The Budget--What's In and What's Out

In an austere year caused by the deep recession, we approved a $4.3 billion total County operating budget for Fiscal Year 2011, which begins July 1. The total budget is 4.5 percent less than the approved budget for FY10, marking the first decrease in a total budget since the adoption of the current County Charter in 1968.

The overall tax-supported budget of $3.66 billion reflects a decrease of $191 million from the FY10 adopted budget, a decrease of 5 percent. This is the second consecutive year the tax-supported portion of the budget has decreased. Since March 15, when the County Executive presented his recommended budget, we have worked to achieve equity in the allocation of limited funds. One way we did this was to reduce spending for Montgomery County Public Schools (MCPS) by $24.4 million, 1.1 percent less than proposed by the Executive. These funds will be used to mitigate deep cuts in the safety net and other vital services, including Montgomery College.

In a budget year complicated by the national and regional economic downturn, our budget protects core services and programs for the most vulnerable, but does not exceed the County's Charter Limit on property tax revenue. The budget includes a $692 property tax credit for owner-occupants of principal residences. It freezes pay for employees of County government, Montgomery College, the Maryland-National Capital Park and Planning Commission (M-NCPPC) and MCPS.

Employees at all agencies except MCPS will be asked to take unpaid furlough days in FY11. Furloughs for County Government employees, including elected officials, will be progressive: three days for employees whose salaries are less than $50,000; five days for those with salaries of $50,000 to $100,000; and eight days for those with salaries greater than $100,000.

The budget includes a plan to consolidate recreation facility and athletic field permitting, class/program registration and additional recreation programs into County Government from the Department of Parks to create a more streamlined and user-friendly system for County residents. The Council believes this consolidation, over time, will lead to budget savings and operational efficiencies.

The budget re-establishes the reserve at 6 percent, which should help maintain the County's AAA bond rating. The reserve had been reduced to 5 percent in FY10.

On the revenue side, although we chose not to exceed the Charter Limit on property tax this year, some other taxes and fees will go up. The energy tax will increase by 85 percent with the increase split between residential and commercial users, and the tax on wireless phones will increase from $2 to $3.50 per month. In this difficult budget year, we are all in this together.

Despite a record drop in revenue, we have worked to develop a budget that is fair--fair to our residents who rely on County services, fair to taxpayers and fair to employees. In allocating sharply reduced resources, we have given top priority to our school children--the MCPS share of total agency spending is 57 percent, up from 55 percent in FY10 and over the last decade--as well as Montgomery College, public safety and the safety net.

For more details, see the press release

County Gets Maintenance of Effort Waiver

The Maryland State Board of Education granted us a waiver of the State’s Maintenance of Effort law for Fiscal Year 2011. The law requires jurisdictions to appropriate at least as much money per pupil to its public schools as it did in the previous year.

Earlier in the day, I, along with Ike Leggett, Jerry Weast and Pat O’Neill presented a united front in requesting the waiver before the State Board.

We thank the State Board of Education for today’s decision that, in essence, recognizes the commitment Montgomery County has historically made to its educational system and also recognizes the drastic budget situation that has impacted our County over the past several years due to a variety of circumstances. No county in this state—in fact, few counties in this nation—have made as great of a financial commitment to education over past decades as has Montgomery County. That commitment will never be altered, and even in this most austere of years, more than 56 percent of our total combined agency expenditures will go to our public schools. We are pleased the State Board of Education has made a decision that is the right one for the children of Montgomery County.

Holiday Schedule for Memorial Day

We will observe the following holiday schedule for Memorial Day on Monday, May 31:

County Offices - closed
Libraries - closed
County liquor stores – open from 10 a.m. to 6 p.m. with the exception of the following stores, which will be closed: Cabin John, Diamond Square and Twinbrook
Ride On – Sunday schedule
Metrobus – Sunday schedule
Metrorail – Sunday schedule
Parking at public garages, lots, curbside meters – free
Refuse/recycling pick-up – no collection*
Transfer Station – closed
MCPS Administrative Offices – closed
State offices & courts – closed

*collection provided one day later for remainder of week (last collection day is Saturday)

My Thoughts on the Budget

Today we reached a tentative agreement on the Fiscal Year 2011 Operating Budget. Here are my thoughts:

This has been an extraordinary and unprecedented fiscal experience, due, in large part, to the 21 percent decline in income tax revenue, and a historic increase in unemployment. We are closing a fiscal gap that in the short span of six months went from about $600 million to nearly $1 billion.

