Delegate Bill Frick (D-16), who is running for County Executive, is running this television ad.
Delegate Bill Frick (D-16), who is running for County Executive, is running this television ad.
By Adam Pagnucco.
The Washington Post’s endorsement of businessman David Blair hit like a grenade this past weekend, blowing up the County Executive race. What does it mean?
First, in reading the language of the Post’s endorsement, we are struck by how closely their views on the challenges facing the county resemble our own. The majority of these opening three paragraphs mirror what we have been writing about the county economy for years.
These seem like boom times in Montgomery County, the mainly rich suburb that has absorbed roughly 100,000 new residents since 2010 to a population now approaching 1.1 million. Amazon (whose CEO, Jeffrey P. Bezos, owns The Post) has shortlisted the county for its second corporate headquarters; construction cranes tower over Bethesda and Silver Spring; and the public school system, one of the nation’s largest, includes some of the best high schools anywhere.
That’s why it’s easy to overlook some ominous signs of fiscal and economic trouble ahead. A burgeoning population of retirees, immigrants and other less affluent residents has strained local resources and budgets. Those moving into the county tend to be poorer than those leaving. The chasm between economically prosperous pockets (such as the ones dominated by cranes) and stagnant ones is widening. Most worrying, business and job growth are anemic.
That’s the unsettling backdrop for the June 26 Democratic primary, which is likely to determine who will run the county for the next four years. County Executive Isiah Leggett, a deft and capable manager, is retiring after 12 years in the job (and no Republican has won an election in Montgomery since 2002). The central question is which of the candidates for county executive is most capable of juicing a sluggish commercial environment — the only way to broaden the local tax base so it can sustain the county’s excellent schools and progressive services.
The Post framed the election’s central question correctly. And their policy view, clearly established in the language above, will no doubt influence their choices for County Council. That said, they do not share your author’s view that governing experience is useful for addressing these challenges. So be it.
The Post has a pretty good record in top-tier MoCo Democratic primaries. They endorsed Chris Van Hollen (CD-8) in 2002, Ike Leggett (County Executive) in 2006 and 2014 and John Delaney (CD-6) in 2012. They also endorsed Kathleen Matthews (CD-8) in 2016, who finished third.
Even so, the Post is not a king-maker; one of the good things about MoCo politics is that we have no king-makers here. But their endorsement matters, especially when five candidates are vying to be the chief rival for Marc Elrich. Consider what Roger Berliner (your author’s choice), Bill Frick or Rose Krasnow would have said if they had gotten the Post endorsement. If Berliner had received it, he would have told non-Elrich voters, “I am the one who combines the Sierra Club, moderates, District 1 voters and now the Post. I’m the alternative to Elrich.” Frick would have said something similar while substituting realtors for the Sierra Club. If Krasnow had received it, she would have said, “I am the only woman in a primary in which sixty percent of voters will be women and now I have the Post. I’m the alternative to Elrich.” None of these things can be said now. All three lose the opportunity to leverage the Post endorsement to expand outside their geographic bases.
It is sometimes said that Elrich has a ceiling. Some voters will find a decades-long socialist who equates transit-oriented development with ethnic cleansing and favors rent control unappealing. But Blair has a ceiling too. That was expressed by a commenter on Seventh State’s Facebook page who wrote, “I don’t want a businessman political newcomer who is trying to buy the election.” Fair or not, that is a common sentiment among Democratic activists, and those who feel this way are not persuadable on this point. Blair can send them thirty mailers and they won’t budge. How many rank-and-file voters have this view? David Trone, who shares this handicap, received 22% of MoCo’s vote in the 2016 Congressional District 8 race. That’s an imperfect analogy because CD8 omits some relatively moderate areas in MoCo’s Upcounty and Trone was not talking about the unpopular nine percent property tax hike in his campaign. Still, Blair will need more than 22% to win.
