Immediately after taking office as county executive, Marc Elrich confronted a budget dilemma. The way he handled it deserves far more notice that it has received.
Outgoing Montgomery County Executive Ike Leggett promised bond rating agencies that he’d move towards a reserve fund of 10% of the country budget. Increasing the county’s reserves provides evidence of fiscal prudence that bond-rating agencies like, so adherence to Leggett’s target helps preserve the county’s AAA bond rating.
But revenues for the current fiscal year so far have fallen short of projections. I don’t view this as due to wildly unrealistic projections by the outgoing executive or council. Projections are called projections and not certainties for a reason. Sometimes, we end up with more money than expected too.
The shortfall presented newly minted County Executive Elrich with tough choices. Elrich could have declared that the 10% reserves target was unnecessarily high and that he would not be bound by Leggett’s commitment. Alternatively, Elrich could have taken a wait-and-see attitude in expectation that the final revenues for the fiscal year will prove higher.
Elrich chose neither of these more expedient options. Instead, he made the tough choice and pledged to cut spending. By asking county agencies for a variety of options, Elrich also used it as an opportunity to do in a smart, policy-oriented way rather than a uniform across-the-board cut. In short, it’s a first small step towards reshaping country government.
In his first major decision, Elrich also acted in an inclusive way by bringing in Council President Nancy Navarro to discuss it in advance of the decision, though the Council will, of course, need to scrutinize Elrich’s independently developed proposal for cuts.
Business, taxpayers and the bond-rating agencies could hardly have asked for a more fiscally responsible approach. In his first move, Elrich sent a message that he intends to pursue strong, responsible fiscal management and work within fiscal constraints.
Throughout the campaign, Elrich repeatedly explained, at times to deaf ears, that he wants to reshape country government to make it more efficient. He understands that this is imperative if only because the county’s current fiscal path is simply unsustainable.
Moreover, Elrich wants to realize savings precisely because he wants the county government to do more. If the county maintains its current trajectory, that won’t be possible. Squeezing more out of residents isn’t really much of an option, as previous councils have already more or less maxed out the local income and property tax.
It’s a pity that the opinion pages that predicted an Elrich administration as dire for business and proper fiscal management haven’t paid more attention.