Tag Archives: Marc Elrich

Bill Frick, Department of Liquor Control, George Leventhal, Marc Elrich, Roger Berliner

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.

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Adam Pagnucco, Marc Elrich, purple line

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.

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budget, Marc Elrich, Montgomery County Executive

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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Adam Pagnucco, Marc Elrich, purple line

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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Economy, Marc Elrich, Montgomery County Executive

Marc Elrich on Jobs

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

Most job growth comes from new businesses expanding in the location in which they were founded.  Surveys indicate that the quality of life and the quality of public goods in an area – including transportation systems and schools – matter far more when businesses are making their initial location decisions than the taxes and other financial incentives they might be offered.

While there is a lot about the economy that is beyond our control – there’s no silver bullet for job growth – there is much that the county can do to create the conditions for businesses to start and thrive.  To the extent that we have cumbersome and inappropriate regulations, we need to change them, and to the extent that regulatory costs are excessive, we need to lower them.  More importantly, I would focus on incubating new local-grown businesses, nurturing their growth, and improving the county’s economic infrastructure.  Other jurisdictions have creative small business incubators and we can learn from their successes to grow a stronger local economy.  The empty spaces in shopping centers and office buildings were once filled with small businesses, and we need to nourish a new generation of entrepreneurs to refill them.

The bus rapid transit (BRT) system proposal that I initiated and have been advocating for during my time on the County Council also holds real potential as a tool for job growth.  Businesses have made an issue of the lack of transit as an impediment to growth.  If we want people to create startups or expand existing businesses, we need entrepreneurs to feel confident that their employees have a reliable way of getting to and from work, that their customers can get to their stores, and that they will be able to transport the goods and services they need to stay in business.

A well-implemented BRT system would reduce future congestion and move more people than roadways alone, making the county a more attractive location for businesses of all sizes.  It would greatly benefit residents as well.

We also need to work with the school system, including Montgomery College, to make sure our students are prepared for jobs that don’t necessarily require a four-year degree but do require post-high-school education.  And we should expand apprenticeship programs in cooperation with the building trades organizations that need the next generation of skilled workers.

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Minimum Wage, Montgomery County

Implications of the Minimum Wage Outcome

Bethesda Beat has the story:

The County Council on Tuesday voted unanimously to a compromise that will phase in the $15-per-hour wage over four years based on businesses’ size.

Under the compromise:

  • large businesses with more than 50 employees will be required to pay the minimum wage in 2021
  • businesses with 11 to 50 employees will have to pay the wage in 2023
  • small businesses with fewer than 11 employees will need to pay the wage in 2024.

The council also approved a measure to tie the wage to the inflation rate in 2022 to prevent the need to vote to increase the wage in the future.

Indexing’s Long-Term Impact

This last bit may be the most important. Indexing to inflation assures that Montgomery’s minimum will continue to rise. As a result, the gap between the minimum wage in Montgomery and elsewhere will continue to grow.

If demand for labor keeps the going rate below Montgomery’s minimum, especially as indexing drives it up, it will make the county less competitive in businesses that don’t need to be located here, though have less impact on many services that are hard to move. However, even these businesses, like restaurants, can choose where to open and we would likely see the result.

The impact on the County budget over the short term is unclear. Over the long term, it may force the County to ratchet up wages and cut other services more in lean budget times, since the County will no longer be able to limit COLAs for workers at the bottom and will have to fight wage compression.

Any future economic and budgetary pressures will be made more acute, as the popularity of indexing wages makes it politically perilous to remove. These potentially negative impacts, however, will occur enough in the future that the current crop of officials will not have to address any consequences of their actions.

Political Impact

The short-term politics are more interesting. It gives Marc Elrich a major victory to tout and undermines critiques of him as ineffective in marshaling his colleagues behind him. At the same time, the unanimous adoption of a compromise takes a lot of the juice out of the political issue as it was adopted unanimously.

Candidates can’t differentiate themselves when there is no difference on an issue. Incumbent Sidney Katz’s opponent, Ben Shnider,  regards this as a victory since he pressured Katz on the issue. But the Council’s action makes it very hard to campaign against Katz on this basis – a win for Katz.

The decline of the issue’s salience also benefits outsider candidates worried about the financial impact, as they are on the less popular side of the question. It may give an opening to County Executive Candidates Bill Frick and Rose Krasnow with the business community, which won’t like the outcome.

