Reopening Plans – MCPS is Behind

Guest column by Lynne Harris, Candidate for Montgomery County Board of Education At-Large.

Reopening schools – safely – is critical. As an MCPS teacher, parent, a nurse and a public health expert, I have been closely following public health guidance, evolving science around COVID, and the work of school systems all around the world that have opened during the pandemic. I’m disappointed that MCPS lags so far behind almost every school district in Maryland. Twenty of our state’s 24 school districts have begun bringing some students back. To prevent irreversible learning and opportunity loss, we need a public health compliant, student-focused plan to start providing some level of in-person instruction to students.

It’s critically important to have a CDC-compliant plan now to bring small groups of students into our schools, periodically. Those most in need of in-person instruction include students vulnerable to learning loss, struggling students, young learners, students with special needs, and students in hands-on CTE programs like mine. That plan needs to ensure that MCPS and the County Health Department are in continuous collaboration, and have a well-thought out and well-communicated plan to move back and forth between fully virtual and hybrid instruction as Montgomery County’s COVID numbers change. Some say that’s hard, but school systems all over are doing that now.

SCHOOLS ARE ALREADY OPEN!

Planning to reopen doesn’t’ require re-inventing the wheel. We can look at how school systems around the nation and the world are educating the next generation face-to-face during a global pandemic. Six of the nation’s ten largest school systems – some with hundreds of thousands more students than MCPS – have reopened. It’s not that MCPS can’t devise a safe plan, it’s that MCPS hasn’t yet created one.

To see how this can work safely, look no further than our own schools. They’re already in use. MCPS for-profit learning pods and low-cost equity hubs are currently operating in more than 60 schools. Private schools in Montgomery County are open too – here’s an interesting piece from Education Week written by a MoCo middle school teacher teaching at one of them.

REOPENING SAFELY

Almost every school system that has reopened devised a hybrid plan, with a mix of in-person and virtual learning. Planning starts by sharing information with communities and providing a firm date for staff and families to opt in or out of in-person instruction. That data is essential for planning – once a school system knows which staff and students will participate only virtually, then it can make school-specific plans for hybrid instruction.

Most school systems have started by bringing in the most vulnerable learners and early learners (mentioned above) first. They are at highest risk for irreversible learning loss. And pragmatically, it’s easier to devise a plan for pre-K and elementary schools, where most students are together in a single classroom – than for middle and high schools where students typically change classes four to eight times daily.

In school districts where partial reopening is working:

Masks are mandatory.

Students and staff can opt for virtual only instruction.

Health screenings are routine, with firm guidelines. Some are completed online daily before students and staff enter the building. Anyone with a COVID-19 exposure must notify the school and self-quarantine. Contact-tracing is handled quickly with health officials. Anyone who feels unwell stays home.

Common spaces are marked for social distancing and equipped with supplies for hand hygiene.

Arrival and dismissal procedures minimize crowding, utilizing as many entrance/exits as feasible so students and staff enter and leave from the exit nearest their classroom.

Groups of students remain together (cohort) throughout the school day – eating lunch together, taking handwashing breaks together, going outside together.

Enhanced hygiene and cleaning protocols include restrictions on multiple use items in classrooms, socially distanced classroom arrangements, and frequent cleaning of high-touch surfaces.

One day per week, usually Wednesday, is virtual for everyone, allowing for deeper cleaning of spaces mid-week.

Staff, students and families know the plan for pivoting back and forth between hybrid and virtual instruction as community COVID numbers change, and understand how they will receive information about community COVID status and school operations.

MCPS’s work with our County Health Department should yield guidelines for safe operations and allow each of our 208 schools to create its own plan for space utilization. Every one of our schools is unique – in enrollment size, building size and layout, and the presence (or not) of special programs. All of those things matter in figuring out how to safely bring some students and staff back into classrooms, and how to safely and efficiently use school space and maintain social distancing.

FACTS VS. FEAR

I hear some people talk about MCPS reopening from a place of fear. That’s understandable – we’re living through a global pandemic. We need to temper fear and rhetoric with reality, knowledge and fact. Zero risk is impossible. Wherever people gather there is always the possibility for illness to spread. Think about it: have you traveled since March? Gone to a gathering of people that you don’t live with? Gone to the grocery store? Gone to a Farmers Market? If so, were conditions tightly controlled and health protocols rigidly observed? There’s always risk.

We have to look at creating a reopening plan through the lens of our purpose as a public school system. Our purpose is to educate students and support students and families. That means we have to look at what’s best for students, and the data is clear – virtual learning is NOT best for the majority of students. Some will suffer irreversible lifetime consequences if we can’t resume some level of in-person instruction.