Besides Blair, the other big winner from the Post’s endorsement is Elrich. Elrich has been crusading against rival candidates who have been supported by wealthy businessmen for years; now he gets an ACTUAL wealthy businessman as perhaps his chief opponent. Elrich is no doubt rubbing his hands together in glee as his progressive hordes gird for battle against plutocracy. His field coordinator must be dizzy with joy.
Both the Elrich and Blair campaigns need to consider the following question. Which group is larger in the Democratic primary electorate: the people who believe that taxes have gone up but their service quality has not or the people in Elrich’s base? If the former outnumber the latter – not an impossible prospect considering that a majority of Democrats voted for term limits two years ago – then maybe an outsider has a shot. It would be totally unprecedented given that every prior MoCo Executive has had governing experience before assuming office. But Robin Ficker winning a charter amendment vote by forty points was also unprecedented.
Thanks to the Post, a wild election has gotten a little wilder. There are only forty-three days to go before this story reaches its momentous conclusion!
Delegate Bill Frick (D-16), who is running for County Executive, is running this ad on social media.
By Adam Pagnucco.
The Washington Post recently published an article declaring that the contest to succeed County Executive Ike Leggett was seen as “anybody’s race.” Pshaw! One of two candidates will win it. One of them is Council Member Marc Elrich, who finished first in the last two Council At-Large primaries and is nearly sweeping progressive endorsements. The other is…
We don’t know yet. And we don’t know if we ever will.
During the 2016 Congressional District 8 race, your author called up one of the smartest people in state politics we know. This fellow lives outside MoCo but he tracks all parts of the state and has sources everywhere. When we asked him who was going to win, he said, “When I talk to the various campaigns, all of them say they’re gonna be the last one at the end along with Jamie Raskin. When I hear that over and over, when I see that they all think that Jamie is the man to beat, that leads me to think Jamie will win.” That dynamic is going on now in the Executive race.
Elrich’s long-time message combining opposition to development with far-left progressivism has earned him an overlapping base of land-use voters, liberals and Downcounty residents, especially in and near Takoma Park, where he served 19 years on the City Council. In the 2014 Council At-Large race, Elrich finished first in every council district except 2 (where he finished second to Nancy Floreen) and first or second in every local area in the county except Damascus and Laytonsville. He finished first in 138 of 251 precincts. In the 2010 Council At-Large race, Elrich finished first in all five council districts and in every local area in the county except Cabin John, Damascus, Darnestown and Laytonsville. He finished first in 166 of 243 precincts. No other MoCo politician running for county office in this cycle has a base of this kind.
How did he assemble it? For many years, Elrich has been assisting residents who oppose master plans all over the county. And whether they won or lost, those development opponents came away from the fight with Elrich as their hero. Here is an illustration: an email sent out by the East Bethesda Citizens Association on 6/2/16, on the eve of the council’s consideration of the Downtown Bethesda Master Plan, describing their meeting with Elrich and calling for action:
A year later, Elrich cast the lone vote against that master plan as he has with several other plans. This plan’s opponents have now been incorporated into Elrich’s base – assuming they were not part of it already.
While other candidates struggle to attract volunteers, Elrich’s volunteer base is well established. In 2014, the campaigns of Elrich and his ally, Beth Daly, posted poll coverage sign-ups on Signupgenius.com. They were able to recruit coverage on 67 precincts, many on more than one shift, with particular strength in the voter-rich areas of Silver Spring, Takoma Park and Leisure World. No one other than the Apple Ballot could touch this. Now that he is running for the county’s highest office, how many precincts will Elrich be able to cover?