For the current fiscal year, before we could even get into the FY11 budget, this council approved two savings plans totaling $100 million, and yesterday approved energy tax increases that will add $21 million in additional revenue to see us through to July.
This budget has been a moving target, and we have responded nimbly. Today, we have taken actions that address, not just to the County Executive’s March 15 budget proposal, but the reactions of the Rating Agencies we received immediately thereafter, and further revenue writedowns in revenue we were presented with in late April.

We have moved steadily and in unison, driven by our collective commitment to four basic principles – fairness to taxpayers, equitable treatment of employees, commitment to the goal of a 6 percent reserve and a balanced fiscal plan.
This budget achieves those goals.

We are reducing overall spending by 4.5 percent, for the first time in recorded Montgomery County history. We preserve our highest priority services, especially in education, public safety and service to our most vulnerable. Since to go any further would devastate these critical services to our residents, we have focused on the fairest way to ask our taxpayers to share the burden. We chose not to exceed the Charter Limit on property taxes this year and instead focused on revenue sources with widest range possible – a rebalanced and reduced energy tax from the County Executive’s proposal, a modest boost to the cell phone tax and the ambulance fee.

We have resisted the pressures to rush to judgment, to choose sides, or to take an adversarial position. Instead we have listened thoughtfully and carefully, and we have balanced extraordinarily valid competing goals and priorities. I want to thank my fellow Councilmembers for your commitment to to making the difficult (and in many cases unpopular) decisions that are in the best interest of the County. Everyone has proceeded with integrity and respect as we have worked through some of the most difficult choices any Council sitting on this dais has ever had to face.

Not a one of us has shied away from a single hard decision. In our worksessions we have made our best efforts to find cost effective consolidation of programs through the regional services centers and office of community partnerships, through the operations of the parks and county police, and through the coordination of services provided by the Department of Recreation and the Department of Parks. We have heard employees concerns about management levels and have investigated their issues. We have worried about the fairest way to share employee pain in reduced salaries and have extended furloughs progressively and comprehensively across the widest range of employee groups, including fire and police, within our control. We have asked for additional cooperation from the public school system and they have partnered with us in finding further reductions in their spending that do not affect our commitment to the classroom or educational excellence.

Next month we will be taking up the balanced fiscal plan that results from these budget decisions as well as the County Executive’s Reserve and Selective Fiscal Policies proposal that, together, will set the parameters of our fiscal future.
And we are not done. We have this week committed to further work on governmental consolidation possibilities, and fiscal structural deficit analysis.

That means we will be leaner for the foreseeable future. In spite of this year’s difficulties, I am entirely optimistic about Montgomery County’s future thanks in part to the forethought and wisdom reflected in this very disciplined budget. Moreover, in just the past two months, we have taken significant steps to expand the County’s tax base.
We have unanimously approved two master plans, approved a bio-tech tax credit, and will soon be establishing the Montgomery Business Development Corporation to advance job creation.

Certainly, today is not a day for celebration. We are acutely aware of the real and personal impacts this budget will have on residents and employees. But we can feel good about the fact that we are on the right track, that we will benefit from a new way of doing business, and that the values that make Montgomery County great are here to stay. It is a new era in Montgomery County, and our future looks bright.

Council Highlights for Thursday, May 20

We made good progress today. Here are the highlights for tomorrow (the big day) from our Legislative Information Office:

The Council is now scheduled to reach a tentative agreement on the budget in a session that begins at 1:30 p.m. on Thursday, May 20. The Council is scheduled to formally adopt the budget on Thursday, May 27. The Council will meet tomorrow on the budget agreement in the Third Floor Hearing Room of the Council Office Building at 100 Maryland Ave. in Rockville. The meeting will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon) and also will be available via streaming video through the County Web site at www.montgomerycountymd.gov.