MCPS is behind schools and learning hubs in our district, most of the systems in our state, and many across our nation and the world. Planning for reopening requires robust collaboration – and it needs to begin now. If none of us are seeing, hearing or learning about that planning, then MCPS is falling even further behind.

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Republican Del. Dan Cox Now Using QAnon Hashtags

The hashtag #WWG1WGA, associated with the dangerous QAnon conspiracies, was used yesterday in a tweet by Maryland Del. Dan Cox (R-4, Frederick & Carroll). Apparently, the hashtag is short for the QAnon slogan of “where we go one, we go all.”

A member of the Maryland General Assembly is now associating himself with QAnon. Once again, the Maryland Republican Party faces a choice once again of normalizing the crazy and dangerous by joining or ignoring this, or facing it down.

I’d note the Senate Republican leadership recently swung right. Sen. Mike Hough, for example, who represents the same district, is enthusiastic for Trump and quit Washington football after decades because they dropped the name. But Gov. Larry Hogan’s brand is as a more sensible mainstream conservative. As leaders of their party, what will they do?

h/t Walter Olson (@walterolson).

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Elrich Blasts WMATA Property Tax Break Bill

By Adam Pagnucco.

In the wake of his veto message, County Executive Marc Elrich has once again blasted a bill passed by the county council granting developers at Metro stations 15-year property tax breaks. The council is set to override Elrich’s veto on Tuesday. Elrich’s mass email, which reiterates his reasons for vetoing the bill, is reprinted below.

*****

Dear Friends:

Last week I issued my first veto of legislation, Bill 29-20 Taxation – Payment in Lieu of Taxes – WMATA Property. I sent a memorandum with the veto explaining in detail the reasons for the veto; you can read the entire memo here, but I wanted to explain some of the reasons in my letter.

Like the Council, I am focused on expanding transit and transit-oriented development, broadening our tax base and preserving and increasing the supply of affordable housing. Unfortunately, Bill 29-20 does not achieve any important goals, is too costly and does not produce sufficient public benefit to justify the cost.

This legislation would require 100 percent exemption of the real property tax for 15 years. This exemption is known as a Payment in Lieu of Taxes, or PILOT [see NOTE 1]. A few requirements are included in the bill. However, it would not increase the number of affordable housing units than otherwise would have been provided. While it was amended to make some of the units more affordable, we could have negotiated that with the developer at a fraction of the cost to the County.

[NOTE 1: The requirement applies to development that is higher than eight stories on property owned by WMATA at a Metro station. The development must include at least 50 percent residential rental housing, and one-quarter of the moderately priced dwelling units (MPDUs) must be affordable for residents at 50 percent of area median income (AMI). The PILOT would begin no later than the second year after the property tax is levied. The law would sunset in 2032, but any existing PILOT would continue until the end of its 15-year period. To be eligible for a PILOT, a developer would be required to use contractors and subcontractors who have no more than two final penalties of $5,000 or more in the three prior years for violations of applicable wage and hour laws. At least 25 percent of the workers constructing the project must be County residents. Special taxing district taxes are exempt from the PILOT.]

It is an expensive, and unnecessary, approach, particularly at this moment when the County is struggling to fund critical services (the need for which is increasing and will likely continue to increase for a while), where the outlook for revenues over the next couple of years is not good and where full economic recovery from this pandemic may take as much as 10 years. It is certainly not prudent to reduce revenues coming into the County coffers at this time.

During the Council’s deliberations on the bill, supporters could only cite one potential development as being eligible for this 15-year, 100 percent tax break – the proposed Strathmore Square at the Grosvenor/Strathmore Station. Under the provisions of this legislation, Strathmore Square’s owners would receive a tax break of approximately $100 million. As a member of the County Council, I supported the zoning changes that made this proposed development possible, but I simply do not believe it is a responsible use of County resources to supplement a market-rate housing complex at this level of expense.

The developer of that project saw an increase in the allowed units that went from a little over 500 to more than 2,200—density that was based on being atop a Metro station. Now, the developer is arguing that it is too expensive to develop on the Metro, yet WMATA records show that the price the developer paid was based on an appraisal that was done AFTER the property was rezoned. The developer accepted the appraisal and agreed to proceed. If the developer thought the price was unreasonable and would make development unprofitable, it could have rejected the appraisal and the deal. Instead, it came to the County three years later and asked that all its taxes be forgiven because the deal does not work for it.

Should similar developments occur at the other potential WMATA sites across the County, lost revenue would likely exceed $400 million. To be clear, I want more housing constructed in our County, and I see the significant benefit of housing that makes transit usage extremely convenient. However, I do not believe providing developers with as much as $400 million in incentives is necessary to get 8,000 new housing units that are projected to come here anyway. Put another way, this bill would provide a developer with a $50,000 per unit gift regardless of cost of rent, without producing additional affordable housing units beyond the amount required for all developments. This is not a good use of public funds.

