Many political observers inside Montgomery County are discussing the meaning of Donald Praisner’s victory in the Council District 4 special election. Our contribution to that debate focuses on mathematics. From that perspective, Mr. Praisner won because of turnout and demographics.
In the district’s total polling place results, Mr. Praisner received 3,288 votes, 348 more than Nancy Navarro (2,940). Steve Kanstoroom finished third with 804 votes and Pat Ryan trailed with 402. Overall turnout was 11.2%. But real insight requires an educated read of the precinct counts.
Council District 4 has 45 precincts. Of that number, Mr. Praisner won 22, Navarro won 21, Praisner and Navarro tied in 1 and Steve Kanstoroom won 1. (We predicted Kanstoroom’s win in Precinct 13-11 a week ago. Keep reading this blog, people!)
The precincts won by Mr. Praisner reported a combined turnout of 12.9%. Navarro’s precincts reported a combined turnout of 9.1%. That difference of 3.8 points contributed to Mr. Praisner’s margin of 348 votes.
But there’s more. Mr. Praisner won all five precincts reporting the highest turnouts, including Precincts 13-54 and 13-69 in Leisure World. Of the eight precincts reporting the lowest turnouts, Navarro won seven and tied with Praisner in the eighth.
The two Leisure World precincts had combined turnout of 20.5%, 9.3 points ahead of the district total. They reported 476 votes for Mr. Praisner (47% of their total), 323 votes for Navarro (32%), 166 votes for Kanstoroom (16%) and 45 votes for Ryan (4%). Leisure World by itself gave Mr. Praisner 44% of his victory margin.
Turnout was correlated with demographics. District 4 has seven precincts in which the Hispanic population topped 20% in the 2000 Census. Navarro won all seven. These precincts cast 267 votes for Navarro (50% of their Democratic total) and 179 for Mr. Praisner (34%). However, their turnout was only 7.6% - a full 3.6 points below the district’s total turnout.
District 4 has eleven precincts in which the black population topped 30% in the 2000 Census. Navarro won seven of these and Mr. Praisner won four. These precincts cast 583 votes for Navarro (47% of their total) and 509 for Mr. Praisner (41%). Navarro’s victory here is notable since Mr. Praisner’s biggest endorsement came from County Executive Ike Leggett, Montgomery County’s most prominent African American resident. These precincts reported a turnout of 8.4% - 2.8 points below the district’s total turnout.
District 4 has fifteen precincts outside of Leisure World in which the white population was at least 60% in 2000. Mr. Praisner won eight of these, Navarro won six and they tied in one. These precincts cast 1,016 votes for Mr. Praisner (44% of their total) and 936 votes for Navarro (40%). Turnout was 10.9%, almost equal to the district’s total turnout (11.2%). In the end, these precincts plus Leisure World accounted for 233 votes of Mr. Praisner’s 348 vote lead, or two-thirds of his margin.
Mr. Praisner’s supporters are understandably pleased at his victory, but they have cause to worry about 2010. As Mr. Praisner has said many times, he will not be on the ballot again. His supporters and potential successors should consider the following relevant facts:
1. School board member Marilyn Praisner (in 1990) and American University professor Jamie Raskin (in 2006) both required year-long campaigns to knock off long-time incumbents. Nancy Navarro came close to defeating the 17-year-incumbent Praisner family in just six weeks. As someone who saw her operation up close, I was impressed by the discipline and tactical intelligence of her campaign. Now that Navarro has survived the fire of an occasionally acrimonious and difficult election, she should be an even more formidable candidate if she runs again.
2. Most voters knew who their candidate was when they arrived at the polls on Tuesday. This reduced the importance of MCEA’s Apple Ballot. This will not be the case in 2010.
3. District 4 is a majority non-white jurisdiction and is trending even further in that direction. Navarro’s strong performance in black and Latino precincts – even against the choice of a black County Executive – swims with the demographic tide of history. And if she chooses to run again in 2010, she will have much more time to get out the vote in those precincts.
Ironically, the best hope for Navarro’s opponents among non-white voters could be Pat Ryan. His work with Action in Montgomery has brought him into contact with many black, Latino and immigrant communities in the county. His hands-on advocacy for affordable housing is a good issue with these constituencies. But Ryan was discouraged from running by the establishment officials who backed Mr. Praisner. Starved for money and deprived of endorsements, Ryan garnered just 5% of the vote and finished last in 33 of the district’s 45 precincts. If Ryan or Steve Kanstoroom, who spent $24,000 of his own money only to draw 11% of the vote, is anointed to be Mr. Praisner’s successor, will either be able to overcome such a low finish?
Friday, April 18, 2008
Council District 4 Special Election by the Numbers
We can again breathe…
Written by Sharon Dooley
Sharon Dooley is the Legislative Director of Upcounty Action.
Many of us who live in the Olney area and others across the upper Montgomery County regions who could not vote in the District 4 Council race are now breathing freely again. With the Democratic primary won by Don Praisner, we are confident that the prudent fiscal and moderate growth policies voiced by Marilyn Praisner will continue to be heard in the council chambers, if he defeats the challenger, as expected in May.
Mike Knapp’s comments that the last election was not about growth were echoed by Nancy Navarro as she made the point that growth is contained here. I differ with this opinion significantly and consider it misguided, perhaps even naïve. Growth policy and land-use decisions are an important part of county governance whether it is for in-fill development or in redevelopment of an older neighborhood. Bad decisions made in zoning or in Master Plans can change the character of a community, so these selections must be made carefully. Growth is cyclical as well, since economies have cycles, just as communities do and we need to plan for both good times and downturns.
Our county’s future growth is most likely not going to be in areas that mimic the plans for new towns such as Clarksburg, but rather in areas where we have settled communities that are becoming more urban. As a county we are growing and will continue to grow – the concern is in which ways will we change? Important questions will have to be asked and answered. Sometimes the knowledge is held in which questions are asked. I submit that the following are some that will need clear answers soon:
• How many stories do we wish to see built for our urban apartments and/or high-rise city office buildings?
• How much development can be supported in our Metro centers?
• How does the BRAC affect our down county roads and transit?
• Will there be affordable housing for these new workers should they choose to move here?
• Where will we get the necessary infrastructure funding as the modest growth continues and tax revenues decline?
• Will we be able to hold the line on class sizes as the county changes?
• Will the transit plans for the CCT and Purple lines be a real part of the transportation futures here?
• How long will we be able to hold the preservation of the Ag reserve as we see attempts at encroachment continue?
There are 93,000 acres approximately in protection in the Agricultural Reserve at
this time; farmers want to be able to have the equity they hold in their land pay
off; several proposals regarding development rights and land trade-offs are
suggested and being studied. These decisions need to be carefully considered
by our elected officials who are tasked with maintaining a viable county into the
future. It is hoped that now we can be confident that the air will remain
breathable, that forests will grow, and agriculture will continue to be a vibrant
part of Montgomery County’s tomorrows.
The Problem with Peter Franchot
The war of words between Governor Martin O’Malley and Comptroller Peter Franchot escalated yesterday. The Governor branded the Comptroller as a hypocrite for crusading against slots after voting for them in 2001. The Comptroller’s spokesman then referred to the Governor’s “attack” as “unusual” and “regrettable.” But what is truly regrettable is the nature of the Comptroller’s engagement in the state’s political debates.
From the start, Peter Franchot said he was not going to be your grandfather’s sort of Comptroller. He was going to be an activist, independent spokesman for Maryland taxpayers. Boy, I thought, this was going to be great. After all, activist independent spokespeople provide great fodder for bloggers!
Soon enough, the Comptroller proved good on his word. He questioned the need to hold a special session last year. He opposed the computer tax as soon as it was suggested. Senate President Mike Miller criticized Franchot and his staff for being “missing in action this entire year in terms of helping the state solve the budget crisis. ... Certainly, during the entire [22] days of the special session he was gone.” Soon after, Franchot became embroiled in an ugly battle with the Senate over his staffing practices and conduct in office. And that’s to say nothing about his opinions on slots!
