Category Archives: Montgomery County Executive

In Lane 2: The Wealthy Businessman

David Blair has more or less been running for county executive since he had a heartbreakingly close 80 vote loss to then-Councilmember Marc Elrich in the 2018 Democratic primary. It’s safe to say that no one will mistake the politics of one for the other.

The most promising issue for Blair—and one that leans into his business experience—is Montgomery’s record in attracting business and jobs. Not only is it substantive issue and a genuine problem, it is also one his opponents have left wide open. Far too often, county government treats real estate development as the one and only issue. The County Council focuses heavily on zoning and various ways to spur development but gives seemingly short shrift to the rest.

But residential development doesn’t do much to grow the tax base. Residents are expensive, especially if they have children who use the public schools. If they do, chances are that they receive more in spending than they pay in taxes towards the one-half of the county budget dedicated to the Montgomery County Public Schools.

Montgomery has always provided its residents an impressive array of services beyond the schools. Unlike in some jurisdictions with comparable tax rates, you can look around and see a fair amount being provided for your money. But if we want to continue to grow the tax base to maintain it, we need more non-development business. That gives Blair both a subject that he can claim as his as well as a message.

Blair, however, is not running as an anti-tax candidate. Like the County Executive and the County Council, he strongly supported Question A in 2020, which will have the effect of raising property taxes higher than would have been possible in the past.

Instead, Blair promises to bring the executive leadership that made him so successful in business to Montgomery County government. While many would argue that shaking up the tree might well be a good thing, government is very different from business. As Truman once said regarding his successor: “He’ll sit here and he’ll say, ‘Do this! Do that!’ And nothing will happen. Poor Ike—it won’t be a bit like the Army.” Does Blair know how to operate the levers of government?

At times, Blair has sent mixed or unconvincing messages on that question and what he thinks. For example, he recently set himself apart by coming out in favor of ending Montgomery County’s antiquated liquor monopoly. But this is after previously hiring Robert Dorfman—the former head of the then-Department of Liquor Control—as his campaign manager. Dorfman is no longer with the Blair campaign.

Moreover, how does Blair plan to get either the county council or state legislative delegation to vote for his plan? Egged on by MCGEO, both have been adamantly opposed to dismantling the monopoly. He’ll have to do a lot of persuading to make it happen.

Blair’s Economic Development Plan is a grab bag. Some appear to be more wish list items than plans, such as “Attract Venture Capital Funding” and “Attracting Hospitality Tech Companies.” Others sound like old ideas repackaged, such as creating a “microincubator program” for life sciences.

I like his idea of cutting barriers to doing business but more specifics would help. His plan states that businesses should not be “bogged down by strict regulations, cost-prohibitive processes and unsatisfactory customer service.” Great, but concrete examples are badly needed to make it meaningful instead of a campaign slogan like his catchily named “Montgomery County Business Bill of Rights.”

People voted for Elrich and Blair last time in a rejection of the status quo.. Blair needs to show that he knows the real nuts and bolts of creating change even as he identifies with the problems faced by ordinary businessmen and residents. And show that it isn’t just a redux of focusing on development interests yet again.

Blair’s huge advantage, of course, will be his cavernously deep pockets. I imagine that, as in 2018, he will spend incredible sums to dominate the airwaves, internet ads and any other form of communication. He’ll also be able to pay an army of campaign advisors and workers. It worked for Reps. David Trone (who used his resources very skillfully) and John Delaney, so I don’t see why it couldn’t work for him.

No doubt his business record will come under close scrutiny. Many will also ask “If he wasn’t so wealthy, would anyone be interested in what he had to say?”

Even if the answer is no, opponents would do well to remember that Americans, including poor ones, tend to admire successful businessmen and women. We don’t hate them; we want to be them. After all, it’s the American Dream.

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Executive Race Lane 1: The Incumbent

Marc Elrich drove the other members of the Montgomery County Council a bit nuts by winning the Democratic Primary in 2018. It was an unpleasant surprise for them that primary voters opted for him despite their frequent rejection of his ideas as either too progressive or anti-business. One of his Democratic colleagues, Nancy Floreen, even went so far as to leave the party so she could challenge him unsuccessfully in the general election. Hans Riemer, also an at-large member, had to think hard before endorsing him.