Roger Berliner will be grateful this issue is off the agenda and will tell business leaders that he did the best he did to mitigate its impact. Ultimately, however, he still voted for a policy they think is harmful, while Frick was willing to say publicly that minimum wage policy should be left to the state.

Frick will argue to business that his actions show that he is willing to take on tougher causes and they should get behind him. Krasnow is not yet formally in the race, which limits any lumps she can take but also prevents her from earning points on this issue. As the Maryland Lottery has spent much money to explain, “you have to play to win.”

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2018 Montgomery County Executive Race, Minimum Wage

Raise the Minimum Wage? Marc Elrich Answers

Seventh State is pleased to present Marc Elrich’s response to our question on the minimum wage.

Do you favor an increase in the Montgomery County minimum wage and, if so, by how much and on what timeline? Would you have any exemptions and, if so, for whom?

Yes, I support making the Montgomery County minimum wage into a living wage of $15 an hour.  I led the fight to secure the county’s last minimum wage increase, which is why our minimum wage is now $11.50 an hour, and believe strongly that jobs should pay people enough to provide for their families.

An extensive body of evidence shows that minimum wage increases have had their intended effect of lifting wages for low-wage workers with little to no effect on employment.  Montgomery County is one of the wealthiest counties in the United States and has a very high cost of living, so we are even more well-positioned than many other jurisdictions to take the step of going to $15.

The most prudent course of action would be to raise the minimum wage to $15 per hour by 2020 for all workers in the county with no exemptions, indexing the minimum wage to rise with inflation or average wages after 2020.  Over 100,000 Montgomery County residents would benefit from such an increase.

Opponents of this idea today made the same arguments and dire predictions four years ago.  They were wrong then and they’re wrong now.

The $15 minimum wage bill I recently reintroduced, like the one that took effect in 2013, contains several compromises to assuage the concerns of some of my colleagues and some small businesses.  It delays the phase-in to 2022 for businesses with 25 or fewer employees, for example, and it continues to allow the exemptions for some workers that exist under federal law.  These compromises will result in less help for people in need than my ideal proposal would achieve, but the bill we ultimately enshrine into law will still have a huge, positive impact.

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Marc Elrich, Montgomery County Executive

In Their Own Words, Part II: Marc Elrich

We continue with our County Executive questionnaires today with Councilmember Marc Elrich (D-At Large).

What was your most important achievement in your current or past office? How do you think it demonstrates your leadership ability?

My most important achievement has been increasing the minimum wage in Montgomery County, and helping to increase it in Prince George’s County and Washington, DC as well.  Opponents of minimum wage increases often try to pit neighboring cities and counties against each other, inaccurately arguing that raising wages in one area will cause employers to flee to surrounding lower-wage localities.  I helped convince lawmakers in these three jurisdictions that joining forces and pushing for higher minimum wages together would defeat this erroneous argument while delivering a real economic win for hundreds of thousands of people.

While I pushed hard for Montgomery County’s minimum wage to increase automatically with inflation, I ultimately accepted a bill without that provision, and with a slower phase-in than I had wanted, to secure the votes necessary for it to pass the Council.  I didn’t give up, however, and have continued to fight for a living wage for county residents, sponsoring a $15 minimum wage bill that earned the support of a majority of my colleagues last year.  Though that bill was vetoed, I am confident that we will soon succeed in passing a version of the legislation I reintroduced.

I believe this achievement demonstrates both my recognition that our residents’ needs demand urgent action and my ability to produce tangible changes through the political process.  I begin by listening to and working with affected communities.  Whether you’re a full-time worker living in poverty or a resident who loves your community and wants to be certain that, as we grow, the county provides the schools, transportation, and other infrastructure necessary to handle that growth without harming the environment, I am committed to getting results for you.  Master planning must include residents; transportation solutions must be affordable and appropriate; and protecting green spaces and water quality, preserving existing affordable housing, and encouraging the use of alternative energy must be priorities.

As County Executive, I know how to build the coalitions with our residents, businesses, and organizations to continue to help this county work for all of us.

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Montgomery County, Term Limits

They Just Don’t Get It

After Adam Pagnucco’s terrific and thought-provoking post from yesterday, I had an interesting conversation with Councilmember Nancy Floreen on Facebook. A very smart and knowledgeable former Council President who is happy to defend her record, the conversation was inadvertently helpful to me in understanding why term limits passed so overwhelmingly.

