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.