When asked about his greatest challenges as prime minister, Harold Macmillan famously replied “Events, my dear boy, events.” So it has been for County Executive Marc Elrich, who no doubt had intended to concentrate his term on pushing forward with vision for a more effective, progressive county but instead faced the major health and economic challenges of the COVID-19 pandemic.

The crisis has provided opportunities and pitfalls for Elrich. Montgomery has the highest rate of vaccination of any county in the nation of its size and has done an especially impressive job of vaccinating Black and Hispanic residents compared to other jurisdictions. However, Elrich has also had to make tough choices regarding school closings, masking, dining, and vaccination requirements that were virtually guaranteed to anger large constituencies no matter the decision.

But he has made them and it’s hard to argue that the county has fared badly or that he strayed from science in the process. Council opponents have snapped at his heels all the way, but I don’t know it has had much public impact. The Council has trouble gaining attention even at the most placid of times.

Elrich was most vociferously attacked for not having imposed vaccine requirements on the police. But in a time of rising crime did we want to potentially find ourselves without substantial numbers of officers and further alienate the police—the group of county employees with the highest non-vaccination rate? While many said “damn the torpedoes,” it is easy to bet that the same people would rush to the front of the line to attack Elrich for any increase in crime that resulted.

To my mind, Elrich faces two challenges as he seeks reelection. First, he needs to communicate clearly what he has done. Elrich explains things well and laudably avoids jargon in the process—one reason residents find him accessible—but is not known for being succinct. He needs to sell a short list of top accomplishments concisely.

Beyond arguing that he’s kept the county safe during the pandemic, Elrich can argue that he got the new FLASH new bus-rapid transit line built with more to come. Elrich also needs to articulate how his administration has worked successfully to protect struggling Montgomeryites throughout the pandemic despite opposition. Everyone likes someone who stands up for the underdog.

This last point will help Elrich with his second challenge: keeping movement progressives on side and active. In both parties today, many expect politicians to work miracles and are ready to attack anyone who hasn’t accomplished them even amidst a world roiling pandemic and absent legislative support. While Elrich’s alliance with labor should hold firm, will progressives be as active for him in 2022 as in 2018?

His opponents may unwittingly help him out there by continuing to caricature him as a throwback Marxist who can’t manage money. And yet, pensions are funded. The county retains its AAA bond rating. Attacks by financial scolds rely more on stereotypes than balance sheets. County finances are in better shape as they have been in recent memory despite the wrenching economic ups and downs of the pandemic.

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Marc Elrich’s Budget Message

The following is the overview from the $5.9 billion budget proposed by Montgomery County Executive Marc Elrich. You can find the full budget proposal below:

This budget is focused on providing our youngest residents with a great start to life. To that end, I have proposed funding of $2.8 billion for the Montgomery County Public Schools (MCPS). I am also proposing $10.4 million for our Early Care and Education Initiative so that we can continue to expand and improve early education services.

This budget contains a modest 0.8 percent increase in tax-supported spending for County Government, which is directed primarily at increasing affordable housing and addressing structural gaps in our fire service and transit budgets. This budget provides our residents with a great amount of detail about my entire $5.9 billion recommended budget.

This budget also ensures that we attain our fiscal policy goal of holding 10 percent of our adjusted gross revenues in reserve in FY20, and we maintain that level in FY21. This is of particular importance now as we face uncertain times.

As I finalize the details of my recommended budget, I am keenly aware of the public health emergency facing our community and the nation. I am proposing this budget with a focus on both the next few days and weeks, as well as the next year and beyond. As we respond to this global health emergency, the economic situation of our residents and our nation are changing rapidly. While this budget reflects my view of County Government on March 16, we all need to be flexible to respond to changing conditions and needs. These conditions may result in me submitting revisions, supplementals and amendments to alter this proposal as conditions warrant.

As we address the immediate needs of our residents and plan for the future, one thing has become abundantly clear to me – our County Government’s revenue structure has reached the breaking point and must be fundamentally altered.