They Don’t Get It. At All.

Voters didn’t quite say “You have sat too long for any good you have been doing lately. . . Depart, I say; and let us have done with you. In the name of God, go!” in the manner of Oliver Cromwell to the Rump Parliament (repeated famously by a Conservative MP to Neville Chamberlain). But a 70% vote in favor of term limits is pretty darn close.

Yet, reflecting a common view on the Council, Nancy Floreen ascribes no meaning to the vote whatsoever, including viewing it as a vote against the status quo (see full Facebook exchange here). In short, there is now a yawning gap between how councilmembers see their work and the County government, and how voters see them.

This ostrich-like response on term limits–and even though I voted against them and really like and respect Nancy, I don’t know what else to call it–vividly demonstrates this distance and why voters supported them.

The Divorce

On reflection, I realized that something fundamental has changed about how voters see the County government. When I was a more of whippersnapper, people had a much more positive view of the County government. Yes, people paid a lot in taxes but the results were visible in terms of quality services from excellent schools to parks to libraries that made it a great place to raise kids.

People are now much more divorced from their County government–and not just because our population has doubled. Traffic, always bad, is now far worse. We’ve gone through a long period in which taxes have gone up but visible outputs in terms of those excellent services, such as libraries, are going down.

People even worry increasingly about the quality of our beloved school system and whether they’re getting value for money. Metro is no longer spanking new but decaying and dysfunctional. Other infrastructure from electric wires to gas lines to water mains needs replacement.

Why Did Voters Want to Throw the Bums Out?

Many of the problems that the County faces have little to do with its current membership. At least part of the term limits vote stems from having gone through a tough period when difficult, unpopular choices had to be made. And yet, the reasons that voters decided to make the psychological trial separation from the County a full-scale divorce via term limits go beyond that.

The Bubble

County Councilmembers are insulated from the public unless they make a strong effort. The highly symbolic locked door that prevents the plebeian masses from even entering their offices is just the start of it. Staff insulates councilmembers from the public, both by fielding calls and answering email.

Besides naturally supportive staff, councilmembers get a lot of positive feedback from visitors. After all, people lobbying for something tend not to want to alienate the Council. After 12 or 16 years, who wouldn’t be changed by that?

Two Electorates

Roughly 10% of eligible voters participate in the Democratic primaries that elect our local officials. Turnout in Montgomery has been stagnant, so politicians focus on the increasingly small share of people who participate in these contests.

The focus on the odd few of us who vote consistently in Democratic primaries leaves the rest feeling disengaged from politics, as politicians sensibly don’t reach out to them at election time because it won’t help them win.

It also leaves politicians with a pretty warped sense of what the average voter wants because the few who participate in primaries of either party tend to be more extreme than not just the average voter but also the average member of their party.

Term limits was one of the few ways that the other 90% could express dissatisfaction with local officials in a meaningful way other than casting a symbolic vote for a Republican, a brand tarnished by national Republicans that mostly fields weak or even nutty candidates here.

Confusing Congress and Local Government

Too many members of the Council seem to want to be national legislators and opine on the great national issues of the day. Increasingly, this creeps into legislation with more time spent on issues away from core functions.

I miss those wonderful ads with Doug Duncan taking out a voter’s trash. To voters, this said that he got it. One reason County Executive Ike Leggett was able to turn back challenges to his leadership despite being the man in charge at a difficult time was that (1) he showed an unusual capacity for listening at events around the county, and (2) he responded to voters with not just deep fluency on local issues but also a respect for voter concerns. At a town hall meeting with Ike, voters always felt heard.

Property Taxes

Most people’s salaries have been stagnant. Nonetheless, the County raised taxes by over 9%. At a time when many voters find it hard to live within their means, the County made it harder by increasing taxes. As it turns out, berating voters that they don’t care about schools or social justice if they feel this way doesn’t work.

In other words, it is time for the County to start to figure out how to live within its means. Maybe this means tax reform of some sort–no, not in the guise of a massive tax cut like federal Republicans–such as eliminating loopholes that help some but not most of us. Councilmember and County Executive Candidate Marc Elrich made a good start by highlighting an old post by Adam on a tax break for country clubs. But it may also mean taking on labor to rein in costs, actions Councilmember Roger Berliner or Del. Bill Frick, also running for executive, are more likely to do.

