Raising Money in Public Financing Takes a Long Time

By Adam Pagnucco.

Former Council Member Phil Andrews’s public financing system is in use for the first time during this election cycle.  It has already changed MoCo’s political landscape, with 33 county candidates – a majority of those running – so far enrolled.  It’s a bit early to say exactly how it will impact specific races, but two facts about the system are starting to become clear.

It’s cumbersome to use.  And candidates who use it need a long time to raise money.

We have already written about the burdensome administrative aspects of the system, especially in demonstrating residency of contributors.  (The system only provides matching public funds for in-county individual contributions of up to $150 each.)  An additional difficulty is meeting the thresholds for triggering eligibility for matching funds.  In order to collect matching funds, Executive candidates must receive contributions from 500 in-county residents totaling at least $40,000; at-large council candidates must receive contributions from 250 in-county residents totaling at least $20,000; and district council candidates must receive contributions from 125 in-county residents totaling at least $10,000.

So far, just seven of 33 participating candidates have reached the thresholds for public matching funds.  Council District 1 candidate Reggie Oldak was the fastest to qualify, hitting the threshold in 112 days.  But Oldak is a district candidate, meaning that her threshold is the lowest, and her district is the county’s wealthiest with the greatest concentration of political contributors.  At-large council candidate Hoan Dang hit his threshold in 148 days, barely beating out Bill Conway (155 days).  Council Members Marc Elrich and George Leventhal, who are running for Executive, needed more than 200 days each to qualify despite having large donor bases going back many years.

Then there are the other 26 candidates who have not yet qualified.  Six of them have been running for more than 200 days.  (District 4 incumbent Nancy Navarro will only be eligible to receive matching public funds if she gets an opponent.)  Eleven more have been running for at least 100 days.  Many of the non-qualifiers have been working hard for months.  It’s just tough to meet the thresholds.

Why is it taking so long to get matching funds?  One reason is that Andrews, the system’s architect, did not design the system to be easy.  He explicitly intended that public dollars only go to candidates who were viable in the sense that they had actual grass-roots support.  Another reason is the nature of fundraising itself.  Candidates who raise money turn to families and close friends first; past contributors next (if they have run before); then extended networks of professional connections, acquaintances and supporters’ networks; and finally complete strangers.  As each network gets further away from the candidate, the marginal difficulty of raising dollars increases.  In a public financing context, the first fifty contributions are easier than the next fifty, which in turn are easier than the fifty after that.  The last few contributions to reach the threshold are the hardest to get.

At-large candidate Danielle Meitiv has been working to hit the threshold with a video on Facebook.

Similar observations can be made about traditional fundraising with this exception: the private system has no single trigger that activates a stream of cash all at once.  The candidates in public financing will be weeded into two groups: the ones who get matching funds and the ones who don’t.  The latter group will be doomed to failure.

There’s one more lesson here for candidates: don’t get into a race late and expect to raise lots of money quickly through public financing.  Even if you have a history of donors going back more than a decade like Elrich and Leventhal, the public system is not built for speed.  If you are a late starter, chances are you will need either traditional fundraising or self-financing to close the gap and have a chance to win.

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Committee for Montgomery Breakfast to Feature Candidates for Governor

Following is the press release from Committee for Montgomery.

Politics for Breakfast

Maryland Candidates for Governor to Serve Up Buffet of Answers

Media Contacts:
Adam Pagnucco
acp1629@hotmail.com
Jim Neustadt
neustadtjim@gmail.com

Bethesda – November 16, 2017 – It’s time for the Maryland 2018 Governor’s race to start cooking. On December 14th, 2017 the state’s candidates for Governor will dine and then digest many of the controversial issues of the day at the Committee for Montgomery’s (CfM) Annual Legislative Breakfast at the Bethesda North Marriott Conference Center.