Among the influencers and highly informed activists, this election is rapidly becoming defined by whether you’re with Elrich or not. If you don’t believe us, check out the Council District 1 candidates. They’re an interesting group that collectively spans the differences of opinions in the county district containing the most Democrats. Bethesda Magazine reporter Andrew Metcalf asked them during a recent debate for whom each was going to vote in the Executive election. After significant prodding, here’s how the candidates responded:
Bill Cook – would vote for Marc Elrich
Pete Fosselman – undecided; wouldn’t vote for Elrich
Andrew Friedson – undecided; disinclined to vote for Elrich
Ana Sol Gutierrez – torn between Elrich and George Leventhal
Jim McGee – would probably vote for Elrich
Reggie Oldak – refused to say; would not vote for Elrich
Dalbin Osorio – would vote for Elrich
Meredith Wellington – undecided
All of the non-Elrich candidates have potential as well as challenges. Council Members Roger Berliner and George Leventhal are running on their experience and qualifications. (Disclosure: your author respects both but supports Berliner.) Berliner is trying to get known outside his council district and Leventhal has been severely out-polled by Elrich in the last two elections. Delegate Bill Frick, former Rockville Mayor Rose Krasnow and businessman David Blair are the fresh faces. But they are little-known in most parts of the county and Blair started as a complete unknown. All of these candidates have a long way to go and each of them is in the others’ way.
To contrast with Elrich effectively, a non-Elrich candidate needs to hit this sweet spot dead-on: “We live in a great county, but we can be even better. Here are some ways we can improve.” That involves a bit of threading the needle for the two council incumbents. It’s understandable that they might react to critiques of the county’s economic performance as criticism of their records, but they should think of it like this: every Executive leaves unfinished business for the next Executive. Ike Leggett inherited his share of problems from Doug Duncan, who in turn inherited some issues from Neal Potter. This is entirely normal, so who is the best choice to lead in the future? As for the non-incumbents, they aggressively point to the need to improve, but they tend not to have many specific proposals to get better because they don’t know the history and operations of county government as well as the two Council Members. To be fair, how could they? If no one hits this sweet spot, that leaves Elrich as the only candidate with a crystal-clear message that is distinct from the others. Those who hear Elrich’s message and agree with it are less likely to peel off to someone else than tentative supporters of the other candidates who might change their preferences between them.
One more thing: we wouldn’t be surprised if most, if not all, of the non-Elrich candidates have polled. If so, they all probably found similar results. And so they could all tailor their messages in similar ways and maybe even say the exact same things. That would blur the differences between them and make Elrich stand out even more. This may already be happening as Berliner, Blair and Frick all repeatedly mentioned “innovation” at last Friday’s Executive forum. Was that a coincidence?
If questioned privately, we bet all of the non-Elrich candidates would grudgingly admit that it’s a problem that five of them are in the race. Each of them wants to be the person who gets to take on Elrich one-on-one. So each of the five is looking at the others and saying, “If YOU all get out of the way, I can beat Elrich.” But no one is dropping out because they all think they have a shot. The big winner from this is – you guessed it – Marc Elrich.
One non-Elrich candidate needs to emerge from the pack and consolidate everyone that is not in Elrich’s camp. If that happens, Elrich is beatable. But if nothing changes and this election continues down the path it is on, Elrich will win with less than 40% of the vote.
By Adam Pagnucco.
Last Friday, the candidates for County Executive attended a forum to discuss a report by Sage Consulting listing numerous problems with the county’s economy. Afterwards, most of the Executive candidates commented on the report and on the economy more generally via email and social media. Their responses say a lot about which ones take the economy seriously, an issue that has drawn much attention from Seventh State.
Council Member Roger Berliner (whom your author supports) sent out this email over the weekend.
Our county has serious work to do to improve our business climate, diversify our economy, and increase the number of good jobs. It must be Priority #1 if we are going to be able to meet the needs of our school system, reduce congestion, invest in public safety, and protect our environment.
I have a record that I am proud of on improving our economy and a vision for our future that you can read about here. Some of my competitors have records too. Others have just words. It’s important to consider what we have done in pursuit of increasing prosperity, not just what we say we will do.
My record includes leading the successful effort to reduce our energy tax three years in a row; creating the small business navigator and a micro-loan program to help our local small businesses and entrepreneurs thrive; and playing a leading role in our Amazon bid. My vision is of a forward leaning county that embraces innovation, education geared towards the jobs of tomorrow, and vibrant urban centers served by state-of-the-art transit.
