period in 2007. All of this is taking place during a national recession that is a year old and in the wake of the worst jobs report in 34 years.
The pain has spread down into Wheaton’s Central Business District, the largest commercial area in District 18. Many restaurants there are on the verge of closing. Even successful restaurants like the Royal Mile Pub are suffering from “killing” increases in beer, food and wine costs. Economic changes of this magnitude MUST be considered in adopting tax policy.
2. The State’s Business Reputation Has Taken a Hit
The Tax Foundation ranks Maryland’s business climate as falling from 24th to 45th among U.S. states over the last year. No other state fell more than 3 places. The Tax Foundation states:Maryland managed a remarkable drop – from 24th in last year’s index to 45th in this year’s – by raising its individual income tax, corporate income tax, sales tax and cigarette tax all in the same year. Maryland added four new tax brackets to the individual income tax, increasing the top rate by 1.5%, adding new complexity and introducing a big new marriage penalty. In fact, we now rate Maryland’s as by far the worst individual income tax in America, displacing California for that dubious distinction.
Delegate Carr opposed the passage of the state’s three-year millionaire surcharge (which I supported) on the grounds that it would be injurious to business owners. By that reasoning, another tax hike on business in bad times would be even more injurious.
Whatever you think of the Tax Foundation’s report or the millionaire tax, their effects on the state’s business reputation must be weighed.
3. The CARR bill is Now a Local Bill
The previous bill would have given tax-raising authority to every county in the state. The new local bill would give it only to Montgomery County. If county government had the authority to raise commercial property taxes and actually used it, the biggest beneficiaries would be Prince George’s and Frederick Counties. Each would have a new advantage in attracting new and existing businesses over Montgomery.
4. The County Government Does Not Support the Bill
At the County Council's work session on local bills, the County Executive recommended no position on this bill. Of the six County Council Members in attendance, two expressed support (Phil Andrews and Marc Elrich), two opposed it (Nancy Floreen and Don Praisner) and two expressed no position (Mike Knapp and Valerie Ervin), resulting in no position taken by the Council. The fact that the very entity intended to exercise the tax-raising authority envisioned by the bill chose not to support it means a lot. If the county officials are not requesting this authority, why give it to them?
Regular readers may be surprised by my use of these arguments. After all, I have spent my entire career in the labor movement, criticized the special session's tax package as regressive, supported the millionaire tax, supported the progressive nature of County Executive Ike Leggett’s property tax proposal and opposed the Ficker Amendment.
Over and over again, I have argued for progressive taxation. And the basic principle of progressive taxation is to tax people who can afford to pay more. Business will always argue against the CARR bill regardless of its intrinsic merit. But the truth is that in this crumbling economy, many businesses legitimately cannot afford a property tax increase. That is especially true of the small and fragile businesses in Wheaton. In a moment of economic depression, it is very hard to make the case that raising taxes that are targeted exclusively at people who create jobs provides a path to recovery.
The bill has considerable support from the county's public employee unions. That is understandable given the fact that three of them have given up their cost-of-living adjustments and the others are likely to follow. But the unions need to think long and hard about two things:
1. The long-run well-being of public employees depends on the economic health of the private sector. A robust, growing private jobs base is necessary to generate the tax revenues needed to fairly compensate public workers. And as I wrote back in April, Montgomery's public employees are NOT overpaid. Discouraging private job creation will prolong the time needed for economic recovery and perhaps even delay the point at which adequate COLAs can be resumed.
2. Now that the Ficker Amendment is in effect, all nine County Council votes are required to break the charter limit on property taxes. Those nine votes are not there, either for a broad increase or for a targeted increase on business as provided for in the CARR bill. So if the CARR bill is passed now, its most likely use would not be for a big tax hike on business, but for a lowering of the residential property rate combined with an increase on the rate for business property. That would be enjoyed by some homeowners and also by some politicians seeking re-election. But it would not only discourage job creation, it would result in no new additional revenue for the county government. That would produce the worst of all worlds for public employee unions: a stagnant economy with NO NEW TAX REVENUE to show for it.
Timing is everything. And while the CARR bill should someday become law, now is not the right time for it.
Thursday, November 13, 2008
Strange Conclusions From The Election
By Marc Korman.
Since Tuesday’s election, pundits and politicians have drawn some strange conclusions from the results.
1. Franchot Lost, O’Malley Won
A front page article in the Gazette of Business and Politics says that the anti-slots Comptroller “might have to reconsider” any plans he had to challenge O’Malley in the Gubernatorial primary in two years because slots passed successfully. Like the rest of us, Franchot has probably known for months that slots was going to pass based on public polling. So I doubt the election results did much to change his current thinking on running for Governor.
If Franchot is seriously considering a primary challenge, how the ballot question did statewide, in Montgomery County, or even among Democrats is irrelevant. What matters is how the ballot question did among Democrats who vote in the gubernatorial primary. In 2006, 524,671 Democrats voted in the Gubernatorial primary. O’Malley ran unopposed, so a competitive primary could have a higher turnout. But it is those voters that matter, not the millions who showed up last Tuesday. Thanks to his slots opposition, Franchot has gotten a lot of attention from these base Democratic voters that could serve him well if he is serious about challenging O’Malley.
