Monthly Archives: January 2020

Adam Pagnucco, budget, Hans Riemer, Marc Elrich

Affordable Housing Spat: Who’s Right?

By Adam Pagnucco.

County Executive Marc Elrich and his biggest critic, Council Member Hans Riemer, are feuding once again.  This time, the subject is affordable housing.  Elrich says his new recommended capital budget includes a record sum for affordable housing.  Riemer says there are in fact no new resources.

Who is right?

Let’s consider the statements from each of them.  First, here is Elrich.

Affordable housing is one of my top priorities. It is vital to our County’s future success. We must maintain and expand our stock of affordable housing and we are taking this critical issue head on in the capital budget. That is why I am recommending we add $132 million for affordable housing to the capital budget over the next six years.

This is a record level of funding for affordable housing projects for our capital budget. These funds will be used by the Affordable Housing Acquisition and Preservation Project to facilitate efforts to preserve existing stock and increase the number of affordable housing units in the County. But that is not all.

In this Capital budget, I am proposing a new Affordable Housing Opportunity Fund to leverage funding from other partners that will support short-term financing while affordable housing developers arrange for permanent project financing.

Here is Riemer’s response.

On affordable housing, I was initially encouraged by the Executive’s speech about increasing funding levels. Indeed, I am intrigued by his proposal to create a new housing preservation fund. However, while he claims to have added more than $132 million in the affordable housing fund, after further examination it became clear that the annual amount is unchanged at $22 million. Under the last Executive, affordable housing funding was only programmed for the first two years of the six year budget, but additional funding was always added in the subsequent years. We need to increase our affordable housing fund to at least $100 million annually. This change in accounting will not result in increased resources. In combination with his resistance to the Council’s affordable housing goals, developed with and agreed upon by all the local governments in Washington region, the County Executive’s housing policy continues to be a matter of serious concern.

These two like each other about as much as Popeye and Bluto.  (Which one is Popeye depends on your point of view!)  But how can their statements be reconciled?

Since Fiscal Year 2001, the county’s primary affordable housing vehicle has been its Affordable Housing Acquisition and Preservation program, which appears in the county’s capital budget.  The program enables the county to buy or renovate, or assist other entities to buy or renovate, affordable housing.  It is financed by several sources including but not limited to loan repayments and the county’s Housing Investment Fund (which is mostly supported by recordation taxes).

The capital budget, which includes the Affordable Housing Acquisition and Preservation program, is a six-year budget.  In even years (like 2020), it is written anew and in odd years, it is amended.  Projects in the capital budget can have up to six different years of funding in them (with more scheduled outside of the budget’s six year horizon).  In the past, the affordable housing program has only shown funding for the first two years of the capital budget with zero money programmed in the last four years.  But since the capital budget is rewritten every two years with affordable housing money renewed in each successive budget, that has not mattered.

The table below shows funding for the Affordable Housing Acquisition and Preservation program in the last 16 capital budgets.  Each budget covers six years.  Budgets labeled with an “A” are amended budgets programmed in off years.

At first glance, Elrich appears to be right.  His new recommended capital budget includes $132 million for Affordable Housing Acquisition and Preservation, which is far higher than any previous capital budget.  But let’s remember what Riemer said about the annual amount of spending.  All the previous six-year budgets included funding during the first two years only.  Elrich’s new capital budget shows funding for the Affordable Housing Acquisition and Preservation program in all six years.  Riemer is correct: an accounting change caused the apparent increase in this program.

But the story doesn’t end there.  Elrich created a new program in the capital budget called the Affordable Housing Opportunity Fund.  This program is dedicated to acquiring affordable housing in areas at risk of rent escalation, such as those near the Purple Line and other transit corridors, and is intended to use public funds to leverage private funds in acquiring and preserving affordable housing.  This new program provides $10 million in each of the new capital budget’s first two years for this purpose.  That money comes from recordation tax premiums which are normally used to finance transportation projects, so it’s not “free” money.  But it is more money for affordable housing.

Combining the existing Affordable Housing Acquisition and Preservation program and Elrich’s new Affordable Housing Opportunity Fund, the table below shows the annual expenditures for affordable housing in the capital budget since FY05.  Annual expenditures are drawn from the first two years of every amended capital budget with FY21 and FY22 drawn from the executive’s new recommended capital budget.

Combining the two programs, Elrich recommends spending more capital money for affordable housing in FY21 and FY22 than any annual expenditure in the preceding published budgets.  When adjusting for inflation, Elrich’s FY21 and FY22 spending amounts are roughly equal to the Leggett administration’s peak affordable housing years of FY09 and FY10, so one can quibble about whether Elrich’s spending is truly a record.  But when Elrich’s new Affordable Housing Opportunity Fund is included, the first two years of his new budget definitely show an annual increase for affordable housing over the prior budget.

