Adam Pagnucco, Economy, taxes

Lessons Learned from the Giant Tax Hike, Part Three

By Adam Pagnucco.

If the next County Executive and County Council want to prevent another Giant Tax Hike, they will have to do something that has not been done for years: seriously improve the county’s economy.  Otherwise, no budget reforms will be enough to pay for the county’s needs.

There are many ways to assess a local economy, but for the purposes of this column, let’s look at two big measures: jobs and income.  From 2001 through 2016, the U.S. Bureau of Labor Statistics (BLS) calculates that total employment in the Washington metro area grew by 393,048 jobs, a growth rate of 14.6%.  In Montgomery County, total employment grew by 14,086, a growth rate of 3.1%.  Of 24 local jurisdictions measured by BLS, Montgomery’s job performance ranked 20th.  Among the large jurisdictions, only Prince George’s County fared worse.

Montgomery fared well in federal employment over this period, growing its federal jobs base by 18.9%.  That beat the metro area’s federal employment growth rate of 13.2%.  The county’s employment problems are concentrated in its private sector, which grew by just 1.0% between 2001 and 2016.  Montgomery’s private sector had 374,115 jobs in 2016, below its peak of 386,626 ten years before.  Over the last fifteen years, Montgomery’s private sector employment growth ranked 19th of 24 local jurisdictions.

In terms of real per capita personal income, the Washington region enjoyed a long period of growth that peaked in 2007, the year before the Great Recession hit.  In the eight years since, the region’s per capita income has struggled to increase for the first time in more than three decades.  Montgomery has a higher per capita income than the regional average, but it has suffered from a similar pattern.

Of 19 local jurisdictions tracked by the U.S. Bureau of Economic Analysis (BEA), twelve had real per capita personal income gains between 2007 and 2015.  Montgomery was one of the seven jurisdictions that did not.  Its 1.7% drop is below the regional total of -0.2% and ranks 14th of 19 jurisdictions in the region.

In broad terms, the employment data and the income data agree: Montgomery County has still not recovered from the Great Recession.

The fragile state of the economy acts like a steel cage on the county’s budget.  The county’s needs in public schools, public safety, transportation, health and human services and countless other areas will not go away.  But unlike days past, the economy currently cannot generate the tax revenues to finance everything desired by those in office – and their constituents.  The county has passed four tax hikes since the Great Recession started – two property tax increases (FY09 and FY16), an energy tax hike (FY11) and a recordation tax hike (FY16).  Added to this is a series of recent laws imposing rising costs on employers.  While some local jurisdictions in the region (especially in Virginia) have passed tax hikes and the District of Columbia and Prince George’s have passed new employment laws, Montgomery County is the only local government that has passed both in significant magnitude.  There may be reason for that, but it has contributed to enormous competitive challenges for the county.

Progressive policies such as those favored by Montgomery County politicians cost lots of money.  That money can only be obtained over the long term through a robust economy.  Economic growth is affected by the totality of what the county does – its investments in education and transportation, its fiscal and taxation policies, its planning decisions and the nature of new laws and regulations it imposes on employers.  If any of these things negatively impacts economic growth, marketing programs, slogans and massive incentives for large businesses will not by themselves make up for it.

The Number One lesson from the Giant Tax Hike is that the next generation of county elected officials must prioritize job creation and income growth.  Failure to do so will result in more tax hikes and further long-term decline.

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transportation

Marc Elrich on Hogan’s Road Plan

The following post by Councilmember Marc Elrich (D-At Large) continues Seventh State’s series on reactions to Gov. Larry Hogan’s road proposal by candidates for county executive. It appeared previously on Maryland Matters.

Recently, Gov. Larry Hogan (R) announced his $9 billion proposal to add toll lanes to I-270, I-495 and the Baltimore-Washington Parkway. While a number of people have initially enthusiastically supported his proposal, I think it bears a lot more scrutiny.

The best thing about it is that the governor shows a willingness to invest in infrastructure, though how much is state money and how much is user tolls is not known.