2. This is a Center Right Nation
Newsweek was actually making this argument even before the election. The thought was echoed by House Minority Leader John Boehner in a letter to his colleagues begging to keep his leadership post. In the case of Boehner and other Republicans, I imagine they are just trying to comfort themselves with this thought.
If I had to try and characterize the country, I would characterize it as center with left and right leanings depending on the time and the issue. Polling has generally shown a majority favors abortion (left), a majority favors prayer in public schools (right), a majority opposes the war in Iraq (left), and a majority favored going to war with Iraq four years ago (right). A better characterization might be that we are a schizophrenic nation, but I will stick with the characterization that we are a center nation with leanings one way or the other depending on the issue.
3. Montgomery County Has Experienced A Tax Revolt
Adam Pagnucco made this argument right here at MPW. He has good company at the Washington Post editorial board. I am confident that Montgomery County residents, like just about everyone, do not enjoy taxes. But we did not have a tax revolt, we had a political failure. Opposition to the Ficker Amendment was late in forming and few people, even opponents, understood the amendment. There was almost no effort to communicate with and educate the public on the issue. Had there been even a modest effort against the amendment, Ficker would have failed as in previous years.
That does not mean legislators should feel free to act irresponsibly with our tax dollars. But it does mean that in two years I predict the charter will be amended again to undue the Ficker law. Placing the first bet on the 2010 election, I say the “Repeal Ficker Act” will pass 55% to 45%. It will not be easy, but the unions, the politicians, and the activists will all work together to make it happen.
Sunday, November 09, 2008
Ficker's Lead Grows
Just as we predicted, Robin Ficker's anti-tax charter amendment is picking up votes as the absentee ballots are counted.
When the precinct count was finished, 170,216 votes supported the Ficker Amendment and 169,603 opposed it - a margin of 613. Domestic absentees supported Ficker by 18,214 to 14,673 - adding 3,541 votes to what is now a total margin of 4,154. While precinct voters supported the amendment by a 50.1-49.9% percentage, domestic absentees supported it by 55.4-44.6%.
Ficker is now certain to win.
Update from David: Adam's right but for the wrong reason. In his original post, he cited stats from past elections which showed that absentee voters trended more Republican than people who voted at the polls. That wasn't the case this year. Absentee voters cast 76% of their votes for Obama, compared to just 72% of Election Day voters. Van Hollen won 78% of the votes of absentees while he won 74% of the votes of Election Day voters. Interestingly, absentee voters were also more likely to vote yes on Question A related to early voting, though not very different from other voters on slots. In other words, absentee voters appear as or more liberal than voters at the polls on all issues except taxes.
Thursday, November 06, 2008
The Great Maryland Tax Revolt
Free State conservatives may have experienced a miserable election night with the victory of Barack Obama and Democratic pickups in the House and Senate. But they should take comfort from one development in Maryland: voters have made clear their intolerance for new taxes.
The most obvious sign is the wild success of the slots referendum. The pundits predicted a close contest. So of course, preliminary totals show the referendum passing by 58.6-41.4%, a margin of 17.3 points. But that number conceals the staggering totality of the sweep. Fourteen of Maryland’s twenty-four jurisdictions recorded 20-point-plus pro-slots margins. And what of the five jurisdictions (Baltimore City, Allegany, Anne Arundel, Cecil and Worcester) that will actually receive a casino? They recorded a combined 59.2-40.8% vote for slots, a margin of 18.4 points.
The most overused line by politicians during this campaign has been, “I’m not a fan of slots.” Of course not. Few people are. But few voters are fans of taxes either. And slots proponents won because voters believed their core argument: slots are preferable to taxes. The regressive nature of the 2007 special session tax package undoubtedly brought that point home to a very large number of Marylanders.
Anti-tax sentiment extended even into the state’s bluest Democratic strongholds. Prince George’s County is infamous for its underachieving schools. Yet, voters rejected a mere $17 million tax hike targeted for the schools by a 71-29% margin. And Montgomery County, perhaps the most liberal place in the state, is on the verge of approving Robin Ficker’s anti-tax charter amendment.
All of this leads me to recall the considerable number of liberal politicians who have suggested an alcohol tax increase. Their argument begins with the fact that liquor taxes in Maryland are relatively low. And since everyone knows that low taxes are bad, basic common sense dictates that this tax be raised. Forget about the fact that few Bud-drinking people I know would agree with this philosophy. The truth is that we are entering a recession. Bad times warrant a comforting nip (or two) from the bottle. I would ask these politicians if they really want to tax my unemployed union members into involuntary sobriety. If they try, they may find how creative a construction worker with a two-by-four can really be.