Now we try to follow a tradition of constructive criticism on this blog. After our rip-roaring romps against MCDCC last year over its legislative appointment process, Paul Gordon suggested holding mid-term special elections and using a variety of ways to incorporate district resident input into MCDCC votes. When I found the Governor’s original special session package to be regressive, I laid out how to seize tax revenues from cheating employers who were costing the state millions. And when I opposed the computer tax, I suggested a package containing the Governor’s original upper-income tax rates, combined reporting and a corporate tax hike as a replacement.
It is very, very easy to criticize someone else’s ideas. It can be very, very challenging to craft a viable alternative. Franchot’s problem is not that he is an anti-slots liberal or that he butts heads with the Senate President. (After all, someone has to fight with Miller!) It’s that he does not supply us with a better way to deal with our problems. What does a progressive alternative to the things he criticizes look like? I’d really like to know, but he never tells us.
And the slots issue is becoming an excruciatingly difficult one. The latest state budget information holds that if the slots referendum is not passed, the state will face $600 million annual budget deficits forever. Regular readers know that I’m not a fan of slots. But after the legislature’s regressive special session tax package, the most likely alternative to slots money will be more sales tax increases or horrendous budget cuts, possibly to education, health care and transportation. These are really tough choices and any honest person who cares about both preventing slots and pursuing progressive economic policy is going to wrestle with them.
So what is the Comptroller’s recommendation? According to the Post:Asked by a reporter how he would replace the revenue if the referendum is defeated, Franchot offered no specifics. He said the state should be nurturing the life sciences sector, industries that would presumably contribute more to the tax base upon its growth.
I’m sorry, Mr. Franchot. If you are going to earn my loyalty, you have to do better than that.
Thursday, April 17, 2008
State Budget Crisis Will Get Worse Before it Gets Better
Courtesy of State Senator Rich Madaleno (D-18), we present a grim reality to MPW readers: the state budget situation is getting even worse.
Over the last two years, Maryland politics has been dominated by a debate over how to deal with the state’s “structural deficit.” This deficit is a long-term imbalance between revenues and spending created by income tax cuts in the 1990s and an expansion of education spending in 2002. The Ehrlich administration was able to defer the consequences of these decisions because of a strong economy and repeated diversions of transportation funds. But Governor O’Malley decided to deal with the problem head-on early in his term, leading to the deficit reduction package of last year’s special session.
The problem is the weak economy. Every time the legislature takes action to correct the deficit, the Maryland Board of Revenue Estimates reports revenue shortfalls. And so the legislature must redo its work. If the shortfalls are serious enough between General Assembly sessions, the Governor will probably have to make unilateral cuts until they return to Annapolis.
Senator Madaleno brought the latest 90 Day Report, a review prepared by the State Department of Legislative Services, to our attention. The report had this to say about future state budgets:As shown in Exhibit A-1.6, although there is a cash balance of about $226.4 million in fiscal 2009, there is a gap of about $350 million when comparing ongoing revenue to ongoing spending. As noted, action at the 2007 special session reduced the projected $1.7 billion structural deficit by about $1.4 billion through a combination of new revenues and spending reductions. Reductions adopted at the 2008 session largely offset downward revenue revisions that were received in March 2008 but did not make additional progress in reducing the structural deficit. There is a potential cash shortfall of about $243 million between revenues and current services spending projected for fiscal 2010. The shortfall is expected to widen to nearly $600 million in fiscal 2011, which mirrors the structural deficit. This is due mainly to the downward revision of revenue by BRE [Board of Revenue Estimates] in March, to an actuarial error in retirement contributions which adds nearly $70 million per year in additional spending for teachers’ retirement costs, and in the financing of health care expansion, enacted by Chapter 7 of the 2007 special session, which adds $70 million in general fund spending in fiscal 2011.
Exhibit A-1.6 is reproduced below.
Based on the assumption that the constitutional amendment to implement video lottery terminals is approved by voters in the fall of 2008, the projected cash and structural shortfall narrows significantly by fiscal 2013. It is estimated that revenue from video lottery terminals will add nearly $500 million in revenue in fiscal 2012, increasing to an estimated $660 million in fiscal 2013. If the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.
These numbers are by no means necessarily the ones that will be used by the General Assembly in next year’s budget decisions. The revenue numbers in particular may be adjusted more than once by then. But in general, here’s how this might play out:
1. More tax hikes are very unlikely. The bulk of the problem will be dealt with on the spending side.
2. The spending increases passed in the special session, such as the establishment of a fund to clean up the Chesapeake Bay and a health care expansion, will be especially vulnerable. Legislators will say, “We thought we had the money for those things but it turns out we don’t. So we will have to wait until the money comes in before funding them.” College tuition freezes and transportation spending will also be endangered.
3. Both the special session and the 2008 general session largely spared the counties from cuts to state aid. That may not be the case next time. The counties are especially wary of any attempt by the state to pass on obligations for teachers’ pensions. Education aid may also be at risk. If aid cuts happen, they would greatly complicate county budget problems, especially in Montgomery County.
4. Slots proponents will be sure to exploit the new data, especially the 90 Day Report’s statement that “if the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.” Even anti-slots legislators will shudder at the prospect of replacing that amount of money, especially as election year approaches.
5. A $243 million deficit is projected for FY 2010, which will be decided next year. But a $596 million deficit is projected for FY 2011, which will be decided in 2010 – an election year. The General Assembly is surely tired of dealing with budget crises every year and will be tempted to take a break in 2009. But if they do that, the 2010 elections will be kicked off by a truly painful debate over even more tax hikes and/or spending cuts – a teeth-chattering prospect for every politician in Annapolis.
On Political Pulse
Marvin Weinman, the President of the Montgomery County Taxpayer's League, will be on the 'Political Pulse' talk show on:
--Thursday, April 17th at 9 p.m. and
--Tuesday, April 22nd at 9:30 p.m.
to talk about the large budget deficit that Montgomery County Council is now debating. Mr. Weinman is quoted often in the Washington Post on County budget matters and recently wrote a Commentary in the Gazette. Political Pulse is on Channel 16 TV in Montgomery County.
Wednesday, April 16, 2008
MCDCC: Apply for the Ballot Questions Committee
While I am not the ideal message boy for MCDCC, we are happy to help out MPW friend Marc Korman. He forwarded this notice for our readers.
Apply for the Ballot Questions Committee
The November election is not just about the presidency. A number of important initiatives will be on the ballot on major policy issues. The Montgomery County Democratic Central Committee (on which I represent District 16) is currently assembling a Ballot Questions Committee to consider these issues and recommend a Democratic Party position on them for the fall. Some of the issues are well known to readers of MPW.
If the challenge to the petition signatures fails, the County will have ballot referendum on the transgender non-discrimination law. The County Council approved law prohibits discrimination based on gender identity in housing, employment, taxi, and cable service.
In 2006, a state court ruled early voting unconstitutional because the state constitution limits voting to one day a year in a voter’s home district. As a result, the legislature passed a constitutional amendment in 2007 to allow early voting. The electorate now must ratify or reject the amendment. If accepted, the amendment would allow the legislature to establish early voting locations around the state to improve voter access in the weeks leading up to Election Day.
Another hot button issue to be decided is the fate of slots in Maryland. During the Special Session, the General Assembly punted to the voters the question of whether slots will be allowed in five locations around the state. Technically, Maryland voters will be ratifying or rejecting a constitutional amendment authorizing legislation to implement gambling.
In addition, the Montgomery County Charter Review Commission is currently considering proposed Charter amendments that may also go on the ballot. The Commission is a bipartisan panel of eleven that recommends charter amendments to the County Council during each election year. Given recent history, it is possible that the Charter Review Commission will forward a Ficker Amendment involving County tax policy.
To get involved in the Ballot Questions Committee, take a look at the requirements set out by the Montgomery County Democratic Central Committee and consider applying:
Volunteers Needed for Ballot Questions Committee
Volunteers are needed for the Ballot Questions Committee. In order to apply, please send a resume and cover letter to the Montgomery County Democratic Central Committee at MontgomeryDems@msn.com or fax it to the Central Committee at 301/946-1002.