Our County Charter includes a provision that limits the growth in property tax revenue – not property tax rates – to the growth in the Consumer Price Index (CPI) for all consumers in the Baltimore-Washington Region from the December 1 to November 30 of the preceding year. Since the Federal Government no longer publishes this index, we have been using the CPI for just the Washington Region. For the period of December 1, 2018, to November 30, 2019, the CPI for the Washington region was only 1.27 percent. No matter how much assessments increase, the total amount of property tax revenues cannot grow by more than 1.27 percent.

It is important to note that this revenue limit does not mean the average property tax bill will only increase by 1.27 percent. Quite the opposite. Most individual bills will increase (or decrease) by the change in one’s taxable assessment. Since County law limits growth in assessments to 10 percent in any given year, a property with such an increase in value will see its tax bill go up by roughly 10 percent. The Charter revenue limit only redistributes the tax burden from properties with little to no increased value to those properties with the greatest increase in value. This has meant that some residents in modestly priced homes have faced 10 percent increases while some high-value properties actually saw their tax bill cut.

When the County Council proposed to the voters our current Charter limit on property taxes in 1990, few people could have foreseen the dramatic changes that would take place in Montgomery County and around the globe. In the past 30 years, our school population has grown by 65 percent and our overall population has grown by 40 percent. The services we provide are now more complex and seek to address a range of challenges, from traffic congestion and climate change to health care disparities and linguistic diversity. And over the past four decades, our property tax rate has declined by 35 percent.

We have all witnessed other local governments regionally and nationally experience generational decline due to conflicting, irreconcilable fiscal policies. Montgomery County is at the precipice of such a decline if we cannot get ourselves out of this cycle of self-enforced structural deficits and inequitable, unpredictable revenue caps. Therefore, I will be sending the Council a proposal for a Charter amendment that will revise our revenue cap to provide certainty to homeowners. This proposal will eliminate our old, cumbersome revenue cap and replace it with a three percent cap on the increase in any homeowner’s taxable assessment. This will give our taxpayers real protection from unexpected increases in property values. It will also provide the County Government with a higher degree of predictable tax revenues like every other jurisdiction in our region.

Without such a change in the Charter, our community could be facing a situation in FY21 where a recession and deflation cripple our ability to provide emergency services and a quality public education system. This perfect storm would threaten lives and diminish the value of properties in our County. I will not stand by and let our community be harmed by the ghosts of voters from four decades ago.

In order to meet the challenge of our rapidly growing school system over the next year, this budget proposal also calls for the creation of a 3.1 cent supplemental property tax rate. State law provides each county with the authority to establish a supplemental property tax rate exclusively for its public schools. While this will be the first use of this State authority in our county, three other counties have already established a similar supplemental tax for their public schools. Even with this additional funding, we will still be providing the school system with less support per pupil than in 2010. A decade of slow growth nationally, unpredictable tax policy changes at the Federal level, and our severe Charter limit has left our schools playing catch-up on funding while absorbing an enrollment growth of more than 25,000 new students.

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. Fortunately, the income tax has overperformed estimates during FY20 to offset this loss. However, even before the current COVID-19 crisis developed, we were forecasting income tax revenues to drop to a lower level. With this supplemental tax rate, we will be back to the rate set for FY17. We will remain significantly lower than other Maryland counties and in line with the residential rates in Northern Virginia. It is also important to note that the Northern Virginia counties charge higher rates for commercial properties with even higher rates for commercial properties in business districts like Tysons and Crystal City.

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Bill Frick: Name One Program You Would Cut

Name one program in the county budget that is not working and can be cut.  Tell us how much in annual savings that would yield.

For too long, Council members have used the County budget as a piggy bank to fund their pet projects and ideas, often ones that could not survive a serious cost/benefit review.

As we reorient County government to be a constituent-consumer focused organization, we can find savings.  For example, the county employs nearly 40 personnel in its 311 call center, despite the dramatic shift in technology away from phone calls and towards electronic communications.  If Montgomery County complemented this with a constituent service app, as exists in neighboring jurisdictions, many constituent services would be routed directly to the relevant agencies instead of going first through bureaucratic call centers, and we could save taxpayer money.

Finally, the County should not be a leader in corporate welfare.  I would end our tax credits for investors, money that goes from everyday taxpayers straight to the pockets of wealthy investors, often to reward them for making investments they would have made regardless.  This is a fight I led at the state level as the architect of the Tax Credit Evaluation Act, legislation to spotlight and reform our runaway subsidies, and by going toe-to-toe with Hollywood to make sure our tax dollars were being spent productively.