One of the problems is that he’s proposing a sledge hammer for a project that needs a scalpel. The scope of the proposed solutions for I-270 and I-495 are overly grandiose and unnecessary. On I-270 a more sensible approach would be two reversible lanes from the county line to the Beltway, which is what the County Council proposed several years ago. There isn’t room for four lanes, and it’s an unnecessary expense, because the congestion on I-270 is directional – meaning from north to south in the morning and the reverse in the evening. (It is also known as peak direction.)

Neither side of the road needs these lanes outside of the peak direction at rush hour. Reversible lanes are the most efficient use of money and space. These lanes should be for express bus and high-occupancy vehicles only.

On I-495 there are serious space constraints, particularly between New Hampshire Avenue and 355. Not only are there many houses close and a major hospital almost immediately adjacent to the highway, but there are also legal constraints regarding encroachments on Rock Creek. Multiple lanes would be an environmental disaster for Rock Creek.

Additionally, large sections of the Montgomery County portion would be astoundingly expensive – remember the overpass bridges don’t have enough room for four lanes of new highway. Instead, a single reversible lane might fit within the existing width of the highway. Engineering data would be needed to confirm this, but there seem to be at least some places wide enough to add a lane now using the inside shoulder service lane. It may be possible to add two lanes past 355 going to Virginia – reversible lanes should be used there as well. Why build what you don’t need?

Gov. Hogan is missing two bigger picture problems: transit in general and Metro in particular. If money is available for highway expansion, then money is available for Metro. Metro cannot fail – in fact, it needs to improve and absorb more riders from the roads. A Metro fail would devolve into a widespread road disaster because most people would use local roads, not the highways, to get around.

Because no highway goes into Washington, D.C., a Metro failure adds thousands of cars on Georgia, Connecticut and Wisconsin avenues. Those additional cars would flood the commute to the city as well as make a mess for those commuters trying to access the job centers along 355.

The second overarching problem is that the governor is not looking at the big picture. The Beltway and I-270 have congestion problems, but what happens when exiting these roads is equally problematic. Even if, for example, cars on the Beltway arrive quickly to Georgia Avenue at rush hour, they would face a long queue simply to exit the Beltway and then a slow slog on Georgia. In other words, the local road network is already overwhelmed and no amount of highway lanes can change that situation. So even if cars spend less time on 495 getting to an exit and then they are stuck on the exit ramp or on the road, where are the savings?

The realities of the commutes necessitate a commitment to local transit. Local transit is the only way to clear enough space off the roads so that people can get to their destinations in a reasonable amount of time.

Because building new local road lanes won’t work, increasing transit usage on the local road network is central to any solution.

The whole point of the Bus Rapid Transit (BRT) network that I proposed was to increase mobility on local roads and take a load off the already overwhelmed road network. (I first proposed the BRT network in 2008 and it is slowly developing.) BRT built right and desirable to use will provide actual congestion relief – just imagine what the roads would function like without a Metro and if those passengers returned to their cars.

Any plan that doesn’t integrate the local roads and the highways is simply not going to work. The governor should look more carefully at what is needed, rather than just declaring the addition of four lanes to the highway at great public expense, whether four lanes are needed or not. A more strategic assessment would free up capital that could go toward a more comprehensive, successful solution.

And, there are two other things to consider. A public private partnership, or P3, may be the most expensive way to fund a project and that is going to reverberate in tolls. Essentially, people with money to spend get a better highway experience and those without the means, remain in a poor experience. If money is the ticket to the new lanes, then you’re disincentivizing car pools, van pools and buses.

We need to get cars off the road, rather than finding extravagant ways to keep them on the road. This is a huge public expenditure with no accompanying analysis of what the state won’t be able to fund as a result – I’m worried about education, transit funding, and other critical infrastructure. Since none of us believes that there’s an infinite well of money, an expenditure like this on three roads may well mean that other critical projects don’t get done.

Another unknown is the impact of increased telecommuting. If we could get 15-20 percent of the workforce telecommuting each work day, we’d be dealing with a far less expensive problem to solve and probably have a much better travel environment.

I know the governor’s announcement makes a great news splash, and it certainly allows Gov. Hogan to say “I’m committed,” but it’s not very well thought out beyond that. I’d like to take the actual state dollars he’s offering and then have a real conversation about a comprehensive solution to the problem that actually makes better connections where trips start and where they end. And transit must be the central part of that conversation.

