In a memo to Montgomery County Public Schools (MCPS) Superintendent Jack Smith, County Executive Marc Elrich is asking MCPS to make operating budget cuts along with the rest of county government. Elrich also makes clear that the capital budget will have to be reduced. Elrich is not asking for a specific cut number yet but indicates that the county will have a clearer picture of its tax base by late August.
What is unclear is how any spending cuts to MCPS conform with state law. The county council recently funded MCPS at maintenance of effort, which is the minimum amount of local dollars allowed by the state. If the county wants to reduce MCPS below maintenance of effort, relevant state law will need to be addressed.
In a June 4 op-ed in the Washington Post and comments reported by WTOP, County Executive Marc Elrich has promised to reform the Montgomery County Police Department (MCPD). According to WTOP, Elrich said MCPD has “an institutional problem” that “starts top down.” He said that he will be submitting a contract to the county council “for reevaluating everything” about MCPD.
If Elrich does intend any serious reforms, he will have to deal with a powerful document that can be invoked in response to them: his own contract with the Fraternal Order of Police (FOP) Lodge 35. The FOP’s contract, which Elrich personally signed, gives the union and individual officers substantial authority to restrict the ability of the chief to run the department, keep employee information confidential, block access to personnel records and mandate the destruction of certain personnel and video records. The contract even obligates the county to help the FOP block answers to public information act requests for videos and data. Many of these kinds of provisions are not unique to Montgomery County. But as the executive who signs union contracts as well as a 12-year member and former chair of the county council’s Public Safety Committee, which oversees the police, Elrich is directly responsible for their implementation here.
Here are some of the provisions of Elrich’s 2019-20 contract with the FOP.
Under certain circumstances, the FOP can force the police chief to bargain over new or changed rules or directives.
Article 61 (Directives and Administrative Procedures) contains a set of procedures that constrain the police chief’s ability to implement new or changed rules or directives. When the chief seeks to implement a new rule or directive or change an existing one, he must notify the FOP. “The primary subject of any new, changed, or amended directives or rules covered by the article shall not include matters currently addressed in the collective bargaining agreement, or matters proposed by the County and rejected by the FOP at the most recent term negotiations, or matters, the primary subject of which, were taken to mediation by the FOP at the most recent term negotiations.”
The FOP may then demand to bargain the proposed rule or directive. If the chief does not agree, the matter goes to the county’s Permanent Umpire who decides if the rule or directive must be bargained. This provision limits the ability of the chief to run his department without the consent of an arbitrator. It could certainly be activated to counter any reform proposals opposed by the union.
If employees are arrested, they must disclose it to their supervisor. However, the disclosure “shall be considered confidential and shall only be shared on a need to know basis.”
Article 15 (Hours and Working Conditions) Section Y contains this language on what happens when an employee is arrested.
Employees shall immediately report, or as soon as practical, to their commander/director or bureau chief, any circumstance where the employee is arrested or becomes a defendant in any criminal proceeding that may result in incarceration, receives an incarcerable traffic citation as defined in the Maryland Transportation Article, has their driver’s license/privilege suspended, revoked, refused or canceled that affects their ability to operate a county vehicle, or is notified that they are the subject of a criminal investigation by any law enforcement agency. If the employee is served with a temporary protective order, temporary ex parte order, or other similar temporary order that impacts the employee’s ability to carry a weapon or to perform their assigned police duties or any permanent protective order, permanent ex parte order or other similar permanent order that impacts the employee’s ability to carry a weapon or to perform their assigned police duties, they shall report the matter (as outlined above) directly to their commander/director or bureau chief to be reviewed to determine if the matter impacts the employee’s ability to perform their assigned police duties. The employee shall provide the commander/director or bureau chief with the information (i.e. date/time/location of the alleged offense, case/docket/tracking number) required for the employer to obtain additional information. All information shall be considered confidential and shall only be shared on a need to know basis. It is recognized that all persons are presumed innocent until proven guilty.
In Maryland, criminal records are public documents accessible through the state’s judiciary website. This language prevents police supervisors from disclosing at least some information that is public record.