Nor do we need this law—the authority already exists for the County to negotiate individual agreements.

It makes sense to continue to allow them on a project-by-project basis—not all projects need the same PILOT term or value. Flexibility should be maintained to enable negotiation of the best possible agreement that is in the public interest.

Additionally, it does not make sense to focus the market rate housing (along with the public subsidy) at Metro stations, which pushes affordable housing elsewhere. As the recent Housing Preservation study points out, affordable housing units near transit are at greatest risk of being lost and are being lost. Seventy-five percent of projected need for housing over the next decade is for affordable housing—why would the focus of a housing bill be on subsidizing market rate housing? Furthermore, given the projected number of market units needed over the next 20 years, there is sufficient zoning near Metro Stations to accommodate the needed units. While they might not be built on top of Metro property, they may be built nearby within easy walking distance of the Metro.

In White Flint, there are properties adjacent to, and across the street from, the Metro entrance where housing could be built that would actually be closer to the Metro entrance than some buildings on WMATA property. In other words, the housing does not have to be built directly on WMATA property; it can be nearby. And this bill creates a difficult precedent. It is likely that other properties near Metro will ask for the same PILOT. Those properties offer similar value in providing transit proximate development. It is simply not good policy to have a general approach to subsidize market rate housing.

Ironically, this bill may be counterproductive by raising the value of WMATA’s land. Under Federal law, WMATA must seek the highest and best price for its land. Land that is exempted from all property taxes for 15 years is more valuable because the calculation of its value includes the costs to acquire and develop, including taxes, weighed against market rents. If two properties are side by side, one exempt from taxes and the other not, and they were producing the same value of unit, the land value of the exempt property would be greater because its cost of development would be less than the cost to develop the tax-paying property. This would, in turn, likely raise the parcel’s appraised value. Supporters of the bill have said they are trying to reduce the cost to developers, but if the value of the land increases, the bill has had the opposite effect.

Furthermore, there is no evidence that this is needed. In fact, if you look around the region, many of our neighboring jurisdictions have their highest taxes on property nearest Metro sites and the tax rates are substantially greater than in Montgomery County. If property taxes were the key to development, we would have won the development battle a long time ago because we are lower than most surrounding jurisdictions. (See chart below)

And I would note that if one of the goals of this bill is to provide tax incentives to attract new businesses, those incentives should go to the occupant of the building, not to the developer of the building. This legislation gives public funds to help build buildings, not to incentivize businesses to become tenants in those buildings.

And workers deserve a prevailing wage. A majority of the Council voted against requiring the prevailing wage at these projects. The provision would have required that all contractors and subcontractors pay prevailing wages and be licensed, bonded, insured and abide by wage and hour laws. Legislation that dedicates public funds to market-rate housing should, at least, also support the workers who build the housing. If WMATA was building a structure on the same property, current law would require it to abide by the prevailing wage. I believe the developments contemplated by this bill should as well. The lack of such a provision to treat workers equitably and to share in the subsidy is another major deficiency in this legislation.

Finally, to risk of stating the obvious, using our limited funds for market-rate (non-affordable) housing development means fewer funds for other services including affordable housing, recreation and education, which has a racial equity/social justice impact. This bill allows housing to be built for those who can afford it, not for lower-income populations who are disproportionately Black and Latino.

I hope this gives you a better understanding why I could not support this bill.

Sincerely,

Marc Elrich
County Executive

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Is Andrew Kleine Going to Write a Book About MoCo?

By Adam Pagnucco.

Less than a month after leaving county government, former MoCo Chief Administrative Officer (CAO) Andrew Kleine has written an essay for Engaging Local Government Leaders, a public manager association, about his experiences in dealing with the COVID-19 crisis. The essay has set tongues wagging about whether Kleine has more to say about his time as CAO.

Kleine’s essay is fairly innocuous. He discusses teleworking, newsletters, masks and his personal exercise routine. He does not discuss his resignation. Notably, the essay makes him look good. The other thing one takes away from it is that Kleine is a superior writer. His writing style is concise, engaging, occasionally humorous and even a little zippy. It’s hard to write about government with zip, but Kleine can pull it off as he did in his book about Baltimore, City on the Line.

From a political perspective, the thing to notice about City on the Line is that Kleine names names. He recounts events and assigns quotes to city managers and politicians. Among other things, he reported this quote from then-Mayor Sheila Dixon: “The budget is like a $3 billion black box to me… The decisions brought to me are at the margins, which means that, as far as I know, 99 percent of the budget is basically on autopilot.” I bet Kleine is right. Very few politicians in my experience know much of anything about the budgets they are supposed to oversee. But what politician wants to see a quote like that in print?

