Category Archives: taxes

County Screw-Up Led to Tax Hike Proposal

By Adam Pagnucco.

Buried in the fine print of County Executive Marc Elrich’s recommended FY21 operating budget is a shocking revelation: the executive claims that a mistake made by county revenue estimators two years ago has caused tens of millions of dollars in losses for the county.  One reason why the Elrich administration is proposing a tax hike now is to recover that money.

To understand what happened, we have to understand how the county’s charter limit on property taxes functions.  Here is the exact text of the charter limit.

Unless approved by an affirmative vote of all current Councilmembers, the Council shall not levy an ad valorem tax on real property to finance the budgets that will produce total revenue that exceeds the total revenue produced by the tax on real property in the preceding fiscal year plus a percentage of the previous year’s real property tax revenues that equals any increase in the Consumer Price Index as computed under this section. This limit does not apply to revenue from: (1) newly constructed property, (2) newly rezoned property, (3) property that, because of a change in state law, is assessed differently than it was assessed in the previous tax year, (4) property that has undergone a change in use, and (5) any development district tax used to fund capital improvement projects.

In plain English, what this means is that the county’s real property tax receipts (with a few exceptions) may not rise at an annual rate exceeding inflation unless the entire council votes to exceed it.

Calculating the charter limit involves three basic steps.  First, one must estimate the value of the assessable base subject to the charter limit.  Second, one must calculate the value of the many property tax credits offered by the county.  Third, one must calculate the levels of real property tax rates that, when applied to the assessable base and taking account of the credits, produce an increase in receipts equal to the rate of inflation.

Hence, estimating the size of the assessable base is critical.  If it is underestimated, property tax rates will be set too high and the charter limit will be violated.  If it is overestimated, property tax rates will be set too low and the county will not collect as much revenue as it could at the charter limit.  These are extremely technical considerations but this affects tens of millions of dollars (at least) for the county budget.

In his recommended budget, the county executive makes this statement:

I am proposing this supplemental tax rate this year to partially offset an unexpected underperformance of the property tax for the last two years. In preparing the FY19 County budget, the taxable property base of the County was overvalued. As a result, the property tax rate needed to generate revenues at the Charter limit for the past two years was set too low. This resulted in lost revenues of $80 million, now permanently embedded in our revenue projections.

The amount of revenue lost by this mistake was $35 million in FY19 and $45 million in FY20.  Because of compounding, the lost revenue will rise each year unless it is recovered.

It’s important to note that Elrich was not yet the county executive when the FY19 charter limit was estimated.  That was done by the finance department in former County Executive Ike Leggett’s last year.

Must the losses be stanched?  The county usually allows property tax receipts to rise up to the charter limit each year, but there is nothing in county law requiring that.  For example, in FY13, Leggett recommended level-funding of property tax receipts, which actually kept them below the charter limit.  The amount of forgone revenue was estimated at $26 million that year, which would have risen in subsequent years.  However, this was not the result of an estimation mistake.  The county had doubled the energy tax two years before and had not sunset it as was promised.  Forgoing a bit of property taxes was something of a consolation.

This issue must be frustrating for all concerned.  County leaders have a choice.  They can live with the mistake and move on.  Or they can tell voters, “We screwed up and now we need to raise your taxes.”

If option number two is selected, how do you think folks will respond to that?

Dear reader, if you are someone who is considering running for office someday, remember this story.  Something terrible could happen to you when you run.

You could win!

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Elrich Then and Elrich Now

By Adam Pagnucco.

The big news coming out of County Executive Marc Elrich’s recommended Fiscal Year 2021 budget is that he is proposing a tax hike.  As you might imagine, I will have something to say about the specifics of that tax proposal in future days.  But first, it’s worth remembering what Elrich said about taxes when he was running for executive two years ago.  Over and over, he made statements ranging from saying that he did not want to raise taxes all the way to flatly refusing to raise them.  Consider the following:

1.  In July 2018, Elrich told WAMU that he “doesn’t want to raise taxes, but would like to see developers pay a greater share of infrastructure costs in the county.”