Council Agenda Highlights for Wednesday, May 19

We're continuing to work our way through the budget, and there are a few changes to tomorrow's agenda. Here's the update from our Legislative Information Office for Wednesday, May 19:

The Montgomery County Council at 2 p.m. on Wednesday, May 19, will continue its discussion on the Fiscal Year 2011 operating budget request of Montgomery County Public Schools. The worksession continues the Council’s examination of County Executive Isiah Leggett’s recommended budget as the Council works to achieve a balanced FY11 budget.

The Council postponed discussion on issues relating to the MPCS budget scheduled for today.

The Council is nearing decisions on most items impacting the new budget, which will go into effect on July 1. Today, the Council also rescheduled the date on which it will reach a tentative agreement on the budget. That will now happen on Friday, May 21. The Council is scheduled to formally adopt the budget on Thursday, May 27.

The full Council session on Wednesday will begin at 9:30 a.m. in the Third Floor Hearing Room of the Council Office Building at 100 Maryland Ave. in Rockville. The meeting will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon) and also will be available via streaming through the County Web site at www.montgomerycountymd.gov.

The Council’s morning session will include scheduled action on County Executive Isiah Leggett’s proposed Emergency Medical Services Transport Fee, also known as an ambulance fee. Bill 13-10 would authorize charges to those transported by County ambulances between $300 and $800, depending upon the level of care needed. They also would be charged $8.50 per mile of transport. For most residents with health insurance, their health insurance companies would be billed for the fees. It is estimated the fees could raise approximately $13 million annually for the County.

The Council also is scheduled to take action on Expedited Bill 29-10, which would create a carbon emissions tax on major emitters of carbon dioxide. The proposed carbon tax, whose chief sponsor is Councilmember Roger Berliner, would require a major emitter of carbon to pay an excise tax of $5 per ton of carbon emitted. Currently, the only impacted user would be the Mirant Corporation power plant in Dickerson.

Another issue slated for action is Bill 15-10, which reflects the County Executive’s proposal to double the County tax on energy use, including on home heating oil, electric and natural gas. The proposal would split the increase between residential and commercial users. The average County household would pay nearly $15 more per month than it currently does.

The Council also is scheduled to address a proposal to increase the current tax on cell phone lines from $2 to $3.

At 2 p.m., the Council will address the MCPS requested operating budget. As currently proposed, MCPS is the only agency budget that does not include a reduction from the approved FY10 budget. By comparison with other agencies of the Montgomery County, the Maryland-National Capital Park and Planning Commission budget includes a reduction of 15.8 percent. The County Government budget includes a reduction of 7.7 percent. The Montgomery College budget includes a 3.7 percent reduction.

As currently requested, the MCPS budget would represent 57.2 percent of the total County budget.

Council Highlights for Tuesday, May 18

As I said last week, we are continuing to make our way through our final budget decisions this week. From our Legislative Information Office, here are the highlights for tomorrow:

The Montgomery County Council on Tuesday, May 18, will continue its discussion on the Fiscal Year 2011 operating budget request of Montgomery County Public Schools. The worksession continues the Council’s examination of County Executive Isiah Leggett’s recommended budget as the Council works to achieve a balanced FY11 budget.

The Council is nearing decisions on most items impacting the new budget, which will go into effect on July 1. The Council is scheduled to reach a tentative agreement on the budget on May 20 and is scheduled to formally adopt the budget on May 27.

The full Council session will begin at 9:30 a.m. in the Third Floor Hearing Room of the Council Office Building at 100 Maryland Ave. in Rockville. The meeting will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon) and also will be available via streaming through the County Web site at www.montgomerycountymd.gov.

The Council’s morning session will include appointment of a new chair of the Montgomery County Planning Board. On May 12, the Council conducted public interviews with four applicants for the position: Francoise Carrier of Rockville; Peter Fosselman of Kensington; Tedi Osias of Chevy Chase; and John Robinson of Kensington. The Planning Board serves as the Council’s principal adviser on land use planning and community planning. Planning Board members also serve as Commissioners of the Maryland-National Capital Park and Planning Commission (M-NCPPC).

During the morning session, the Council is scheduled to take action on Bill 16-10 that would limit “imputed compensation.” The bill, whose chief sponsor is Councilmember Phil Andrews, addresses negotiated general wage adjustments with organizations representing employees with County police, fire and general government. The unions agreed to postpone in FY10 previously negotiated general wage adjustments as the Council passed a bill that would calculate the wage increases in an employees’ salary history as if the increases had been given. An actuary has since determined that continuous inclusion of the calculation would require the County to increase its annual contribution to the Employee’s Retirement System Trust Fund by $8.6 million per year over the next 40 years. Bill 16-10 limits inclusion of the calculations only for FY10.