As CAO, Kleine was THE top manager in MoCo government. He would have been present for all the big decisions. He knows who said what, who did what and how everything turned out. Heaven knows what documentation he has. Heaven knows how much he would be willing to say, but in his book on Baltimore, he said a LOT. (Kleine’s funniest story relates to a city manager who accused him of wanting to write a book about Baltimore after he leaves the city.)

If I were a senior official in the executive branch, I would dread the prospect of Kleine writing a book about his experiences in MoCo. He has nothing to lose and everything to gain. Let’s remember that Kleine never wanted to resign. The county council forced County Executive Marc Elrich to push him out. How would you feel if something like that happened to you?

One more thing: Kleine has plenty of time to publish another book before the next election.

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Weren’t Term Limits Supposed to Fix All This?

By Adam Pagnucco.

Recently, one of our readers emailed me this reaction to my column on Republican support for Nine Districts.

Dear Adam, thanks for covering the “Nine Districts” matter. Rest assured, there is at least one dyed-in-the-wool Democrat who believes that County Council has for years betrayed the voters and residents on planning issues … and welcomes trying a new approach that might bring to end the years of County Council’s betrayal of voters and residents … so passing the “Nine Districts” ballot measure might not be a silver bullet, but it sends a strong signal — like passing the “term limits” ballot measure — that County Council’s betrayal of voters and residents has not gone unnoticed and that, to the extent possible, County Council will be held accountable by the voters they have betrayed.

This reader has an interesting point in bringing up term limits. The coalition for Nine Districts bears a more-than-passing resemblance to the coalition supporting term limits in 2016. Both groups contained Republicans, business folks, unhappy developers, moderate Democrats and everyone else who opposed the status quo. Some upcounty residents see a lot of appeal in Nine Districts. Four years ago, Clarksburg, Damascus, Derwood, Laytonsville, North Potomac and Poolesville voted in support of term limits by 80% or more.

Now let’s consider what Nine Districts supporters had to say about why they favored that initiative. There are themes of being ignored, losing out to downcounty and/or “Takoma Park” progressives, dissatisfaction with planning issues and more. Those very same grievances were cited by term limits supporters four years ago. And term limits were sold as the magic elixir that was supposed to fix it. All of it.

One thing that the term limits vote accomplished is that it spawned enormous, although probably temporary, aversion to tax hikes at the county council. Five council members who voted for the 8.7% property tax hike in 2016 that preceded the 70% vote for term limits are still on the council. Most of them along with at least half of the freshmen have opposed tax hikes at nearly every turn over the past year. When the county executive proposed a tax hike to fund more money for schools, eight of the nine council members immediately rejected it out of hand. When members of the General Assembly offered more taxing power to the council, a majority of them rejected that too even though it was merely enabling authority. They also rejected a hidden tax hike that was buried in the county executive’s budget. Council Member Evan Glass’s bill to tax teardowns is in limbo. And though they don’t favor Robin Ficker’s draconian charter amendment banning property tax increases, the council proposed an alternative containing a unanimous vote requirement for breaking the charter limit. Let’s remember that the latter requirement originated with a charter amendment passed by Ficker in 2008.

Yes, it’s true: so far, the county council of 2020 has had the same position on breaking the charter limit on property taxes that Robin Ficker had in 2008. No one seems to have noticed.

Someday, the anti-tax sentiment on the council will fade. Term limits, after all, create lame ducks who are by their nature immune from political accountability in the event that their careers in office are over. Throw in the county’s humungous multi-year revenue crash and we have not seen the last of tax hikes.

Whatever becomes of taxes, none of the other things that term limits were supposed to “fix” have been “fixed.” Four years later, supporters of Nine Districts are still complaining about those very same things. Here’s a prediction, folks – if Nine Districts passes, the new county council will be seen as just as bad as the current one by a faction of angry residents who will then spawn a new charter amendment – for the same reasons. And on and on it will go.

Instead of endlessly rejiggering the charter, how about we organize people to vote for adults? And then if the politicians act like bottle-throwing babies, vote them out. A few election cycles of that will send a message to the politicians that they won’t forget, even more so than term limits or nine districts.

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Is the County Playing Favorites Among Small Businesses?

By Adam Pagnucco.

The Montgomery County Economic Development Corporation (MCEDC) is the county’s economic development authority. It is a 501(c)(3) whose board members are nominated by the county executive and confirmed by the county council. Its operating budget comes mainly from county government. In June, MCEDC launched a business assistance initiative called 3R (Reopen Relaunch and Reimagine), which is funded by a combination of public and private money. One component of 3R is a new grant program for restaurants and retailers to prepare for the winter months. All companies in those sectors are encouraged to apply, but there’s a catch:

Getting the money depends in part on where in the county they are located.