Please state that you would like to serve on the Ballot Questions Committee. The deadline to receive the resume is Monday, May 1, 2008 at 5:00 pm.
All candidates will be interviewed before the Central Committee appoints he members of the Ballot Questions Committee. It is one of the goals of the Central Committee to have a Ballot Questions Advisory Committee that is geographically and ideologically balanced.
The County Democratic Party rules require that at least half of the Committee members must be precinct chairs, vice chairs, or area coordinators. The role of the Committee is to review the Ballot Questions and to review certain judicial candidates for the General Election. Please respond as soon as possible.
The estimated time commitment is 40 hours. It is anticipated that the committee will meet once a month from May to September. Additionally, the committee is expected to hold a public hearing in late August.
Once the committee has been appointed, each member of the Committee will be expected to take at least one of the ballot questions, research it thoroughly, and then prepare a one-page write-up setting out the arguments as to why the Party should support a vote "yes", why the Party should support a vote "no", and why the Party should not take a position. After the August public hearing, the committee will make a recommendation on each ballot question.
The Advisory Committee's recommendations (along with the one-page write-up on each of the three possible positions) will be sent out to all of the chartered Democratic Clubs; all of the precinct chairs, vice chairs, and area coordinators; all the members of the County Central Committee; and all of the elected Democratic officials in the county. About 2 weeks after the report is sent out, the Precinct Organization will meet and take its position on each of the questions. Following that meeting, the Central Committee will meet and take its position on each question. Where the Precinct Organization and the Central Committee are in agreement, that will be the position of the County Democratic Party. On any question that the Precinct Organization and the Central Committee are not in agreement, the County Party will be neutral on that ballot question. Since this system was put in place about 10 years ago, the Precinct Organization and the Central Committee have always agreed on the Party's positions on each ballot question.
Montgomery College Agrees to Neutrality - Or Does It?
Regular readers will recall how Montgomery College told its adjunct professors that they were "not public employees" in order to avoid allowing them a union election. Now the college is claiming to be "neutral." But is it?
Two days ago, the President of Montgomery College sent out the following memo to adjunct professors:MONTGOMERY COLLEGE
It is encouraging to hear the college proclaim its "neutrality" though I have heard such statements from anti-union employers many times over the years. The true test of neutrality is not what the college says, but what the college does.
Office of the President
April 14, 2008
MEMORANDUM
To: Part-Time Faculty
From: Brian K. Johnson, President
Subject: Service Employees International Union for Part-Time Faculty
Many of you are aware of the petition filed by SEIU Local 500, seeking to represent adjunct faculty for purposes of collective bargaining. I wanted to clarify the College's position in this matter. We are not anti union, we are neutral, and will respect the right of adjunct faculty to decide through a secret ballot vote on whether you wish to be represented by the union. Throughout this process we must perform our organizational and legal duties. This includes making sure that the unit proposed is authorized by Maryland law to do so and to make sure that the definition of the unit to be organized is sufficiently clear and appropriate so that elections can be conducted in accordance with the requirements of law. These steps followed in accordance with the requirements of Maryland law result in benefits to all concerned and eliminate tremendous legal and logistical problems in the future.
We are working with the Maryland State Commissioner of Labor and SEIU Local 500 to seek an expedited election process that will allow you to vote on this question as soon as possible. Information regarding the election procedures will be forthcoming from the Commissioner's office in the very near future.
Montgomery College has a rich history of harmonious labor relations with our employee unions. We are committed to that tradition continuing with SEIU or any other union, should they become your collective bargaining representative.
The adjuncts are seeking an election prior to the end of the semester, which occurs in mid-May. The college states that it "must perform our organizational and legal duties," which include "making sure that the unit proposed is authorized by Maryland law to do so and to make sure that the definition of the unit to be organized is sufficiently clear and appropriate so that elections can be conducted in accordance with the requirements of law." If the college contests the definition of the bargaining unit - a common tactic used against workers who want a union - it can easily run out the clock on the semester. That would give the college all summer to plan a more aggressive campaign against the adjuncts in the fall.
If the college is genuinely neutral, it must agree to an election in the next couple weeks. Otherwise, its declaration of neutrality will be proven as baseless as its claim that the adjuncts are not public employees.
Lasting Impressions from the Special Election
Don Praisner, with Councilmembers Marc Elrich, Duchy Trachtenberg, and Phil Andrews just after the final precinct votes were released.
Here are the final photos from yesterday's election.
Thanks to Mike Benefiel, Campaign Manager for Pat Ryan, for the pictures from Leisure World.
Signs outside of 13-54, Clubhouse I.
Don Praisner and Lillis Caulton, precinct chair, 13-54.
A mid-day walk of the "gauntlet" by a voter at 13-54.
From left: Praisner voters Al Shanefelter and Claire Rupert surround precinct chair, Elaine Crutchfield, neutral, outside of Tyler Page ES (5-8).
Candy Shimming, for Praisner, outside of Kennedy HS (13-02) in the early morning cold.
Kathy Ryan, wife of candidate Pat Ryan, just after voting at Fairland Center (5-17).
Vicky Meyers, precinct vice chair and Betty Petrides, for Kanstoroom, outside of Fairland Center (5-17).
Kevin Gillogly, for Praisner, and Delegate Ana Sol Gutierrez, for Navarro, outside of Shriver ES (13-36).
Dr. "Z" (aka Gilberto Zelaya, Ph.D), Community Outreach Liaison Director for MoCo Board of Elections, working his Blackberry outside of Shriver ES (13-36).
Have a photo you want to share? Then post a comment and I will contact you privately.
Rich Madaleno on Taxes
In a thoughtful diary on Free State Politics, Sen. Rich Madaleno outlined changes in tax rates and the State's fiscal outlook since the special session, and why he opposed the surcharge on people with annual incomes over $1 million which passed the General Assembly. As it turns out, my past posts on this topic woefully underestimated the gap in tax rates between Maryland and Virginia for these very high-income taxpayers:
Our actual work this year began last October when Governor Martin O'Malley called the General Assembly back to Annapolis for an extraordinary special session to address the state's fiscal problems. In just four weeks of work, the General Assembly and Governor O'Malley worked out a comprehensive fiscal solution that included $600 million in spending reductions and $1.3 billion in tax increases to fund the state's general operating and transportation budgets.
The tax increases included raising the sales tax rate from 5% to 6%, raising the corporate income tax rate from 7% to 8.25%, and reconfiguring the personal income tax rates. Maryland's previous top rate was 4.75% for all income over $3,000. The new, more progressive rates result in a .25% rate increase (to 5%) for income over $150,000 and a .75% rate increase (to 5.5%) for income over $500,000. As a result of increases to the personal exemption and the new rates, people earning less than $100,000 will pay less in income taxes while people making more than $150,000 will pay more.
As you know, the General Assembly also authorized a referendum on the issue of slot machine gambling. If passed this November, the slots plan will authorize a maximum of 15,000 machines in five predetermined locations around the state. By the end of the special session, we were able to finally eliminate the state's ongoing structural deficit.
The regular session had the odd feel of a hangover after our frenetic fall session and opened with a real sense of melancholy following the unexpected deaths of three colleagues. Additionally, our new-found structural balance was not to last long as the nation's worsening economic condition began to take its toll on our projected revenues. In fact, much of the regular session's work seemed to revise, rewrite, or repeal our work from the special session.
While the governor's initial budget proposal in January was balanced to our original revenue estimates, state revenues from the income tax and sales tax both fell significantly below projections in the first quarter. These two revenue sources account for more than 80% of the state's tax revenues. When they fall, the budget quickly falls back into the red.
January's year-over-year growth in sales tax revenue alone saw the deepest decline in 15 years. This situation is not isolated as similar steep drops were seen by Virginia and the District of Columbia. As a result, the state's official revenue estimate was decreased by $330 million.