2.  In a candidate forum in October 2018, Elrich said, “I’m not raising taxes and I’m not raising fees.”  Check out Elrich’s remarks at 1:25 of this video.

3.  In May 2018, Bethesda Beat reporter Lou Peck asked Elrich this question:

As county executive, could you foresee yourself proposing a property tax increase above the charter limit of the rate of inflation, requiring another unanimous council vote?

Elrich replied:

I would seriously hope not. I feel that before you go talk about a tax increase, I would have to demonstrate to people that I’ve done everything I can do to lean out the county, to make sure we’re as efficient as possible, that I’ve taken people and been able to repurpose them, rather than just going to taxes first. I think the days of going to taxes first are over.

4.  In November 2018, Elrich said the following to Source of the Spring:

“A lot of people ask me about taxes,” Elrich said. “One of the issues in the campaign, people said, ‘Oh, Marc is going to bring in all these massive numbers of social programs and raise taxes on everybody.’ And actually that’s not what we’re doing. We know that the budget is going to be constrained.

“We’re pretty committed to staying inside the box and trying to run the government more efficiently,” he continued. “I’ve been telling people I’ve got $5.5 billion or more in revenue, and if I’m going to look for doing new things and being creative, I’m going to look at the revenue I have [and] figure out how to use it better. I think we can do a better job.”

5.  Immediately after he was elected, WAMU asked Elrich about taxes.

Despite being Maryland’s largest county with more than a million people, Montgomery County tax revenues aren’t growing fast enough to keep up with rising costs, Elrich said.

But, he said, a tax increase is out of the question.

“If you don’t handle the money you have better, you’re gonna have a hard time doing what you’re doing today, let alone doing things that you need to [in the future],” Elrich said. “But I think it’s actually a good thing to have this decision that there’s not going to be additional taxes because it means you actually have to think about what you’re doing.”

As a candidate, Elrich proposed an alternative to tax hikes: restructuring the government to increase efficiency and save money.  In a November 2018 op-ed in the Washington Post, Elrich wrote:

Far from saddling taxpayers with higher bills, I will streamline county government. Unions and their members, our county’s workforce, know and trust me. That is why we announced our plan to restructure county government together. Our county is facing difficult financial times; without thoughtful changes, employees will face across-the-board cuts.

Elrich elaborated on his restructuring plans in his 2018 questionnaire response to the Greater Silver Spring Chamber of Commerce.

I have explained how I would begin to rethink government in my First 90 Days Financial To-Do List, which you can find on my website. In this list, I lay out how I would initiate a long-term financial plan, increase the net profit contribution from the Department of Liquor Control, begin a structural review of county departments in partnership with the county workforce, implement a labor-management partnership called gainsharing (in which both parties agree on targets for improving performance and reducing cost and everyone receives a share of the savings generated), leverage a business process improvement system called Lean, assess the appropriateness of county reserve levels, improve data practices, review non-competitive county contracts, establish an innovation fund, increase government accountability, and develop budgets that prioritize spending and ensure that the county meets financial commitments in a sustainable way.

After Elrich’s election, the Sentinel interviewed him and reported, “Elrich said he plans to restructure the County government to make it run more efficiently, saying that doing so will help pay for the new programs he proposes without needing to raise taxes.”

So according to candidate Elrich, there would be no need for tax hikes because he would work with the unions to restructure government and save money.  What is his actual governing record through his first two budgets?

1.  Elrich’s recommended FY20 operating budget contained an increase of 82 full-time equivalent (FTE) positions in county government.  This does not include position increases in other agencies like MCPS, the college or park and planning.  The personnel cost increase recommended for county government was $37 million.  For the three county government unions, Elrich negotiated contracts containing raises of up to 9.4% for some employees.

2.  Elrich’s recommended FY21 operating budget contains an increase of 189 FTEs in county government with a personnel cost increase of $21 million.  Again, this omits increases in MCPS, the college and park and planning.  Elrich’s negotiated contracts with the three county government unions contain raises of up to 8% for some employees plus lump sum bonuses of $1,000 and longevity increases for some employee categories.