Who:  Candidates for Governor
What: One-Hour Panel Discussion
When: December 14, 2017, 7am-10am
Where: Bethesda North Marriott Conference Center, 5701 Marinelli Rd, North Bethesda, MD 20852

Moderator: Josh Kurtz, Founder and Editor of Maryland Matters

Confirmed Participants:

  • Rushern Baker, Prince George’s County Executive
  • Maya Rockeymoore Cummings, Founder, Global Policy Solutions
  • Ben Jealous, Former President/CEO, NAACP
  • Kevin Kamenetz, Baltimore County Executive
  • Rich Madaleno, State Senator, Montgomery County (District 18)
  • Alec Ross, Former Senior Adviser, U.S. State Department
  • Jim Shea, Former Chair, Venable LLP
  • Krishanti Vignarajah, Former Policy Director, First Lady Michelle Obama

Invited Participant:

  • Larry Hogan, Governor

With a board made up of leaders from business, non-profit, labor, education and civic organizations, Committee for Montgomery formed more than twenty five years ago to encourage recognition that all residents of the County share common interests and needs that can be met through sound public policy. CfM works with elected officials at the State level of government to enact those policies. “This forum provides an early look at the candidates as the election is now just seven months away,” says CfM’s Chair, Marilyn Balcombe.  “This is a great opportunity to see all of the candidates in one setting.”

Josh Kurtz, the Founder and Editor of the fast growing political website, Maryland Matters, is the moderator. “The Committee for Montgomery Annual Legislative Breakfast is a powerhouse event, so it’s not surprising that the candidates for Governor want to be there, says Kurtz.  “It’s early in the campaign and they’re refining their messages, so it ought to be illuminating and fun.”

Members of the media are invited. Details regarding credentials, parking, access to candidates and other logistics will be relayed to you in the week prior to the event.

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George Leventhal: Name One Program You Would Cut

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

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

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

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

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

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Marc Elrich: Name One Program You Would Cut

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

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

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

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

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

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

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

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

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Elrich: Without Rent Control, Purple Line Will Cause “Ethnic Cleansing”

By Adam Pagnucco.

In response to a question about just cause eviction and rent control at the Progressive Neighbors County Executive forum, Council Member Marc Elrich stated that the Purple Line would cause “ethnic cleansing” without a rent control law.  Elrich said:

I support rent stabilization and I think we need to be honest with ourselves about this.  If we throw up our hands about this and say the market will determine the price of housing and the market alone will determine that, then we are going to wipe out neighborhood after neighborhood in Montgomery County.  If you did that, then if you did not put rent stabilization around the Purple Line stops, for example, then the neighborhoods around the Purple Line will not continue to exist.  They will be bought, they will be repurposed and they will go to other people.

When we did the Long Branch plan, and Park and Planning came in and said we want to rezone all the existing housing in Long Branch, I accused the Planning Board of ethnic cleansing.  And I said some people do it with the gun, you guys are doing it with the pen but the truth is those folks would be gone and they would be gone forever…

Elrich’s remarks begin at the 2:29 mark of this video taken by Ryan Miner.

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.

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Gus Bauman Responds on David Blair

Gus Bauman, an attorney, is a former chair of the Montgomery County Planning Board and as candidate for county executive. He sent me the following response to yesterday’s post on David Blair’s first outing with the press as a candidate for county executive.

Concerning your fine Seventh State post of November 14 on David Blair entering the Montgomery County Executive race, I have one small, but telling, bone to pick with your otherwise piercing analysis of Mr. Blair’s candidacy. You call Mr. Blair a “politician.” But all that you wrote underscores how he is not—-and that, in my judgment and experience, is not a good thing.

Know that I have not decided who to support among the six Democratic candidates. Obviously, given the field, I am inclined to support some. As the leaders of the County well know, I have for years raised the alarm of the need for a business-friendly government if we are to have any chance of maintaining a healthy tax base for needed public services.