Yesterday, a consultant tasked with assessing our business climate and outlook, issued a scathing report. It highlighted one startling statistic: that “between 2011 and 2016, the number of [business] establishments in Montgomery County increased by 6, or roughly the population of businesses at a strip mall.” The report concludes that “Montgomery County therefore desperately needs to step up efforts to expand its commercial tax base.” You will get no debate from me on that point.
At the same time, the report declares:
This should not be mistaken for an assertion that Montgomery County is anything other than the finest possible location for Amazon HQ2. It will be difficult for Amazon to identify an area that is as open to new ideas, offers such abundant human capital, is as saturated with transportation options, supports such high quality public education, is as institutionally rich, and is as committed to shared prosperity as Montgomery County, MD.
So, while it is true that we have our challenges, challenges that must be met head-on, it is also true that we have extraordinary assets and a quality of life to match. I will build on our assets as your next County Executive, work diligently to improve our business climate, and am 100% committed to expanding a “shared prosperity.”
Life is good in Montgomery County, but we can make it better still. That’s my goal: a “more perfect” Montgomery County.
Delegate Bill Frick (D-16) sent out this email hours after the Executive forum ended.
Something doesn’t add up. How does a county with our talent, our people, our great public schools and our values lag behind the rest of our region in job growth and economic development? How is it that private sector employment has declined by 12,500 jobs from 2006 to 2016? How is it that, during that same time period, Montgomery County created on net just six new businesses?
The answer is clear. As I told the Montgomery County Business Roundtable earlier today, it is our political culture. My opponents have built a political culture in Montgomery County that doesn’t want to work with businesses to thrive and grow here in our County. And if we elect someone to be County Executive who is part of that culture, things will not get better for business.
I am an outsider to Montgomery County Government and yet I have real governmental leadership experience as the Majority Leader of Maryland’s General Assembly. I have the relationships in Annapolis that can help our County. But since I am not a multi-millionaire, and unlike three of my opponents, I am not spending your taxpayer dollars to fund my campaign, I need your help to communicate with Montgomery County residents who deserve leadership that the current members of the County Council will not provide.
Montgomery County is an awesome place to live. It’s why I’m raising my two children here and sending them to our public schools. But we have a problem, and that is that we must reform in order to create new private sector jobs and increase our tax base. We have to focus on the core functions of county government – education, public safety, and transportation – and those need to be our priorities for our budget. Our County Government does not need to be in the liquor business, a failed venture that is hurting our food culture to the benefit of downtown DC restaurants. We have to have a culture of ‘yes’ in county government so that we are trying to find reasons to say yes to businesses rather than find reasons to say no.
Former Rockville Mayor Rose Krasnow ran this Facebook ad.
David Blair commented on Twitter.
Council Member George Leventhal commented on Facebook.
We are not aware of Council Member Marc Elrich commenting via email, Facebook or Twitter.
By Adam Pagnucco.
County Council Member Nancy Navarro is blasting County Executive candidates Rose Krasnow, David Blair and Bill Frick over their comments on her racial equity resolution. The council resolution would have the county measure racial equity impacts of budget items and legislation. Its action language states:
The Council is committed to examining the data needed to develop an equity policy framework that would require the County to question how budget and policy decisions impact equity.
This effort must be a partnership between the County Council, County Executive, County Government, county agencies, institutions, and our community. The County Government
must challenge itself to bring new and different partners to the table. Partnering with other jurisdictions as members of the Government Alliance on Race and Equity (GARE) will also enhance the County’s effort and commitment to fostering equity.
Equity analyses should be part of capital and operating budget reviews, appropriation requests, and legislation. Program and process oversight should be undertaken viewing programs and processes through an equity lens. Equity targets and measures of progress must be put in place.