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Roger Berliner: Name One Program You Would Cut

Name one program in the county budget that is not working and can be cut.  Tell us how much in annual savings that would yield.

I have been a leading proponent of trying to find ways that our county could operate more efficiently.  Working with the County Executive, I was the lead sponsor of legislation that created the Organizational Reform Commission, led by a diverse and talented group of citizens to identify ways we could make our county government more efficient.  However, at the end of the day, while there were steps we were able to take that made our county government more efficient, direct dollar savings were not significant.

I have for years argued that the County Executive should move to what is known as “zero based budgeting”.  What is zero based budgeting?  “Zero-based budgeting is a repeatable process that organizations use to rigorously review every dollar in the annual budget, manage financial performance on a monthly basis, and build a culture of cost management among all employees.”  That would be my goal as County Executive.

In addition to rigorous scrutiny of costs, there are initiatives that you don’t readily think of that can produce cost savings – initiatives like having our county buy 100% renewable power and putting solar on our county rooftops.  Those initiatives alone will save many millions of dollars going forward.  Sometimes doing the right thing actually can save taxpayer dollars!

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George Leventhal: Name One Program You Would Cut

Name one program in the county budget that is not working and can be cut.  Tell us how much in annual savings that would yield.

I will work diligently with the Office of Management and Budget, and with every department, to find savings and process improvements if I am elected to lead this government. I understand the mission of every county department. I have low tolerance for redundancy. I am prepared to prioritize, and to say no to additional spending where saying no is warranted. One place we could start is by looking at how the county provides health care to its employees.

Montgomery County will spend $245 million in FY2018 on employee health coverage. In 2011, I commissioned a Task Force on Employee Wellness and Agency Consolidation, which recommended adoption of an employee wellness program. It took the Leggett administration until 2015 to get the program fully up and running. Between 2017 and 2018, health claims dropped by $3 million, although it is not clear this is statistically significant, or directly caused by participation in employee wellness programs. I am confident that continued implementation of employee wellness efforts will lead to continued reduction in utilization of health benefits, and increased savings.

The task force also recommended consolidating procurement of employee health coverage between county government, the school system and Montgomery College. The school system and the college have declined to adopt this recommendation. School employee unions feared their members might lose their more favorable benefits. However, the county’s Office of Human Resources already administers health benefits among different bargaining units, and could easily administer health benefits for school system and college employees, resulting in substantial overhead savings, and savings from group purchasing. I will continue to advocate for unified administration of health benefits among all three agencies.

Additional overhead savings, and efficiencies from volume purchasing, could also be achieved by consolidating procurement of all goods and services for county government, MCPS and Montgomery College in a single office.

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Marc Elrich: Name One Program You Would Cut

  1. Name one program in the county budget that is not working and can be cut. Tell us how much in annual savings that would yield.

While there’s no one program we could cut that would produce enough savings to fund the education, transportation, and other investments the county needs, I want to explain how I would take a different approach to how the county makes budget decisions.

Montgomery County faces enormous economic and fiscal challenges: slow job growth, federal budget cuts, an aging population, poverty and its attendant social costs, inadequate infrastructure, and rising school enrollment.  Revenue projections indicate that just maintaining current services will continue to be a challenge, not to mention dealing with the costs necessary to address some of the critical unmet needs facing us.  We have to find ways to maintain the services our residents expect while addressing challenges that can impact our quality of life.

The next County Executive will need to get as much value as possible from every tax dollar, and the only way to do that is to bring a new way of thinking to how we spend our $5 billion budget.  While that’s easier said than done, my record shows I can deliver.  During my first term on the County Council, for example, I recognized that the proposed renovation of the Circuit Courthouse had morphed into an incredibly expensive total replacement.  The project didn’t make sense.  I challenged the assumptions behind the change and I ultimately helped save the county tens of millions of dollars by demonstrating that a renovation could be done much more efficiently.

If elected, my team will move away from the county’s traditional budgeting approach, which starts with last year’s spending and adjusts it incrementally.  We won’t balance budgets with across-the-board cuts that punish good programs and protect poor performers.