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Adam Pagnucco, budget, Montgomery County Council, taxes

Lessons Learned from the Giant Tax Hike, Part Two

By Adam Pagnucco.

The untold story of last year’s 9% property tax hike is that it was not merely the product of needed funding for public schools or the adverse consequences of a U.S. Supreme Court decision on income taxes.  It was also the product of an innate bias towards more spending built into the County Council’s budget process.  That bias created mounting pressure to fund ever-growing spending programs accumulated over many years which contributed to the tax increase.  The next generation of county elected officials must reform this process or they too will eventually feel compelled to raise taxes.

All state and local operating budgets must be balanced each year as a matter of law.  At the state level, the General Assembly may cut spending items in the Governor’s budget but they generally cannot add to them.  (The legislature can and does pass laws mandating spending on certain items in future years.)  Several counties with Executives follow the state’s model, as does the City of Baltimore.  But the Montgomery County charter grants all final budgetary authority to the County Council, which can do almost anything it wants to the Executive’s recommended budget.  It can add, subtract or rearrange spending items subject only to requirements in state law, such as mandatory minimum funding levels for public schools and the college.  Other than that, the only constraint on the council’s power is that the budget it passes must be balanced for the fiscal year.

Every March 15, the Executive is required by the charter to send a recommended budget to the council.  The council then begins its process for reviewing and changing the budget that lasts roughly two months.  The council’s vehicle for altering the Executive’s recommended budget is the reconciliation list (commonly called the rec list), which is a ledger of spending additions and deductions.  Each council committee, and the full council itself, can post additions or deductions to the rec list.  The last step in the process is figuring out how to finance some portion of the additions since they always exceed the deductions.

In theory, there are two sound places to go to fund additions to the Executive’s budget: new tax revenues or offsetting spending cuts.  In practice, the council’s use of these resources is limited.  Tax increases are typically proposed by the Executive, who distributes the revenues they generate across spending items in the recommended budget.  In such cases, the new revenue is not available for further spending desired by the council unless it alters the Executive’s choices.  The council could also cut the Executive’s spending items and use the money for its own items.  But the Executive’s spending proposals have constituencies who will squeal if they are diverted or cut.  No one likes to be the bad guy at budget time!

Page one of the council’s final draft reconciliation list for FY18.  These are some of the new spending items the council wanted to fund last spring.  The challenge was how to pay for them.

If new taxes and spending cuts are insufficient to pay for new spending desired by the council, other funding sources must be identified.  In the past, favorite sources for funding included setting aside less reserve money than proposed by the Executive, setting aside less money for retiree health benefits, occasional transfers of cash from the capital budget and other one-time fixes.  In FY12, the Executive proposed $10 million for snow removal and the council redirected $4.1 million of that for new spending on the reconciliation list.  Snow removal costs must be paid, so if they were to ultimately prove larger than budgeted funds, the council’s action would be tantamount to a backdoor drawdown of the reserve.

Since FY05, the council has added a combined $245 million to the Executive’s budgets through its reconciliation lists.  One does not have to be a certified public accountant to see what the effect of these additions will be over time.  Many spending items added by the council are ongoing, such as hires of new employees and expansions of programs expected to continue indefinitely.  But some of the funding sources for the new spending are one-time in nature, like capital budget transfers and reserve drawdowns.  Repeated use of one-time funding sources for ongoing spending creates enormous long-term pressure on the budget.  Eventually, especially when a downturn comes, the new spending must be trimmed or taxes must be raised.  Guess which is more likely to occur?

Why does this happen?  It’s not because elected officials are stupid.  It’s because of the incentives they face.  From mid-March through mid-May every year, Council Members are besieged by requests for more spending from the community.  Every year, there are three nights of hearings jam-packed with constituents wanting more money for their favored programs.  They are followed by dozens of meetings with groups who want even more than that.  Aside from occasional admonishments from council administrator Steve Farber and Executive Branch budget officials, there are almost no voices for moderation in the budget process.  And here’s the thing: whether it’s hiring social workers, funding more childcare assistance, deploying more police officers in communities that need them, removing more tree stumps or much, much more, almost all the new spending proposals have merit.  Given the incredible pressure brought to bear by groups with genuine funding needs, it’s kind of a miracle that the budget gets balanced at all.