The Council will provide additional FY19 Operating Budget resources for the Office of Legislative Oversight to develop a baseline report describing current disparities in education, employment, housing, health, employment, land use, and other measures of opportunity by May 31, 2019. Following the transmittal of the baseline report, the Council will introduce legislation for the County to develop an equity policy framework to inform the delivery of all County services.
The entire council, including the three members running for Executive (Roger Berliner, Marc Elrich and George Leventhal), has co-sponsored the resolution. But fellow Executive candidates Rose Krasnow, David Blair and Bill Frick criticized it in the Washington Post:
Democrat Rose Krasnow, the county’s deputy planning director and a former mayor of Rockville, said she worried the measure would lead to “paralysis by analysis.” She also questioned the timing of the resolution: “It seems like such a political statement in an election year.”
Del. C. William Frick (D-Montgomery) said growing “private-sector jobs” and wages is the best way to eliminate disparities. Businessman David Blair applauded the vote but the Democrat wrote in an email that “we shouldn’t confuse activity with progress. . . . Where’s the progress been the past 12 years?”
That drew Navarro’s wrath. She denounced the three candidates on Facebook, writing:
I am deeply disappointed by the comments made in this article, by County Executive candidates, Rose Krasnow, David Blair, and Bill Frick regarding my efforts to establish an “Equity Policy” for County Government… These candidates have chosen to dismiss an effort that will directly support our immigrant communities, communities of color, seniors, people with disabilities, and other underserved groups for their own campaign posturing. As far as I’m concerned, I would prefer that our next Executive be someone who is constantly examining how decisions impact all County residents. I hope that the voters will take this into consideration on June 26th!
We see Navarro’s point. Montgomery County, like the rest of the United States, is rife with inequities of all kinds. Navarro’s resolution does not prescribe specific remedies; it only initiates the process of measuring inequities so that they can be considered in public policy decisions. It’s hard to understand how any progressive candidates for office could oppose that. Perhaps Krasnow, Frick and Blair would like to comment further before their existing remarks are set in stone.
By Adam Pagnucco.
First, the easy part: all three incumbents – Senator Susan Lee and Delegates Ariana Kelly and Marc Korman – are running as a team and are headed to reelection. Lee has historically been one of the delegation’s best fundraisers (although Korman surpassed her by a little bit this cycle). Kelly is beloved by advocates for families, women and children for her work on their issues and has emerged as a leader on ridding Annapolis of sexual harassment. Korman is a rare bird: a lawyer who is good with numbers. Metro riders everywhere should thank him for his tenacious work to improve WMATA. Great things are predicted for Korman so long as he does not return to blogging.
Attorney Sara Love and MCPS teacher Samir Paul are the top non-incumbents vying for the seat being vacated by Delegate Bill Frick, who is running for County Executive. Love and Paul would be great candidates in any part of the county, but unfortunately for them, they are running in the same district. Love fits in well with the progressive female voters who dominate District 16 primaries. Paul is a teacher who has been active in MCEA (which has endorsed him), but his message is much bigger than education as he draws links between all public institutions that confer benefits but require investment, especially WMATA. Love and Paul had super fundraising performances and are essentially equal in cash on hand. Those who have met them are impressed with both of them, but sadly, there is only one open seat.
The Big Question: will Frick, who filed a disappointing January report, drop back down to the House race? We know Frick does not enjoy that question, but since he withdrew from the Attorney General’s race and refiled for Delegate at the last hour in 2014, this is on everybody’s mind. Such a move by Frick would probably result in all four incumbents being reelected, wasting huge time and effort by Love and Paul.
This district is a mess. The only certainty here is that Senator Cheryl Kagan and Delegate Kumar Barve will be reelected, assuming that Kagan is not picked up by a gubernatorial candidate as a running mate. As for everything else… well.