As for experience, I first became engaged in political campaigns by supporting and speaking for presidential candidate JFK in 1960. I have worked in Congressional and presidential campaigns, all for Democratic candidates. I have twice served in government in Montgomery County. Once, I was even persuaded by a sizable group of women to run for Montgomery County Executive at a time when this community fielded three solid Democratic candidates and three solid Republican candidates. And I have chaired Nancy Floreen’s campaign in all four of her At-Large races for County Council (having an excellent candidate and politician made my job immeasurably easier).

All of that is to say that aside from being a close student of history, I also have pertinent experience to speak to the point—the point being, one should be leery of a candidate lacking not only governmental and political experience but also involvement with community organizations, who suddenly wishes to lead an increasingly complex political jurisdiction of 1,000,000 souls. There are so many examples in our history of the point, but you only need look to the current occupant of the White House for one more example.

Mr. Blair is an accomplished person. I have no doubt he is also a well-meaning man. But when you need a brain surgeon to delve into a brain problem, you would be wise not to hire, say, an accomplished auto parts manufacturer. Or even a General Practitioner.

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David Blair’s Entry Raises More Questions Than Answers

Businessman David Blair became the sixth candidate to announce for county executive. However, beyond a willingness to open up his wallet (more on campaign finance below), there is little evidence that he is ready to run. Right now, this tech entrepreneur has no campaign website. (Correction: He does! It just doesn’t show up in the top Google searches yet.)

You May Have Questions. Does Blair Have Answers?

While it can be refreshing to see a politician who doesn’t claim to have all the answers, David Blair takes it a bit far. Based on his interview with Bethesda Beat’s Andrew Metcalf, he is neither ready nor willing to answer questions:

Asked if he’s always been a registered Democrat, Blair responded, “I believe so. I believe that’s a true statement.”

However, Maryland Board of Elections voter information indicates Blair was a registered Republican before he switched his registration to the Democratic Party in 2003.

Asked about that, Blair responded, “I don’t remember that. That could be accurate. … That could be.”

Blair refused to answer a question about taxes:

He declined to take a position on the County Council’s decision last year to raise property and recordation taxes.

“There will be a lot of opportunities to talk about specific policies,” Blair said.

And this was one of them.

He did seem ready with the political pablum:

“One of the ways to generate new revenue is through business,” Blair said. “We need more jobs here.”

“I have a vision to take Montgomery County to the next level.”

If Blair wants to enter the political arena, that’s great. But he needs to be ready to talk about issues when asked about them. I look forward not only to hearing more specifics but also more openness and willingness to answer questions from journalists and voters.

No on Public Financing. Will Empower Montgomery Launch an IE Campaign?

Unsurprisingly for someone from a very wealthy family, Blair said he will not participate in the public financing system. Bobby Lipman of MoCoVoters.org has already dinged him for this in the comments section of the Bethesda Beat article.

But why on earth would Blair want to waste his time asking people for small checks? Why would people want to give them to him? Why would he want to limit his spending when facing several better-known candidates?

More interesting from a campaign finance perspective is his decision to distance himself from Empower Montgomery:

When told he has been publicly referred to as a co-founder of the group, Blair said he contributed money.

“I would not consider myself a co-founder of that group, no,” Blair said.

Empower Montgomery’s website lists him as one of the founders of the group. . .

Empower Montgomery has now removed his name as one of the founders of the group.

If this pro-business group is planning an independent expenditure (IE) campaign on his behalf, Blair would not want to look like he is helping to direct it, as independent expenditures have to be independent to avoid legal troubles. And Empower Montgomery clearly plans to be active:

We are set up as a non-profit, tax exempt organization in Maryland, which allows us to perform a wide range of public education and advocacy activities and even participate in elections when key issues get elevated in the voter’s mindset.

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Roger Berliner on Jobs

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

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

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

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

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

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

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

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

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

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M-83 Supporters Get a Win

By Adam Pagnucco.