3.  The county council trimmed Elrich’s contract with MCGEO last year but his contracts and increases for managers and non-union employees this year will cost a combined $27.4 million in FY21 and $37.7 million each year thereafter.

And so, if there has been any restructuring at all, it has not saved any money or created any obvious new efficiencies.  Instead of streamlining government – as he said he would do – Elrich just wants a tax hike.

Would anyone like to rerun the 2018 county executive election right about now?

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Is This the Worst Communications Debacle in County History?

By Adam Pagnucco.

As MoCo residents are just now starting to find out, County Executive Marc Elrich has recommended a property tax hike as part of his Fiscal Year 2021 budget.  And how did they find this out?  The first mention of it came from a county council statement released at 1:05 PM today opposing the tax hike.  As of this writing, the public knows little about the budget other than the fact that it contains a tax increase.

With the coronavirus spreading and the local economy on its knees, how do you think folks are going to feel about that?

Let’s set aside for the moment any analysis of the merits of the tax hike.  (That will come.)  Instead, let’s consider how a competent administration would try to roll this out.  In the past, administrations held press events with the council on the mornings of their recommended budget releases.  Right after those events, press releases went out containing loooooooong lists of all the goodies in the budgets.  More money for schools?  Check.  More social workers?  Check.  Increased numbers of police officers?  Check.  Big Macs for every girl and boy (or quinoa for the healthy eaters)?  Check.  Doug Duncan, Ike Leggett – it didn’t matter who it was, they all put on a Santa cap and handed out cookies from the chimney, at least when there wasn’t a recession.

But this budget contains a tax hike.  No problem, plenty of budgets in the past contained tax hikes.  You sell those tax hikes based on what they buy and other factors making them necessary.  Leggett, for example, sold his FY11 doubling of the energy tax hike as being the only way that he could preserve the bond rating.  In FY17, the county council sold its 8.7% property tax increase as an “Education First” budget.  It didn’t matter so much whether they were right.  The point is that they had an argument to make.

And now to today.  The administration was always going to face hurdles in selling a tax hike.  After all, the council just two weeks ago said that they didn’t want more taxing authority from the state because they weren’t interested in raising taxes.  So what do you do?  First, you line up advocates who benefit from the tax hike and forge them into an army.  That shouldn’t be so hard since the teachers, the service employees, MCGEO, the non-profits, the enviros and lots of other stakeholders are getting a piece of the new money either directly or indirectly.  Invite them to your presser.  If the coronavirus prevents that, get them in writing.  Have them make videos.  Include supportive quotes from them in your own communications.  Have them all up team up on an online petition.  (MCGEO already has one that they promoted through a mailer.)  Have them send out supportive blast emails and social media posts the very morning on which the budget is released.  And so on.  The point here is that this isn’t just the executive’s budget.  It belongs to all of these other groups too.  This makes the council members understand that they would pay a price by voting no.

The budget isn’t drafted overnight; it takes weeks to prepare.  That means the executive branch had time to get ready.  They should have lined everything up and beat the council (and everyone else) to the punch.  Yeah, the critics are going to cry about it, but let them go last so YOU can define this budget first.  Instead, the administration did… apparently nothing.  There was no morning press event, even a livestreamed one, and there were no preemptive communications – at least none that I saw.  The very first communication released from the county came from eight council members who opposed the tax increase.  As of this writing, other than a brief statement from Elrich defending the tax hike, there is STILL no comprehensive communication from the county listing all the benefits of the budget.  Is anyone other than Elrich out there defending it?

What a disaster!

So who should be upset about this?  It shouldn’t be the tax opponents.  The administration’s incompetence allowed them to define the budget around the tax increase.  Robin Ficker has to be bellowing in joy right now.