At the root of the mess is Delegate Jim Gilchrist. By all accounts, he is a nice guy who never causes trouble. His defenders describe him as a studious, intellectual workhorse who gets into the weeds and doesn’t claim credit for anything. But he has little tangible to show for three terms in office. He has passed no signature legislation. His website is inactive. His Facebook page has not been updated since 2014 as of this writing. And his fundraising is weak. Consider this: since 2006, Gilchrist has raised a total of $83,217 from others, an average of $27,739 per cycle. (He has also self-financed $11,120 over that period.) MoCo has a bunch of candidates who can raise $27,000 in a month.
The search result for Gilchrist’s website less than five months from election day.
So why does he keep winning office? He has a guardian angel: Barve, who is his committee chair and likes him. Barve slates with him regularly and appears in joint mailers with him. Gilchrist would be a goner in most districts, but with Barve helping him, he survives. And that has caused grumbling in some parts of District 17.
This time, Rockville City Council Member Julie Palakovich Carr decided to run for Delegate in July even when it appeared that all three incumbents (Barve, Gilchrist and Andrew Platt) were running for reelection. Six months later, Platt dropped out and Barve and Gilchrist quickly decided to slate with Palakovich Carr. That’s when simmering tensions erupted into the open.
Kagan, who is no fan of Gilchrist, announced that she was not endorsing the Delegate slate, at least not yet. This is almost unheard of; in virtually all cases when incumbent Delegates form a slate and none of them are challenging the sitting Senator, the Senator participates. And when Kagan posted her decision on Facebook, the Mayor of Gaithersburg and two Gaithersburg City Council Members voiced their displeasure with the slate.
Open dissatisfaction with the Delegate slate surfaces on Kagan’s Facebook page.
The nominal reason expressed by some for their unhappiness is that with the inclusion of Palakovich Carr, all three slate members are from Rockville and none are from Gaithersburg. (The two cities are roughly equal in size.) But lurking underneath is festering discontent with Gilchrist’s performance in office. Some would prefer open competition in part because it might lead to Gilchrist’s defeat, but instead they got another slate designed to protect him. Two Gaithersburg House candidates – school board member Rebecca Smondrowski and attorney Julian Haffner (who is married to a City Council Member) – have now entered the race. Barve is the only Delegate candidate with any real money, so all the others have a lot of work to do.
The Big Questions: will the Gaithersburg grumblers step up and organize for one or more of the House candidates from their city? Or will they cut their losses and make their peace with Barve and his slate-mates? And what, if anything, will Kagan do?
By Adam Pagnucco.
Christmas morning is over and your blogger is done opening the presents – errrrr, campaign finance reports. Now we get to share them with you! And we will start by breaking down the Montgomery County Executive race.
Before we start playing with the toys, let’s clear away the wrapping and discuss a few data issues. Our numbers are different from what you will read in other outlets. That’s because Seventh State readers are special and we are going to give you only the best! First, we calculate total raised and total spent across the entire cycle and not just over the course of one report period. Many candidates, particularly in other races we will discuss, have been campaigning for more than a year and we want to capture that. Second, we separate self-funding from funds raised from others. Self-funding includes money from spouses. Total raised does not include in-kind contributions. Third, for self-financed candidates, we include public matching fund distributions that have been requested but not deposited in raised money and in cash on hand (which we call adjusted cash balance). That gives you a better idea of the true financial position of publicly financed campaigns.
And now, we reveal the numbers you all have been craving: the first round of fundraising reports for the seven people running for County Executive.
This is exactly the kind of race Council Member Marc Elrich wants. He is up against five other candidates, only one of whom has run countywide before, who are nothing like him and cannot steal votes from his progressive and anti-development base. Better yet, because of public financing, he has the resources to be financially competitive. (The thought of Elrich with money is almost as strange as the sight of Elrich wearing a suit and tie.) Elrich has been building a grass roots base for thirty years and he will be able to combine it with substantial labor, progressive and environmental support. This election is starting to turn into Elrich and a competition to become the non-Elrich alternative.
Council Member Roger Berliner has to feel good about his report. He leads the field in total raised for the cycle and cash on hand, and also has the lowest burn rate. Berliner can now start making the case to those who are not inclined to support Elrich that he is the most viable alternative to Elrich. Doing that is essential for his path to victory. (Disclosure: your author is a publicly-listed supporter of Berliner and has done work for him in the past.)