The tax argument for term limits was made especially effective by the 28.1% pay increase that the Council voted to award itself in 2013. The Citizens Commission report had recommended a 17.5% increase in one year plus COLAs. That would’ve given the Council a 17.8% increase through 2016 based on the CPI for the Washington-Baltimore region. Comparing annual wages per employee in Montgomery County from 2013 and 2016 reveals that private sector wages have risen just 7.6% in current dollars.

The People v. The Powerful

Monied interests are way better at working Rockville than the rest of us. While members of civic associations are part-time volunteers who are not always up on the latest in ZTAs (zoning text amendments), developers and other powerful interests have expensive lawyers who know how to work the process.

This critique is very different than rich v. poor because the problem affects neighborhoods across the County. Developers and other interests can afford lawyers who can navigate them through the process and leave neighborhoods feeling powerless.

Social Engineering

This intersects with the social engineering tendencies of both the Council and the Planning Board. Personally, I think smart growth is generally a great thing that builds urban nodes like Silver Spring, Rockville and Bethesda where many people want to live or to spend time.

At the same time, it needs to be done with sensitivity and awareness of existing neighborhoods. Most people moved out here for the suburban lifestyle of a house and a yard. They don’t appreciate being told that they’re outdated and even being demonized for caring about their neighborhoods and worrying about whether the infrastructure can handle the growth.

Moreover, those who have lived here a long time have a healthy suspicion of urban planners. In the 1970s and 1980s, these are the same people who told us that elevated urban plazas behind office buildings were the wave of the future. Total disaster.

I think they’ve got it more right this time with smart growth. But carrying it out in such an ideological manner that dismisses neighborhood concerns alienates the people who are supposed to be served. Downcounty residents are mighty tired of hearing patronizing talk of how much they’ll like that new 30-story building looming across the street from their home. Or that traffic is good because it will force us to ride the decaying Metro that doesn’t take us to the supermarket.

Upcounty residents really do want some of those promised roads built and are real tired of begging. If you don’t believe me, check out the hundreds of petition signatures submitted by upcounty citizens (see below) who are deeply unhappy that Councilmember Hans Riemer’s proposed resolution on traffic solutions for the area drops the M-83 extension of the Midcounty Highway.

Put another way, start treating smart growth like a very good idea to be pursued in concert with residents rather than a new religion desperate to burn some heretics. The Council made a good start with the Bethesda Master Plan. It wasn’t perfect but it was a good process so kudos, especially to Councilmembers Roger Berliner, Marc Elrich and Hans Riemer. But concerns have already arisen that development will go beyond what is in the plan, as developers and their lawyers are already working the process.

Ferment in the Land

So yes, it’s definitely “a time for a change” election. Yet, we may end up with a crowd that has much the same views as the previous one but voters will welcome the change of faces. And, who knows, new faces may bring some good new ideas and approaches.

Here’s hoping.

M-83 Petition Signatories 101717 by David Lublin on Scribd

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Minimum Wage

Elrich Slams Berliner on Minimum Wage

The following is by Councilmember Marc Elrich (D-At Large):

Earlier this week, the Council’s HHS committee voted 2-1 (Berliner and Rice vs Leventhal) to delay the full implementation of the minimum wage by two years for BOTH large and small businesses. (My bill cosponsored by 4 of my colleagues would raise the minimum wage 2020 for businesses with more than 25 employees and 2022 for those under 25.) While everyone acknowledges that there will be some impact on some small businesses, yet again no evidence was presented that demonstrated that it would be a significant impact.  While there are numerous studies, the meta-analysis of those studies show slight to no impacts on employment.[1] Statements should be supported by data or analysis.  The absence of data is part of what made the PFM study so bad, because their original massive job loss assertions, and even their second lower revised figure, did not reflect the data from anywhere (as this blog and others have documented[2]).  On the other side of the scale, studies clearly show the devastating impacts of poverty on children and families. I taught for 17 years at a high poverty school, and I saw up close the impact of poverty on students.

We have an opportunity to move toward a decent standard of living for these workers who have been working hard at low wages. Councilmember Berliner’s amendment to delay large businesses by two years to 2022 puts us two years behind Target’s stated nationwide plan. That is particularly inappropriate given that our county is one of the wealthiest in the entire country.

Councilmember Berliner argued for the delay using Minneapolis as the model and said that Montgomery County should use the same timing as they had. Using Minneapolis’ implementation schedule as a model would assume that it is a comparable jurisdiction. But it is not. Below I compare the living wage in the two jurisdictions. There are some big differences.