All of this creates serious problems for the County Executive.  The charter grants the Executive a line item veto over spending items, but this is never used because the council would simply override it.  The Executive could abstain from including the council’s new spending in next year’s budget, but again, the council could just put it back in.  For the most part, the Executive and his top aides grumble in private and put on a happy face for Wall Street, but they did go public in objecting to a $10 million draw from the reserve two years ago.  Instead of fighting the council, the Executive’s staff simply tries to figure out how to retain and pay for the council’s new spending in next year’s budget.  And each year, the job gets a little harder without new revenue.

This process is a big reason why the county has had seven major tax hikes in the last sixteen fiscal years.

Next year, a new County Executive and at least four new Council Members will take office.  This new generation of officials will have a choice.  They can keep the existing budget process and eventually come under pressure for yet another tax hike, as happened last year.  Or they can reform it by requiring that new ongoing spending be offset by actual ongoing spending cuts, not one-time measures.  Failure to learn this lesson will mean repeating history.

We will conclude with one last lesson from the Giant Tax Hike in Part Three.

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transportation

Bill Frick on Hogan’s Road Plan

The following post by Del. Bill Frick (D-16) continues Seventh State’s series on reactions to Gov. Larry Hogan’s road proposal by candidates for county executive:

Traffic congestion is possibly the biggest challenge to Montgomery County’s quality of life and its economy, so I am pleased that Governor Hogan is talking about taking bold steps to deal with this problem.  That said, what little we know of Hogan’s strategy raises many questions that must be answered.

Will we really be able to accomplish all he has outlined with private dollars?< Will there be any work to remedy clogged arterial streets and the bottleneck at the American Legion Bridge?

Would an all-toll solution provide enough capacity that it benefits non-toll drivers?   

Will Hogan address Metro’s problems with seriousness and collaboration with DC, VA and the Federal Government?

Will Hogan include – and fund- the Corridor Cities Transitway as part of the I-270 strategy?

These are merely some of the policy questions.  This doesn’t even scratch the surface of the practical and logistical issues that the proposal presents.

I hope that Governor Hogan is committed to real solutions to a real big problem.  Press conferences are not enough.  We need leaders to devote serious work, provide adequate resources, and bring stakeholders together across party and jurisdictional lines to get this county moving again.

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Adam Pagnucco, MCPS, taxes

Lessons Learned from the Giant Tax Hike, Part One

By Adam Pagnucco.

Unfortunately for those Council Members who voted in its favor, last year’s 9% property tax hike won’t go away.  The issue came up at the first County Executive forum, at which the three Council Members who voted for it defended it under heavy criticism from their Republican rival, Robin Ficker.  It is sure to be mentioned again as several County Council candidates, including some Democrats, are openly wary of more tax hikes.  And there is a general sense that the 40-point passage of term limits last year was driven at least partially by the tax increase.  All local politicians have taken notice.

There is no question that the Giant Tax Hike is widely unpopular, but it cannot be undone, so let’s learn from it.  Next year, the county will have a new Executive and at least four new Council Members.  All candidates taking office will assume responsibility for a county with needs that have not abated and a budget that remains challenging.  What lessons can these new office holders learn from the Giant Tax Hike?  In this series, we present three of them.

Let’s start with Montgomery County Public Schools (MCPS).  Tax hike supporters point to MCPS’s needs as a reason for the increase and they have a point.  MCPS has enormous and permanent needs.  The school system is a huge asset that requires continuous large investments to maintain.  But while all of that is true, the sad fact is that the county imposed seven years of austerity on MCPS while lavishing double-digit increases on nearly every other function of government.  Once MCPS’s problems became too large to ignore, then and only then was the tax hike passed.

MCPS’s funding issues began when the Great Recession started impacting the county’s budget in 2009.  The County Council has significant power to cut most parts of the budget but the school system is an exception.  MCPS is covered by the state’s Maintenance of Effort (MOE) law, which establishes local per pupil contributions to school districts as a floor for funding levels in future years.  The intent of the law is to prevent counties from supplanting state aid for schools by cutting their own local school funding and moving that money to other functions.  Under the old MOE law, when a county wanted to cut its own local per pupil contribution, it needed a waiver from the State Board of Education or it would forfeit any increase in state aid for public schools.  This penalty did not deter several counties from cutting local per pupil spending during the recession.