Businessman David Blair is sometimes compared to fellow businessman David Trone, but he is not using a Trone-like strategy. When Trone entered the CD8 race last year, he staffed up rapidly and began spending millions on television within weeks. Accordingly, some observers expected Blair to write himself a million dollar check, putting opponents on notice and perhaps intimidating one or two of them to withdraw. But while Trone plays to win, Blair looks like he’s playing around. He gave himself just enough money ($300,000) to equal the formerly penniless Elrich in cash on hand and trail Berliner. As for private sector fundraising, Berliner has raked in almost three times as much as Blair. Blair needs to sharpen his message, learn more about the county and show a hunger to win.
Council Member George Leventhal is plenty hungry. He might be the hardest-working candidate in the race and he clearly believes he’s the best person for the job. But Leventhal is killing his campaign with his sky-high burn rate (46%), which is more than double the burn rates of Elrich (19%) and Berliner (18%). Like Berliner, Leventhal needs to show to non-Elrich folks that he is the most viable alternative to Elrich. To do that, he needs to tighten up his spending and get some big endorsements – sooner rather than later.
Bill Frick, you know we love you. We admire your heroism on the liquor monopoly and we appreciate all the great fodder you have given us over the years. But you showed a cash balance of $150,753 – less than half what Berliner, Elrich and Blair reported. Why are you doing this, Bill? We want many more years of you in public office, so please take our advice: stay in the House and run to succeed Brian Frosh as Attorney General when the time comes. We will help you do it! We will even write dozens of blog posts just like this one.
Former Planning Department staffer and Rockville Mayor Rose Krasnow is an appealing, substantive and competent candidate with fans in both the business and smart growth communities. The fact that she is the only female candidate running against five men in a Democratic primary electorate that is almost 60% female is a big plus. Her numbers are not in yet, but she told Bethesda Magazine that she had raised $39,800 from small contributions in the public financing system. If that’s true, it means she is on pace to qualify for public matching funds much faster than either Elrich or Leventhal did. Still, we don’t understand why she entered public financing. It takes a long time to raise money that way and it prevents her from tapping into what could be substantial business support. Even if she qualifies for matching funds, she could very well trail all the other Democrats in fundraising except maybe Frick.
Republican Robin Ficker appears roughly halfway to qualifying for public matching funds. That means the county’s most infamous anti-tax activist could wind up campaigning on the public dole. And all of you MoCo residents will be paying for that!
Next up: the council at-large candidates.
Question: The county’s liquor monopoly has come under heavy criticism–not least from Seventh State. If at all, how would you reform or change, or press the state legislature to change, the Department of Liquor Control?
At the county level, I have been the chief advocate for ending our unique – and counterproductive – liquor monopoly. As someone who has fought monopolies most of my professional life, I know in my bones that monopolies are rarely, if ever, in the public interest. Government monopolies are generally even less efficient. And a government monopoly that tries to do a job that the private sector does in the rest of the country is almost always less efficient. That is true in MoCo. As a result, our residents vote with their feet. Almost one-third of our purchases of liquor are made outside Montgomery County. Our restaurants hate it. Top flight restaurants have said that they would never come here. Bottom line: our monopoly needlessly perpetuates the reputation of our county being anti-business and anti-consumer and stunts our economy.
However, the state is a critical partner in this conversation. It is state law that created our monopoly, and state law must be passed to change it. The positive side of this dynamic is that the state would be the principal, direct beneficiary of increased liquor sales. I would work with the Governor and our legislature to split the savings that the state would derive and hold the county harmless as it weans itself from this monopoly. The dollars are not that significant given that our retail operations should continue to do well – assuming that they can compete! And in the long run, our county will prosper more without the monopoly than with it.