At the same time, fierce opposition to one of the new taxes passed in November began to push the legislature to repeal the expansion of the sales tax to computer services. The technology industry made a strong case that this tax would make Maryland tech firms uncompetitive especially with Virginia-based companies. However, this new tax was slated to produce $200 million in new revenue. When the decision was finally made to repeal this "tech tax," the General Assembly was faced with a $530 million shortfall.
To address this problem, I strongly advocated for a reduction in spending including a scaling back of the new spending initiatives we had enacted during the special session. These new initiatives included funding for transportation enhancements, health care expansion, Chesapeake Bay clean up, and higher education access. The General Assembly went along with the cuts to health care, bay clean up, and higher education but balked at reductions in the funding increase for transportation, which I proposed scaling back. Instead, the governor proposed another personal income tax bracket for income over $1 million. This new bracket will be 6.25% and will last for three years. When combined with the local income tax rate of 3.2% in Montgomery and Howard Counties, our new top bracket of 9.45% will be the third highest tax rate in the country and will be 75% higher than the top rate in Virginia.
It may be hard to pity the just more than 6,000 taxpayers who will be impacted by this tax. However, these few people, most of whom derive income from business ownership, account for nearly 20% of the income taxes paid to the state. In Montgomery County, where 40 percent of these taxpayers live, they account for almost 25% of the county's income tax revenue. I fear this new tax rate, which is a 30% increase over the old top rate, will seriously diminish our ability to retain or attract new businesses. Should even 500 of these taxpayers leave or simply declare residency in another state, by wintering longer in Florida for example, our state and county could see a significant reduction in tax revenues.
As a result of the deteriorating economy and last minute revisions to our tax code, I leave Annapolis this year, frankly, with a great deal of concern about our state's long-term fiscal outlook. Even with all of the difficult decisions of the past six months, we are still facing a serious fiscal situation. The economic news seems to get worse by the week. Energy prices continue to rise while home values fall. Job growth has stopped, and the stock markets are volatile. Should the slots referendum fail in November and the economy perform as anticipated; the state will once again be facing a nearly billion dollar structural deficit.
I sincerely hope this does not occur, but I believe we need to plan for the worst. That is why I proposed additional spending reductions to close our short-term deficit. During the committee debate on the tech tax repeal and income tax swap bill, I proposed an amendment to reduce General Fund support of the Transportation Trust Fund by $150 million annually. This was a cut in one-half of the sales tax revenue diversion we implemented during the special session.
My amendment would still have provided $4 billion next year for transportation operations and construction and $6 billion for construction projects over the next six years. It would also have left transportation with at least a $300 million annual enhancement. I was only proposing a reduction in the increase not a reduction in current services or projects - a modest one-third reduction in the increase.
Some of my colleagues have said they voted against my amendment due to our region's traffic problems. A review of the new projects proposed by the department to be funded with this new revenue reveals, in my opinion, few which will impact traffic in any meaningful way. For example, the only new Montgomery County road projects that will be funded by the new money allocated during the special session are intersection improvements around the Bethesda Naval Hospital to prepare for the relocation of Walter Reed, a new grade-separated interchange at Georgia Avenue and Randolph Road, planning for a new interchange on I-270 at Watkins Mill Road, and planning for improvements along Georgia Avenue from Forest Glen Road to 16th Street. I would argue that none of these projects will result in any improvement to congestion except for traffic flow in the immediate vicinity of these intersections.
Two Laws Honoring Jane Lawton
Sen. Rich Madaleno reports on two laws passed in memory of Del. Jane Lawton:
This session was also the first without my friend and colleague Jane Lawton, whose untimely death in November was a shock to us all. Working with Ana, Jeff and Al, we were able to pass two bills to carry on Jane's work at protecting our environment. In fact two new programs will be named in her honor. The Jane E. Lawton Loan Program will provide eligible homeowners with access to low interest loans to improve the energy efficiency of their homes through the installation of new windows, insulation, and heating equipment. The Jane Lawton Farm-to-School Program will provide public schools with the ability to buy local produce for school meals. Jane had been working on this program when she passed away. These two programs will be a fitting memorial to her and help ensure that her efforts to improve our community continue.
Tuesday, April 15, 2008
Don Praisner Leads
According to the Montgomery County Board of Elections website, the unofficial results indicate that Don Praisner leads in the race for the Democratic nomination for District 4. Praisner received 1471 votes to 1360 votes for Nancy Navarro, 362 for Steve Kanstoroom, and 180 for Pat Ryan.
Update: I hadn't realized all the votes weren't in when I first posted results. (Thanks to the commenters who informed me of the error.) The current results are: Praisner 2064, Navarro 1864, Kanstoroom 487, and Pat Ryan 266. 33 of 46 precincts in the district have reported as of 9:49pm.
Update II: 39 of 46 precincts are reporting. Praisner 2589, Navarro 2346, Kanstoroom 626, Ryan 313.
Update III: 42 of 46 precincts reporting. Praisner 2874, Navarro 2593, Kanstoroom 687, Ryan 353.
Photos From Don's Party
Looking at election returns on the WWW -- just like you. From left: Campaign Manager, Eric Hensel, Mary Ann Bowens (partially blocked), Rocky Lopes, and Claire Iseli. Oh and some guy named Don Praisner in the back right.
Don Praisner with his grandkids from left to right: Camden, Madison (in Don's arms), Rachel (in front), and Kaitlin.
Council District 4 Special Election -- Latest News
The 3 o'clock count was just over 2500 Dems. That means the turnout is just under 5% of the 58,000 Registered Dems. We have thirty minutes to close of polls. The turnout out here (13-36) and from calls across the district in the post 3:00 PM tally is also very very low. Look at the above picture. It was taken around 4:15PM. It looks like high noon in an old Western. No one was in the parking lot, on the streets, or in the voting booth. The low turnout should favor Don but we have only a few hours to find out the actual answer.
Update from Delegate Roger Manno
Just got off the phone with Delegate Manno. He told me that the combined Leisure World precincts is 1442 for both parties,. approx. 20% was GOPers. Meaning that 1,100 Democratic voters came from these two precincts. And if turnout is around 4,000 Democrats that this key group will supply over 25% of the total Democratic vote.
Council District 4 Special Election -- Mid Day Report
Above: Wayne Goldstein for Steve Kanstoroom outside of Kennedy HS.
Dear Readers, Adam Pagnucco and I are out for our respective candidates (he is for Navarro and I am for Praisner). I am writing from just outside of Shriver ES in Wheaton (13-36). If there are typos in this report it is because the laptop I am on does not have an anti-glare and it is too sunny outside.
We here are MPW are going to try and give you updates of the special election in District 4, not to be confused with the special election Congressional District 4 that will select the temporary replacement for Al Wynn. We will cover that later.
Anyway the total number of Democratic voters at 10:00 AM, which is the first time all 46 precincts will post how many people have voted, is 992. I don't have the Republican numbers.
The next report will be out at 3:00 PM and it will take awhile for the figures to come in.
But the 10:00 AM is number is extremely low. If the total number of voters is around 60,000 then you are looking at turnout that will not cross 10% for the Dems and probably is closer to 7%. (Most voters will come out after work.) But this race could be won with 2,500 voters.
A low turnout favors Don (Adam and I both agree on that point.) But any group that is able to motivate its base and get them to the polls will win. So expect the Navarro camp to get the teachers (MCEA) and support staff (SEIU) to man the phones and the polls as soon as the schools close.
Here are the Leisure World precinct numbers for 10:00 AM.
The Leisure World I (13-54) had 128 Dems and 30 GOPers.
Leisure World II (13-69) had 65 Dems and 23 GOPers.
Thanks to Mike Benefiel, campaign manager for Pat Ryan, for those numbers.
All of the candidates have been to Leisure World. Sid Kramer, the former County Executive, is also out at Leisure World for Nancy Navarro.
At my precinct, 13-36 (Shriver ES), which is one of the most heavily Hispanic preincts in the county. The turnout at 10:00 AM was 11 Dems and 10 GOPers. This is a strong Dem preinct so having more Republicans than Democrats is amazing. It is 65 total voters (regardless of party) at 2:35PM.