In Montgomery’s case, the county cut its per pupil contribution three times.  In FY10, the county’s cut was forgiven by legislation passed in the General Assembly.  In FY11, the county obtained a waiver for a cut from the State Board of Education, who warned the county not to cut again.  In FY12, the county cut its local per pupil contribution for a third time without even asking for a waiver.  Egged on by the teachers union, the General Assembly got fed up and changed the MOE law.  From now on, if a county tries to cut its per pupil contribution without a waiver, the state would send the county’s income tax revenues directly to its school system to make it whole.  There would be no more messing around with MOE.

This presented a budgetary challenge for counties.  From now on, increases to local per pupil contributions would be almost locked in and very difficult to escape without the cooperation of local school boards.  The new law was a risk factor that had to be managed.  MoCo’s County Council reacted by freezing the county’s per pupil contribution for four straight years after three years of cuts.  By FY16, the county’s per pupil contribution was $9,759 – well below the prior peak of $11,249 in FY09.  Factoring in inflation, in real terms, the county’s per pupil investment in MCPS was 24% lower.  That caused huge budgetary strain in the public schools.

The budget was only one reason for the county’s behavior.  There was also politics.  Over the years, former Superintendent Jerry Weast had constructed a machine combining the school unions, the PTAs and the Washington Post editorial board to aid him in obtaining budget increases.  Increasingly, the council viewed him as going too far.  That perception became more acute when he held a meeting with union leaders at his home in 2008 and directed them to endorse Nancy Navarro in the District 4 special election.  Further strains appeared when Weast threatened to sue the county over MOE and the council accused the school board of lying about its budgetary needs in Weast’s last year.  Weast’s successor, Josh Starr, was caught in the aftermath.  He was unlucky enough to serve during MCPS’s austerity years and the budget squeeze effectively sabotaged his tenure.

While MCPS starved, the rest of the county government was well fed.  Between FY10 and FY16, the county cut local funding for MCPS but increased it by double digits for most other government functions.  The police department, the fire department, the libraries and almost every other department recovered nicely from the recession.  The council itself enjoyed a 19% increase for its own operations.  MCPS was almost alone in austerity.  (Housing had a significant decline only because of a one-time large expenditure to the Housing Investment Fund in FY10).  This profligacy throughout county government made it harder to afford an increase for MCPS without raising taxes later on.

MCPS might have collapsed if it were not for state aid increases.  Over the FY10-16 period, the county cut local operating funds for the schools by $33 million, but state operating aid went up by $192 million.

Meanwhile, many other counties reacted to the new MOE law differently.  While MoCo froze its local per pupil contribution to its schools, fifteen other counties increased their contributions during the first three years of the new law.  Nine of these counties were controlled by Republicans.  That’s right, folks – supposedly progressive MoCo lagged Republican counties in increasing local support for schools.

After seven years of squeezing MCPS, the county finally relented and increased its per pupil contribution, but it did so with a 9% property tax increase.  And it wasn’t just the schools that got more money – once again, nearly every other department got a bump.  There’s a lesson here for the next generation of county leaders.  MOE does indeed present a risk for the county budget, but it’s a risk that can and should be managed.  Seven years of austerity for MCPS cannot be imposed without major strains on public school operations.  A far better approach is to implement small but steady increases to per pupil funding while moderating growth in the rest of the government to pay for it.  That’s the best way to maintain one of the county’s greatest assets without imposing giant tax hikes.

In Part Two, we will look at another lesson to be learned.

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taxes

Trump-Ryan Tax Plan Screws Marylanders, Especially in Anne Arundel, HoCo & MoCo

We only know so much about the Republican tax cut plan. As now seems to be the Republican way from healthcare to widening I-495, I-270 and the BW Parkway, plans have only gauzy outlines. However, the little presented is enough to know that tax “reform” would screw many Marylanders. Big Time.

The central idea of tax reform is that the elimination of various special interest tax breaks allows for a reduction in rates without reducing revenue. This plan reduces income tax rates, primarily at the top end, along with corporate tax rates but does virtually nothing to attack special interest tax breaks, so it will result in a massive reduction in revenue. It’s a yuge tax cut for the wealthy being presented in the guise of tax reform.