At 1 p.m. Tuesday, the Council’s Education Committee, which is chaired by Valerie Ervin and includes Councilmembers Phil Andrews and Mike Knapp, will discuss the MCPS requested operating budget. As currently proposed, MCPS is the only agency budget that does not include a reduction from the approved FY10 budget. The M-NCPPC budget includes a reduction of 15.8 percent. The County Government includes a reduction of 7.7 percent. The Montgomery College budget includes a 3.7 percent reduction.

At 2:30 p.m., the full Council will discuss the MCPS budget request. As currently requested, the MCPS budget would represent 57.2 percent of the total County budget.

At 1:30 p.m., the Council will hold public hearings on Expedited Bill 29-10, which would create a carbon emissions tax on major emitters of carbon dioxide, and another public hearing on the County Executive’s proposal to double the current tax on cell phone lines.

At 3 p.m., the Management and Fiscal Policy Committee and the Transportation, Infrastructure, Energy and Environment Committee will meet jointly to discuss the proposed carbon tax, whose chief sponsor is Councilmember Roger Berliner. The bill would require a major emitter of carbon to pay an excise tax of $5 per ton of carbon. Currently, the only impacted user would be the Mirant Corporation power plant in Dickerson.

Council Highlights for Monday, May 17

In yesterday's post I said that we will wrap up our budget decisions next week. From our Legislative Information Office, here are the highlilghts for Monday, May 17:

The Montgomery County Council’s Management and Fiscal Policy (MFP) Committee and its Transportation, Infrastructure, Energy and Environment (T and E) Committee at 1:30 p.m. on Monday, May 17, will meet jointly to discuss County Executive Isiah Leggett’s proposal to sharply increase the County’s fuel/energy tax as part of its efforts to achieve a balanced Fiscal Year 2011 Operating Budget.

The full Council is nearing decisions on most items impacting the new budget, which will go into effect on July 1. The Council is scheduled to reach a tentative agreement on the budget on May 20 and is scheduled to formally adopt the budget on May 27.

On Monday, beginning at 9:30 a.m., the Council will hold worksessions on several issues that have yet to be resolved. The Council meeting, and afternoon committee meetings, will be held in the Third Floor Hearing Room of the Council Office Building at 100 Maryland Ave. in Rockville. The meetings will be televised live by County Cable Montgomery (CCM—Cable Channel 6 on Comcast and RCN, Channel 30 on Verizon) and also will be available via streaming through the County Web site at www.montgomerycountymd.gov.

During its morning session, the Council will discuss the annual Community Grants program and the new MC 311 Customer Service Center that will radically change how the County addresses requests for services and information. The Council also will get an updated report on the proposed consolidation of the Park Police unit of the Maryland-National Capital Park and Planning Commission with the Montgomery County Police. Another item on the Council agenda is Department of Economic Development.

Council to Complete Budget Next Week

With a full week of meetings, we will finalize all of our budget decisions next week. We start on Monday by considering community grants and the proposed consolidation of some Park Police and County Police functions, among other items. Tuesday we will decide the Montgomery County Public Schools budget. On Wednesday, we will take action on the fuel/energy tax rates and the proposed increase in the telephone tax. And on Thursday we will take a straw vote on the budget in its entirety (with the final formal vote on May 27). These are just the highlights, so if you are following along, now is the time to pay close attention. For agendas and background information, visit the Council’s Web page.

Letter on Possible Furloughs

We have received many e-mails about the possibility of furloughs for Montgomery County Public Schools employees. Since this issue has generated so much interest, I would like to share with you our response.

Dear Resident:

Thank you for your correspondence about the possibility of furloughs for Montgomery County Public Schools employees. I distributed your message to Councilmembers when I received it.

All of us on the County Council take great pride in the outstanding achievements of our school system, and we know MCPS employees are the keys to this success. Please be assured we remain committed to providing our children with the top-notch education our residents have come to expect.