Any discussion of the Department of Liquor Control (DLC) must acknowledge that the Montgomery County budget relies on over $30 million in liquor revenue per year. That is no small amount of money, and it supports critical county services, including almost $11 million for bond payments. Nobody who has proposed privatizing the county’s liquor supply has a workable plan to fill the budget hole privatization would create, likely because there is no way to do so that doesn’t create other problems for the state.
Privatization proposals thus should not be taken seriously; instead, we should continue to look for ways to make the DLC more efficient and effective than it has been in the past, and to increase sales so that we can increase the revenue that the DLC generates.
We’ve already changed the way the DLC is run by bringing in industry professionals, including the director and the warehouse manager, who have improved the operations of the liquor system and brought in a philosophy of continuous improvement. I’ve also encouraged introducing lower markups for more expensive items, which they did, and I’ve supported and will continue to support efforts to help local breweries and wineries sell and distribute their goods. Both the new director and I want to hear and consider other ideas for helping transition the DLC from something that the county has long taken for granted into a professionally run system.
In fact, if a private-sector business had a division that produced a substantial profit but was identified as having management problems and customer service issues that prevented it from being more profitable, its most likely course of action would be to change management, work to improve services, and strive for greater profits. That is exactly what we have been doing with the DLC.
I have been the state’s leader on fixing this abysmal broken system. My “end the monopoly” effort, helped immensely by the Seventh State’s Adam Pagnucco, fell short in 2016 in large part because of vigorous opposition from the Council and County Executive. We agreed to let the Executive lead a work group on the issue, but that work group served no real purpose other than to push the issue onto the desk of the next Executive.
This is a great opportunity. The DLC has value, and I have proposed to ensure that the value stays with Montgomery County by selling off the DLC’s assets, such as its franchise rights to beer distribution, its stores and warehouse, to generate millions in capital dollars that can be spent on school construction. Because the elimination of the DLC will generate millions in repatriated sales and excise tax dollars, I would work with my colleagues in the legislative leadership to help return some of those revenues to the County. Finally, we all know that the work of alcohol distribution will not disappear with the end of the DLC, rather, those jobs will migrate to the private sector and will likely grow in the County as our consumers come home to buy their beer, wine and spirits here. I will work with the private sector distributors and unions to find the best outcomes for current DLC employees as we get the County out of the liquor business.
I am willing to entertain serious negotiations with parties who are willing to make a serious offer to purchase the right to distribute beer, wine and spirits in Montgomery County. In FY 2018, that enterprise generated more than $33 million in surplus revenue over expenses to the county’s general fund, of which $11 million was spent on debt service for approximately $100 million in Liquor Control Revenue Bonds, which were issued more than a decade ago to pay for transportation improvements, including the Montrose Parkway. I think we should commission an independent economic analysis of the present value of a guaranteed revenue stream of more than $30 million each year. My understanding is that it would come to hundreds of millions of dollars – more than enough to retire the bonds. I do not think the county should simply give away these valuable rights, which belong to the people of the county. However, serious offers from serious buyers should be considered. Simply giving the rights (and the associated revenues) away would require that the bonds be retired or refinanced through other means. If general obligation bonds were used to refinance the Liquor Control Revenue Bonds, it would reduce the county’s ability to construct new schools and other capital projects by $100 million.
In the absence of a serious offer to buy the rights to the entire enterprise, I continue to support the County Council’s 2015 proposal to privatize special order sales of beer and wine. Problems with delivery of special orders comprise the vast majority of complaints from restaurants, but the Montgomery County delegation to Annapolis declined to take up the County Council’s proposal in the 2016 session after County Executive Leggett asked for more time for study.
The Montgomery County delegation also declined to take up proposals for immediate privatization or for a voter referendum. Candidates for County Executive who have concerns about the Department of Liquor Control’s shortcomings should remember that liquor laws are made in Annapolis, not in Rockville. I would also support action by the state legislature to allow sales of beer and wine in grocery stores. Beer and wine stores will soon be able to sell spirits under legislation that passed in the 2017 session, which I supported.
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.