Given the above developments, there is no safe place for a tax-hiking politician to hide in the Free State right about now. Not in Kingsville, Kettering, Kensington or the Kentlands. My advice to our political friends is to tolerate the spending cuts, keep your heads down and check back in with us after the next election.
Friday, October 24, 2008
Robin Ficker Never Gives Up
Imagine if you tried something in 1975 and it didn’t work out. So you tried it again in 1990 and it failed. And then you did it in 1992, 1994, 1996, 1998 and 2004 – all with no success. You would stop trying, right? Well, you’re not Robin Ficker.
Say what you will of Robin Ficker, but he is a man of immense energy. After many years of heckling that would have put a two-headed jackal to shame, the Washington Wizards relocated his season seat away from visiting players. (Unusually, Ficker got the message and failed to renew.) Next, the Maryland Court of Appeals suspended Ficker’s law license, stating in a 7-0 opinion, “The hearing judge found that he exhibited incompetence, lack of diligence, failure to communicate with his client, and committed conduct prejudicial to the administration of justice.” Ficker then started a “Robin Realty” brokerage, but that seems to be mainly a front for planting his notorious “Save Our Homes” signs everywhere.
All of the above pales beside his endless runs for office (County Executive, U.S. Senate, U.S. Congress, State Senate and even a successful Delegate race in 1978). The signature Ficker move came in 2004, when he briefly considered challenging Governor Ehrlich in a GOP primary. His problem? No running mate. His solution? Posting this classified ad in the Baltimore Sun for a Lieutenant Governor: Prefer female who is tax-cutting Republican, ambitious, intelligent, fearless, adventurous, hardworking and young (age 30 by 01/07) with flexible schedule to traverse Maryland.
But enough of Ficker’s illustrious career of mayhem. His latest ballot proposal, like almost all of his others, would limit Montgomery County’s ability to raise property taxes. Under current law, seven of the nine County Council Members must vote to approve any property tax increase that would exceed the rate of inflation. Ficker’s Question B would change the requirement to unanimous approval. That could give any one County Council Member absolute veto power over the entire budget – a power that not even the County Executive possesses.
Ficker cares more about minimizing his property taxes than he cares about your needs for fire, police and school services – needs that do not go away when a recession depresses county tax revenues. While his proposal differs structurally from Prince George’s County’s 30-year-old TRIM amendment (which requires voter approval of tax increases), its intention is the same: starving the government of revenues. Prince George’s Delegate Joanne Benson (D-24) recalled the battle over TRIM in a 2003 Gazette article: Del. Joanne C. Benson (D-Dist. 24) of Landover was there in 1978 when a group of residents banded together at a meeting to pass TRIM.
So there you have it. If you would like Montgomery County’s schools and police department to resemble those in Prince George’s, you should take your place alongside Robin Ficker. Otherwise, vote no on Question B.
“Research showed us that if we put this initiative in place, in 25 years we were going to see a devastating impact on public education and public safety, and that is exactly what has happened,” Benson said.
Friday, May 16, 2008
It’s Over – For Now
After a torturous few months, the Montgomery County Council finally reached a unanimous budget agreement today. But while the bleary-eyed Council Members are no doubt working their way through their liquor cabinets as we write this, the fiscal hangover will arrive all too soon.
Yesterday’s cliffhanger boiled down to this: three Council Members (Duchy Trachtenberg, Phil Andrews and Roger Berliner) wanted $20 million in “labor savings” gained by a 2-day furlough, while two Council Members (Valerie Ervin and George Leventhal) said they would not violate the public employees’ contracts. Marc Elrich expressed dissatisfaction with the structure of the property tax while Nancy Floreen argued for more cuts not connected to the labor agreements. The final solution announced this morning by Council President Mike Knapp contained elements of every one of these ideas. We present the text of his proposal to our readers:Statement by Council President Mike Knapp
After a long night of yelling, negotiating, coffee-swilling and perhaps coffee-throwing, none of the Council Members had any fight left in them to repeat the political theater of prior days. All praised the placid Mike Knapp and none claimed victory over the others for their priorities. Apparently they have tired of providing fodder for loose-tongued bloggers and I do not blame them.
To enable the Council to reach common ground and complete action on the FY09 operating budget, I propose the following final steps in the budget process:
1. Reduce the amount of property tax proposed by the County Executive by $20 million.
2. Keep property tax rates at the current level and provide a credit to owner-occupied homes of $579.
3. Reduce expenditures and change resources as follows:
$8.0 million from County Government and MCPS, to be achieved by reducing employee/personnel costs and securing productivity improvements and increased efficiencies. Each will report back to the Council about how these reductions will be achieved.
$1 million in fund balance from Montgomery College.
$3.5 million from the Council’s changes on May 15 to PAYGO (cash) in the FY09 capital budget and resources for Park and Planning.
