Bill Frick, Economy, Montgomery County Executive

Bill Frick on Jobs

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

For far too long, our Council has been complacent with the status quo and at times even outright hostile to the private sector.  Resting on the expectation of stable employment from the federal government, the Council has been largely indifferent and even averse to growing the private sector economy.  We can no longer afford to talk about the need for job and wage growth and yet show no interest in facilitating business growth that creates those jobs.  As Norm Augustine likes to say, “you can’t be for jobs and against employers.”

From our notorious permitting process to our burdensome tax policies, we need to stop treating small business as the enemy.  Small businesses are the vital engine that will drive our middle class growth.  We need to reorient our administration to recognize that being punitive to businesses isn’t actually in our interests.

We must also foster and facilitate growth and entrepreneurship.  We benefit from an amazingly well-educated and creative workforce. But our women and men often find DC or Virginia or Baltimore to be more promising environments in which to grow and create businesses.  I want to enhance access to capital by building on our programs to keep local and state dollars in the community banks that are most likely to lend to small businesses, like I did at the state level. And I will help jump-start our hospitality, service, and restaurant economy by reforming or eliminating the Department of Liquor Control, a broken system that has functioned as a repellent to restaurants and consumers alike. I led this fight in the legislature, and will win this fight as County Executive.

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Overnight Analysis

Five Quick Takeaways from Last Night

Very Bad News for Maryland Republicans

If there was one lesson from last night, it’s that local Republicans cannot insulate themselves from this wave. It is a very strongly partisan era. No matter how much they tied themselves to the Trump mast or sailed away from his message they suffered.

In Maryland, Republicans went down big in Annapolis and Frederick. Republicans with strong local followings lost in Virginia. The areas in Virginia most like those that Maryland Republicans depend upon to win here – Loudoun and Prince William Counties – swung enormously against the Republicans.

Democrats win statewide in Virginia when they win these counties narrowly. Last night, they annihilated Republicans by 20 points. Neither Fairfax nor Prince William may have any more Republican delegates. Democrats also picked up seats in Loudoun.

This is terrible news for Maryland Republicans. Republican expectations of major gains in outer suburbs just got rolled back. Equally important, Larry Hogan now looks a lot more vulnerable than he did yesterday. It probably doesn’t help that he went down to Virginia to campaign for losing fear-mongering Trumpy candidate Ed Gillespie.

Organization is Important

Social media is not enough. Progressives talking to each other about how awful Republicans are doesn’t accomplish much. As much as I love blogs, action in the hard work of politics such as knocking on doors and other forms of meaningful voter contact to get out the message and the vote created the victory.

The effective deployment of huge numbers of Maryland volunteers played a critical role in getting out the vote in northern Virginia. Together with local volunteers, they helped create both impressive statewide victories and completely unexpected massive gains in the House of Delegates, which is utterly gerrymandered in favor of the Republicans.

Unquestionably, Trump fired up Democrats. There was a huge organic component of volunteers from resistance organizations that cannot be manufactured. But that surge needed to be channeled into effective organization. People need to go where they’re need, so kudos to people like Sens. Rich Madaleno and Roger Manno who spent yesterday in Frederick.

Yes, Trump and Federal Republicans are a Problem

There is no secret silent majority hidden from pollsters. Trump and the national Republicans are incredible millstones. As Todd Eberly explained, “Even if they don’t take the House, this was the stuff of nightmares for the GOP. A president at 36% and a Congress that can’t legislate is one helluva weight around the neck of the party.”

The Republicans face a legislative trap of their own making. They’ve promised their base wildly unrealistic, terrifically bad radical ideas that scare the public. Right now, they face a choice of disappointing their supporters or enacting them and angering the public – and possibly their own supporters when they discover what really happens.

Trump compounds these problems. His total unreliability and disloyalty toward legislative partners combined with his fecklessness and lack of knowledge about policy make him a terrible dealmaker. As it turns out, government by tweet doesn’t work.

Junk the Litmus Tests

Purity tests have become depressingly in vogue in the Democratic Party. Increasing numbers want to support only candidates they regard as meeting their litmus test and discarding others as heretics from the true faith.

Democrats spend too much time parsing candidates who are all progressive with the same goals. When elected, people like Ralph Northam and Tom Periello – both fine Democrats – face the same barriers to achievement. Don’t get mad at Democrats who compromise to push the agenda forward. It has worked very well for unquestionably progressive politicians like Chris Van Hollen and Jamie Raskin. Sure beats getting nothing done in order to remain untainted.