The folks who should be really upset are the ones who might benefit from the tax hike.  A proper communications effort should have been designed to get the council to hold off on expressing opinions about the increase, thereby buying time for the advocates to lobby them and start shifting some votes around.  Instead, eight council members said no immediately in the most public way possible.  (Council Member Nancy Navarro, who has chaired the council’s tax-writing committee for ten years, followed up with a hell no.)  It would be very hard for the council to move off that now.  As for the advocates, instead of waging a common battle for a bigger pie, they might have to fight each other for scraps as the council figures out how to reduce the executive’s increase in county expenditures.

And so, because of an epic communications debacle, a tough sell has become damn near impossible.

Congrats to the administration.  Or something.

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Elrich Defends His Tax Hike

By Adam Pagnucco.

Forty-five minutes after eight members of the county council released a statement opposing the property tax hike contained in County Executive Marc Elrich’s recommended budget, the executive has released a statement defending it. We reprint it below.

Montgomery County Executive Marc Elrich’s Statement on Release of his Recommended Fiscal Year 2021 Operating Budget

As required by the County Charter, I submitted my annual budget to the County Council earlier today. My staff and I have been working on this budget for more than six months. During that time, we received budget requests from the community, the school system, our departments and Councilmembers that help to shape this budget proposal. The three-cent increase is a special tax that is specifically designed for education and would help to fund the budget request from Montgomery County Public Schools.

At the time that we were developing this budget, COVID-19 was not on the horizon and now, during these unique and difficult times, we have to factor in its impact. I stand by the need for us to increase our investment in education, but I understand the unique situation that we are currently in. We have all known from the beginning that funding the school system’s request could not be funded within anticipated revenues and, as we have been working at the State level to increase school funding through the Build Act and Kirwan, I believe that we should make the additional investment in schools that they need today, even if it required a special tax increase dedicated to the schools.

I combined this proposed three-cent special schools tax increase with a $108 increase in the County’s property tax credit so that a homeowner with a $500,000 home would see about a $42 annual tax increase—the three cents would raise the taxes by $150, but combined with the County property tax, the net increase is $42. A one million dollar home would have a net $192 per year increase. 

As in every budget cycle, I have informed the Council that I will work with it to find ways to deal with the budget.

Dealing with today’s emergency situation and having a long overdue community conversation about the future we want to build for our County will be a challenge in coming weeks.  The challenges we face in areas such as education, economic development and transportation will still be there long after this crisis is over and we can’t take our eyes off the future no matter how hard those decisions will be. I know that in today’s context it is hard to determine what the future looks like, but we will balance addressing our present situation with planning for the future of this County. And we will do it together.

To learn more about the recommended operating budget, go to https://www.montgomerycountymd.gov/operatingbudget

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Elrich Recommends Tax Hike, Council Says No

By Adam Pagnucco.

County Executive Marc Elrich has proposed a 3.18 cent property tax hike in his recommended Fiscal Year 2021 operating budget, which was released today. The budget does not state the exact size of the tax hike, but because state data indicates that the county collects almost $20 million per penny in real property taxes, the tax hike is probably in the vicinity of $60 million.

Soon after receiving Elrich’s budget, the entire county council except for Council Member Tom Hucker released a statement opposing the tax hike. Their statement is reprinted below.

Statement by Montgomery County Council President Katz and Councilmembers Albornoz, Friedson, Glass, Jawando, Navarro, Rice and Riemer on the County Executive’s Fiscal Year 2021 $5.9 Billion Operating Budget Recommendation

ROCKVILLE, Md., March 16, 2020—Montgomery County Council President Sidney Katz and Councilmembers Gabe Albornoz, Andrew Friedson, Evan Glass, Will Jawando, Nancy Navarro, Craig Rice and Hans Riemer, made the following statement on County Executive Marc Elrich’s proposed 3.18 cent property tax increase in the fiscal year 2021 Recommended Operating Budget:

“Our focus in the midst of an unprecedented health emergency must be on bringing together businesses and residents, nonprofits and government to address the immediate crisis we face. We also must provide as much certainty and support as we can for county residents who understandably fear what the economic realities of this global pandemic will have on their jobs, retirement savings, small businesses and families.

This is a time for cautious decision-making, not property tax increases. We look forward to working with the County Executive to address the initiatives in his budget recommendations.”

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Who Are These People?