Management does not have an unfettered right to access personnel records.
Article 51 (Personnel Files) Section B gives an employee and their authorized representative access to the employee’s personnel file. Additionally, the following individuals can access the file only on a “need to know” basis: the employee’s supervisor, an appointing authority or designee, the county’s Human Resources Director or designee, the county attorney or designee, the Chief Administrative Officer or an Assistant Chief Administrative Officer, and members of a Recommendations Committee when an employee has applied for a position vacancy announcement.
“Need to know” is not further defined in the section other than for the county attorney, when it is defined as “when an employee is in litigation against the County, e.g., Merit System Protection Board, Worker’s Compensation, Disability, Retirement, etc.)” and members of a recommendations committee, when it is defined as “limited to performance evaluations, letters of commendation, awards and training documents for bargaining unit members assigned to Recommendations Committee.” Release of personnel records to anyone else is prohibited without the employee’s signed authorization.
Personnel files are destroyed five years after an employee leaves county employment.
Article 51 (Personnel Files) Section E states the following.
Except as provided below, all records including medical and internal affairs files, pertaining to separated employees shall be destroyed five (5) years after separation, unless the files are the subject of pending litigation. In which case, these files will be destroyed at the conclusion of the litigation.
The County may maintain records necessary to administer employee benefits programs, including health and retirement, a file containing the employee’s name, address, date of birth, social security number, dates of employment, job titles, union and merit status, salary and like information.
Except as required by law, no information may be released from any file without the express written permission of the separated employee.
Section H adds these restrictions.
To the extent not specifically preempted by State law, adverse information concerning an officer’s past performance shall not be admissible in any proceeding unless maintained in strict accordance with this article.
Except as provided in paragraph 1 of this section, only information properly maintained in personnel files as established by this Article may be used in any other process, proceeding, or action.
Elrich’s signature on the FOP’s 2019-20 contract.
Mobile Vehicle System (MVS) recordings may not be used for performance evaluations.
Article 66 (Mobile Vehicle Systems) Section C.7 states, “No recording may be used for the purpose of performance evaluations.” Section C.6 states, “All recordings will be destroyed after 210 days, unless the recording is, or may reasonably become, evidence in any proceeding. A recording will be retained if the FOP provides notice to the Department within 210 days of its potential use in a hearing.”
Management may use MVS recordings for disciplinary purposes under certain circumstances including external complaints, pursuit, collision, uses of force, injury or when management has “reasonable basis to suspect that a recording would show an officer engaged in criminal wrongdoing or serious allegations of misconduct in violation of Department rules and regulations applicable to bargaining unit members.”
Body camera recordings “shall not be routinely reviewed for the express purpose of discovering acts of misconduct or instances of poor performance without cause.”
Article 72 (Body Worn Camera System) Section D.2 states:
BWCS recordings shall not be routinely reviewed for the express purpose of discovering acts of misconduct or instances of poor performance without cause. An employee’s supervisor may use BWCS recordings to address performance when cause exists. Any recording used must be reviewed with the subject employee prior to any documentation of performance. Any documented review will be included in the employee’s supervisory file. The employee shall have the opportunity to respond in writing to the document. The response shall be attached to the supervisor’s document. The employee and the employee’s representative shall be provided access to the referenced recording if requested. Performance evaluation shall not be the sole reason for the employer retaining a recording beyond the agreed upon term.
Section F.1 states, “All BWCS recordings will be destroyed after 210 days, unless the Department deems it necessary to retain the recording for a longer period of time.” Section F.2 states, “An employee may elect to save BWCS recordings for longer than 210 days if the recording was used to support a performance evaluation which resulted in a single category being rated as below requirements.”
Police instructors are prohibited from having sex with trainees. However, they cannot be disciplined for it.