The press release announcing the new program says:

As part of the public-private 3R (Reopen, Relaunch and Reimagine) Initiative, the Montgomery County Economic Development Corporation (MCEDC) is now accepting grant applications from local restaurants and retailers for up to $5,000 to prepare for the upcoming holiday season and winter months. Eligible businesses can submit applications through November 5.

More information on the 3R Initiative Restaurant & Retail grant program and the application can be found here. The grant is an important component of MCEDC’s comprehensive year-long 3R Initiative designed to address the devastating impacts of the pandemic on the Montgomery County restaurant and retail industries.

Although any locally-owned restauranteur or retailer with fewer than 100 employees can apply for the grant, ten Montgomery County target corridors will be given priority for funding: Burtonsville/Briggs Chaney, Wheaton/Glenmont, White Oak, Aspen Hill, Germantown, Damascus, Takoma-Langley, Four Corners, Montgomery Hills, and Twinbrook/White Flint. These ten target corridors were selected with community input.

I asked MCEDC CEO Ben Wu to explain the organization’s rationale for geographic prioritization. He wrote the following to me:

Hi Adam, thanks for your message and your interest in the 3R Initiative.

As you know, the 3R Initiative supports our Montgomery County restaurant and retail sectors during this pandemic crisis. This $1 Million public-private partnership is designed as a year-long initiative, of which the grants are an important element, especially now with the start of the winter and holiday seasons. Future elements include a retail recovery guide, a countywide e-commerce marketplace and additional targeted investments in selected commercial corridors.

While the 3R Initiative has county-wide components such as the recovery guide and the e-commerce marketplace, it is also an economic development pilot project that seeks to bring together community stakeholders in hard-hit target corridors that might not have significant resources to search for collective solutions. These community stakeholders could include landlords, tenants, chambers of commerce, neighborhood associations, local support organizations, and the County Regional Service Centers. The 3R Initiative will work with the target corridors to help their restaurants and retail establishments develop strategies and access funding (through the 3R and/or Reopen Montgomery grants). At the program’s conclusion, depending on the pandemic, we would discuss the future of bringing the successes of this community-based model in the target corridors to potentially be recreated in other areas of the county.

Although any locally-owned restauranteur or retailer with fewer than 100 employees can apply for the grant, ten Montgomery County target corridors will be given priority for funding. These ten target corridors were selected with recommendations and input from the five County Regional Service Centers and the community. They were selected to be geographically and demographically diverse. Each of the Regional Service Center jurisdictions have at least one target corridor, many with more than one.

If you should have any further questions, let me know.

Best, Ben

Now let’s stipulate a few things up front. First, MoCo is an incredibly diverse jurisdiction in all kinds of ways. One can make a case that non-identical communities should not be treated identically. Second, MoCo holds events in locations all over the county that are not the same in kind or timing. There are county seminars, recreation programs, park programs, community events and all sorts of things that rotate across geography. Third, the county has different tax, fee and regulatory requirements depending on area, including parking fees, impact taxes, enterprise zones and of course master plans. We are too large and diverse to enact perfectly homogenous standards for everything the county does.

But in the case of COVID impact, businesses all over the county are suffering. Downtown Silver Spring lost Not Your Average Joe’s, Sergio’s and Eggspectation. Downtown Bethesda lost Flanagan’s Harp & Fiddle, George’s Chophouse and Le Vieux Logis. Gaithersburg lost Red Hot & Blue and Union Jack’s. Rockville lost Bagel City, Gumbo Ya Ya, La Tasca, Gordon Biersch and Urban Bar-B-Que. And yet most of these areas are not prioritized under MCEDC’s grant program. Small businesses in these areas may have to wait behind applicants from other areas and might not get grant money at all.

I don’t think MCEDC intends this, but their decision to steer money to some areas and away from others feeds one of the more toxic trends in MoCo politics: the suspicion that some parts of the county are treated better than others. There are tensions of east vs west (especially in issues connected to the schools). There is upcounty vs downcounty. (Folks ask why the Purple Line is being built but M-83, the upcounty highway, is not.) There is wealth vs less wealth. There are issues of racial equity which play out differently across MoCo. The current movement for nine council districts sprang from these tensions. The biggest single argument made by Nine Districts for MoCo is that the county council’s structure, especially its use of at-large members, steers resources away from some communities and towards others. MCEDC’s program is an unwitting but actual demonstration of this sort of thing.

So now two things will happen. First, conspiracy theorists residing in one of the non-prioritized areas will say, “Aha, we were right! The county really is trying to screw us!” Second, businesses in the largest non-prioritized areas will complain and say, “What about us?” The fact that the county’s largest business districts – Downtown Silver Spring, Downtown Bethesda, Downtown Rockville and Gaithersburg – are non-prioritized means that some serious clout could be brought to bear on this issue.

