Category Archives: Marc Elrich

Public Financing Geography, Part Three

By Adam Pagnucco.

It’s time to start looking at the geography of in-county contributions for the thirteen candidates who have so far qualified for public matching funds: County Executive candidates Marc Elrich, Rose Krasnow and George Leventhal and Council At-Large candidates Gabe Albornoz, Bill Conway, Hoan Dang, Evan Glass, Seth Grimes, Will Jawando, Danielle Meitiv, Hans Riemer, Mohammad Siddique and Chris Wilhelm.  While all participate in the same system, there are immense differences between them in where they are raising money.

First, an overview.

Long-time Council Members Marc Elrich and George Leventhal lead in public financing fundraising.  But former Rockville Mayor and Planning Department staffer Rose Krasnow is closing on them.  Krasnow qualified for matching funds in 109 days, far faster than Elrich (209 days) and Leventhal (278 days).  All three lead the Council At-Large candidates in total raised primarily because of the higher public matching rate for Executive candidates.  Riemer, Conway and Glass lead the council candidates while Meitiv, Siddique and Grimes trail.  The fact that some candidates last reported two months ago while others reported within the last few weeks will affect this data somewhat.  Including the traditionally funded candidates, Roger Berliner so far leads the Executive candidates while Delegate Charles Barkley is one of the Council At-Large leaders and Ashwani Jain is competitive.

Here’s an important thing to note about public financing: it’s not just about money.  It’s also a cornerstone for a field program.  The same folks who show up at campaign events and bring small checks are the people who can be tapped for neighbor-to-neighbor letters, canvassing, phone banking, lit drops and poll coverage.  The total amount raised is a useful proxy for the number of ardent supporters, so money raised in a local area may be a possible, partial precursor to actual electoral performance.

Now to the three Executive candidates.

Marc Elrich

Elrich is the number one fundraiser in Downtown Silver Spring, Olney and Takoma Park, the latter by a mile.  His contributions have been heavily concentrated in the Democratic Crescent, which accounts for 53% of all in-county contributions and 68% of in-county contributions to Elrich.  This resembles the Downcounty support for Jamie Raskin in his 2016 race for Congress.  That distribution along with Elrich’s number one finish in the last two at-large elections and his many progressive endorsements makes him the front runner in the eyes of most observers.

George Leventhal

Leventhal, a former Chair of the county Democratic Party, has leveraged his more than twenty years in county politics to assemble the most geographically diverse contribution distribution of the Executive candidates.  He is the number one fundraiser in Bethesda, Gaithersburg, Germantown and Montgomery Village.  Leventhal leads Elrich in Upcounty but trails him by a lot in the Democratic Crescent.  Can Leventhal pull enough votes from Midcounty and Upcounty to overwhelm Elrich’s strength in Silver Spring and Takoma Park and break through?

Rose Krasnow

Krasnow was an elected official in Rockville between 1991 and 2001 and she is crushing both Elrich and Leventhal in money raised from the city.  On the other hand, she trails them badly in the Democratic Crescent.  Krasnow is off to a fast start in public financing but she needs more exposure in Downcounty areas like Downtown Silver Spring, Bethesda and Chevy Chase.  Elrich and Leventhal have been working those places for years and time is getting short.

Next, we will start looking at the Council At-Large candidates.

Disclosure: the author is a publicly-listed supporter of Berliner for Executive.


MoCo Endorsements: March 9, 2018

By Adam Pagnucco.

We have entered the thick of endorsement season and a big one just came out: a partial decision by MCEA, holder of the mighty Apple Ballot.  We have updated our institutional endorsement matrix and offer some comments below.

First, a note.  Many of the listed endorsing organizations have not finished their processes and may be announcing more decisions in the future.  Other important organizations (like the Washington Post, the Realtors and the Volunteer Fire Fighters) have not endorsed yet at all.  So this list is a work in progress.

That said, here are a few impressions.

Senator Roger Manno, who might be the most pro-union member of the entire General Assembly, is sweeping labor endorsements in his run for Congress District 6.  How far will that take him against Delegate Aruna Miller and Total Wine co-owner David Trone?

Council Member Marc Elrich, who is running for Executive, has put together an impressive string of progressive endorsements and he will be getting more of them.  He is definitely the favored Executive candidate of the left.

Ben Shnider, who is challenging District 3 County Council candidate Sidney Katz, has also become a darling of the left.  Will that be enough to take out Katz, who has been the most prominent politician in Gaithersburg for decades?  We will have an opinion on that in the near future.