Indeed, the only eliminated tax break is the state and local tax deduction for taxpayers that itemize. This change is transparently designed to screw blue states that provide high levels of services and thus have higher state and local taxes, as this chart from the Wall St. Journal reveals:

Anne Arundel, Howard and Montgomery Counties will be among the biggest losers. Upper-middle class households that earn more than $100,000 are more likely to itemize because the current tax code makes it worth the bother. In 2015, over one-half of households earned more than $110,000 in Howard, $98,000 in Montgomery, $90,000 in Anne Arundel, and $75,000 in Maryland as a whole. These figures are even higher now.

As a result, Maryland, especially Anne Arundel, Howard, and Montgomery Counties, will take a big hit. Indeed, many upper-middle class taxpayers may well end up paying more in taxes under the Trump-Ryan plan than they do now because the elimination of this deduction will wipe out any gains that they would otherwise make.

There are some “good” nuggets of news in Trump-Ryan tax plan. While the administration is employing its standard tactic of the big lie by saying that this plan will not help the wealthy, including Donald Trump. Since Donald Trump said “believe me” when making this case, we know from experience that it’s extra big lie.

And indeed, it is. If you’re among the most extremely wealthy, you’ll make out very well. Trump wants to eliminate the estate tax, so that he—oops Freudian slip—other very wealthy people can leave massive money to their heirs tax free. Annually, only around 5000 estates are subject to the estate tax in any year but Maryland probably has more than its fair share as the most affluent state in the country.

Other prominent features in the proposal will also aid the wealthy enormously, especially the reduction in the top income tax bracket and pass-through S-corporations. The graph presented at the top of this post, developed by the Tax Policy Center, shows just how much the top 1%, and especially the top 0.1%, will gain.

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transportation

George Leventhal on Hogan’s Road Plan

I had the chance to speak with George Leventhal about Gov. Hogan’s road proposal. He explained that the proposal was a complete surprise to local officials because just days earlier Hogan’s Department of Transportation had presented their proposal to spend $100 million to improve mobility on I-270.

As for Hogan’s new proposal, created without any consultation with Montgomery officials, George said “It isn’t possible to be for it or against it because we don’t really know what it is.” In particular, he he emphasized the lack of any information on whether the proposal would include the American Legion Bridge.

The following is by Councilmember George Leventhal (D-At Large):

We need a lot more information about Governor Hogan’s announcement yesterday, but I am glad to see him paying attention to Montgomery County’s traffic congestion problems. I have been calling for expanded capacity on I-270 and the American Legion Bridge for a long time, and until yesterday, the governor had offered only a good, but insufficient, proposal for I-270, to improve technology and signalization, totaling $100 million. It will be interesting to learn how his new proposal is to be integrated with that earlier proposal.

The County Council has called for two additional reversible lanes on I-270, and it will be worth discussing with the state whether that would be sufficient, and obviate the need for four new lanes. Also, I would like to see a dedicated transitway as part of any plan for I-270 and the American Legion Bridge.

When it comes to I-495 east of the I-270 spur, I don’t understand how lanes could be added without significant adverse consequences to homes, businesses, watersheds, and Rock Creek, Sligo Creek and Northwest Branch Parks.

The governor’s attention to our transportation problems is welcome, but it would have been nice to see closer consultation with local officials before the announcement was made. Fortunately, it’s just a broad outline at this point and I hope that he and his team will now work with local government to figure out the details.

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Adam Pagnucco, Bill Frick

Bill Fricks Up the Executive Field, Part Two

By Adam Pagnucco.

Delegate Bill Frick’s candidacy for Montgomery County Executive raises a number of questions that will impact both him and his rivals.  Here’s our shot at asking them and teasing out some answers.

Question 1: The Path Not Taken

Four years ago, the higher office Frick really wanted was Attorney General.  His path at that time was blocked by his district’s Senator, Brian Frosh, but it could be much more viable in the near future.  Frosh will be 76 years old at the end of his second term.  If Frick were to remain in the House and raise money, expand his connections and build a statewide network, he would be a strong contender to succeed Frosh.  Frick would also have a great rationale for an AG candidacy: his legislative history on consumer issues demonstrates that he would be an aggressive crusader against predatory banks, rapacious credit card companies and sleazy Internet scammers.  That’s a politically powerful message.  But a losing race for Executive would let other candidates jump ahead of him for an AG run.  It’s a huge opportunity cost that should not be paid lightly.