I think MCEDC is well intentioned. But I also think that this could turn into yet another headache that county leaders don’t need.

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Elrich’s First Veto: The Politics

By Adam Pagnucco.

County Executive Marc Elrich has a soft and raspy voice. Close your eyes and imagine that voice saying:

I just think that developers should pay their fair share.

Last week was a terrible one for Elrich. His chief administrative officer and emergency management director were blown to smithereens by the county council over the pace of the executive branch’s distribution of federal assistance funds. The story dominated the local press for days. Elrich responded to the council with this saucy comeback: “I used to be a legislator, and it’s the best job in the world because you can just say, ‘I want to spend this money,’ and tell someone to go spend it. And you don’t actually figure out how to do it.” There is more than a bit of truth to this, but the observation won’t improve Elrich’s relations with an irate council.

That came on top of numerous other headaches, including the ethics problems that forced the resignation of Elrich’s first chief administrative officer, criticism of Elrich’s mushrooming COVID pay liability, the beatdown the administration took from Governor Larry Hogan over reopening private schools, pushback over Elrich’s joking that the council was “fact proof” and the general drudgery of having to deal with the crises in public health, the economy and the budget spawned by the coronavirus. Whether one is sympathetic to Elrich or not, the stories about his administration of late have nearly all been bad. (One exception: the opening of the county’s first bus rapid transit route on Route 29, an event that would never have happened without Elrich.)

But all of that bad news is wiped away, at least for the moment. That’s because Elrich changed the subject by vetoing legislation providing 15-year property tax breaks for Metro station high-rise developers. What’s the new subject?

I just think that developers should pay their fair share.

Supporters of the vetoed bill argue that it was necessary to enable development of high rises at the pending Grosvenor-Strathmore Metro station project. They feared that failure to act would doom or shrink the project. That urgency prevented them from examining other, more time-consuming, paths to a deal including an appropriation from the economic development fund (in which Elrich would get to play) or providing financing through the county’s economic development corporation or the Housing Opportunities Commission. But unlike those mechanisms, legislation is a highly public thing. By giving Elrich an opportunity to veto the bill, his critics on the council gave him an opportunity to go on offense.

But wait a minute, you say. The bill passed on a 7-2 vote, one more than necessary to override a veto. When the council overrides Elrich, doesn’t that make him a loser?

Those who think that do not understand how Elrich got elected executive. During his twelve years on the county council, Elrich was the sole no vote on a host of master plans, all increasing density. Yes, he “lost” those votes again and again. But he also picked up support in those communities from skeptics of the plans who came to see Elrich as their only champion. Those folks became a critical and expanding part of Elrich’s base. Few if any politicians in the county have ever won more from “losing” than Marc Elrich.

Elrich’s opposition to many new development policies have prompted his critics to brand him as a NIMBY. But there is more to his political success than pure NIMBYism. When you listen to him discuss development closely, he is making an equity argument as much as a land use argument. Here is what he said about development in 2002:

Our beleaguered middle-class is told that the County can no longer afford to provide the quality of life that made this place so attractive at the same time it throws millions in subsidies into the pockets of millionaires. We make great claims about ending welfare, but we’re really only changing the beneficiaries. What we’ve done is to recast developers as the new poster children of the Nineties. This blind devotion to growth is great – if you’re a developer or a tumor – but it doesn’t work so well for the rest of us who are better served by priorities that strengthen our communities and our schools.

In other words, throwing public money at developers reduces the money available for schools, public safety, health and human services, libraries, parks and more. Here is a more refined version of this argument from his 2018 campaign kickoff.

Elrich’s quarrels with developers resonated more when the economy was better, such as in 2006, when he was first elected to the council. As executive, such arguments come up less often, first because his office does not often deal directly with land use and second because the economy is in such wretched shape. MoCo has much bigger problems at the moment than “predatory” developers. But in a dark blue county in which Democratic primaries are the real elections for office, Elrich’s equity argument still has purchase when occasion calls for it.

Supporters of the bill that Elrich vetoed have good arguments on their behalf. It’s true that Metro sites have extra development costs. It’s true that, for the most part, high-rises are not being built on these sites. It’s true that transit-oriented development is superior to sprawl or no growth. So it’s not a crazy position that public investment should be used to make these projects happen.

But the bill’s supporters have two problems. First, they are making complicated arguments and Elrich is making a simple one. In politics, simple arguments usually beat complicated ones. Second, the supporters are making economic arguments while Elrich is making a value judgment. Most MoCo Democratic primary voters are not accountants or economists, but they do have progressive values. Broadly speaking, they agree with the notion that everyone with means – not just developers – should pay towards the cost of funding government.