Will Jawando, who is running for Council At-Large, has had a great six weeks.  He is the only non-incumbent who has assembled four influential institutional endorsements, including the Apple.  (Chris Wilhelm has three and Danielle Meitiv and Brandy Brooks have two each.)  Combine that with Jawando’s fundraising success, electoral experience and natural charisma and he is looking strong right now.

The good news for Delegate Jeff Waldstreicher, who is running for the District 18 Senate seat being vacated by Rich Madaleno, is that he is dominating the institutional endorsements over Dana Beyer and Michelle Carhart.  The bad news is that his dispute with House candidate Helga Luest is escalating.  Women are 60% of MoCo Democrats and this is a particularly bad cycle to run afoul of them.

While MCEA has made some county-level endorsements, it has postponed its decision on the incumbents (except for Sidney Katz).  The teachers are unhappy with recent MCPS budget decisions made by the County Council, especially with the breaking of their collective bargaining agreement two years ago.  With Ike Leggett’s recommended budget coming next week, we will learn more about what might happen to MCPS this year and that will affect the union’s thinking.  The remaining non-incumbents in the Council At-Large race will be paying rapt attention!

Speaking of the At-Large race, we wrote last April that the sole incumbent running, Hans Riemer, was going to be reelected.  We still believe that will happen and so do most of the folks running in his race.  But what happens if he is passed over by both the Apple Ballot and the Post?  The Apple is skeptical of council incumbents right now.  As for the Post, the newspaper endorsed Riemer in the 2014 primary in part because it said challenger Beth Daly was “dead wrong.”  But it dumped Riemer for a no-name Republican in the general election, saying he was “a first-termer with modest achievements.”  The Post has a lot more options in the 2018 At-Large field than it did last time.  Then throw in the facts that there are a lot of good folks in the At-Large race and Riemer’s name will be appearing near the end of a VERY long ballot.  If Riemer loses both the Apple and the Post and the hungry field of non-incumbents continues to impress, is he still a lock to win?  (Disclosure: your author used to work for Riemer.)

That’s it for now.  We’ll have more when the next wave of endorsements comes in!


SEIU Local 500 To Endorse Five in MoCo Races

By Adam Pagnucco.

SEIU Local 500, one of the largest unions in Maryland, will be endorsing five candidates in MoCo races soon.  The local’s membership of more than 8,000 is concentrated among MCPS support staff, adjunct college faculty and child care workers.  It has one of the most aggressive political operations in the state and its endorsement is highly valued in MoCo.

At this time, the local will be endorsing:

Marc Elrich for County Executive

Gabe Albornoz, Ashwani Jain and Will Jawando for Council At-Large

Ben Shnider for Council District 3

The union has not decided on an endorsement yet in Council District 1 and may announce one later.  It has postponed endorsement decisions for incumbent Council Members outside District 3 pending further actions of the council.  Since MCPS accounts for a significant portion of the local’s membership, budget decisions on the schools may impact the union’s thinking.

Congratulations to the endorsees.  To be continued!


Laborers Union Announces MoCo Endorsements

By Adam Pagnucco.

The Mid-Atlantic region of the Laborers International Union of North America (LIUNA) has announced its endorsements in MoCo county-level races.  The union is supporting Marc Elrich (County Executive), Andrew Friedson (Council D1), Ben Shnider (Council D3), Nancy Navarro (Council D4), Tom Hucker (Council D5) and Hans Riemer and Chris Wilhelm (Council At-Large).

LIUNA’s announcement on Twitter.

Elrich and Shnider are starting to roll up progressive endorsements; both are supported by SEIU Local 32BJ and Casa, while Shnider has the Sierra Club and Elrich has the AFL-CIO.  Friedson looks like he is building the kind of business-labor coalition that once supported politicians like Doug Duncan.  Navarro and Hucker have no opponents – so far.

LIUNA, SEIU and UFCW Local 400 (grocery store workers) are probably the most active unions in the Washington region that include at least some private sector members.  LIUNA does not represent any MoCo county employees, but it does represent workers employed by the county’s private trash removal contractors.  LIUNA’s main objective is getting the county to use project labor agreements on its construction projects which would mandate union representation of the workers on those jobs.  While the union has not been a huge player in MoCo politics in the past, it did spend hundreds of thousands of dollars to get Cathy Pugh elected as Mayor of Baltimore in 2016.

[Disclosure: your author worked as a strategic researcher for LIUNA’s international office in 1994 and 1995.]


Top MoCo Fundraisers, January 2018

By Adam Pagnucco.