Above: Ana Maria Delgado for Nancy Navarro and Delegate Al Carr, neutral, outside of Wheaton HS (13-28).
Update:
Most of the stories you get now are more the personal rather than hard news. Here's one that I think is telling. A friend of mine, Genie Moreno, voted at Good Hope Rec Center (5-1) at 7:05 AM this morning and the chief election judge clapped and cheered because she was the first voter.
Monday, April 14, 2008
The Apple Has Worms
The most important endorsement to have in the Democratic primary in liberal MoCo comes not from the party bosses over in Kensington or left activists in Takoma Park and beyond. Rather it is in getting the Apple Ballot endorsement.
Having worked the polls the past six years for a series of candidates time and again I have seen voters not take the Democratic materials or even liberal materials in democratic stronghold. But they will almost always take the Apple Ballot.The results are evident at the ballot box. In the last election cycle all but three of the Apple Ballot nominees won.
As part of full disclosure here at Maryland Politics Watch (MPW), I am a District 4 Resident and I support Don Praisner. I came to that conclusion after sitting down with 2 of the candidates personally (Navarro and Ryan) and having brief conversations with the other two (Praisner and Kanstoroom).
Why The Apple Ballot is the Biggie
One of the reasons people select the Apple Ballot over other material is the perception that being for the schools is good AND that the MCEA endorsement is above board and beyond party politics. Our citizens, who are in favor of good schools, also see hope in providing a bright future for its children with a solid education. But there is also an element of good government in the using the Apple Ballot as the metric for selecting one's candidate.
The Apple Ballot is really a union endorsement put out by the MCEA. It is not a good schools endorsement though it can be. Nor is it a good government endorsement though it has in been the de facto one in recent times. But the people who use it consider both a good school and good government endorsement as much as it is a union one. Teacher's Union (MCEA) does this endorsement under a hugely successful PR blitz with a bright red apple on everything. I mean who is against apples for teachers. It hearkens back to the days when giving an apple was considered a nice gift, whereas now that might be an ipod.
Fellow Blogger Adam Pagnuccio wrote about the MCEA calling them the 800 lb gorilla of MoCo politics. The strength of the Apple Ballot causes politicians to bow before the owner of it, the teachers union. The problem lay not in the Apple Ballot itself. I tip my hat to MCEA for creating an effective PR tool. I have used the ballot to help my candidates when I thought it would make the pitch better than me.
The real strength of the Apple Ballot lays in the voters who use it as their voting guide, much like previous generations of MoCo-ers may have used the Gazette or the League of Women Voters. The strength is not in the teachers' union itself. There are not enough teachers in the county to make that type of impact. Also the number of teachers who are politically active are on par with the rest of the county. So it is not that teachers are more active than the rest of us.
That strength comes when voters from non-union households and non-teacher households who think this endorsement embodies the ideals of both good education and good government as much as it is a pro-union selection.
It is that second value -- being is viewed as above party politics -- that is the real strength of the Apple Ballot. MoCo residents, much more so than other parts of the country, do not take kindly to backroom deals when exposed to the light of day. It is the reason other endorsements be it from party bosses or insiders have limited impact compared to other parts of the US. In MoCo, those type of endorsements lost their impact because voters saw through it and what remained exposed was a blatant political agenda.
If the voter who use the Apple Ballot thought that the MCEA was using the Apple Ballot solely to advance a political agenda then its strength in non-union households would diminish greatly and getting the Apple Ballot would become another endorsement right up there with who Amway Reps endorse.
Is the MCEA really above politics?
First the unions, MCEA along with their ally SEIU, had private meetings on the "budget" at King Jerry's Castle, where only one elected member of the School Board, President and candidate Nancy Navarro, was invited. They did not invite the rest of the duly elected School Board. Also the School Budget chief was not invited. Humm... there is a meeting on the school budget and only one person from the School Board is there and the key staff budget person is also missing. And to make sure everyone can come over let's have it in a private home away from the school resources that could help in making good budget decisions.
The MCEA sends out emails to its teachers in District 4 on the school system list. And the teachers are saying that this is ok. Really? Most of us tend to think that electioneering using public resources is not kosher.
Was the MCEA fair and open in its endorsement process?
The MCEA also went to great lengths to tell us how open and transparent their endorsement process would be. They even posted ads in the Gazette, saying the deadline for endorsements would Monday March 3, when they had already had private meetings at King Jerry on March 2 and February 29 to select a candidate who would give them what they wanted -- more money for union contracts, regardless of whether or not the county had the money for it.
The unions can and should endorse but then don't tell everyone how fair you are going to be and then select your candidate before you get a chance to interview all of the candidates. But to have your endorsement set while you tell the public it is still being decided that is just plain wrong. Unless of course you only care about #1, money. But if you do then the impact of the Apple Ballot diminishes to being one of the many endorsements candidates seek rather than the most important endorsement to have.
Why is the MCEA doing this? Simple. As blog father David wrote it is about money. And more money. The MCEA is practicing the original sin of politics. They want COLAs in excess of what others Moco residents are getting in a down market. And they will support anyone who will get them their money. There are other candidates in the race who are just as supportive of teachers and good schools. Some of them even have family members as teachers. But having family members as teachers is not the trump card. It is who will provide the union with the most money. And that is what the Apple Ballot really is -- a union endorsement for more money. It is not for better schools though it can be and it not for good government, at least this time.
So tomorrow when you go to the polls and someone hands you an Apple Ballot remember this time the Apple Ballot has worms.
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?
Foolio Demands a Union
A Navarro campaign worker who refers to himself only as “Foolio” is demanding union representation. Following is our exclusive interview.
Adam: Are you the same Foolio who has been posting comments on our blog?
Foolio: Yup, that’s me.
Adam: Why don’t you tell the readers your real name?
Foolio: I’d rather not, but Kevin Gillogly knows who I am. He’s still upset with me for not supporting him when he wanted to run for Council.
Adam: Foolio, why do you want a union?
Foolio: The working conditions here are awful. David Moon, Nancy’s campaign manager, is a tyrant. He keeps us chained up in Nancy’s basement. All we have to eat are little Hershey’s bars and Diet Cokes. He eats all the cheeseburgers himself. I want a cheeseburger!
Adam: Diet Cokes and Hershey’s? That’s all you get?
Foolio: There’s also a giant box of caffeine pills. It says, “Compliments of the Montgomery County Chamber of Commerce.”
Adam: What else is going on?
Foolio: The only time we get to leave the basement is when we canvass. Moon attaches ankle bracelets with GPS chips to all of us. If we wander off our canvass map, a pickup truck full of Carpenters Union members grabs us and brings us back to Nancy’s.
I think I’m getting carpal tunnel syndrome from all the door knocking. On top of that they now have me clicking away on this stupid Internet poll. But they won’t let me file for workers’ compensation because they’ve misclassified me as an independent contractor!
Adam: IPoCS (Internet Poll Clicking Syndrome) is a serious problem. Al Carr and Hugh Bailey are still recovering from it.
Foolio: Why is Moon so obsessed with these blogs? Everyone knows that no one reads them!
Adam: That’s true. I get emails from readers who say they don’t read our blog all the time.
Foolio: So we finally started calling unions to come organize us. But MCEA, SEIU Local 500 and MCGEO all said they weren’t interested.
Adam: Hmmm, that’s a mystery. I wonder why that is?
Foolio: Well, we’re forming our own union. Moon finally broke down and agreed to let us have a union election. It’s going to be on April 16th.
Adam: But Foolio, that’s the day after the primary. You’ll all be out of work by then.
Foolio: Dammit! I knew something was up with that. And I had to give Moon the last campaign cheeseburger to get him to give in!
Last Pre-Election County D4 Round-Up
By tomorrow night, this race will be over. Here’s the state of play one day out.
On press, coverage has picked up in the last week. The Post has written its last wrap-up article. Maryland Moment discusses a spat over an email sent by MCEA to its members. Dan Reed at Just Up the Pike has interviews up with almost every candidate. He will post an interview with Don Praisner tomorrow morning. Politicker Maryland has posted interviews with Praisner, Pat Ryan and Nancy Navarro’s campaign manager in the last few days.