Article 15 (Hours and Working Conditions) Section L prohibits instructors and field training officers (FTOs) from having sex with trainees whom they are instructing. If that happens, the instructors and FTOs are separated from the trainee’s class. However, if the instructor or FTO discloses the relationship to management, “managers and supervisors must maintain the disclosure in confidence” and “no disciplinary action or retaliation must occur as a result of the disclosure.” If the relationship is not disclosed but is otherwise discovered, the more senior officer is involuntarily transferred but “violation of this rule will not result in discipline.” Nothing in the contract prohibits the instructor or FTO from proceeding to train other trainees.
The contract obligates the county to help the FOP block answers to certain public information act requests.
The Maryland Public Information Act (MPIA) is mentioned in three different articles of the contract.
Article 65 pertains to Automatic Vehicle Locators (AVLs) and Portable Radio Locators (PRLs), which are described as “systems that allow the Department to identify the location of police vehicles and portable radios that are equipped with GPS tracking capabilities.” Sections D and E address what happens when MPIA requests are made for AVL and PRL records.
Section D. MPIA. The County agrees that it will deny all Maryland Public Information Act (MPIA) requests for stored AVL/PRL data on the movements and location of vehicles assigned to unit members until and unless a point is reached where court decisions establish that AVL/PRL data is public information subject to release under the MPIA. The County will defend its denials of MPIA requests for stored AVL/PRL data in the trial courts, and will continue to defend these denials in trial courts until and unless court decisions establish that AVL/PRL data is not confidential information. The County may, where appropriate, seek appellate review of court decisions ordering the release of AVL/PRL data, but is not required to do so. If the county chooses not to appeal, the employee shall have the right, as allowed by the Court, to continue the appeal at the employee’s own expense.
Section E. Summonses. The County agrees that it will seek court protection from any subpoena or summons seeking stored AVL/PRL data on the movements and location of vehicles assigned to unit members, except for subpoenas issued by a grand jury, or a State or federal prosecutor. The County will seek protection from subpoenas and summonses in the trial courts, until and unless a point is reached where court decisions establish that AVL/PRL data is not confidential information. The County may, where appropriate, seek appellate review of court decisions ordering the release of AVL/PRL data, but the county is not required to do so. If the county chooses not to appeal, the employee shall have the right, as allowed by the court, to continue the appeal at the employee’s own expense.
And so the contract directs the county to block the public’s access to these records in court.
The second article mentioning the MPIA is Article 66, which pertains to Mobile Vehicle Systems (MVS). Section 3.13 states:
All external requests for copies of recordings, including subpoenas and summonses, will be reviewed by the County Attorney’s Office. The County will notify the FOP of all such requests for MVS recordings/data involving unit members and solicit its opinion before determining whether the request will be granted or denied. If the County determines that a request cannot be denied under the MPIA, it will give the FOP an opportunity to file a reverse MPIA action and will not grant the original request until and unless a court orders that the recording/data be disclosed.
The third article mentioning the MPIA is Article 72, which pertains to Body Worn Camera Systems (BWCS). Section E states:
Release of BWCS video in absence of a specific request: The County will provide written notice to the FOP prior to the release of any BWCS recording to the public. In the event of an emergency or a bona fide public safety need the County may provide written notice after the release. This does not include release of recordings in connection with litigation, In events where there is no exigency, an employee captured in the recording may object to the use of the recording, in writing, to the Chief of Police (or designee) within two calendar days of receiving the notice of intent to release the recording as to any reason(s) why he or she does not wish the recording to be released. The Chief of Police (or designee) will consider any reason submitted by the employee before proceeding with the release.
The release of recordings of an employee’s death or injury shall not occur absent compelling law enforcement related reasons to release the recording or in situations where the release of those recordings are required by law.
The County shall ensure that all external requests for copies of recordings, including subpoenas and summonses, will be reviewed for compliance with applicable standards, including those imposed by law or by provisions of this Agreement. The County will maintain a log of all MPIA requests for BWCS video that it receives. The County will make this log, the underlying MPIA request, and the requested recording, available to the FOP for inspection. If the FOP objects to the release of any portion of the recording, it must promptly notify the County of its objection(s) and its intent to file a “reverse MPIA” action if the County decides to release the requested recording. The County will promptly notify the FOP of any decision to release the requested recording and the date and time of that release, unless the FOP first serves the County with a “reverse MPIA” action it has filed in a court of competent jurisdiction. The parties will make all reasonable efforts to provide each other with expeditious notice under this section given the relatively short time limits in the MPIA and its overall policy of providing the public with prompt access to public records without unnecessary delay.