On top of all that, consider the times we are in. The county’s unemployment rate is the highest it has been in anyone’s memory. Small businesses are shutting down left and right. Tenants are missing rent and will be, eventually, at risk of eviction. So what are we doing? Giving developers 15 year tax breaks. That’s how Team Elrich is going to frame this.

I just think that developers should pay their fair share.

Unless something strange happens, the council will override the executive’s veto. The bill’s supporters will get the policy win. But the political win? Overall, that belongs to Marc Elrich.

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Elrich’s First Veto: The Policy Debate

By Adam Pagnucco.

On Friday, County Executive Marc Elrich issued the first veto of his administration against a bill by the county council offering 15-year property tax breaks for high-rise developments at Metro stations.

Vetoes are uncommon events in MoCo politics. Elrich’s predecessor, Ike Leggett, vetoed three measures: a county property disposition bill in 2012 (which was overridden), a minimum wage bill in 2017 (which was subsequently replaced by a similar bill that he signed) and a 2018 line item in the capital budget covering stormwater contracting (which resulted in passage of a compromise). Vetoes are typically prevented by one of two things: deal-making between the executive and the council or passage of a measure by more than the six votes required to override. But there was no deal in this case: Elrich opposes the property tax bill and wrote his rationale in a lengthy veto message.

This post examines the policy debate around the bill, about which I wrote a three-part series. (Here are links to Part One, Part Two and Part Three.) Tomorrow, we will discuss the politics.

Bill 29-20, the target of Elrich’s veto, originated from three related events. First, Montgomery County, like the rest of the region, has a shortage of housing when compared to projections of population growth. This was chronicled in a report by the Metropolitan Washington Council of Governments (MWCOG), resulting in passage of a resolution by the county council to meet the county’s share of regional housing growth. (Elrich was notably skeptical of this.) Second, for at least the past fifteen years, the county has chosen to concentrate new density around Metro stations through its master plans for a combination of reasons related to transportation, environmental concerns, placemaking and preservation of the Agricultural Reserve. (Elrich voted against many of these master plans when he was on the council.) Third, Fivesquares Development, which was selected by WMATA as its ground lease development partner at the Grosvenor-Strathmore Metro Station, has proposed a housing development including high rises at the station. However, Fivesquares has since said that the economics of the site won’t allow anything more than low density development unless they obtain a subsidy.

These events gave rise to Bill 29-20, which offers developers at Metro stations 15-year property tax breaks if they build high rises. The bill’s supporters claim that without the tax breaks, the sites will either remain undeveloped or will contain low- or mid-rise projects that waste the stations’ potential for generating transit-oriented development. Elrich disagrees, offering several key reasons that I will evaluate.

Elrich: The bill “harms the budget.”

Elrich wrote:

At a time when the County is struggling to fund critical services, where the outlook for the next couple of years is uncertain at best, and where full economic recovery from this pandemic may take as much as ten years, it is certainly not prudent to reduce revenues coming into the County coffers.

The bill’s supporters argue that the tax break would only apply to projects that would otherwise not happen without the bill, thus not creating a real marginal cost to the county. They also say that without the bill, the Metro stations would remain undeveloped and therefore pay nothing to the county. However, according to Fivesquares, a low density project would be viable at Grosvenor-Strathmore without a subsidy and would therefore generate actual property taxes for the county. So even without the bill, it’s possible to get taxpaying low- or mid-rise development at Metro stations. The real question is not so much about the budget but whether the public benefit of high-rise housing infrastructure at Metro stations is worth an investment of public dollars. Elrich says no, the bill’s supporters say yes.

Elrich: The public benefit isn’t worth it.

Right now, developments at Metro stations are required to ensure that 12.5-15% of constructed units are moderately priced dwelling units affordable to moderate income people. Council Member Will Jawando amended the bill to require that 25% of a qualifying project’s units be moderately priced to get the tax break. Elrich says there should be a higher percentage of moderately priced units and he argues that they should be mandated rather than included in a tax incentive. (If he believes that, he should send over legislation to accomplish it.) Bill supporters argue that a higher percentage of affordable units would kill a project’s economics. The record of the bill does not conclusively prove either side right.

Elrich: Public funds should be used for affordable housing, not market rate housing.

Elrich argues that MoCo’s real housing shortage is in affordable units, not so much in market rate units, and that because the bill allows projects with 75% market rate units to get tax breaks, it contributes little to solving the county’s housing problems. He is right that MWCOG’s report recommends that “at least 75% of new housing should be affordable to low- and middle- income households.” But with all due respect to MWCOG, the difference between the county’s requirement that 12.5-15% of new units be moderately priced and the report’s recommendation that 75% of them be affordable is VAST. The county’s housing target is 10,000 units above forecasts. No one – not Elrich, not the council, not the planning board – has a credible financing plan for plowing (at least) hundreds of millions of dollars of public money into building 7,500 or more affordable units. Holding this bill or any other plan to that standard is unrealistic.