But everyone on all sides of the debate – the Council Members, their staff, the Executive Branch, the union leaders and all other observers – expect that the approval of this budget is only the first round in a bruising match. That is because FY10’s budget will most likely also have a deficit in the hundreds of millions and similar debates will no doubt erupt. Drink up, Council Members, because here is what the morning after will look like:
1. The public employee unions preserved their contracts this time. But two Council Members (Phil Andrews and Duchy Trachtenberg) openly favored two-point reductions in their cost of living adjustments (COLAs). One more, Roger Berliner, favored a two-day furlough proposed by Mr. Andrews. Another one, incoming Council Member Donald Praisner, suggested a need to “review” union contracts during his special election campaign. That leaves the County Council only one vote away from approving “labor savings” next year. The unions are well aware of this situation and must work out a strategy to respond. They would be well-served to stick together.
2. All sides must watch the real estate market, which drives the county’s volatile recordation and transfer taxes. In an earlier post, I stated:According to the county’s Department of Finance, residential real estate sales volume averaged over $500 million per month from 2006 through the first eight months of 2007. Since then, residential real estate sales volume has averaged between $200 and $300 million per month. It is this collapse in residential real estate transactions that has caused many of the county’s current budget problems. All policymakers – both inside the government and inside the unions – should watch this figure in the Finance Department’s monthly economic updates. If it rises back up to $400 million per month or more, the county’s real property transfer and recordation taxes will begin to recover. If it falls further, tougher times are ahead.
If the real estate market does not turn up by the end of this year, projected revenue growth for FY10 may be even slower than the anemic rates that constrained the FY09 budget.
3. The county is getting hit badly by rising fuel costs. The agencies’ budget requests did not adequately predict the meteoric recent rise in gas and diesel prices. If the County Executive submits a supplemental budget request to cover higher fuel costs, will the County Council be able to locate the money without offsetting spending cuts?
4. As we documented a month ago, the state budget continues to deteriorate. Rumors are flying that the state will have to cut aid to the counties next spring, perhaps even passing down the burden of paying teacher pension contributions. This would add MANY millions more to any county budget deficit next year.
The County Council, and especially its ever-smiling (but seldom-blogging) President Mike Knapp, performed very well this year under heavy pressure. They will need to rise to the occasion at least one more time before the current economic downtown is over.
Thursday, May 15, 2008
Deadlock
The County Council gathered today to pass its budget for next year. Because that budget calls for a property tax hike in excess of the rate of inflation, the county’s charter requires seven votes for it to pass. Instead, the County Council split on a 4-4 vote. Deadlock.
First the preliminaries. The council voted unanimously to divert $25 million from the PAYGO program to the operating budget. As we reported yesterday, PAYGO is a cash contribution made by the county to its capital program, which is otherwise financed by bonds. Council Member Marc Elrich recommended this measure yesterday and the rest of the council agreed. The council also voted to cut its “reconciliation list,” or the new spending it intends to add to the County Executive’s proposal, from $40 million to $25 million. The two measures combined freed up $40 million for the budget, equal to the amount of “labor savings” proposed by Council Members Duchy Trachtenberg and Phil Andrews last week.
And then came the vote on Council President Mike Knapp’s proposed budget. That budget included a property tax hike of $138 million – equal to the amount proposed by the County Executive, but structured differently. The budget also did not alter the county’s labor contracts. Council Members Knapp, Valerie Ervin, George Leventhal and Nancy Floreen voted in favor. Council Members Elrich, Trachtenberg, Andrews and Roger Berliner voted against. Deadlock.
During the campaign season, many of these council members – all Democrats – tend to sound alike. All favor labor rights, helping poor people, fiscal responsibility, “smart” growth policy and high-quality services. The way to truly evaluate the differences between these council members is how they deal with the gritty specifics of governing. Ms. Floreen loves to say, “The devil is in the details.” (Spend a half-hour with her and she will say it twice.) She is absolutely correct and, in this budget season, there is plenty of hell to go around.
Valerie Ervin and George Leventhal stand on a principle: labor agreements must be honored. Ms. Ervin credits her former membership in the United Food and Commercial Workers Union (parent union of MCGEO) with helping her survive her days as a low-income single mother. Mr. Leventhal believes that high-quality services, especially the schools and public safety, are the reason why people move into Montgomery County. While many residents may be angry about taxation, he asserts that they are not angry at the public employees who serve and protect them. For both Ms. Ervin and Mr. Leventhal, any violation of the public employees’ agreements will erode the county’s ability to provide effective services and damage its value to residents over the long run.
Duchy Trachtenberg, Phil Andrews and Roger Berliner also stand on a principle: taxpayers and employees must both share the pain of reaching a budget in tough times. Ms. Trachtenberg believes that there are people in the county who are more vulnerable than public employees, including the poor, the homeless, seniors and the mentally ill. Mr. Andrews believes that it is only fair to ask county workers to accept pay reductions if residents are paying higher taxes. Whereas before he favored a two percent cost of living [COLA] reduction and “labor savings” in the amount of $40 million, he proposed today that public employees be furloughed without pay for two days. He expects that measure to save $20.5 million, which he would use to reduce the property tax hike. Mr. Berliner agreed with Mr. Andrews and declared that his furlough proposal did not “break the contracts.”