Back on November 3, David Lublin wrote that the County Council had placed the planned Upcounty highway M-83 “in the freezer.”  We agree with that take with one addition: if and when M-83 comes out of that freezer, it will be ready to serve.  That’s because instead of killing the road, the resolution passed by the County Council has preserved it for a future county government to build.

To understand what has happened, one has to consider the goals and challenges of road supporters and opponents.  The supporters want to fund its construction.  That’s tough because the road will cost roughly half a billion dollars and the county is reducing its annual issues of general obligation bonds to trim future debt service.  Opponents want to remove the road from the county’s master plans.  They believed they had a chance to do that since six Council Members said they opposed M-83 during the 2014 elections.  But that has not happened.

The council’s resolution, passed on Halloween, did not implement the agendas of either side.  Its action language is worth reading word for word.

The County Council for Montgomery County, Maryland approves the following resolution:

  1. The Council supports expanded capacity on I-270, the Corridor Cities Transitway, Bus Rapid Transit on or near MD 355, and improvements on MD 355. These improvements will provide significant, immediate relief for Upcounty residents. These improvements align with our economic development strategies, providing the broadest and most diverse benefits, and minimize impervious surface, stormwater runoff, carbon emissions, and other environmental impacts.

  2. The Council directs the Montgomery County Planning Board not to assume additional road capacity from the northern extension of Midcounty Highway when calculating the land use – transportation balance in future master plans, including but not limited to the upcoming Gaithersburg East Master Plan and the Germantown Plan for Town Sector Zone. This step ensures that any new development allowed under these plans does not rely on the northern extension of Midcounty Highway, while retaining the right-of-way for this extension in these plans.

Road supporters did not like the omission of M-83 from the list of projects supported by the council.  They should have no argument with the idea of not including M-83’s capacity in calculating infrastructure needs for future development.  That could help prevent the road from filling up immediately after it’s built (if it’s built).  But the last sentence referring to “retaining the right-of-way for this extension” is a big win for supporters of M-83.

Why does this matter?  A casual perusal of land ownership maps from the State Department of Assessments and Taxation shows massive county land holdings in the vicinity of M-83’s preferred alternative.  Identifying every one of the dozens of parcels owned by the county and county-affiliated entities there would be a time-consuming research project.

A sample of county-owned land for M-83 near Watkins Mill Road and Great Seneca Creek.

Instead, we asked the county Department of Transportation’s project manager for M-83 how much of the right-of-way for the road’s preferred alternative was currently owned by the county and state.  We received this response.

Dear Mr. Pagnucco:

Thank you for your interest in the Midcounty Corridor Study (M-83) project.  Per our preliminary assessment, approximately 60% ROW for M-83 has been dedicated or reserved and another 24% is in parklands owned by the County’s Parks.

Should you have any questions, please contact me.

Best regards,

Gwo-Ruey (Greg) Hwang, P.E.

Capital Projects Manager

That’s right, folks – the county and Park and Planning together control 84% of the right-of-way for M-83 right now.

Why does this matter?  Let’s remember the history of the Intercounty Connector.  The highway had been in master plans for decades.  As of 1997, the county and state owned more than half the right-of-way for the ICC.  The following year, Governor Parris Glendening announced he was killing the project and later told the state government to sell part of its right-of-way.  But the state did not sell off all its right-of-way and in fact purchased some of it after Glendening’s announcement.  Continued state ownership of the ICC’s right-of-way made it much easier for Glendening’s successor, Governor Bob Ehrlich, to reverse his decision and begin construction.

So it may be with M-83.  The county’s holdings of right-of-way for the project may be even greater as a percentage of its acreage than the state’s holdings of the ICC were a decade before its construction.  The resolution by the council explicitly calls for “retaining the right-of-way” in the master plans, suggesting that the county’s holdings will not be sold.  And the road has not been removed from any master plans, a key goal of opponents.

M-83 supporters should have hope.  M-83 opponents should beware.  Both sides have a lot of work to do in next year’s elections.

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