Ralph Northam was derided by many as too centrist. Whether or not he was a great campaigner, he was the right person in the right place. His moderation and reputation may have played a key role in reaching out to highly educated women who gave Democrats an important edge.

Medicaid expansion may come to Virginia as a result. Even if you regard single payer as the desired long-term solution, don’t knock providing health care to thousands more Virginians. That’s what the Democratic Party is all about. In short, stay focused on the goal, not comparatively small ideological differences. That’s how the Republicans got into this mess.

Authentic Diversity is Good for Democrats

Beyond major victories, the first two Latinas ever won election to the Virginia House. The very first transgender candidate ever won election to the state legislature, defeating a heinous politician who thrived on bigotry in the process. At the statewide level, an African American won election as Lieutenant Governor.

Authentic diversity occurs not because party leaders carefully balance tickets or pave the way for candidates from particular identity groups. It happens because candidates from various backgrounds jump into the political arena and do the same hard work of politics to build coalitions and support, as that is how nominations are won.

For example, Lt. Gov.-Elect Justin Fairfax ran four years ago and surprised by almost winning the nomination for Attorney General. Though he lost, he set himself up nicely to win the nomination and then the general election for Lt. Gov. this year. The two Latino winners sought office and ran hard in tough areas.

The key role for party leaders is not to downplay the chances of a candidate from Group X. In our partisan era, people seem very willing to vote for members of their party regardless of a different group. As Democrats have a diverse coalition, visible organic expression of it helps affirm the value of participation in it and fires up Democrats.

Postscript on Charlottesville

The citizens of Charlottesville sent  a powerful message in the wake of the horrific events foisted on their community. In 2017, 31% more people voted than four years ago, as compared to 16% across the state.  A stunning 85% voted for Northam and against Gillespie’s shameless stoking of racial tensions. A lopsided 64% did the same in surrounding Albermarle County.

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David Lublin

Stacked for Separatists? Catalonia’s Version of the Electoral College

Believe it or not, I don’t study Maryland much for my day job as a political scientist. Read my analysis on Catalonia in the Monkey Cage blog in the Washington Post.

Notwithstanding separatist leader Carles Puigdemont’s dramatic flight to Brussels, Catalonia’s fade from American headlines gives the impression that normalcy is gradually returning to the region in the wake of the ousting of the region’s separatist government by the Spanish central government.

Appearances are deceiving. New regional elections are scheduled for December 21 and the electoral system may yet again manufacture a separatist majority in a manner eerily parallel to the electoral college. In other words, what Catalonia has just gone through might well be the end of the beginning rather than the beginning of the end.

 

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Adam Pagnucco, Council At-Large, Montgomery County Council

Be Careful About Going to an All-District County Council

By Adam Pagnucco.

Recently, MoCo’s political community has been thinking of changing the structure of the County Council.  Since 1990, the council has had four at-large members and five members elected by residents of districts.  One idea is to reduce or eliminate the at-large members and replace them with more district members.  Advocates of that perspective believe the districts are too large, that district members are more responsive than at-large members and that the cost of running at-large enables interest groups to play more in those elections.  We offer no opinion on any of those theories, but prior election history points to one consequence of shifting to an all-district council.

The level of political competition will almost certainly decline.

Why do we believe that will happen?  Consider recent elections.  Below is a chart showing the results of all district council elections since 1998.  Over that period, there have been 28 district council elections, 20 of which featured incumbents.  The incumbents won 17 of 20 races, an 85% win rate.  If the Republican incumbents are omitted, the remaining Democratic incumbents won 14 of 15 elections, a 93% win rate.

If that is not enough to prove the non-competitiveness of these elections, consider just two facts.  First, only one Democratic district incumbent has lost under our current structure, and that happened in 1998.  Second, of the last six contested district races, five saw the incumbent win by more than fifty points.

Meanwhile, the at-large races are much more competitive.  Since the current system was established in 1990, no group of at-large incumbents has ever run unopposed.  Three Democratic incumbents have lost – Blair Ewing (2002), Mike Subin (2006) and Duchy Trachtenberg (2010).  Even in the two elections in which all four incumbents ran for reelection (2010 and 2014), challengers still entered the race and one of them (Hans Riemer in 2010) knocked out an incumbent to win.