Our budgets will instead be built from the ground up to achieve the outcomes residents want, such as closing the opportunity gap, reducing commute times, making housing more affordable, and improving public safety.  We will work to foster a culture of innovation, cooperation, creativity, and transparency so we can move away from a “this is how we’ve always done it” mindset into a model of continuous improvement.

What does that mean?  We will work with our employees, nonprofit partners, and our customers – both residents and businesses – to ensure that our service delivery follows best practices and meets our customers’ expectations.  We will insist on accountability and make funding decisions based on performance.  We will publish an annual report, available to everyone, showing how tax dollars were spent, the measurable progress we are making toward our outcomes, and where we need to do better.

I have no doubt that, by realigning work to reflect best practices, insisting on performance accountability, and creating a culture of teamwork, we can operate existing programs more efficiently.  Doing so will allow us to pivot existing human and capital resources to better address the challenges facing us.

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Roger Berliner on Jobs

Job growth has been stagnant in Montgomery County over the past few years. What would you do to encourage increased job growth?

Increasing prosperity — and having that prosperity shared more broadly — is the central platform of my campaign.  As in most things, achieving this will be a multi-prong effort:

1.  In our county, small business is big business. And for far, far too long, businesses in Montgomery County have seen our county as a foe, not a friend.  We need to be a partner to business, not an obstacle.  That is what prompted me to be the lead sponsor on legislation that created both the Small Business Navigator and the Business Solutions Group in county government — to put in county government resources that are intended to make life easier for our small business community. When we adopt new programs and regulations in our county, we need to make sure we are doing so in a manner that will not harm small businesses.  That is how I have done my work on the Council and it is how I will do my work as County Executive if I have the privilege of leading our great county.

2.  We need to attract businesses to Montgomery County. We have extraordinary assets. Amazon’s request for proposals for its new H2Q brought that home:  Montgomery put checks in all the important boxes.  Smart, skilled work force — check. Transit — check.  Vibrant urban amenities – check.  Awesome quality of life — check.  Diverse population- check.  Good government-check.  Strong, national business leaders-check.  We need to do a better job of promoting our county.  As County Executive, I will be a passionate, ceaseless champion of our county.

3.  What are the fundamentals that create economic growth and opportunities? A skilled workforce, which is why I have been the leading champion of workforce development; world class transit, which is why I have championed fixing Metro, building the Purple Line & Bus Rapid Transit and supporting Ride On Extra; affordable housing, which is why I sponsored legislation that requires our county to consider co-locating affordable housing on county property and increases the obligation of developers to provide affordable housing; creating vibrant urban nodes, with world class architecture, that attracts millennials and businesses like Marriott and Fox 5 to Bethesda; embracing innovation, which is why I led the way to create the Office of Innovation in our county government — we either lean forward or fall back.

4.  Build a “green economy”. Under my leadership, our county has become one of the most sustainable communities in our country.  Those efforts have not only led to our county government being “carbon neutral”, but to creating good green jobs.  Solar companies are thriving; energy efficiency firms are flourishing; composting and organic farming is growing; and our commitment to storm water management should increase jobs and job training opportunities.  A green economy is a healthy economy.

5.  Support our immigrant entrepreneurs. Immigrant-owned businesses are the fastest-growing segment of the county’s economy. Often, these businesses need only a little help to get started. That is what motivated me to lead the effort to create our county’s first micro-loan program, modeled after successful programs around the world.

6.  Pay people a decent wage, which is why I support increasing the minimum wage to $15 an hour consistent with the County Executive’s proposal.

My record on creating a more favorable economic climate in our county has led four Montgomery County Business Hall of Famers, past presidents of local chambers of commerce, entrepreneurs of the year, minority business leaders and green business leaders to endorse me.

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George Leventhal on Jobs

Job growth has been stagnant in Montgomery County over the past few years. What would you do to encourage increased job growth?

We have seen good news on job growth recently. County Executive Leggett’s office reported in January that the county had added 7,163 jobs since the previous January and in May that resident employment had increased by 10,900 jobs (not all located in the county) since the previous May. High-profile business location decisions recently have included Marriott’s decision to keep its headquarters in the county, Discovery’s decision to keep 230 jobs in Silver Spring rather than relocate them to Virginia, and WTTG/Fox 5’s decision to relocate to Bethesda from Northwest Washington.