Marc Elrich did not vote against the budget because of the labor agreements, but because he disagrees with the structure of the property tax. As originally proposed by County Executive Ike Leggett, the property tax hike would have contained a significant rate increase but also a large increase in the tax credit. This would have been a rather progressive tax. The County Council voted 7-1 to decrease both the rate and the credit, effectively shifting the burden away from business and apartment buildings and onto homeowners. The council’s rationale was to lower the tax burden on renters by limiting its impact on rental buildings. Mr. Elrich would like a return to something resembling the County Executive’s proposal and is trying to leverage his vote accordingly. Since the property tax formula can be changed in multiple ways, perhaps Mr. Elrich can gain some movement in his desired direction.
Nancy Floreen said, “I don’t see the crisis particularly because we just added $20 million to the budget. I am bewildered by what the ‘crisis’ is.” Ms. Floreen has a point: the council added $40 million to the County Executive’s original spending proposal before cutting it back to $25 million today. These are hardly the acts of desperate times. She further advised against a “last minute reduction taken out of the backs of the people who provide the services.”
The council is now debating the disposition of $20 million out of a $4.3 billion budget. In almost any business or labor-management context, this relatively small sum could be worked out. But the issue has been hardened by the fact that both sides have adopted a position based on principle. Mr. Leventhal and Ms. Ervin will not bend on the labor agreements; Ms. Trachtenberg, Mr. Andrews and Mr. Berliner insist that tax increases must be accompanied by “labor savings.” Either side can block the budget because it requires seven of the sitting eight votes to pass.
And what of Council President Mike Knapp? Pity upcounty’s gentle giant. He is the man in the middle. The District of Columbia elects its Council President for a full term. The holder of that office possesses many carrots and sticks to cajole colleagues into line. But under Montgomery County's rotating Presidency, Mr. Knapp holds his office for only one year. He has much responsibility and little commensurate authority. He faces a badly divided County Council and is struggling to get them past their differences. But he must get them to agree. Because for a county government that is required by law to balance its budget, deadlock is not an option.
Wednesday, May 14, 2008
Council Votes 6-2 to Preserve Labor Agreements (Updated)
Last Friday, Council Members Duchy Trachtenberg and Phil Andrews voted in the council’s Management and Fiscal Policy (MFP) Committee to recommend $40 million in “labor savings” or “employee participation,” alternative terms for under-funding the county’s collective bargaining agreements with its employees. Today, they sought support for their proposal from the full County Council. They found none.
Labor contracts were not the only budget item considered by the Council. They also discussed the nature of the proposed property tax hike. The MFP Committee recommended that the County Executive’s proposed rate and his proposed credit be cut. The effect of that structural change would be to channel the tax burden onto homeowners and away from commercial properties, including apartment buildings occupied by renters. That proposal was approved by the Council by a 7-1 vote, with Council Member Marc Elrich dissenting. Council Members Trachtenberg and Andrews also recommended lowering the amount by which the property tax would exceed the charter limit from $138 million (which was the County Executive’s proposal) to $118 million. Ms. Trachtenberg and Mr. Andrews were joined by Mike Knapp and Roger Berliner, but Valerie Ervin, Marc Elrich, George Leventhal and Nancy Floreen voted against it. And so the property tax reduction failed on a 4-4 vote. Interestingly, Ms. Floreen commented that she voted against the reduction because she wanted to see a larger one.
But the main action of the day concerned “labor savings.” The 300+ people who mobbed the room were not there to lobby for a $20 million reduction in a tax hike. The vast majority were public employees present to defend their livelihoods. And at least from the perspective of political theater, the County Council did not disappoint.
Former union organizer Valerie Ervin hurled the first thunderbolt. “We could fund this budget right now and not go into the COLAs [cost of living adjustments],” she said. “A lot of this other stuff is just subterfuge.”
George Leventhal objected to any hint of “subterfuge,” defending the county government’s record of clean government. But he agreed with Ms. Ervin on the COLAs, saying, “I don’t really appreciate the term ‘employee participation.’ That’s a euphemism for busting contracts.”
Phil Andrews would not back down. He looked the 300+ public employees in the eye and told them, “Employees need to do their part… It would be unfair to expect taxpayers to pay a tax increase to fully fund employee contracts that would be 8% next year.” He praised MFP Chairwoman Trachtenberg, who had joined with him in recommending labor savings, for her “intelligence, diligence and guts.”
Duchy Trachtenberg also stuck to her guns. “I have stood with labor on a number of issues,” she said, citing her support for living wage legislation and the SEIU’s organizing campaign at Montgomery College. “I represent a million residents. Most of them don’t have an opportunity to join a union and benefit from collective bargaining agreements… I don’t disrespect you, but I respect the unrepresented, the seniors, the disabled and the homeless.” She told the crowd, “I have been the object of a lot of vilification. It doesn’t do any good to attack another person on a policy difference.”