In summary, the FOP’s contract requires the county to block public access to automatic vehicle locator and portable radio locator data in court and also requires it to facilitate the FOP’s opposing release of motor vehicle and body camera video in court.
If Elrich is serious about reform, he needs to review his own police union contract to see if its provisions are compatible with change. If he doesn’t, the county council will have to step in.
It was supposed to be a good moment for Montgomery County. County Executive Marc Elrich was set to announce a phase 1 reopening of county businesses, mirroring in part the recent announcement by Governor Larry Hogan. It was an occasion for cautious optimism with sober recognition of the challenges ahead.
Instead, it turned into a mud-splattered free-for-all.
That was probably inevitable given how the event was staged. The county announced through a press release the night before that the event was taking place at the Kentlands and Bethesda Beat published it. That gave protesters time to prepare and they weren’t planning on handing out cupcakes and milk. Just two weeks ago, they descended on Annapolis – many without masks – to resist “tyranny” and “trampling the U.S. Constitution.” Why would they behave differently in Rockville?
The smart thing to do would have been to hold the event in a controlled environment in the executive office building with attendance limited to press. But the administration decided to go for a photo-op in the Kentlands’ business district instead. Well, a photo-op was had – for the protesters. They got ample coverage from NBC4, WJLA, WTOP, Bethesda Beat and even Baltimore TV that they would not have received at a controlled indoor event.
“Dictator!” “Fascist!” “Nazi!” “Liar!” “Recall!” “Trump 2020 baby, that’s what this is all about!” Those were the nice comments. The protesters repeatedly interrupted and shouted down the executive, preventing others from hearing him. At an event with such heckling, a communications person normally steps forward to cut it off early. Instead, Elrich actually took questions and prolonged the event, which went on for more than 20 minutes. The sign language interpreter even interpreted the hecklers’ comments while standing right next to Elrich.
The look on Elrich’s face (far right) says it all. Also appearing: county health officer Travis Gayles (at podium) and the sign language interpreter (far left). Credit: WJLA Facebook stream.
Besides the relentless yelling, a number of unmasked protesters stood within spitting distance of the executive and his staff. One unmasked fellow in a hat and sunglasses stood behind him for nearly 15 minutes and, at one point, got dangerously close to the executive. Police officers were present. Why did they not move unmasked protesters away from the executive and his staff to protect their health?
How could security allow an unmasked man to get this close to the executive? Credit: WJLA Facebook stream.
As for the protesters, there were enough of them to make serious noise. Just like in Annapolis, the event turned into a mass gathering with unmasked people. The COVID-19 crisis is not over. It’s a complete contradiction to the county’s message to allow – much less to CREATE – a mass gathering including unmasked individuals. It’s not just a PR blunder, it’s a threat to public health.
Let’s not mince words: the protesters were boorish miscreants who should be held responsible for their own actions. They are an embarrassment to the county. All of that said, they should never have been given a grand stage on which to run amok in front of TV cameras. Someone on Elrich’s communications team should have raised what a bad idea it would be to hold the event in public with notice to anyone who wanted to attend. Some shutdown protests around the country have turned violent and armed protesters even stormed the Michigan Capitol. The protesters succeeded in turning an announcement which should have furthered stability and progress into one that spotlighted division and chaos.
This event should not have happened.
But it did. And once again the administration has endured a communications debacle that could have been avoided.
In a letter to Council President Sidney Katz, County Executive Marc Elrich has asked the council to limit the work of the Planning Board to “noncontroversial” issues during the COVID-19 crisis.