Recently, we have run several reports on fundraising through January 2018.  This post combines all of our data and presents the top 20 fundraisers in MoCo so far.  Note that we break out self-financing and report totals raised for the cycle, not just totals since the last report.  And… here they are!

A few random thoughts.

1.  It’s natural to expect Brian Frosh and Peter Franchot to be the leaders since they both hold statewide offices.  Of the county-level candidates, Council Member Roger Berliner, who is running for Executive, is number one.

2.  The numbers for Senator Rich Madaleno (D-18), who is running for Governor, are misleading since he will be applying for public matching funds.  Madaleno has said that he anticipates receiving about $975,000 from the state.

3.  Delegate Jeff Waldstreicher (D-18), who is running for Senate, is the leading fundraiser among all of MoCo’s state legislators.  He will need that money against his self-funding rival, Dana Beyer.

4.  County Executive candidate David Blair, gubernatorial candidate Krish Vignarajah, Council District 1 candidate Andrew Friedson and Council At-Large candidate Bill Conway are first-time candidates.  It’s a significant achievement for first-timers to make a list of this kind although it’s somewhat tempered by the self-financing of Blair and Vignarajah.

5.  Delegate Marc Korman (D-16) is the only first-term elected official on this list.  That’s a big deal and a sign of good things to come.

6.  Council Member Marc Elrich, who is running for Executive, has never been on a top fundraising list in his life.  He is now, and that’s thanks to public financing.

7.  Lieutenant Governor candidate Susan Turnbull raised more money in a month and a half of campaigning than half the people on this list did in the entire cycle, a staggering feat.

8.  Governor Larry Hogan has raised more money this cycle ($11.5 million) than everyone on this list combined.

Note: an earlier version of this post mistakenly omitted Turnbull’s results.  We have corrected it to include her.


Democratic Socialists Endorse Elrich, Brooks, Meitiv and Wilhelm

By Adam Pagnucco.

The Metro DC chapter of the Democratic Socialists of America (DSA) has endorsed Marc Elrich for County Executive and Brandy Brooks, Danielle Meitiv and Chris Wilhelm for Council At-Large.  DSA is the successor to socialist organizations once led by Eugene V. Debs and Norman Thomas.  It has grown to become the largest socialist group in America in the age of Trump.

DSA’s endorsement announcement on Twitter.

The Metro DC chapter has posted its questionnaire responses from Elrich, Brooks, Meitiv and Wilhelm on its website.  Pertinent information includes the following facts.

All four are members of DSA.  Brooks said she was not a member on her questionnaire but her campaign manager, Michelle Whittaker, informs us that she is.  Elrich joined decades ago.  Wilhelm joined in November 2017.  Meitiv said, “I am a DSA member. It would be personally disappointing for me if I did not get the organization’s endorsement.”

Elrich and Wilhelm oppose “privatization” of the liquor monopoly.  Wilhelm wrote, “I do not support privatizing the Department of Liquor Control because it provides good jobs for hundreds of county workers and it also generates tens of millions of dollars in revenue for the county. We cannot afford to eliminate this source of funding.”  Meitiv opposes most privatization, but supports it for the liquor monopoly, writing, “With regard to the County Liquor Department, I am of a different mind. I think that the liquor business is not an essential government service and is an artifact of temperance movements and pay for play corruption. I would favor allowing for locally owned and operated private liquor stores.”  Brooks’s position is unclear.

Elrich, Meitiv and Wilhelm favor decriminalization of sex work.  Brooks does not commit to decriminalization, citing the problems caused by human trafficking.

All four support having Montgomery County act as a sanctuary county for immigrants.  Currently, county officials do not consider the county to be a sanctuary jurisdiction.

All four believe undocumented immigrants should have the right to vote in elections.

All four support rent stabilization laws.

All four support tuition-free community college, though Elrich says, “However, we do not currently have resources at the county level (and probably not at the state level, either) to fund it. We should work towards lowering the cost of college, but our ability to do that is constrained by what resources we have.”

The Metro DC chapter of DSA’s logo.

DSA asked, “Do you identify as a democratic socialist?”

Elrich responded, “Democratic socialism doesn’t have a hard and fast definition; I see it as a philosophy that envisions a more democratic society. I believe in democracy in both the political and economic spheres. What does socialism mean now? We are living in the 21st century, and simply reducing political analysis to a debate between 18th century capitalism and 19th century Marxism doesn’t help us find solutions. There are ideas that have worked and have moved society forward that have evolved from both perspectives, as well as things that haven’t turned out so well from both. So a lot of the ideals of democratic socialism contribute to my thinking, but they don’t entirely define my thinking.”