By Adam Pagnucco.

They look like the folks who were elected in 2018.  Their names match the names listed on the county website.  There is no evidence of alien abductions or replacement by clones.  And yet, they don’t sound like members of the Montgomery County Council.

Who are these people?

In a scene seemingly lifted from a strange dream, a majority of the county council convened yesterday to oppose two state bills giving them additional taxing authority.  One bill would let them raise the maximum income tax rate and establish brackets instead of the current flat structure.  Another bill would let them raise property taxes on different categories of property, including homes with more than 5,000 square feet.  Council staff recommended that the council support the legislation.

Six council members said no.

Who are these people?

The six individuals (assuming they are not cloned replacements) who said no are Council Members Gabe Albornoz, Sidney Katz, Nancy Navarro, Craig Rice, Hans Riemer and Andrew “Real Deal” Friedson.  The vote of Friedson, who has emerged as the council’s leading voice of fiscal sanity, is no surprise.  But Katz, Navarro, Rice and Riemer all voted for the 8.7% property tax increase of four years ago, an event that contributed to the passage of term limits.  The increase was supposed to close MCPS’s achievement gap, but a recent Office of Legislative Oversight report showed little if any progress on that issue despite the large tax hike.

Some members of past councils might have jumped up and down to be awarded more taxing authority by the state.  The constraints on both property and income taxes are real.  State law requires that counties charge one tax rate for almost all real property (although offsetting credits can be awarded and multiple taxes might be levied).  State law also requires that counties may charge a maximum income tax rate of 3.2% using a flat structure with no brackets.  The state bills advocated by Council Member Will Jawando and Delegate Julie Palakovich Carr do not mandate county tax hikes, but they do grant enabling authority to the council to devise them.  Certain options, like establishing a new top income tax bracket, could raise millions for county government.  And yet six council members said no.

Who are these people?

Let’s let them tell us.  Here are a few quotes from the council meeting at which the state bills were considered.

Friedson: “We need to demonstrate as a county, as a county council, as political leadership at this really important time for where we move forward that we are focused relentlessly on growing the tax base and not only focused on raising the tax rates.”

Albornoz: “We all read the report recently that our colleagues in Prince George’s County have surpassed us with regards to economic development here locally and so we are now not just competing with our colleagues and friends across the river and the District of Columbia, but we’re competing with local jurisdictions right here within the State of Maryland to actively and aggressively expand economic development opportunities here within the county.”

Riemer: “My concern at the moment is there is a really significant tax proposal that is already on the table, and that is to tax services.  And that is going to have a huge impact on our county’s economy.  I feel like we ought to not confuse the conversation about that issue with additional proposals.  I think we ought to let the state leadership kind of drive the train… We ought to just hang back at this time and let the state process do its work and not complicate that matter with trying to drive funding proposals from the county level that are really reaching to the same goal.”

Rice: “I don’t think that we should be continuously going to the well locally and asking our residents individually to be paying more when we realize that as a state we know we can do it the right way.”

Riemer: “I don’t quite understand the timing of this idea and really why we’re talking about it.”

Friedson: “It is the wrong message to be sending at the worst time.”

Left unsaid but no doubt on the minds of the council was the menacing specter of political heckler Robin Ficker, who was on that very day delivering 16,000 signatures on behalf of his latest charter amendment to limit tax hikes.  Past tax hikes helped Ficker pass two charter amendments in 2008 and 2016, but his newest one, which would prohibit growth in property tax collections from exceeding the rate of inflation, is the most draconian of them all.  Ficker cites a long history of county tax hikes in justifying his quest to bring them to an end.  They were, of course, passed by prior county councils.  This time, six council members declined to throw more red meat to Ficker.

Who are these people?

Could it be that they recall the harsh lesson of four years ago and are now more careful in considering the issue of taxes?

If not, let’s call the aliens and ask what they did with our council members!

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Picture This

By Adam Pagnucco.

Picture this, dear readers: two events, both scheduled for today.