Question 2: Geography

How much are Frick and Council Member Roger Berliner handicapped by the fact that they represent much of the same area?  Berliner’s District 1, which includes Bethesda, Chevy Chase, Kensington, Potomac and Poolesville, contains 31% of all Super-Democrats (Dems who voted in all three of the 2006, 2010 and 2014 primaries).  Frick’s Bethesda-based District 16, which is inside District 1, contains 19% of all Super-Dems.  These areas are excellent bases from which to launch a countywide campaign.  But Frick and Berliner could split these votes, hurting both of them.  Also worth considering is that Council Member Marc Elrich will get votes in this region as well owing to his criticism of unpopular master plans passed by the County Council.

Question 3: Prior Races

Consider this.  In the last four years, Frick has run for four different offices: Attorney General, Delegate, Congress and now Executive.  No other MoCo politician can say that.  Accordingly, there is some skepticism in the political community that he will be in the Executive race to the end.  That is going to play itself out with large contributors, who are critical since Frick will be using traditional campaign financing and there are only nine months left until the primary.  The last thing a big donor who cares about county government wants is to go all in for a candidate who drops out and runs for something else.  This is huge considering that Frick reported a balance of $45,818 in his state account in January and he cannot transfer funds directly from his federal account.  Frick needs to have a convincing argument to address this with donors or he will be unable to fund a competitive campaign.

Question 4: Counter-Attacks

Frick’s early strategy is to attack the County Council, a message that should get some traction among the majority of county Democrats who voted for term limits.  Frick told the Washington Post, “Our demands exceed our capacity, on our roads and in our classrooms… Too often, local leaders have been complacent, content to raise taxes and resist vital reforms, and our small businesses and parents grow more and more frustrated.”  In Bethesda Magazine, he criticized the “Rockville bubble” and blasted the council for protecting the liquor monopoly.  (Berliner is the one Council Member who agrees with Frick on that issue.)

But Frick has a record too and his new rivals are sure to bring it up.  While Frick attacks the county’s giant property tax hike, he voted for numerous state tax increases during the O’Malley years, including a 2012 state income tax hike of which MoCo residents paid 41% of the increase.  The Council Members will grill Frick on the state’s anemic performance in financing school construction in MoCo, a major issue for voters.  And Council Members Marc Elrich and George Leventhal, both of whom have co-sponsored a bill establishing a $15 minimum wage in MoCo, will ask Frick why he was not a co-sponsor of the state’s $15 minimum wage bill in the last General Assembly session.  In politics, no one gets to throw a sharp elbow without taking one in return.

Question 5: Other Candidates

We suspect that Frick may not be the last non-Council Member to enter the race.  Senator Cheryl Kagan (D-17) is sure to look at a field that includes four men and think, “In a primary electorate that is roughly 60% female, maybe there’s room for a woman in this race!”  Former Council Member Valerie Ervin, who polled an Executive race in 2013, might think, “Yeah, I got that, plus I have a base that no one else has!”  Businessman David Blair, who can self-finance, is polling and would be a true outsider candidate – even more than Frick.  Elrich, who has an immovable base of true believers who could be a fifth of the electorate or more, would no doubt welcome a large field.

And there could be even more surprises in an election that is shaping up to be one of the wildest in MoCo history.

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transportation

Roger Berliner on Hogan’s Road Plan

Today, I am pleased to start a series presenting the views of candidates for the Democratic nomination for county executive on Gov. Larry Hogan’s plans to widen I-270, I-495 and the BW Parkway. The following is by Councilmember Roger Berliner (D-1):

I am pleased that the Governor has come in off the sidelines and onto the playing field to address one of our county’s and our region’s greatest challenge:  congestion.  Congestion robs our residents of their time and diminishes our quality of life and our competitiveness.  We need to take strong action.

But we also need to take action that is focused, efficient, and smart, action that comes after consultation with the communities most affected.  I deeply regret that the Governor did not engage in any dialogue with our county on his plan.  It would have been a better plan if he had.  Bigger is not always better.  And that is particularly true when the costs are to be paid for by drivers and when you don’t want to create even more demand by promoting more sprawl.