Brooks responded, “I believe strongly in the ability of everyday people being able to ‘freely and democratically’ set the vision for their government and community. That is the essence of the participatory governing strategy I will bring to elected office. On core issues of economic, social, and racial justice, we must also recognize how capitalism and corporate influence on our policies and politics negatively impacts our people, our planet, and our communities. We must remove the influence of corporate money in our politics and policy to create systemic reform.”

Meitiv responded, “I joined DSA because I found a community of activists who share my values and policy goals. As for identifying as a democratic socialist, I am still exploring what that label means, to DSA members and to the public generally, as well as my own understanding. For example, I’m reading about distinctions being drawn by theorists regarding Social Democracy and Democratic Socialism. There should be no question about whether I share the ideals and concerns of the group, or whether I am concerned about publicly acknowledging DSA membership. I am a little hesitant to put myself in a box with a neat label, but I am absolutely comfortable with identifying as a member of DSA for those reasons.”

Wilhelm responded, “Yes.”


Campaign Finance Reports: County Executive, January 2018

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.


Public Financing Update: January 2, 2018

By Adam Pagnucco.

Happy New Year, folks!  After a relatively quiet period in the fall, December saw a number of applications for public matching funds from county candidates participating in public financing.  One of the many positive things about public financing is that when candidates apply for matching funds, they have to file full reports with the State Board of Elections.  That gives data junkies like your author – and Seventh State readers!  – lots of updated data without waiting for the relatively few regular campaign finance reports in the state’s schedule.  The next time all campaign finance reports are due, both from public and traditional accounts, is on January 17.

The candidates below have met the thresholds for matching funds and have applied for those funds from the state.

A few notes.  The column titled “Non-Qualifying Contributions and Loans” refers to loans from candidates and their spouses (up to $12,000 is allowed) and out-of-county contributions, which are allowed but not matched.  The column titled “Adjusted Cash Balance” includes the cash balance in the last report plus the most recent matching funds distribution requested but not yet received.  It is the closest we can approximate the financial position of each campaign at the time they filed their last report.  The column titled “Burn Rate” is the percentage of funds raised that has already been spent.  Generally speaking, candidates should strive to keep their burn rates low early on to save money for mail season.  Mohammad Siddique’s totals are preliminary as there are a few issues in his report that will have to be resolved with the Board of Elections.  And District 4 Council Member Nancy Navarro applied for $35,275 in matching funds but cannot receive them unless she gets an opponent.

Below is the number of days each candidate took to qualify for matching funds.  Let’s remember that the thresholds are different: 500 in-county contributors with $40,000 for Executive candidates, 250 in-county contributors with $20,000 for at-large council candidates and 125 in-county contributors with $10,000 for district council candidates.

So what does it all mean?  Here are a few thoughts.

County Executive Race

Council Members Marc Elrich and George Leventhal, who are using public financing and running for Executive, have been active in county politics for a long time.  Elrich first joined the Takoma Park City Council in 1987 and has been on the county ballot in every election since.  He has been an elected official for thirty years.  Leventhal worked for U.S. Senator Barbara Mikulski and was the Chair of the county Democrats in the 1990s.  He played a key role in defeating a group of Republican Delegates in District 39 in the 1998 election.  Both of these fellows have built up large networks of supporters over many years and they have done well in public financing, raising similar amounts of money from similar numbers of people.

The difference between them is burn rate.  Leventhal is spending much more money than Elrich early, with some of it going to a three-person staff.  He had better hope this early spending is worth it because if this trend keeps up, Elrich could have almost twice as much money as Leventhal available for mailers in May and June.

At-Large Council Race

One of Council Member Hans Riemer’s advantages as the only incumbent in this race is the ability to raise money, and he has put it to good use in public financing.  Riemer leads in number of contributors and total raised.  He has also maintained a low burn rate.  This is Riemer’s fourth straight county campaign and he knows what he’s doing at election time.  His biggest problem is that his name will be buried near the end of a VERY long ballot.

The five non-incumbents who have qualified for matching funds have raised similar amounts of money so far.  As a group, they are not far behind Riemer.  The one who stands out here is Bill Conway.  Hoan Dang, Evan Glass, Chris Wilhelm and Mohammad Siddique all filed in December while Conway last filed in September.  Our bet is that when Conway files next month, he will show four months of additional fundraising that will put him close to Riemer’s total.

That said, the five non-incumbent qualifiers have so far separated themselves from the rest of the field.  Gabe Albornoz and Danielle Meitiv have said they have qualified but have not filed for matching funds with the state.  No other candidates have claimed to qualify.  Raising money in public financing takes a long time and raising a competitive amount (at least $250,000) takes a REALLY long time.  Those at-large candidates who do not qualify soon risk appearing non-viable.