Picture 1: Robin Ficker, author of numerous charter amendments on taxes and term limits, has announced his intention to deliver 16,000 signatures in support of his latest anti-tax amendment to the county executive’s office.  Ficker needs at least 10,000 signatures to place his amendment on the ballot.  Let’s remember that no one in the history of Montgomery County has more experience in gathering signatures than Robin Ficker.

Picture 2: Just a short walk away in the county council building and almost simultaneously, County Council Member Will Jawando and Delegate Julie Palakovich Carr have announced a press conference in support of two state bills that would enable the county to levy tax hikes.  One bill would allow counties to set different property tax rates for commercial properties, industrial properties and residential properties with more than 5,000 square feet.  The other bill would allow counties to increase their maximum income tax rates from 3.2% to 3.5% and establish income tax brackets.

Picture 1 is to be expected; we have seen Ficker’s grandiose signature deliveries before.  Picture 2 is problematic for two reasons.

First, Jawando and Palakovich Carr justify their bills partly “in order to pay for the increased local share of education funding required under the Kirwan Commission.”  Counties around the state are concerned about how they might pay for any additional local obligations to schools stemming from the Kirwan Commission’s recommendations.  Those obligations are laid out in Appendix F of the Kirwan Commission bill’s fiscal note, which is reprinted below.

A careful look at the phase-in schedule shows that Montgomery County is not currently required to contribute any more to its public schools than it already has been doing until Fiscal Year 2027, which is MORE THAN SIX YEARS AWAY.  Why are these elected officials pushing tax hikes now?  One struggles to see how this is linked in any way to Kirwan.

Furthermore, even in years in which no tax hikes are levied, the Montgomery County government gets an average of more than $100 million in new revenue a year, and that excludes intergovernmental aid.  If the phase-in schedule above were altered to allow a more gradual phase-in for the county’s local obligations – say, $25-30 million a year instead of cramming it all into four years – the county might not have to raise taxes at all.  The county might have to restrain spending in other areas to allocate greater shares of new revenue to MCPS, but that would make up for the fact that local money for MCPS has been one of the slowest growing parts of the county budget for a decade.

Second, this plays directly into Ficker’s hands.  There was a time not so long ago when Ficker’s name was so radioactive due to his NBA heckling and his rampant placement of illegal campaign signs that his very association with a ballot question was enough to kill it.  Those days are gone.  In 2008, the county raised property taxes by 13%.  Voters responded months later by passing Ficker’s charter amendment requiring that nine county council members must vote in favor of any property tax increase breaking the county’s charter limit.  In 2016, the county raised property taxes by 8.7%.  Voters responded by passing Ficker’s charter amendment on term limits by a landslide.  Now, counting the bills supported by Jawando and Palakovich Carr as well as a separate bill by Council Member Evan Glass calling for new taxes on teardowns, there are three different bills pending that allow county tax increases just as Ficker is pushing for a new anti-tax charter amendment.

Ficker must be the happiest man in MoCo.

Ficker does not win passage of his charter amendments because voters love him.  He has run in almost every four-year election cycle since the 1970s, with just one victory (a 1978 Delegate race) that was reversed after a single term.  He has not come close to being elected since.  Ficker wins because he has deduced something that county politicians hate to admit, at least in public: voters are skeptical that our elected officials are capable of behaving responsibly with their tax dollars.  Indeed, the county has levied nine major tax hikes since Fiscal Year 2003, with only one (an energy tax increase in Fiscal Year 2011) occurring during a recession.  The most recent tax hike, the 8.7% property tax increase in 2016, was marketed in part as a way to close MCPS’s achievement gap.  Three years later, the council’s Office of Legislative Oversight found that the county has made little or no progress on the achievement gap despite the massive tax hike.

This kind of thing is why Ficker wins.

Let’s think of what is at stake.  In 1978, Prince George’s County passed an anti-tax charter amendment only a little more draconian than Ficker’s.  Five years later, in the wake of the devastating recession of the early 1980s and lacking an ability to raise taxes, the county had to gut services and lay off more than 500 teachers, laying the groundwork for decades of problems.  Heaven help MoCo if we proceed in that direction.