Elrich begins his letter by noting that the council has delayed some hearings on non-budget issues due to problems of public participation stemming from social distancing. Elrich contrasts that with the planning board’s policies. He writes:
The Planning Board continues to meet, have substantive presentations, and take action on controversial matters important to the public. While its meetings are available on the website and the Planning Board has provided a form for public participation, the new process is complicated and subject to ‘technical difficulties,’ as happened on Thursday, April 2nd. The result is little, if any, participation by a distracted public.
After noting two issues of public interest before the board – an amendment to environmental overlay zones in Ten Mile Creek and ongoing work on the Subdivision Staging Policy – Elrich writes:
I ask that the Council give direction to the Planning Board consistent with its own decision to delay certain public hearings until such time as the public can more fully participate. Because sensitive environmental and major policy decisions require full public participation, I recommend that the Board limit its actions to those agenda items that are noncontroversial, necessary for the administrative functioning of the agency, and unrelated to major policy decisions that will come before the Council.
It’s unclear whether the council has the specific authority to direct the Planning Board in how to perform its work. The council does fund the agency and it appoints Planning Board Members. Complicating the issue is Elrich’s barely veiled contempt for Planning Board Chair Casey Anderson. Last year, Elrich told Bethesda Beat that he was “not a fan” of Anderson but the council unanimously reappointed him as chair anyway.
County Executive Marc Elrich has reached agreement with the three county employee unions (MCGEO, the fire fighters and the police) to provide additional pay related to the COVID-19 crisis to their members. The additional pay will range up to $10 per hour, is retroactive to March 29 and will last for at least six pay periods. Elrich’s press release appears below.
County and Labor Representatives Reach Agreement on Recognizing the Risks of On-site Employees
For Immediate Release: Friday, April 10, 2020
County Executive Marc Elrich is pleased to announce that the County has completed its negotiations with all three County unions and agreed upon COVID-19 differential pay to recognize the unusual risks employees now face in leaving their homes and delivering vital services to the public. These agreements are significant because the union representatives worked with management during this crisis time to achieve an agreement that ensures that critical services are maintained, employees are taken care of and fiscal realities are addressed. The three unions are the International Association of Fire Fighters, Local 1664; the Fraternal Order of Police, Lodge 35; and, the United Food and Commercial Workers, Local 1994 (MCGEO).
“I appreciate the work and the willingness of our union representatives to join with us in a collaborative approach to bargaining, to achieve an agreement that respects the increased risk for our workers who are continuing to do their jobs and respects our budgetary obligations,” County Executive Elrich said.
This agreement recognizes the increased risk of the work done by our first responders – firefighters and police officers during this pandemic. It also recognizes that other employees are doing work that requires public interaction – and therefore increased risk, including work by corrections officers, bus drivers, nurses, and social workers.
The County Executive noted that under provisions of existing county bargaining agreements (which were negotiated years ago), the unions could have insisted on much larger benefits, but they understood the importance of the ongoing fiscal health of the county. The County Executive also noted the progressive nature of the agreement, which gave dollar, rather than percentage, differential payments.
The County Executive acknowledged that the County has nonprofit partners serving on the front lines of the Corona-19 response and will work with them to find possible ways to help them maintain necessary staffing.
After teams of management, in close coordination with union representatives, identified the critical core services that would need to continue for the next eight weeks, the likely minimum duration of the COVID-19 crisis. This COVID-19 differential pay would apply to those front-facing and back-office onsite employees who are required to come to work to respond to COVID-19 or provide County’s selected critical core services. Those who must work onsite are in the following two categories:
Front Facing Onsite: work that cannot be performed by telework, involves physical interaction with the public and cannot be performed with appropriate social distancing.
Back Office Onsite: work that cannot be performed by telework and does not involve regular physical interaction with the public. The broad details of the COVID-19 pay differential are as follows:
The differential pay will be uniform for FOP and IAFF members. For MCGEO-represented and GSS employees, the differential will distinguish between front-facing onsite and back office onsite work. The differential pay for all impacted employees are retroactive to March 29, the beginning of the current pay period.