This table compares the living wage NEEDED TODAY in each jurisdiction.

Living Wage Minneapolis Montgomery County
Single adult $11.36 $15.80
1 adult 1 child $24.68 $29.82
1 adult 2 children $31.04 $34.87
2 adults 2 children $16.85* $18.72*

*This number is per adult in the two-adult family
(Source: Living Wage Calculator, MIT)

In every case, more than $15 an hour is needed TODAY in Montgomery County, but the cost difference between living here versus Minneapolis is the equivalent of $4 an hour, or $2 an hour if 2 adults are working.

However, the most important factor in cost of living differences is housing. Housing costs are what drives the cost of living and necessitate a particular wage. Here is a comparison of housing costs:

Jurisdiction 1br  yr/mo 2br  yr/mo 3br  yr/mo
Minneapolis $7824/ 652 $12635/1075 $17967/1497
Montgomery $15684/1307 $19476/1645 $25728/2144
Difference – or how much higher it is MoCo $7860/655 $6841/570 $7761/646

(Source: Living Wage Calculator, MIT)

A MoCo resident would need between $570-655/month more than a Minneapolis resident to pay the difference in housing costs. For all other expenses combined, Montgomery County is a few hundred dollars per year more costly to live in than Minneapolis, but annual housing costs are between $6841 and $7860 higher for Montgomery County. To suggest that a wage in Minneapolis, or a schedule for raising wages, should be replicated in Montgomery County ignores the enormous cost difference between the two jurisdictions which leaves our working poor deeply mired in poverty. We are simply prolonging an untenable situation for tens of thousands of families.

Finally, there is one last incorrect assumption in delaying the implementation date, and that is that Minneapolis is noticeably more gentle to small business. It’s been said that the proposed rate of increase is too fast. However, the facts show a different story.

Here is the pace of increase in the two jurisdictions:

Jurisdiction Small business increase # of years Cost/year Large business

increase

 # of years Cost/year
Minneapolis $7.25 7 $1.03 $5.50 5 $1.10
Montgomery County $3.50 5 $.70 $3.50 3 $1.16

In other words, the impact in Minneapolis on small businesses is greater in terms of total increase than Montgomery County ($7.25 vs $3.50) and greater as a per-year expense ($1.03 vs .70) For large businesses, the difference in total increase in Minneapolis is also greater than MoCo ($5.50 vs $3.50) but is slightly less per year ($1.10 vs $1.16).

So for small businesses, if the issue is pace, then the Minneapolis schedule is worse for their small business than what I’ve proposed, and for large businesses our target is 2020, no different than what Target has committed to nationally for 2020.

In short, Minneapolis is so different regarding affordability for its citizens that the impact of raising the minimum wage, and the urgency for raising the minimum wage, is simply not the same. Our residents are far more rent burdened and have far less disposable income. And if you’re worried about small employers, our steps are smaller, only 2/3 of the average annual increases that Minneapolis is implementing.

For one last comparison, I looked at Flagstaff, Arizona, which is also raising its minimum wage to $15.  Their living costs are slightly higher than Minneapolis but still much lower than Montgomery County.  And housing costs in particular are slightly higher than in Minneapolis, but about $6,000 a year lower than those costs in Montgomery County.  Yet they are raising their minimum wage for all businesses from $8.05 in November 2016, to $11.00 in January 2018, and then up to $15 an hour in January 2021.  So they are increasing by $7 per hour over just 5 years – a rate of increase that exceeds anything proposed in Montgomery County.

The minimum wage needs to reflect the costs that people have to bear in order to sustain themselves.  Prolonging the implementation simply erodes the value of the wage.  Frankly, in a perfect world we’d be close to $15 today and then let it rise with inflation.  Even my bill, with 2020 and 2022 implementation dates will mean that when $15 is reached it will be worth less than $15 today, and I wish we could do better, but the proposed delay just makes things worse and is completely divorced from the reality that low-income families face.

[1] http://jaredbernsteinblog.com/the-minimum-wage-increase-and-the-cbos-job-loss-estimate/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JaredBernstein+%28Jared+Bernstein%29 and https://www.hendrix.edu/news/news.aspx?id=64671

[2] http://www.epi.org/blog/the-montgomery-county-minimum-wage-impact-study-is-absurd-junk-science/

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