If MoCo’s elected officials want to avoid that sort of outcome, they need to behave responsibly.  Save the tax hikes for times of desperate need, like recessions.  The rest of the time, figure out how to live within your means just like your constituents do.  Above all, stop giving ammo to Ficker.

The alternative?  Picture this.  Ficker celebrates in November, bellowing in victory at the passage of yet another charter amendment.  And the county government, struggling in fiscal chains strung up by distrustful voters, becomes more vulnerable to the next recession.

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RGA Hits Jealous on Taxes

By Adam Pagnucco.

The Republican Governors Association (RGA) is up with a second TV ad, this one claiming that Democratic nominee Ben Jealous would raise taxes and “would blow a Chesapeake Bay-sized hole in the state budget.”  That latter quote comes from a Washington Post editorial opposing Jealous’s proposal to offer free tuition for Marylanders at public colleges.  RGA’s campaign, which also includes mail to Democrats, may be early but the risk is that it will define Jealous before Jealous gets to define himself.

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Who is Voting for Neil Greenberger?

By Adam Pagnucco.

At least one homeowner is voting for Council At-Large candidate Neil Greenberger and he printed a picture of the person’s house on his first mailer.  To our knowledge, Greenberger is the only Democratic Council At-Large candidate to guarantee that there will be no property tax hike if he is elected.  That’s because the county’s charter requires that all nine Council Members must vote to increase property tax collections above the rate of inflation and Greenberger promises to vote no.

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Non-Incumbents Embrace Moon Country Club Bill

By Adam Pagnucco.

Delegate David Moon’s local bill on country clubs, which would have phased out a $10 million special tax break received only by country clubs with golf courses, did not get much love from elected officials.  The County Council did not support it (despite recently passing $53 million in budget cuts), the County Executive outright opposed it and Moon’s colleagues in the MoCo House Delegation killed it on a 17-7 vote.  This story is not quite over though because Moon has a statewide bill that would not eliminate the tax break but would limit country clubs’ assessed land value to one percent of market value.

Elected officials may not have embraced Moon’s bill but there is another group of people who absolutely loved it: non-incumbent candidates for office.  In the wake of the bill’s death, MANY candidates made clear they would support it if elected.  Here’s a sample.

Bill Conway (Council At-Large) tweeted in support of the bill.

Danielle Meitiv (Council At-Large) wrote in support of the bill on Facebook and criticized those who voted against it.

Andy Hoverman (House D-39) took out a Facebook ad supporting the bill.  Among the District 39 Delegates, Shane Robinson voted for the bill while Kirill Reznik and Charles Barkley (who is running for Council At-Large) voted against it.

Three non-incumbent candidates for Delegate in District 18 spoke out in favor of the bill on Seventh State’s Facebook page.

Emily Shetty said, “We have a budget deficit and are struggling to fully fund schools and other high priority services. I support David’s bill, and appreciate and would have supported the amendments he made to further tailor it as well. I don’t think it’s fair for private clubs to benefit from tax breaks otherwise unavailable to families and other employers in the state.”

Mila Johns said, “I 100% support David Moon’s bill. I have previously stated that on this page and I’m extremely grateful to Jeff Waldstreicher and Ana Sol Gutierrez for their principled vote. I read Al Carr’s reasoning and while I understand how he came to his decision, I disagree with it. It’s simply hard to believe so many in our county discarded a very reasonable way to raise revenue in a time of such painful budget shortfalls.”

Leslie Milano said, “Here’s where I stand: We cannot continue to subsidize a luxury restricted to the wealthy when taxpayers do not have access to the very thing they are subsidizing. The fact that only the very wealthy can access this subsidized luxury is extremely distasteful, especially when there is a great deal of poverty in our county as well as a budget shortfall of $120M affecting a variety of areas for every taxpayer. I would sponsor or co-sponsor a revised bill come January to ensure that clubs are paying their fair share. I agree with Ike Leggett that MoCo clubs shouldn’t be taxed differently than clubs in other counties, but I think we need to course correct MoCo clubs first with a local bill – as a sign of good faith – and in a second bill address remaining clubs in the state, which is David’s proposal. It will be easier to pass in two stages and moves us in the right direction.”