On the ground, it appears that Navarro has sent out more literature than the other candidates combined. Some District 4 residents have reported receiving more than a half-dozen mailers from her over the last three weeks. Recently, Navarro lit has been showing up with “Endorsed by the Washington Post” stickers. The signs are more balanced among the Democrats; Praisner probably has a narrow lead with Navarro and Ryan close behind. Republican Mark Fennel may have more signs up than all the Democrats combined, with each accompanied by a “Robin Realty” sign. The three largest MoCo unions - MCEA, SEIU Local 500 and UFCW Local 1994 (MCGEO) - have several thousand members inside the district and are no doubt calling and emailing them on Navarro’s behalf. Don Praisner will be drawing on a list of everyone who has contributed to or supported Marilyn Praisner over the years and his campaign will be asking them to show up one last time for the family.
The great unknowable is who will arrive at the polls tomorrow. In the special election to fill the County Council District 5 seat in Prince George’s County, only 8% of the registered Democrats showed up. If turnout is less than that, Don Praisner will have the advantage. All sides concede that the Praisners have a devoted base inside the district who are sure to vote. But if turnout gets into the mid-teens, Navarro will close the gap.
So now the great call-out begins. Over the last several weeks, each of the candidates has been identifying their voters and earning their loyalties. Now they have to make sure that their people show up. That will determine the course of the election, the holder of the council seat and the political direction of Montgomery County for the next two years.
Sunday, April 13, 2008
Reply to the Reply on Property Taxes
Adam posted a thoughtful reply to my post on property taxes. It was so good that I was initially inclined to be convinced by it. On reflection, however, Adam's response may simply reinforce my original conclusions:
Adam's Point: The senior property tax credit takes care of those on fixed incomes.
Except that not everyone on a fixed income is a senior (though my post did mention retirees). Moreover, since the credit existed before the increase, seniors on fixed incomes would still see a sizable increase in property taxes.
Adam's Point: The governor's tax package was regressive according the Maryland Budget and Policy Institute
Except that this analysis only takes into account taxation, not spending. Is the tax package really still even mildly regressive once one takes into account the variety of spending programs targeting poor and middle-income Marylanders? I doubt it. Additionally, property taxes tax property not income so the relationship of the tax to income--the very measure of progressivity--is less straightforward than with the income tax.
Adam's Point: Maryland cannot compete with Virginia on taxes so we need to compete on services. In any case, the County Exec's package raised the median assessed household by 38 cents per day and this rich county can afford it.
Let's leave the "cents per day" appeals to "Save the Children". Until recently, Maryland may have had somewhat higher taxes than Virginia but we were competitive--that is, we were in the ballpark. The state tax increases made us less so. If the millionaires tax had been adopted, we would have increased total state taxes paid by this group by roughly one-third over the past year, making us completely uncompetitive in the eyes of many.
Montgomery County is already the most expensive place in the nation (again, not in MD, not in the DC metro area, but the US of A) to buy and sell property in terms of transfer taxes. One question I'd like to have answered is how much property taxes have already risen due to incredible increases in assessed values that were not compensated for by decreases in the property tax rates. Bear in mind that many people have seen 10% increases in their property taxes for years thanks to these increases in assessed values. And the increased value is nice but one still has to buy someplace else to live after one sells.
And as much as it pains me to admit, there are probably worse places to live than Fairfax. They even have some good public schools across the Potomac. So I wouldn't be quick to assume that we win the services battle quite so handily as we might like to believe as much as prefer Maryland's overall approach.
Still, as Adam says, we may need to pony up to maintain the level of services we like here. As I said before, I think we're going to get the tax increases and the spending cuts in the near future as the Bush recession continues.
More Than You Ever Wanted to Know About Maryland's New Foreclosure Law
Calculated Risk Blog has a long post on one of Maryland's new foreclosure laws. The post examines the law's effect on actual foreclosure timelines and finds that it brings Maryland closer to national averages.
The legislature's foreclosure package is perhaps the most positive achievement from a general session that focused mostly on budget-cutting and the now-deceased-and-unmourned computer tax. But it's worth reading exactly what the new foreclosure legislation will do. If you are a real estate lawyer, you're really going to love the analysis.
Thank you to Joe Davidson for passing this along.
Saturday, April 12, 2008
On Progressive Taxation and Property Taxes
David Lublin raised a number of good points on the property tax increase that deserve a response. Let’s take them in order.
(1) Lots of people have lived in homes for a long time that have appreciated substantially. Particularly for retirees on a fixed income, an increase of over $1000 (very easy to hit in SoMoCo) can be tough even if they live in a high-value home. Even if economic theory says they can borrow against their homes, people really hate that idea for understandable reasons. In any case, this market isn't the best one for realizing the profit.
David rightly points out that some people on fixed income could potentially receive a $1,000 property tax increase under County Executive Ike Leggett’s proposal. Under the formula in my previous post, a home receiving a county property tax increase of $1,000 would have a net assessment of $891,789 (and a much higher gross assessment and market value if the homestead credit applied). But the county provides residential property owners of at least 70 years in age a “senior property tax credit” of 25% of their combined state and county homestead credits. So a senior would be allowed to own an even more valuable home than a non-senior before being subject to a $1,000 property tax increase – perhaps even a home approaching $1 million in market value.
But no one will want to pay that amount of property tax increase. So suppose we relieve the tax increase on seniors with homes approaching a million dollars in market value. If there is to be a property tax increase at all, someone will have to pay more as a result – perhaps seniors occupying homes worth $300,000. But suppose we relieve them too from the extra taxes. Then the burden will fall on young families – a group with substantially less wealth than seniors and significantly less retirement security. Where should the burden fall?
Progressive taxation, a bedrock principle of progressive economic philosophy, holds that tax burdens should advance with income levels. Recent events suggest that principle may be out of fashion in Montgomery County.
(2) Focusing just on the millionaires tax is a mistake. Don't forget all those sales and income taxes raised during the special session. Also don't forget all those fees which were jacked up under Gov. Ehrlich. The voters won't. All things being equal, Americans like having more disposable income. If this is done to maintain services, it will need to be convincingly explained--not necessarily an easy sell though it can be done.
I am not about to forget the tax package from the special session. Because it relied primarily on sales taxes, it was regressive. To quote once again the analysis by the Maryland Budget and Policy Institute: The poorest 1/5 of taxpayers will pay nearly 0.8% more of their income in taxes. The middle 1/5 will pay half that percentage: just over 0.4%. The wealthiest 1/5 will pay between 0.3% and 0.5% of their incomes in increased taxes. This overall regressive distribution occurs because the regressive nature of the sales tax increase overwhelms the progressive features of the income tax changes.
The County Executive’s property tax proposal is progressive and may, in conjunction with the new state millionaire tax, flatten the tax burden. These two progressive tax proposals, which together total $238 million, have attracted immense opposition from a substantial portion of Montgomery’s political leadership. But the $700+ million regressive state sales tax hike passed without a whimper. That is a chilling but instructive development in this county’s political environment.
In any case, I agree that any tax hike, no matter its character, must be explained to voters. The public employee unions are not in the best position to do this since most people will perceive their defense of public services as a defense of their memberships, which is of course their role. It is the responsibility of the politicians to explain why county services are worthy of a tax increase if that is what they believe. That is especially true of politicians who were eager to accept the support and aid of labor during the last election campaign. For the most part, that defense has yet to begin.
(3) The debate has been cast as an either/or debate with no middle ground. Either taxes go up a great deal or services are cut substantially. Like all money issues, this one can be negotiated to all sorts of points inbetween. Both sides know this but are posturing right now is my guess.
I suspect the County Council will have to settle somewhere in the middle. Such is the way of legislative bodies. But the decision to surpass the charter limit truly is an either/or decision. If the council rejects the County Executive’s tax proposal, they will have to cut the budget by a further $128 million.