This year, those same trends continue unabated.  There are 25 at-large candidates (with more to come) running with three seats open.  Meanwhile, district incumbents Nancy Navarro (D-4) and Tom Hucker (D-5) have no opponents while Craig Rice (D-2) has token opposition in the primary.  Only Sidney Katz (D-3) has a serious challenger.  This disparity persists even in the presence of public financing, which was supposed to promote competition.

What explains this pattern?  After all, district races are theoretically cheaper than at-large races because they have fewer voters.  The reason is that one-seat races against incumbents are very different affairs than at-large contests.  A challenger running against an incumbent for one seat must show that the incumbent has committed a firing offense; otherwise, voters will support the candidate they know better.  These one-seat races can turn nasty as we have seen from recent MoCo Senate elections as well as the bitter fight between Council District 5 incumbent Derick Berlage and challenger Marc Elrich twenty years ago.  At-large races are seldom negative unless slates are formed to compete against each other.  (That hasn’t happened since 2002.)  At-large challenger Hans Riemer ran a model race in his 2010 win, promoting his policy agenda of progressivism and smart growth and never targeting any single incumbent for criticism.  Most candidates don’t have the stomach for negative elections when an open seat is available.  And in six of the last eight at-large races (including next year), at least one seat has been open.

Political competition is extremely valuable.  It should not be discarded lightly.  There may be good reasons to increase the number of districts, but if at-large members are completely eliminated, voters will pay the price with fewer choices and less accountability at election time.

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Frederick County

Democrats Thump Republicans in City of Frederick

Frederick 2017 Unofficial Results by David Lublin on Scribd

Frederick voters came out to elect their mayor and city council today. Or at least 8,810, or 21%, of the 42,053 voters did. The Democratic sweep around the country extended into swingy Frederick, as Democrats trounced their Republican opponents.

Democratic Alderman Michael O’Connor beat incumbent Republican Mayor Randy McClement by 22%. The previous Board of Alderman had four Democrats and one Republican. No more as Democrats take full control. Incumbents Kelly Russell and Donna Kuzamchak will be joined by newcomers Derek Shackelford, Roger Wilson and Ben McShane. The nearest Republican fell 2273 votes behind the last place Democrat — a 26% difference.

Sens. Rich Madaleno and Roger Manno, candidates for governor and Congress, respectively, were both there to celebrate the big victory after working to get out the vote in Frederick earlier in the day.

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Annapolis

Immigrant Dem Elected Mayor of Annapolis, Defeating GOP Incumbent

In what sounds like a nightmare for the Trump crowd, one-term Annapolis Mayor Mike Pantelides (R), got beat by Gavin Buckley (D), an Australian immigrant. Buckley is a first-time officeholder. Just under 35% of Annapolitans turned out to vote in the hotly contested race.

The Board of Aldermen will continue to have seven Democratic and one Republican. Incumbent Alderman Frederick Paone (R) held on by just 18 votes against Kurt Riegel (D). In Ward 8, Incumbent Ross Arnett (D) held off a strong Republican challenge by 54 votes.

Here are the results.

Votes Percent
Mayor
Mike Pantelides R (i) 3354 38
Gavin Buckley D 5439 62
Board of Aldermen
Ward 1
Larry Claussen R 594 35
Eleanor Tierney D 1028 61
Ward 2
Frederick Paone R (i) 780 51
Kurt Riegel D 762 49
Ward 3
Rhonda Charles D (i) 648 97
Ward 4
Sheila Finlayson D (i) 380 72
Write-In WI 148 28
Ward 5
James Appel R 389 39
Marc Rodriguez D 610 61
Ward 6
Shaneka Henson D 426 95
Ward 7
David Frankel R 339 36
Rob Savidge D 592 63
Ward 8
Julie Mussog R 792 48
Ross Arnett D (i) 846 52

 

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Gaithersburg

Unofficial Gaithersburg Election Results

Only 3282, or 9.2%, of Gaithersburg voters, voted. Mayor Jud Ashman was reelected without opposition and 2895 votes.

Council Results (2 seats)
Laurie-Anne Sayles, 1953 (59.5%)
Michael Sesma (i), 1730 (52.7%)
Jim McNulty, 1259 (38.3%)
Yvette Monroe (i), 1253 (38.2%)

For the two seats on the city council, newcomer Laurie-Anne Sayles ran away with the race with close to 60% of the vote. Incumbent Michael Sesma also won easily, though with just over majority support. Incumbent Yvette Monroe came in fourth place and lost her seat.