Montgomery County has a great story to tell, but we need to do a better job telling it. Our quality of life is high; we have great public schools; honest and effective government; excellent cultural and recreational opportunities; beautiful natural features; proximity to airports, shipping routes, interstate highways and public transportation; high family incomes; a low crime rate, and a low unemployment rate. I supported creating the new Montgomery County Economic Development Corporation and am glad to see it is investing more than ever before in marketing our county’s excellent attributes to grow our job base and retain existing employers.

We have one of the smartest, most diverse work forces in the United States. We should advertise ourselves as the International Gateway to the Nation’s Capital, to attract employers from around the world and entice the talent our employers need to compete in the global marketplace. While our workforce already possesses more graduate degrees than any other community, and a wider array of language skills than most, we must make language education a higher priority in our schools. Language immersion should be expanded, especially in languages critical for global trade and national security, like Mandarin, Spanish, French, German, Hindi/Urdu, Arabic, Russian, Farsi, and Portuguese.

To appeal to the millennial generation of workers, and the generations that will follow them, we must continue our placemaking efforts, to build great urban communities in locations well served by transit, including Bethesda, Silver Spring, Rockville, Wheaton, and Glenmont, and we must expand transit options to economic opportunity hubs like Gaithersburg, Germantown and White Oak.

We should increase vocational training in our schools. The courses available at Edison High School are insufficient. Not all students will, or need to, attend college. Many good-paying jobs in industrial, manufacturing, information technology and other sectors can be filled by high school graduates with additional technical and vocational training.

We need to continue focused efforts to streamline our planning, permitting and procurement processes to see where they can be made more efficient and business-friendly. We must also strengthen our efforts to keep Montgomery County tax dollars in our local economy, by strengthening programs like the Local Small Business Reserve (which I originated), and minority, female and disabled business purchasing preferences.

I support designating Enterprise Zones to attract investment to areas that are struggling, like Glenmont and Burtonsville. I have also supported tax credits for investors in life science, environmental technology and cybersecurity, and I am currently exploring a county add-on to federal Small Business Innovation Research (SBIR) awards. I will seek to reduce our county energy tax, which puts our high-tech and data-intensive businesses at a particular disadvantage.

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Marc Elrich on Jobs

Job growth has been stagnant in Montgomery County over the past few years. What would you do to encourage increased job growth?

Most job growth comes from new businesses expanding in the location in which they were founded.  Surveys indicate that the quality of life and the quality of public goods in an area – including transportation systems and schools – matter far more when businesses are making their initial location decisions than the taxes and other financial incentives they might be offered.

While there is a lot about the economy that is beyond our control – there’s no silver bullet for job growth – there is much that the county can do to create the conditions for businesses to start and thrive.  To the extent that we have cumbersome and inappropriate regulations, we need to change them, and to the extent that regulatory costs are excessive, we need to lower them.  More importantly, I would focus on incubating new local-grown businesses, nurturing their growth, and improving the county’s economic infrastructure.  Other jurisdictions have creative small business incubators and we can learn from their successes to grow a stronger local economy.  The empty spaces in shopping centers and office buildings were once filled with small businesses, and we need to nourish a new generation of entrepreneurs to refill them.

The bus rapid transit (BRT) system proposal that I initiated and have been advocating for during my time on the County Council also holds real potential as a tool for job growth.  Businesses have made an issue of the lack of transit as an impediment to growth.  If we want people to create startups or expand existing businesses, we need entrepreneurs to feel confident that their employees have a reliable way of getting to and from work, that their customers can get to their stores, and that they will be able to transport the goods and services they need to stay in business.

A well-implemented BRT system would reduce future congestion and move more people than roadways alone, making the county a more attractive location for businesses of all sizes.  It would greatly benefit residents as well.

We also need to work with the school system, including Montgomery College, to make sure our students are prepared for jobs that don’t necessarily require a four-year degree but do require post-high-school education.  And we should expand apprenticeship programs in cooperation with the building trades organizations that need the next generation of skilled workers.

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