The front-facing onsite employees will receive an additional $10/hr and the back-office onsite will receive $3/hr.
Additionally, this week masks will be distributed to employees who do not have them, and administrative leave will be given to high risk employees who cannot telework and do not feel safe working on site.
The agreements cover six pay periods, which started on March 29, or until the Maryland State of Emergency is lifted. If the State of Emergency is still in effect at the end of the six pay periods, the agreements will be revisited.
Part One of this series laid out the rules and methodology for how we determined MoCo’s most influential people. These lists were developed by adding together the nominations of 85 people who are themselves extremely knowledgeable and influential. Now to the Final Four – the most influential elected officials in MoCo!
4. Council Member Andrew Friedson (D-1) – 32 votes
Source: He knows what local government is good for and what it’s not good for, and even if he frustrates you, you can’t help but admire how competent he is.
Source: Has carved out his own brand on a Council crowded with talent.
Source: More than any other member, Andrew has changed the terms of engagement on so many issues in front of the County Council. He’s taken to it like a sponge. His ability to keep the “main thing” the “main thing” is matched only by his incredible work ethic.
Source: He’s getting tons of respect as very sharp, with integrity, and isn’t scared to speak honestly and openly about what he sees going on.
Source: Andrew sticks out as the shiny new thing on the council for his willingness to show some moderation. This leadership is sorely lacking on a council dominated by the far left. If he can actually move the council toward the middle, he will have earned his title as “the real deal.”
Source: It is difficult to find anyone on this side of town who doesn’t love him. Truly wonderful.
Source: Burst on the scene, no signs of stopping; high marks for constituent service; fresh blood but smart enough to keep on seasoned staff from Berliner.
Source: Has shown incredible political savvy. Has done tremendous work in just his first year – economic impact analysis, vote against tax legislation, COVID19 response.
Source: Dynamic, smart, driven and witty, Andrew has made his mark as the voice of the business community. He is tireless as evidenced by his “home alone” video. He is always the last one to leave the Council building at night (unless he’s at an event).
AP: You would expect business types to vote for Andrew but he had broad strength among my entire source pool, even among those who sometimes disagree with him. Andrew GETS politics in a way that few other local politicians do. He can work the inside, he can work the outside, he can compromise and he can pull others along. He will have bumps in the road like everyone does, but remember this now and for the future: Andrew Friedson is the Real Deal.
3. Delegate Marc Korman (D-16) – 34 votes
Source: What a brilliant guy, and a serious transportation guru.
Source: The smartest person in the room, a future Appropriations chair, and has an underrated ability to cultivate allies.
Source: Brilliant. He absolutely knows how to get stuff done. He’s widely respected as a go to guy for numbers.
Source: Marc has carved out a niche as the dominant expert on mass transit and has earned the respect of his colleagues. Smart, hard-working, effective, and hyper responsive to constituents. One wonders how he has time to do it all. With the spectacles to complement his innate nerdiness, he could go a very long way with a little more charisma and charm.
Source: He’s just way smarter, more substantive, organized and hard-working than just about anyone else in elected office.
Source: Brilliant tactical legislator good at using all that to get things done. Well positioned in the House to get it done.
Source: Universally respected, Metro/transit geek (that’s a compliment), returns emails with superhuman lightning speed, knows Annapolis inside and out.
AP: Marc reminds me a lot of Anne Kaiser in terms of his work ethic, substance and steady Eddie temperament. He is also incredibly responsive and never neglects his constituents. Marc is one of the very best elected officials in the state and MoCo is lucky to have him.
2. County Executive Marc Elrich – 36 votes
Source: Half the Council may be ready to run against him but he writes the budget and sets the priorities.
Source: Love him or hate him, he’s been throwing fireballs from the left for decades. He took several tries to get on the council and y’all just couldn’t shake him off, now he’s your county executive. Deal with it!
Source: Rocky first year, has lost credibility with progressives on the housing issue, and administration seems to lack priority issues or obvious agenda.