Ashman endorsed Sesma and Monroe. Sayles complained that he violated ethics laws in the way he did it. My guess is council meetings just got a bit more interesting. Congratulations to all the winners and thanks to all for running.

 

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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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Minimum Wage, Montgomery County

On Raising the Minimum Wage, Part II


Today, 7S continues yesterday’s discussion of critical issues surrounding the proposed increase in the County’s minimum wage to $15 per hour.

Impact on Employment

Minimum wage opponents have long argued against raising the minimum wage on the grounds that it will spur businesses to hire fewer people. The intent of the policy is to help people who are struggling get out of poverty – not unemploy them – so this is a critical question.

Proponents argue correctly that past studies have shown that moderate wage increases have not had a measurably negative impact on employment relative to neighboring jurisdictions. They can also make a case that the stagnation in the minimum wage has left it lower in real terms than in earlier eras.

Moreover, a minimum wage increase can aid the economy by giving money to people who will undoubtedly spend it because of basic needs and pent up demand, and stimulate the economy.

Of course, the impact of Montgomery’s increase on our own economy depends on whether they spend it here or in neighboring jurisdictions. Do beneficiaries live here? Do they spend their money here?

The Size of the Wage

Councilmember George Leventhal, who opposed the previous wage increase, supports this one because he didn’t think the previous one caused any problem, so the County should press forward with this one. That logic remains wholly unconvincing because one could similarly argue why stop at $15. Why not $17 or $20?

The size of the minimum wage is obviously crucial. Even if the current $11.50 hasn’t caused any problems, which some might debate based on employment figures, it doesn’t mean that a $15.00 wage – a 23% hike – will not, especially if inflation remains low over the phase-in period.

Don’t forget that various social charges tied to total wages will also rise, as will the potential wage differential with neighboring jurisdictions. The proposed $15 minimum will be twice as high as the minimum wage in Virginia.

Councilmember Elrich frames his argument in favor of the wage on what is needed to get people a living wage. A living wage, unfortunately, may be divorced from the wage that has a negative impact on the economy and employment.

The graph at the top shows the difficulty of the assessment problem. If the minimum wage had continued to increase as it did in the 1950s and 1960s, it would be much higher today. But it has tended to fall or stagnate since around 1968, which makes the argument for the increase but also suggests that the higher rate would be outside our historical experience.

Broad Economic Changes

The tight labor markets of the 1990s resulted in wage increases and substantial reductions in poverty.  In contrast, the magnitude of the financial crisis left tremendous slack in the labor market and current low unemployment rates don’t reflect that there is much room for discouraged workers to enter the labor force.

At the same time, wages have stagnated during post-2000 economic recoveries, making it unclear that tighter labor markets will increase wages. The Republican focus during the 2000s on directing ever more money in tax cuts to the wealthy while cutting services only accentuated this trend – an experiment the Republicans seem intent on repeating.

As has often occurred in the past, technological innovations are destroying jobs and creating others. Right now, technology is rapidly replacing many low-end jobs, which creates downward pressure on wages despite lower unemployment. Scanners allow people to check out themselves at the supermarket. McDonald’s is now experimenting with a touchscreen order system. The Internet puts enormous pressure on in-store retail sales.

Minimum wage increases may encourage firms to move more aggressively to adopt new technologies, resulting in fewer workers. This is not necessarily bad for the economy, as it could position Montgomery to be at the cutting edge of efficiency. Higher wages may spur Montgomery businesses to become leaner and meaner faster than the competition while ensuring that employees get better compensation.

Economic Strategy

Finally, the County needs to consider how this issue fits into its broader economic approach. We have experienced low growth and stagnant employment. What can the County do to reverse these trends? How does a minimum wage increase fit into that strategy?

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2018 Montgomery County Executive Race, Minimum Wage

Raise the Minimum Wage? Roger Berliner Answers

Seventh State is pleased to present Roger Berliner’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?  

I do favor increasing our county’s minimum wage to $15 an hour. I support the County Executive’s timeline, which would increase wages each year and reach $15 an hour by 2022 for larger businesses and 2024 for small businesses. I believe the County Executive’s time line best harmonizes the conflicting truths that are present in this debate: (1) too many people are working too hard for too little; and (2) if we raise wages too quickly, we will harm small businesses in our county, particularly minority-owned businesses, and this in turn will produce results that are exactly the opposite of what we want.

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Maryland Politics Watch