Among the District 18 Delegates, Al Carr voted against the bill while Ana Sol Gutierrez (who is running for Council District 1) and Jeff Waldstreicher (who is running for Senate) voted for it.

Several other candidates sent us statements in support of the bill.  They include:

Brandy Brooks (Council At-Large)

Our budget and tax policies should be built around the mutual concept of the common and each contributing their fair share. The common good should guide us in our decisions as well as our interactions with one another. It’s clear the special tax breaks for country clubs benefit only a few.  When wealthy special interests have a major influence over the policy discussions — even around common sense bills to create tax equity — our communities suffer. The county faces a huge budget shortfall, a severe housing crisis, income inequality, and education and opportunity gaps in our schools, to name a few of the pressing issues. Yet, the arguments made by those opposing the bill fail to address these needs. Instead, the country club lobbyist gave lawmakers an ultimatum: kill this bill or workers lose their jobs. All too often, hourly and low wage workers are the first to suffer when management says they need to tighten their belt.   Our policymaking should be focused on the common good. Lawmakers need to hear the voices of everyday people over corporate and big money interests. Our voices — the voices of everyday people — must be central in our policymaking, otherwise we further divide the county into the haves and have nots.

Hoan Dang (Council At-Large)

I strongly backed Delegate Moon’s bill to phase out the special property tax break for Montgomery County country clubs. I was disappointed that this bill was killed by special interests in this County.   This action is another example of why we need more efforts to take money out of politics, such as the public financing of all candidates in Montgomery County from School Board to the General Assembly.

Seth Grimes (Council At-Large)

I support ending special tax treatment for country clubs. Thanks to David Moon for taking a shot. We’ll try again in 2019.

Ben Shnider (Council District 3)

It’s common sense that clubs with annual dues in the tens of thousands of dollars should pay their fair share in taxes when we’re struggling to keep up with vital investments in transportation, school facilities, and other critical infrastructure. It’s not sustainable to keep raising taxes on working families in the County to meet our budgetary needs.

Vaughn Stewart (House D-19)

It’s a shame that this proposal to bring the taxes paid by country clubs in line with the far higher taxes paid by working families and seniors failed to generate wide support. The extra $10 million of revenue per year would be especially beneficial at a time when the county is cutting school funding to address a $120 million budget shortfall caused in part by wealthy residents strategically withholding capital gains. If we can’t afford to pay teachers and staff what they deserve, we can’t afford tax breaks for Montgomery County’s Mar-a-Lagos. I’ve spoken to thousands of District 19 residents since starting this campaign, and they want to know how I’m going to reduce their healthcare costs, create alternatives to traffic congestion, and fully fund their kids’ schools. Not one of them has asked me to continue subsidizing the golf games of our county’s wealthiest few. I look forward to helping Delegate Moon revive this bill next session.

Editor’s Note: All three District 19 Delegates – Bonnie Cullison, Ben Kramer and Marice Morales – voted against the bill.

Chris Wilhelm (Council At-Large)

I’m disappointed that our County and State representatives weren’t willing to stare down the country club lobbyists on this bill, especially when the County is getting ready to balance the budget by cutting from education and other important services. I see this issue through a racial equity lens: how can we claim to “resist” and stand up for our diverse community when so many of our officials were unwilling in this instance to help shift the tax burden from lower and moderate income residents to the ultra wealthy? This is why Montgomery County needs to stop patting itself on the back for being the most progressive place in the world; we aren’t.

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Additionally, institutional supporters of Moon’s bill include SEIU Local 500, MCGEO, National Nurses United, Montgomery County Young Democrats and the Sligo Creek Golf Association (which advocates for a public golf course).

Moon’s statewide bill, which limits but does not abolish the country club tax break, is headed to a hearing before the Ways and Means Committee tomorrow (February 27).  The Chair of the Committee, Delegate Anne Kaiser (D-14), voted against the local version of the bill.

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