There is another option. As Delegate Al Carr pointed out in a comment on an earlier post, the County Council is considering increasing taxes on electricity and natural gas. This is a far more regressive option than the County Executive’s property tax hike and it does not need a super-majority to pass. The shade of Annapolis may be descending on Rockville.
(4) The recession may just be starting with next year's budget looking even more grim. As at the state level, the chances of getting both budget cuts and tax increases over the course of several years are starting to look pretty good.
A recession is a distinct possibility as we recently reported. People on the lowest rung of the income ladder, not those earning one million dollars a year, are on the leading edge of the downturn. The residents at the bottom will be sure to bear the brunt of any spending cuts. They should not also bear the brunt of the tax increases. Under the County Executive’s property tax proposal, many working-class people are indeed spared further tax hikes after their setbacks in the last special session. They will not be spared the lash of a home fuel tax hike.
I completely agree with David's judgement that the tax and budgetary choices are going to get tougher at both the state and county levels, not easier, in coming years.
None of this has any bearing on some key questions other have raised: (1) does labor deserve the pay increases, (2) does MoCo need to pay them to maintain quality services, and (3) can MoCo afford the pay increases. The first is a morality, not a market, question. The second is largely market driven. The third is driven by the tax base, economic needs, and taxpayer willingness to pay. I haven't thought much about any of these questions so I won't weigh in just yet.
On point (1):
Speaking as someone who has been involved in several union organizing campaigns, the notion of what a worker “deserves” is a very explosive question. Many public employees are starting to believe that their leaders think they are paid too much. This argument has been stated, or at least hinted at, by more than one of the Democratic candidates in the District 4 County Council race. Economic arguments can be conducted rationally but the question of what a worker “deserves” is a question for the heart. Right now, hearts are pounding inside the public sector workforce.
On point (2):
In a recent survey of county employee compensation, we learned that Montgomery faces potential problems competing for labor in the region. Fair-to-middling (at best) pay levels, a lack of defined benefit pensions and high housing costs may deter top talent from coming here in the future. The existing workforce, originally recruited in times when the county’s housing stock was more affordable, is still known for its excellence. But the entry level talent will gradually erode unless the county keeps up with its neighbors.
On point (3):
In 2006, Montgomery County reported the 8th-highest median household income of all 3,077 counties in the United States. The County Executive’s proposal taxes the median assessed household an extra 38 cents per day. Readers can form their own opinions on whether we can afford that.
But there is a much larger argument here: where does the county’s economic competitiveness come from? Montgomery is perceived to be one of the higher-cost jurisdictions for residents and businesses in the region. So why are people willing to pay those costs? One reason is the excellent reputation of the schools and public services. As a former resident of the District of Columbia and a rural area in upstate New York, I have a meaningful standard of comparison for the county’s service quality.
But Montgomery’s true competitors are jurisdictions like Fairfax – counties that also have good schools and abundant resources. We are never going to compete with Virginia by matching them on tax rates. Instead, we will have to equal or surpass them in our quality of education, planning, parks, police and other public services. Those services comprise a valuable, productive asset that preserves our standard of living, maintains our property values and protects our economic edge. The money we spend on the public sector is an investment, not money thrown down a black hole. Any investment has to be evaluated not merely on its cost but also on the return it generates for its holders. Why are we hearing so much about the cost but so little about the return?
Friday, April 11, 2008
The Joy of Property Tax Increases
This started out as a comment on Adam's post but expanded into a separate post. Adam, Thanks for the useful post. It's nice that you're willing and able to pay more property taxes. Some thoughts on why others may object:
(1) Lots of people have lived in homes for a long time that have appreciated substantially. Particularly for retirees on a fixed income, an increase of over $1000 (very easy to hit in SoMoCo) can be tough even if they live in a high-value home. Even if economic theory says they can borrow against their homes, people really hate that idea for understandable reasons. In any case, this market isn't the best one for realizing the profit.
(2) Focusing just on the millionaires tax is a mistake. Don't forget all those sales and income taxes raised during the special session. Also don't forget all those fees which were jacked up under Gov. Ehrlich. The voters won't. All things being equal, Americans like having more disposable income. If this is done to maintain services, it will need to be convincingly explained--not necessarily an easy sell though it can be done.
(3) The debate has been cast as an either/or debate with no middle ground. Either taxes go up a great deal or services are cut substantially. Like all money issues, this one can be negotiated to all sorts of points inbetween. Both sides know this but are posturing right now is my guess.
(4) The recession may just be starting with next year's budget looking even more grim. As at the state level, the chances of getting both budget cuts and tax increases over the course of several years are starting to look pretty good.
None of this has any bearing on some key questions other have raised: (1) does labor deserve the pay increases, (2) does MoCo need to pay them to maintain quality services, and (3) can MoCo afford the pay increases. The first is a morality, not a market, question. The second is largely market driven. The third is driven by the tax base, economic needs, and taxpayer willingness to pay. I haven't thought much about any of these questions so I won't weigh in just yet.
How to Calculate Your Property Tax Increase (Updated)
Much is being made of County Executive Ike Leggett’s proposal for a property tax increase. Here’s how to calculate what it means for you.
Leggett’s property tax proposal has two components. First, he is increasing the property tax rate. Second, he is also increasing the property tax credit that homeowners receive for their primary residences from $613 to $1,014. The combination of the rate increase and the tax credit increase skews the resulting tax hike towards homes that are worth more money.
So here’s how to determine how much more taxes you would pay under his proposal. First, look up the gross assessed value of your property on the county’s property tax account website. (This will be the assessment listed on the county property tax line at the top of the bill.) Second, if your home is your personal residence and you have lived in it for more than a year, you will likely have a county homestead credit. This credit is designed to prevent your net, or taxable assessment from increasing by more than 10% per year. Find your county homestead credit, which will appear in the middle of your bill if you have one, and subtract it from your gross assessment. This is your net assessment. Third, multiply the net assessment by 10% to estimate its value as of 7/1/08. (This assumes that your net assessment is still “catching up” to where it would be without the restraint of the homestead credit. The homestead credit, after all, restrains but does not eliminate taxable assessment increases.) Fourth, multiply your 2008 net assessment by 0.008208 and then subtract $613. This would be your county property tax levy without Leggett’s proposal. (It does not include state taxes, solid waste or water charges.) Fifth, repeat the above exercise by multiplying your 2008 net assessed value by 0.009779 and subtracting $1,014. This would be your county property tax levy under Leggett’s proposal. The difference is your county property tax increase if Leggett’s proposal was passed by the County Council.
The County Executive states that the median assessment for a Montgomery County home is currently $343,200. Under the math above, that home’s county property tax would rise from $2,204 to $2,342, or 6.3%. That's an increase of 38 cents per day. A home assessed at $220,000 would see a tax bill cut from $1,193 to $1,137, or 4.7%. A million-dollar house would see a tax bill increase from $7,595 to $8,765, or 15.4%. (That’s a good size hit on top of the recently-passed state millionaire tax.) The break-even point is $255,331 in net assessed value (after any homestead credit). Homes worth more than this would see a tax hike while homes worth less would see a tax cut.
I performed this math on my own house in Silver Spring. If I had no homestead credit, my home’s assessed value on 7/1/08 would be $463,953. If Leggett’s proposal were passed, my county property tax bill would rise from $3,195 to $3,523 – an increase of $328. That works out to 90 cents per day. But with a homestead credit, my home’s assessed value on 7/1/08 will be $328,544. So my county property tax bill would rise from $2,084 to $2,199 – an increase of $115. Now that’s 32 cents per day.
Try the above formula for your own home. We all have different economic circumstances. Some of you will conclude that your potential property tax increase is unaffordable for your personal budget. If that’s your opinion, you should certainly contact the County Council. But I am ready to pay 32 cents per day - or even 90 cents per day - if it means maintaining quality public services in the county.
Update: In a work session of the County Council's Management and Fiscal Policy Committee yesterday, Chairwoman Duchy Trachtenberg and Council Member Phil Andrews voted against the property tax increase. Because of the District 4 vacancy, two opposing votes are sufficient to kill the property tax hike. If both council members stick to their votes, the County Council will have to locate $128 million in cuts to replace the tax.