But the other Council Members did not seem convinced that reducing the COLAs was the only alternative. Council Member Marc Elrich brought up possible savings from the county’s annual PAYGO expenditure. PAYGO is a cash contribution made by the county towards capital projects, which are mostly financed by bonds. Council staff told Mr. Elrich that next year’s capital budget would be paid for by $330 million in bond issuances and $30 million in a cash PAYGO contribution. If the county did not make its cash contribution this year, it would not necessarily delay any capital projects which would be mostly covered by bonds. In fact, the unions recommended reducing PAYGO by $10 million last week, just one part of their suggested $67 million package of cuts and alternate revenues. Mr. Elrich’s idea received support from several other Council Members, though Ms. Trachtenberg opposed it.
And then Mr. Leventhal pointed out the real role played by the council in labor contract decisions. For non-schools government employees, the council does indeed set funding levels for contracts. But with regard to the public school system, the council only approves its budget as a whole. Contract funding is decided by the school board. Mr. Leventhal called Board of Education President (and former County Council candidate) Nancy Navarro to the witness table. He asked her whether the school system, if handed a budget cut by the council, would respond by cutting employee raises. She replied, “The board feels very strongly that its strategic investment is in the compensation of our employees.” And then she said that while she could not speak for the rest of the board, she personally would not vote to underfund contracts. Mr. Leventhal concluded that if the council cuts contracts for non-school employees but the school board preserved its employees’ pay, significant inequities in pay scales would result.
After Ms. Ervin recognized several exceptional county employees in the room – including one fire fighter who had heroically raced into a burning building to rescue victims inside – the County Council took its vote on the contracts. Ms. Trachtenberg and Mr. Andrews were the only Council Members on the short end of a 6-2 vote. While some of their colleagues defended their good faith, none were willing to break the county’s commitment to its employees.
But the issue is far from decided. In order to fund the contracts, the council must approve a property tax hike that exceeds the rate of inflation tomorrow. The county’s charter states that seven votes are necessary to do that. Both Mr. Andrews and Ms. Trachtenberg have publicly opposed breaking the limit, which would be sufficient to block it. One of them must budge. If they do not, there is no obvious alternative and catastrophe would result.
And so the lights will be on in the County Council building very, very late tonight.
Update: The Gazette and the Post have also covered the story.
Sunday, May 11, 2008
REVOLT!
In a moment that defined their political careers, Montgomery County Council Members Duchy Trachtenberg, Phil Andrews and Valerie Ervin put the fate of the public employees’ cost of living adjustments on the table last Friday. Present to greet them were over 300 chanting, stomping, clapping and occasionally yelling union members.
Council Members Trachtenberg, Andrews and Ervin are members of the council’s Management and Fiscal Policy (MFP) Committee. The committee’s charge on Friday was to discuss the extent to which savings on the county’s labor costs should be applied to fix its $297 million budget deficit. “Labor savings” ultimately means funding less for personnel costs than is called for in the county’s collective bargaining agreements: a practice derisively labeled by the unions as “contract busting.”
A word about the union members in the pictures. Assembled by pugnacious MCGEO President Gino Renne in the nearby County Executive Office Building, they were in no mood for “contract busting” and marched across a rain-soaked street to confront their council overseers. Their radioactive yellow battle color is not intended to please the eye and it certainly does not. It is designed to attract attention. They certainly received plenty of it on Friday.
Council Member Trachtenberg, chairwoman of the MFP Committee, opened the meeting with new transfer and recordation tax receipt numbers for April. Transfer and recordation taxes depend on property sales and they have been devastated by the recent collapse in the county’s real estate and construction market. According to Ms. Trachtenberg, the county received $13 million in transfer and recordation taxes in April 2008, down from $18 million in April 2007. For the year to date, transfer and recordation taxes totaled $138 million, down from $180 million the year prior. “Taxpayers are reaching a breaking point,” declared Ms. Trachtenberg and that justified a 2% reduction in the unions’ negotiated COLAs.
Council Member Andrews agreed. Citing the fact that personnel costs accounted for 80% of the county’s budget, he told the ornery union members, “What’s fair is to ask everyone to help.” As he has for months, he criticized the unions’ agreements as “unaffordable” and stated flatly, “I would not have negotiated the contracts that came over to us.” Supporting Ms. Trachtenberg, he said, “I believe that the 2% COLA reduction is a fair way to go.”
Pictures cannot do justice to the unholy din created by the roaring public employees. Hundreds of police officers, bus drivers, librarians, deputy sheriffs, correctional officers and park and planning workers rose to their feet to challenge Council Members Trachtenberg and Andrews. “What are you giving back?” one cried. “We are the taxpayers!” another yelled. “You’re hitting us twice!” pointed out one employee who was also a county resident. Worker after worker decried simultaneous increases in fuel and food costs, cuts in county services and proposed cuts in COLAs as a squeeze on their standard of living from multiple sides.