I am sure that you are aware of the County’s extremely difficult fiscal situation. The County Executive forwarded us his recommended budget in March, and that budget funded MCPS at the same level as last year. Even taking into account the 2 percent increase in student enrollment, the school system fared much better than other departments and agencies within County government.

Since March, declining income tax revenues have required us to revise budget assumptions down by about $170 million. In total, the County has had to close a budget gap of nearly $1 billion, which is equal to about one fourth of our annual budget. As a result, we are forced to look at even more cuts in services, layoffs of hundreds of employees and increases in taxes on top of the original proposal.

In an effort to be fair and equitable under the changed circumstances, we are looking at revising the ten-day furlough plan the County Executive originally proposed for certain categories of County employees. One option would be to reduce the number of days of furlough and extend it to all employees, including the police and fire and rescue workers. We understand that Montgomery College and the Maryland-National Capital Park and Planning Commission employees also will be furloughed.

Given the extraordinary situation, we must ask everybody to contribute to the solution. As we do this, we are acutely aware of the real and personal impacts our budget decisions have on residents and employees.

You should note that the Board of Education is the ultimate authority on allocating funding within MCPS. Although we will continue to work together throughout the budget season, the Board will decide how to implement any budget cuts.

Again, thank you for taking the time to write to us with your thoughts.

Sincerely,

Nancy Floreen
Council President

Great Seneca Science Corridor Passed

Today we voted unanimously to approve the “Great Seneca Science Corridor” Master Plan. The long-term plan—formerly known as the Gaithersburg West Master Plan—will allow the area near Shady Grove Road and Darnestown Road to develop into one of the nation’s premier areas for scientific research and development.

The Council has studied the proposal intently since last fall. A major portion of the plan involves the former Belward Farm that was purchased by Johns Hopkins University. The university has sought to incorporate that land as part of the area’s development.

On April 13, the Council reached key agreements on the plan, including reduction of the maximum allowable existing and proposed commercial space in the plan from the proposed 20 million square feet to 17.5 million square feet. An amendment was added to require the County’s Planning Board to work with existing neighborhoods to monitor evolving transportation issues of the plan.

According to the approved plan, the Great Seneca Science Corridor would allow a maximum of 9,000 dwelling units and approximately 52,500 jobs. Most of the new development cannot proceed until funding is obtained for the Corridor Cities Transitway (CCT). The CCT would be either a light rail or bus rapid transitway transportation system extending from the Shady Grove Metro Station to Clarksburg.

We have worked carefully to establish a plan that will guide Montgomery County’s future for decades as one of the world’s most prominent areas for science. In working toward this goal, we have also listened to the concerns of residents and nearby local jurisdictions. We came out with a plan that would work for those who already live in this area and for the future residents and employees who will be attracted to the Great Seneca Corridor. The decisions we made will benefit all of Montgomery County.

Included in the Great Seneca Science Corridor plan is the proposed creation of a 21st Century Life Sciences Center. The area will include housing and retail uses with the hope that many of those who work in the Life Sciences Center Zone will elect to live nearby and reduce regular use of automobiles.

The plan calls for creation of a Muddy Branch Park that would be a minimum of 12 acres, with a minimum width along Muddy Branch Road of 100 feet. Mission Hills Preserve will create a 200-foot wide buffer between the rear property line of the nearest Mission Hills homes and any buildings on the northern side of Belward. Darnestown Promenade will include a three-acre landscaped buffer (60 feet wide) along Darnestown Road that maintains vistas to the historic farmstead, includes the landmark sign and creates a tree-lined pedestrian path that connects to the on-site path system and the Life Sciences Center Loop. Approximately 44 to 46 percent of the Belward Farm will be maintained as open space.

The Council action significantly strengthens the plan’s section on sustainability and protection of environmental features on specific properties. The plan also recommends reinforcing and expanding the use of green buildings with development seeking to maximize energy conservation and increase renewable energy such as solar, wind and geothermal.

The new community would be chiefly served by I-270 and the proposed Corridor Cities Transitway (CCT), which would be either a light rail or Bus Rapid Transit extension from the Shady Grove Metrorail Station. The plan calls for the Urban Square at the CCT station to be “a hub of daily activity with space for special events and gatherings, as well as some community retail for the convenience of CCT riders, workers and area residents.”