Elrich: The bill sets a difficult precedent.

Here, Elrich makes the same slippery slope argument that I made. If developers at Metro stations get these tax breaks, developers of properties next to Metro stations will want them too. The bill’s supporters argue that Metro sites have extra costs that require subsidies to offset. Those extra costs are probably responsible for the dearth of new high-rise projects at Metro stations all around the region. But the bill does change how the county does incentives. In the past, incentives have been granted on a case-by-case basis (including the Marriott headquarters development project). The bill establishes its subsidy in law, giving it to developers by right. The bill’s supporters don’t say this publicly, but they argue privately that legislation is necessary because Elrich can’t be trusted to constructively negotiate with developers. Even if that were true, Elrich won’t be executive forever, and case-by-case negotiations have advantages that a one-size-fits-all approach can’t replicate.

Elrich: Construction workers deserve prevailing wages.

Council Member Will Jawando offered an amendment to require that Metro station development projects should pay construction workers the same prevailing wage they receive on county construction projects to get tax breaks. The amendment failed on a 4-5 vote, with Jawando and Council Members Evan Glass, Tom Hucker and Sidney Katz voting in favor. Elrich cites the bill’s failure to require prevailing wage as a reason to veto it.

When I was employed by the carpenters union, I lobbied the council to pass what is now the county’s prevailing wage law. In doing so, I provided them with a mountain of evidence that prevailing wage laws do not inflate construction costs because higher wages tend to be offset by higher productivity. As Nooshin Mahalia of the Economic Policy Institute wrote just before the bill was passed:

An overwhelming preponderance of the literature shows that prevailing wage regulations have no effect one way or the other on the cost to government of contracted public works projects. And as studies of the question become more and more sophisticated, this finding becomes stronger, and is reinforced with evidence that prevailing wage laws also help to reduce occupational injuries and fatalities, increase the pool of skilled construction workers, and actually enhance state tax revenues.

Council Member Marc Elrich was a co-sponsor of the prevailing wage bill. No current council member was in office when it passed in 2008.

The county has a prevailing wage law for its construction projects. WMATA uses the federal prevailing wage law (the Davis-Bacon Act) for its construction projects. And yet a developer with a county subsidy building at a WMATA Metro station is not required to pay prevailing wage. That just does not make a lot of sense.

Those who voted against prevailing wage coverage argue (against the evidence linked above) that it would inflate project costs and offset the value of the 15-year property tax break. If they truly believe that prevailing wages increase costs, then to be intellectually honest, they should repeal the county’s prevailing wage law to save money for the capital budget. Unless they do that, the arguments against prevailing wage ring hollow. On this one, Elrich is right.

The best point that Elrich’s critics make against him is that if he opposes this bill, then what is his plan to build more affordable housing? The county’s current total of $62 million in operating and capital money for preserving and building affordable units is woefully inadequate when compared to the needs. Elrich has been discussing this issue while in elected office for 14 years. What is the Elrich Plan to Build Affordable Housing?

Tomorrow, we will get into the politics of the veto.

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That Day When Our County Exec Had to Explain Economics to the Council in a Veto Message

Yesterday, Montgomery County Executive issued the first veto of his administration. It was of a major tax giveaway bill to developers — the county would likely lose over $400 million in revenue according to Elrich — passed in the name of sparking additional housing development around Metro.

My favorite part of the veto message in where Elrich, a progressive often accused of being an impractical lefty by opponents, explained the economics of these sorts of tax subsidies:

Under Federal law, WMATA must seek the highest and best price for their land. Land that is exempted from all property taxes for 15 years is more valuable because the calculation of its value includes the costs to acquire and develop, including taxes, weighed against market rents. If two properties are side by side, one exempt from taxes and the other not, and they were producing the same value of unit, the land value of the exempt property would be greater because its cost of development would be less than the cost to develop the tax-paying property. This would, in turn, likely raise the parcel’s appraised value. The Bill could potentially be counterproductive by raising the value of WMATA’s land.

Put another way, by reducing the tax burden, all the county has done is make WMATA’s land more valuable and increased the amount that they can charge for it. They will capture that value in the sale price of the land with Montgomery County taxpayers, who already heavily subsidize WMATA, having footed the bill.

They say you can’t get something for nothing. But if you’re not careful, you can get nothing for something. Or, at P.T. Barnum put it, “there’s a sucker born every minute.”

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