Source: [On Elrich and Chief Administrative Officer Andrew Kleine] Consider the decisions they make, don’t make, and back-pedal on—this pair is the biggest influencer on county government whether they know it or not.
Source: I don’t agree with him at all, but his policies are shaping the county – for better or worse.
Source: His lack of vision and leadership is what influences events and issues in the county.
AP: The county executive, whoever he or she is, must be on this list. But Elrich is very different from his predecessors. For 30 years, he defined his political career primarily on what he opposed. That’s a great formula for being a contrarian council member but not much of a governing strategy for being a county executive. Elrich did not have a great start and now he is dealing with a budget crisis. If he can work productively with the council to fix it, he will regain some ground. If not, the council will make him irrelevant.
1. Congressman Jamie Raskin (D-8) – 38 votes
Source: Even though he is becoming more of a centrist neoliberal, you cannot argue his influence and ascent to national politics and how he’s beloved by all factions of MoCo Democrats.
Source: Right expertise at the right time.
Source: An unabashed liberal with unsurpassed talent to excite his far-left base. Wicked smart, respected, and likeable even among non-liberals. These abilities explain his quick ascension in Congress. Probably too liberal to run statewide, but I wouldn’t rule him out.
Source: Jamie Raskin has a lot of influence because he has total credibility with local progressives.
AP: I never thought I would see a MoCo member of Congress attain more popularity than the legendary Chris Van Hollen. I don’t know if Jamie is there quite yet, but he might be tied – and that’s incredible. Jamie was always a brainy and appealing progressive, but the contrast with a deranged, misogynistic and white supremacist president has amplified his impact. And in MoCo, it has made him a bona fide hero.
We are not done. Coming next – the most influential non-elected people in MoCo!
Facing severe crises to public health, the county’s economy and its budget, County Executive Marc Elrich sent the letter below to the county council about the budget. The main takeaways are:
1. The executive has instituted freezes on hiring and procurement for functions not related to COVID-19 response. Overtime has also been restricted to COVID-19 response departments.
2. The finance department has begun estimating the crisis’s impact on county revenues.
3. The executive has begun talking to the county’s unions about “a range of compensation issues.” No further details were provided.
4. Office of Management and Budget Director Rich Madaleno has been designated as the liaison to the council on “issues related to fiscal response and recovery.” When Madaleno was a State Senator, he was a key player in working on the state’s budget problems during the Great Recession. Few people in Maryland understand the state budget better than Madaleno.
Within minutes of seeing our post on parking tickets being issued for restaurant takeout pickups, Council Member Tom Hucker asked county officials to stop the practice. When Hucker announced this on Facebook, County Executive Marc Elrich replied, “I just told DOT to stop enforcement until they have put in place pick-up zones around all the restaurants. We don’t want cars parking and not moving, at least as long as some things are open, but you can’t be ticketing people trying to pick up food after having encouraged restaurants to maintain as much service as they can through carry-out and delivery.”
All of this happened in less than an hour.
Elrich and Hucker deserve praise for acting with such speed.
Hucker’s Facebook post, along with Elrich’s comment, is reprinted below.
Wage losses in these industries are certain to show up in
reduced income tax receipts. Because of
the nature of these kinds of jobs, the affected workers will likely never
recover that income. All of this is
going to profoundly hit the county budget.
And it is coming in the middle of the county’s budget process, which
normally concludes in mid-May.
As Fred Sanford used to say, this is the big one!
We haven’t seen anything quite like the coronavirus pandemic in a century, but we have seen economic crises before. The last one MoCo encountered happened a decade ago. The Great Recession had been underway since 2008 but did not truly destroy the county’s budget until the spring of 2010. As required by the county’s charter, then-County Executive Ike Leggett released his recommended FY11 budget on March 15. Just ten days later, Leggett sent a memo to the county council explaining that circumstances had changed since his budget was transmitted. Leggett wrote:
I am sending this memorandum to recommend that we jointly take additional actions to strengthen the County’s financial position in the current fiscal year and for FY11.