Public Matching Funds Will Be Nowhere Close to $11 Million

The county has so far set aside $11 million to cover the cost of public matching funds.  That appears to be waaaaaay too much with only $1.4 million so far disbursed.  Our guess is that the ultimate total will be less than half what was allocated and will be even lower in the next election cycle with fewer seats open.

Incumbents Have Nothing to Fear From Public Financing

Five council incumbents are using public financing.  All five have qualified for matching funds and have done so fairly easily.  We will see how the challengers stack up, particularly in the at-large race, but so far the only at-large incumbent (Hans Riemer) is leading.  As we predicted last April, public financing is good for incumbents because it allows them to leverage their networks into lots of small individual contributions.  State legislators and other County Councils should take heed.

That’s it for now, folks.  Come back in a couple weeks when all reports, including those from traditional accounts, are due and we’ll put it all together for you!


County Executive Candidates on the Liquor Monopoly

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?

Roger Berliner

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.

Marc Elrich

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.

Bill Frick

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.

George Leventhal

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.


Should There Be Rent Control Near the Purple Line?

By Adam Pagnucco.

Council Member Marc Elrich, who recently equated potential gentrification near the Purple Line with “ethnic cleansing,” is taking flak for his remarks and is not backing down.  We will leave it to others to judge his choice of words.  But what interests us is the policy proposal he has made: specifically, Elrich would like to see rent control imposed near Purple Line stations.  That’s worth discussing.

Economists tend to disagree on many issues but a huge majority of them oppose rent control.  Liberal New York Times columnist Paul Krugman has written, “Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.”  A massive review of economic research on rent control found evidence that it encourages conversions of rental units into condos and leads to higher rents in non-controlled units.  Rent control repeal in Cambridge, Massachusetts led to a surge in property values in both controlled and non-controlled units and a 20% increase in housing investment.  Even Communists denounce rent control.  In 1989, Vietnamese Foreign Minister Nguyen Co Thach told a news conference that rent control did more damage to his capital city than American bombs.  “The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy.”

One need not go to a Communist nation to observe the effects of rent control.  MoCo has a good example of that policy right here at home: the City of Takoma Park, which passed a rent control law in 1981.  We examined U.S. Census data to analyze how the city’s housing stock compares to the county’s.  Below we show that just 10% of the city’s housing was built in 1980 or later, much lower than the county’s percentage of 47%.  That’s not a fair comparison since the city is much older than the vast majority of areas in the county.  However, other older areas inside the Beltway like Downtown Bethesda (27%), Chevy Chase (20%) and Downtown Silver Spring (26%) have much higher percentages of their housing built in 1980 or later than Takoma Park.

It gets worse.  Takoma Park has been losing rental housing units for years.  Below we show the city’s total, owner-occupied and renter-occupied housing units in 2000, 2010 and the five year period of 2011-2015.  During that time, the city’s total housing units fell by 4% and its renter-occupied units fell by 18%.  Owner-occupied units increased by 10% and vacancies rose by 30%.  No housing policy that produces double-digit losses in rental units can be described as good for renters.

Takoma Park’s housing decline is not going to turn around soon.  According to the site plans, preliminary plans and sketch plans listed on the MoCo Planning Department’s development tracking map, only two housing projects with a combined seven units are pending in Takoma Park.  Those units are all single family, which are exempt from the city’s rent control law.

This extract from the Planning Department’s site plan map shows the huge contrast in development plans between Takoma Park and Downtown Silver Spring.

The implication of all this is clear: housing developers are steering clear of Takoma Park’s rent control law.  These folks are not going to be any more enthusiastic about rent control near Purple Line stations.  Why does that matter?  When it comes to building new housing, there are basically three options.  First, you can build it near transit.  Second, you can build it away from transit, thereby incurring the associated congestion and environmental costs.  Or third, you can try to block it from being built, and that’s one probable effect of rent control.  But that won’t stop population growth – instead, it will result in overcrowded housing, unsafe living conditions and code violations.  (Such phenomena are not unknown in some areas of the county.)  Rent control near the Purple Line just encourages options two and three.

Finally, the Purple Line is a huge investment, costing at least $2.65 billion to construct.  Only an insane society would pour billions of dollars into a transit project and then stop new housing from being built next to it.  Even Vietnamese Communists would agree.

Disclosure: Your author is a long-time supporter of the Purple Line and is a publicly listed supporter of Council Member Roger Berliner for Executive.