And then Ms. Ervin took the mike. She is a 25-year veteran organizer and trainer in the labor movement and everyone knew what she would say. “I was a proud member of the UFCW union,” she announced to the crowd. “We do not have to balance this budget on the backs of working people.” She recounted a bookful of statistics on poverty and income inequality to the groans of the audience (some of which we will examine on this blog) and concluded with, “Montgomery County is affluent for only some people.” “I believe that cutting salaries will hurt our local economy,” she said, “and I will not support a 2% COLA reduction.” We present the crowd’s reaction below.
In the end, the MFP Committee did not recommend a 2% COLA reduction. Instead, Ms. Trachtenberg introduced a motion calling for $40 million in “labor savings” with the exact mechanism to be decided later by the rest of the County Council. Mr. Andrews concurred and Ms. Ervin ferociously dissented. Neither the council members nor the staff justified this particular number against a lesser or greater amount. No mention was made by anyone of the unions’ identification of $67 million in additional revenues and savings as reported on this blog. The Post and the Gazette also omitted that fact from their coverage.
So what will become of the committee’s proposal for “labor savings,” a euphemism for underfunding the contracts? There do not appear to be any other votes on the council for the MFP Committee’s proposal, especially considering the fact that the union contracts are affordable in the next fiscal year. Instead, a rough consensus is forming in favor of a slightly lower property tax increase than that proposed by the County Executive along with a carbon tax proposed by Council Member Nancy Floreen. 
But even that plan involves breaking the county’s charter limit on property tax increases, which generally holds tax receipt gains to a level equaling the increase in the consumer price index. Seven of the eight County Council Members must vote to exceed that limit. Both Council Members Trachtenberg and Andrews oppose breaking the charter limit, enough to kill any property tax hike. Will either of them budge on that position, thus enabling the union contracts to be preserved? That is the big question. We will have an answer by Thursday.
Monday, May 05, 2008
Nancy Floreen Calls for Across-the-Board Spending Cuts
Montgomery County Council Member Nancy Floreen challenged all county agencies to present a plan to cut their budgets by 2% below the County Executive's proposal on her blog today.
Floreen contends that a 2% across-the-board cut would enable the council to chop the County Executive's property tax increase in half. However, because she would still break the charter limit, her proposal would require seven votes to pass. Floreen argues:As far as I am concerned, the proposed tax burden is untenable, particularly for the average homeowner facing increased fuel, food and health care costs. I am afraid that this budget is way out of line. In today’s economy, it is unaffordable... I know my colleagues have put their hearts into trying to limit spending. But I don’t believe we have gone far enough. Our neighbors in Fairfax County, the District of Columbia, and Prince George’s County are looking at budget increases of no more than 1.3%. We in Montgomery County need to join the rest of the region in looking toward a more sustainable budget.
It is impossible to overstate the turmoil going on in Rockville right now over the budget. Two council members - Duchy Trachtenberg and Phil Andrews - oppose a property tax increase, enough votes to kill it. Council Member Trachtenberg is eyeing the county's labor contracts for savings. The County Council's Education Committee voted to restore $26 million for public schools and $9.1 million for Montgomery College last week. How can resistance to the property tax hike, increases for education, adherence to union contracts and Floreen's call for across-the-board cuts be reconciled?
We'll find out soon enough. Zero hour for the budget is next week.
Thursday, May 01, 2008
Challenge to the Unions, Part One
In a story first reported by the Washington Post’s Ann Marimow, Montgomery County Council Member and Management and Fiscal Policy Committee Chairwoman Duchy Trachtenberg has written to UFCW Local 1994 (MCGEO), one of the county’s public employee unions, offering a choice between layoffs or smaller pay increases. We reproduce the letter and discuss its importance below.April 29, 2008
The letter is a dramatic development in the county’s budget crisis for several reasons.
Gino Renne, President
UFCW Local 1994 MCGEO
600 S. Frederick Ave., Ste. 200
Gaithersburg, MD 20877
Dear Mr. Renne:
In light of the difficult decisions County Council faces for the upcoming budget, I am turning to elected union leadership for counsel during this process.
The strong advantage of having union represented county employees is that the union structure, through its elected leadership, is an excellent conduit to reach out to the rank and file. It is important to each councilmember to hear and respect what options county and school employees would prefer as the Council balances the interests of residents across Montgomery County while making our final budget decisions. Without unions in place, this process would be much more difficult.
With the uncertainty of the County Council’s willingness to break the charter limits and concerns over jeopardizing our AAA credit rating, we may well not have the revenue needed to execute the current CBAs [collective bargaining agreements] without invoking their provisions for Reductions in Force. In an abundance of caution, I want to begin a conversation about all available options that might come forward to avoid force reductions as we face the budget deficit.
I am reaching out for an honest and open discussion of options to address our budget deficit. This invitation is extended to MCGEO, SEIU 500, FOP [police], IAFF [fire fighters] and MCEA [teachers]. To facilitate our discussion, below is a list of ideas that have come to my attention that warrant a response from organized labor. You are all invited to submit a memo outlining your concerns and options you feel will be acceptable to the county and school system employees you all represent.