Update 2:
In a comment on this post, District 18 Delegate Al Carr points out that the County Council is considering increasing fuel and energy taxes. In the staff memo he linked, Senior Legislative Attorney Mike Faden writes, "A resolution to increase fuel/energy tax rates, sponsored by the Council President, is scheduled to be introduced on April 15, 2008. This resolution would increase the rates currently in effect to produce $11.1 million more revenue. This resolution is introduced as a placeholder to allow the Council, if necessary, to adjust the rates of the fuel/energy tax."
This is big news and we are grateful to Delegate Carr for supplying it. Few household costs have been increasing more noticeably than electricity and natural gas. And a straight tax hike on fuel will ensnare many households at the bottom end of the income distribution that would escape the County Executive's property tax proposal. There may be at least as much resistance to increasing fuel taxes as there is to increasing property taxes. And if the property tax hike fails, then fuel taxes may be increased more as a result. Fuel tax increases are not subject to the charter limit and may be passed by a straight majority vote of the County Council. This is a very meaningful development and I hope the Gazette and Washington Post reporters who read this blog will follow up.
Thanks to Louis Wilen and Al Carr for correcting my earlier failure to account for the homestead credit. When readers correct and improve my content, I will credit them publicly.
Washington Post Endorses Navarro
Will this make a difference in a tight, fiercely-contested race that will probably have low turnout? Read the language of the endorsement below.
A Critical Primary in a Changing County
Friday, April 11, 2008; Page A20
THE DEATH this winter of Marilyn J. Praisner, a wellspring of sound judgment, fiscal prudence and deep knowledge over her 17 years on the Montgomery County Council, left an enormous gap. It also left the council divided on critical questions involving the management and budget of a dynamic jurisdiction of almost a million people.
That sets the context for an unusually important and hard-fought Democratic primary on Tuesday to fill Mrs. Praisner's empty seat in District 4, an exceptionally diverse area that includes Aspen Hill, the Route 29 corridor from White Oak to Burtonsville and a grab bag of neighborhoods between Wheaton and Olney. Since the district's 200,000-odd constituents are overwhelmingly Democratic, the victor in that party's primary is almost assured of winning the general election May 13. We believe that the best candidate is Nancy Navarro.
Ms. Navarro, current president of the county's Board of Education, is the only public officeholder among the candidates in the primary. That alone doesn't make her the best choice, but it does inform an outlook that is moderate, sensible and sensitive to an array of competing constituencies. In a slow-growing county that has nonetheless been gripped by venomous battles over growth, she possesses a vision broad enough to understand that the challenges facing the county may not replicate the debates of the past.
The Post opposed Ms. Navarro when she ran for the school board in 2006, thinking her too enamored of confrontational politics. We were mistaken. On the board, where she has twice been elected president, she has played a constructive role in guiding one of the nation's largest and best school systems, impressing colleagues with the care of her preparation and her passion for excellence. On the council, she would face a steep learning curve to master county government issues. But she has already shown a capacity for detail-oriented leadership that would serve her well.
Four members of the current council, as well as County Executive Isiah Leggett, have endorsed one of Ms. Navarro's primary opponents, Don Praisner, widower of the late council member. Their choice partly reflects a concern that Ms. Navarro, who has received much of her financial backing in this race from organized labor, would be in the unions' pocket. It's a legitimate worry, particularly during the county's current budgetary squeeze, when public employees unions, among others, will have to bear some of the burden. Ms. Navarro makes no bones about her alliance with labor, but we hope she will be sufficiently independent-minded to see that annual pay increases of 8 percent are simply not sustainable in the current budgetary environment.
Thursday, April 10, 2008
Kanstoroom Reports Finances to MPW
County Council District 4 Candidate Steve Kanstoroom is the only Democrat in the race for whom the State Board of Elections is not displaying a finance report. After I mentioned this fact to him last night, he explained that he sent in his report on time but the board was not returning his calls asking that it be posted. Kanstoroom promptly emailed me his finance report and the details will surely interest our readers.
As of 3/30/08, Kanstoroom’s campaign recorded $24,520 in total receipts. All but $520 are loans from Kanstoroom himself. The campaign spent $20,553.86, mostly on printing and campaign materials ($16,462.57). Its cash balance was $3,966.14.
While Kanstoroom’s ending balance was low, his receipts surpassed Don Praisner ($22,030) and Pat Ryan ($10,825) but fell short of Nancy Navarro ($34,446). His extensive loans and former ownership of an IT business suggest that Kanstoroom is the one candidate in the race who can self-finance his campaign. In the handful of days left, volunteers are more important than money, but cash can still buy robocalls and print ads.
I saw Kanstoroom and several other candidates at a late-night forum sponsored by the Northwood-Four Corners Civic Association, which represents the neighborhood just north of the hellacious University Boulevard-US 29 intersection. The forum followed another debate in Burtonsville that ran late, and the bleary-eyed candidates staggered into the North Four Corners Recreation Center after 9:30 PM. The neighborhood is locked in a bitter battle with the County Council and the Parks Department over a plan to construct a soccer field in their current tree-filled park. The park is THE ISSUE in this part of District 4, much like the Intersection of Death is the big issue in my area.
Precinct 13-11, which conforms to the neighborhood boundaries, had 2,668 registered Democrats in the last primary. It had the 7th-highest voter turnout rate in the 2008 Democratic primary and the 5th-highest voter turnout rate in the 2006 Democratic primary among County District 4’s 45 precincts. However, Kanstoroom and Nancy Navarro were the only Democrats to show up for the civic association’s forum. Kanstoroom, a legendary foe of Park and Planning, cleaned up with this group. But the absence of Praisner and Ryan was noticed.
Back in 2006, my civic association jam-packed an apocalyptic public meeting at Holy Cross Hospital covering various issues connected to the reviled Georgia Avenue-Forest Glen intersection. We recorded the attendance by politicians on our website. We never forgot which politicians came and which ones didn’t. I imagine that the residents of Northwood-Four Corners will react the same way.
One more quick tidbit. Don Praisner has begun reporting contributions received since his last campaign filing on his website. I don’t understand why the individual contributions are reported as ranges (for example, the County Executive gave him “$1,000+”). But this is still more information than his rivals are disclosing and he deserves credit for that.
Disclosure: I am the Assistant to the General President of the United Brotherhood of Carpenters. Our local affiliate, the Mid-Atlantic Regional Council of Carpenters, endorsed Nancy Navarro.
More on King Jerry
You did not think that one blog posting would be enough on this major gaffe by our newest political kingmaker. Here's Council Member George Leventhal's take on it as well as the President of the MoCo Civic Federation, Wayne Goldstein.
This gets to the heart of the issue we have been talking about here at Maryland Politics Watch (MPW). That the unions had private meetings with the School Board President (and known candidate) were they all agreed to follow the lead of King Jerry, an appointed official. These was done because the school unions (MCEA and SEIU) wanted for pay increases totaling a $100 million per year during a recession. King Jerry did it because he is not content to run the 50% of the MoCo budget. He wants it all. I would say who died and made him King; but he appointed himself as King and we better enjoy it.
Ask yourself is that how you want to have things run in MoCo?
All of you who were so quick to comment on the School Board and the Budget posting I did yesterday, please tell us your take on this? It gets the heart of the matter.
But all of you were silent on the King Jerry posting. What gives? Where's the love?
These two issues are related.
Ok who out there defends these meetings? Foolio? Where are you?
On Political Pulse
Congressman Chris Van Hollen from Maryland's 8th District will be on the 'Political Pulse' TV Show on Thursday, April 10th at 9:00 p.m.; and Tuesday, April 15th at 9:30 p.m. Topics that will be discussed include:
-the Iraq War;
-whether the Democrats can increase their majority in the House of Representatives (Congressman Van Hollen is the Chair of the Democratic Congressional Campaign Committee); and
-the Presidential Campaign.
'Political Pulse' is on Channel 16 TV in Montgomery County.