There is no perfect time to formulate a budget. Since I recommended my budget earlier this month, we have already received more bad news that points to additional fiscal deterioration. This includes a dramatic increase in the County’s unemployment rate from 5.2% to 6.2% and may signal further erosion of income tax revenue. In addition, Anne Arundel County’s bond rating was recently downgraded from a AA+ to a AA rating due to several factors including the deteriorating condition of Anne Arundel’s reserves. At the same time, the Department of Finance has been in discussions with the bond rating agencies relative to an upcoming bond sale and is concerned about feedback they have received from the rating agencies on our fiscal position.
At that time, Leggett recommended increasing the energy
tax and transferring money from non-tax supported funds into the general fund,
which is the county’s main vehicle for funding most governmental functions.
On April 5, Leggett followed with a second memo explaining that the county’s March income tax distribution had fallen significantly and that Moody’s had placed the county on a watch list for a potential bond rating downgrade. Things were getting worse. Leggett wrote that he “asked the OMB and Finance Directors to meet with the department heads of all large County Government departments to identify outstanding, remaining purchases and reimbursements for FY10 or early FY11.”
On April 22, Leggett sent a third memo to the council outlining a $168 million writedown in income tax revenue and a resulting total fiscal gap of “approximately $200 million.” Leggett forwarded a long list of recommended spending cuts along with a larger increase to the energy tax to close the gap. By this point, Leggett had essentially re-written his recommended budget, which was released just 5 weeks earlier.
The resulting budget passed by the council in May was the ugliest budget in county history. It broke collective bargaining agreements, furloughed county employees, doubled the energy tax and spent 4.5% less money than the prior year’s approved budget, the first actual dollar spending cut that anyone could remember. But it did not resort to mass layoffs and the county kept its AAA bond rating. For all its fiscal brutality, this budget saved the county from financial disaster. It was Leggett’s greatest achievement and it was shared by a county council that did its job.
Today’s policy makers should heed the lessons of
2010. (The only current elected
officials who were in county office that year were Council Member Nancy Navarro
and then-Council Member Marc Elrich, who is now the executive.) Chief among them are that teamwork, honesty,
speed, an absence of finger pointing and political courage were all crucial to
success. No one was trying to score
points. Everyone was trying to do their
best. Amazingly, it all happened in an
Here is what must happen now.
1. Elrich must
stop defending his recommended budget.
It no longer matters whether it was a good budget or not. It’s not going to happen now. The actual revenues generated from the
county’s emaciated economy will not support it.
And once the council starts making changes, he has to be constructively
involved, as Leggett was. Standing aside
and taking potshots from the sidelines would be a failure of leadership.
2. The finance
department must revise its revenue estimates, especially for income taxes. Leggett’s finance department was able to see
a deterioration in income tax receipts within three weeks of the release of his
recommended budget. Today’s finance
department must react with the same speed.
3. The office of management and budget must prepare a menu of savings options for the council. Everything – Elrich’s collective bargaining agreements (which now contain raises of up to 7-8%), hiring freezes, attrition and more – needs to be on the table. The council must know what number it needs to hit and they need to have choices on how to get there.
4. A discussion must take place about the county’s reserves. As of FY20, the county’s reserves (including its agencies) were estimated to be more than $500 million, or 10.5% of revenues. That’s a lot higher than the 6% reserve level possessed by the county in 2010 and is a direct result of Leggett’s long-term plan to bolster reserves and maintain the bond rating. It’s a great goal to have a 10% reserve, but that money is kept available for emergencies – and that’s exactly what we have now. County leaders should discuss whether we need to maintain reserves at that level or if they can be used to plug government spending holes and/or to fortify the economy. Comptroller Peter Franchot has already recommended that $500 million be allocated from the state’s rainy day fund to assist small businesses.
5. With public participation in the budget process limited by the coronavirus, the county must keep residents and businesses informed of the latest budgetary and economic developments. The county has a large media apparatus that it can tap for doing so.
Ike Leggett proved that he was up to the task of dealing
with a crisis. Now it’s time for today’s
elected officials to show that they are too.
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
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
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