I have four main issues with the Governor’s plan:

  1. Instead of 4 lanes on 270, our Council has advocated for years that the state should add two reversible lanes.  270 is almost entirely peak driven.  We need AM and PM rush hour capacity.  Reversible lanes provide precisely that.
  2. While the Governor has proposed adding capacity “to” the American Legion Bridge, he has not said if or how he would “fix” the American Legion Bridge.  Adding capacity to the bridge without fixing it would make one of the worst chokepoints in the region that much worse.  Fixing the American Legion Bridge has to be one of the highest priorities of any plan to address congestion, and any fix should accommodate rapid transit between Montgomery County & Fairfax, a long term goal of ours.
  3. The Governor’s plan calls for 4 new lanes on the Beltway. Most of us who use the Beltway every day scratch our heads and wonder where he thinks we can get 4 lanes without taking scores of homes, destroying neighborhoods, taking hospitals and park land.  Getting any additional capacity will be a challenge, let alone 4 lanes.
  4. The Governor’s plan does not recognize the value of transit. Our top transit priority along the 270 corridor is the CCT.  We had to beg to get just enough dollars in the state budget to keep it alive.  Transit proximity is what future looking companies like Amazon are looking for.  Not highways.  And on highways, our Council has urged High Occupancy Toll Lanes, lanes that give priority to car pools, vans, and buses.  Express lanes, as the Governor has proposed, does not do that.   Highways are a 20th century solution.  Transit is the 21st century choice.     The Governor needs to double down on his commitment to transit.

Bottom line:  the Governor has started a critically important conversation.  But it better be just the start, not the end of it.

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Adam Pagnucco, Bill Frick

Bill Fricks Up the Executive Field, Part One

By Adam Pagnucco.

Delegate Bill Frick (D-16) has dropped out of the Congressional District 6 race and is running for County Executive.  This is the biggest story so far in the Executive race.  Council Members Roger Berliner, Marc Elrich and George Leventhal have been preparing to run for Executive for years but Frick has never before expressed interest in county office.  Additionally, Frick is the first person who is not a term-limited Council Member to declare for Executive and he may not be the last.

So  who is Bill Frick?  He’s a MoCo native who went to Northwestern and Harvard and is an attorney with Akin Gump downtown.  He was little known to the MoCo political community until he stunned the establishment by defeating a formidable field for a Delegate appointment in 2007.  He worked his way up in the House to become Parliamentarian and later House Majority Leader.  After first serving on Ways and Means, he joined the powerful House Economic Matters Committee, which decides all issues connected to alcohol, public utilities, insurance, banking, economic development and workers compensation.  He is the Chair of the Property & Casualty Insurance Subcommittee.  Frick is generally liked by his colleagues, often pranking them by stealing their phones and typing worshipful Facebook posts (“Bill Frick is my hero!”), but he is also respected as a substantive lawmaker.  His multiple, aborted runs for higher office (Attorney General in the prior term and CD6 until just recently) have raised questions among some of his colleagues about his political savvy but have not dented his popularity in Annapolis.

Frick has been a busy legislator over the years with a focus on consumer issues.  He has attracted news by introducing legislation to crack down on credit card companies and Internet scamming.  His bill to tighten renewable energy standards was vetoed by the Governor but passed after an override by the General Assembly.  Frick achieved countywide renown by introducing legislation in 2015 to allow MoCo voters to decide whether to end the county’s liquor monopoly.  It was a tremendous act of political courage that few MoCo politicians can match.  It provoked the county government employees union, which represents liquor monopoly workers, to target his wife and call for an investigation, none of which went anywhere.  The union may never endorse Frick in a future race, but for those who want to End the Monopoly, Frick is an eternal hero.

One more thing:  He is one of the most witty, charming and likable humans on Planet Earth. No one other than George Clooney, Bill Clinton or Bono is going to win a personality contest with Bill Frick.

Frick holds court in 2010.  Is this how MoCo voters will react to him?

For all of his undeniable assets as a candidate, Frick’s entry into the race provokes more questions than answers.  We will examine those questions in Part Two.

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