1. If your members were given a choice between a reduction in COLA [cost of living adjustment] or involuntary layoffs through each contract’s provisions for Reduction in Force, which option do you think your rank and file would find most acceptable?
2. The County Executive projects only 58 employees will take an early retirement buyout option. Do you concur with this position, or do you believe there is more demand for this option? What are the best ways to structure these offers to make them more appealing to your members?
3. Would you have members interested and able to participate in a voluntary layoff program that would protect their seniority and health insurance while they drew unemployment for six months? Would there be more interest if this option could be used as a way to bridge a member to retirement?
4. During the District 4 Special Democratic Primary, Don Praisner proposed an extensive labor management cooperation program to help identify savings, much in the same manner as MCGEO’s letter to council. Would your members be interested in such a program?
These questions by no means limit our conversation. For further clarification of this request and any other questions you may have, please contact Eric Hensal through my office. Eric is a former union organizer with a depth of experience in labor issues and a Masters of Public Administration earned through the National Labor College. I am sure you will find Eric an excellent resource as we all chart a course through the current budget crisis.
Cordially,
Duchy Trachtenberg
Chair, Management and Fiscal Policy Committee
cc: Honorable Ike Leggett, County Executive
Honorable Mike Knapp, Council President
Honorable Phil Andrews, Council Vice-President
Steve Farber, Council Staff Director
1. There are only about two weeks to go before the County Council begins voting on the FY09 budget. This letter to the unions comes late in the game. As recently as April 9, the Gazette reported that Council Member Trachtenberg “said the contracts with county employees should be honored.”
2. When Ms. Trachtenberg refers to “the uncertainty of the County Council’s willingness to break the [property tax] charter limits,” she is referring to a situation over which she has some control. After all, Ms. Trachtenberg told the Gazette, “I do not support going over the charter limit.” Added to Council Member Phil Andrews’ opposition to the property tax increase, the tax hike is in real danger of not passing because it requires seven of the current eight council votes. Ms. Trachtenberg’s opposition to the property tax hike may in fact be creating a need for the sort of choices she is now offering the unions.
3. The reference to Eric Hensal is noteworthy. Hensal lost a special election in Takoma Park to fill Marc Elrich’s vacant city council seat and went on to manage Don Praisner’s District 4 County Council campaign. During the District 4 campaign, the Post reported that Hensal was seen entering the County Council building for lunch appointments with staffers for Marilyn Praisner and Ms. Trachtenberg. Has he now been hired as council staff or as a consultant by Ms. Trachtenberg? If he is a consultant, a reference to him in the letter is very unusual. Why would a sitting council member allow a third-party consultant to speak for her on such a vital matter as employee layoffs or COLA reductions?
But there is more. The public sector unions have not forgotten Don Praisner’s frequent criticism of their contracts during the special election. Nor have they forgotten how the Praisner campaign branded union-backed Nancy Navarro as a “special interest” candidate. Are any of the unions likely to view Mr. Praisner’s campaign manager as a desirable interlocutor for labor relations issues?
4. Ms. Trachtenberg gained a famous fan through her letter: none other than Robin Ficker. On Maryland Moment, Ficker squealed with delight:Trachtenberg is just the kind of person I like---one tough cookie when she wants to be. Continue asking the tough questions Duchy. Social security recipients get a 2.3% increase in 2008 with NO step increases. I loved Charles Barkley. I would ask him, “Charles I know you want to run for Governor of Alabama, but before I vote for you I want to know your views on the economy, NAFTA and healthcare.” He would reply, “Well, I do have a view on the death penalty----they should use it on you!” Trachtenberg reminds me of Barkley.
All of the above is subject to one awful truth: the county is facing a $297 million budget deficit and the County Council has two weeks to go before the tough votes come. Ms. Trachtenberg did not create this deficit and the problems are real. In Part Two, we will examine whether the county can meet its contractual obligations to the unions in the current budget environment.
Monday, April 14, 2008
More Wobbling on the Property Tax
While the great debate between David Lublin and myself over the property tax is now over, the great tumult over the issue on the County Council is just getting started.
The Gazette reveals that Council President Mike Knapp is now uncertain about his vote on the County Executive's property tax proposal. This follows votes against the tax in the Management and Fiscal Policy Committee by Council Members Duchy Trachtenberg and Phil Andrews and an abstention by Valerie Ervin. Council Member Nancy Floreen has also expressed doubts about the tax.
Because the District 4 council seat will not be filled until after the budget is decided, seven of the remaining eight Council Members must vote to break the charter limit to pass the property tax hike. So far, we count two votes against, two votes not committed and four votes with no expressed position. That's a bad sign for passage of the tax hike.
Do any of our readers know if it's possible for the County Council to turn down the property tax hike and not re-open the public employee contracts?
Subscribe to:
Posts (Atom)