The county’s capital budget has been shrinking due to cutbacks in general obligation bond issuances and declining projected school impact tax receipts.  That’s a dire subject for another time.  But given the county’s budget difficulties, Elrich’s financial commitment to affordable housing is meaningful.  Friends and foes alike should give him credit for it.

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Adam Pagnucco, Economy, Prince George's

Alsobrooks Brags About Beating MoCo

By Adam Pagnucco.

In a blast email sent today, Prince George’s County Executive Angela Alsobrooks bragged about a recent Washington Post story showing her county pulling ahead of Montgomery County in job creation. The email is reprinted below.

*****

Prince George’s Overtakes Montgomery as Top Job Creator in Maryland Suburbs

Dear Prince Georgians:

In case you missed it, an article published Monday in the Washington Post showed that our County has officially overtaken Montgomery County in terms of job creation for Maryland.

From 2013 to 2018, we added 21,236 jobs in our County, growing by 7.1%.  That growth secures our County’s spot as the top job creator for the entire State of Maryland.  I am Prince George’s Proud to say that these numbers confirm what we have been saying, which is that we are the economic engine for our State.

As the article states, our job growth is due in part to honest and effective political leadership in our County over the past several years.  In addition, our County has aggressively courted businesses by making key investments over several budget cycles.  We are not just waiting for businesses to come, but instead going out and beating the bushes to tell the story of Prince George’s.  These factors, plus the strong working relationship that we have with our colleagues on the County Council, have contributed to a very business-friendly environment in our County.

As we maintain the spot as the top job creator for the State of Maryland, we will not rest on our laurels.  Over the next several years, we plan to continue making investments to incentivize businesses to locate to Prince George’s County.  Some of our top priorities include high-quality dining and amenities, technology companies, and even federal government facilities that are looking to relocate.

We also plan to invest in creating what we call the Downtowns of Prince George’s.  These are areas where we will focus on mixed-use, transit-oriented development to continue attracting new businesses and growing our commercial tax base.  In the past year alone, we have seen several successes with these projects and the investments we have already made.

For example, in the area around the New Carrollton metro, Kaiser Permanente opened its new regional headquarters last year, and we learned that WMATA plans to move its regional headquarters there as well.  Construction will soon begin on the Carillon Project in Largo, which will revitalize the former Boulevard at Capital Centre.

Finally, we broke ground on the Hampton Park Project, which will replace the former Hampton Park Mall in Capitol Heights.  We’ve already secured several commitments from businesses to open in this location when construction is done, including the award-winning Ivy City Smokehouse restaurant and a Market Fresh Gourmet grocery store.

Those are just a few of the accomplishments we had in 2019 in terms of attracting new businesses and job creation.  You have my commitment that my administration will continue telling our story, making critical investments and attracting new businesses to create even more jobs over the next several years.

The best is truly yet to come for Prince George’s, and I know that by working together, we’ll have an even better story to tell in the coming months.

Yours in service,

Angela Alsobrooks

Prince George’s County Executive

Additional Coverage: The Economy is Booming in Prince George’s County

Following the Washington Post article, WJLA ran a story discussing the booming economy in Prince George’s County.  We have thousands of job openings in the County, and engineering firms like ATCS are excited to be here and hiring now. In case you missed the story from WJLA, watch it online by clicking here.

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Adam Pagnucco, Marc Elrich, Montgomery County Council

Grading the County Council

By Adam Pagnucco.

Regular readers know my views on the administration of County Executive Marc Elrich by now, but let’s turn to an equally important entity: the Montgomery County Council. The county’s charter gives the council enormous powers, especially over land use, legislation and the budget, and its decisions are at least as important to the county’s direction as the activities of the executive.

The current council has four freshmen, the most at any one time since the council of 2006-2010. The freshmen include a former county department head, a former senior state government official, a former Obama White House official and one of the county’s most seasoned civic activists, so they came well-prepared to serve. In fact, they have become so ensconced at the council that they don’t seem like true freshmen any more. Overall, while the council has some internal rivalries that occasionally can be seen, it has been devoid of the open infighting that plagued many prior councils. Like them or not, they have mostly stuck together during the trials of governing.

The council’s portfolio is vast and it has made dozens of decisions in its first year. In my view, eight consequential events rise above the others. The council’s performance on these events is the determinant of its overall grade, which appears at the end. Let’s get to it.

Mid-year savings plan (January)

The new council members had hardly adjusted their dais seats when they were confronted with a $41 million budget hole, prompting a mid-year savings plan from the executive. The council – and especially the new members – could have complained, delayed and otherwise squirmed. But instead they got down to business and made the cuts in short order.

Grade: A

MCGEO agreement (March through May)

After Elrich negotiated a set of raises with the largest county employee union that included a peak raise of 9.4%, the council had to decide on their affordability. This was not easy as the union had a long history of torturing defiant politicians. But the council stuck together and unanimously forced Elrich to negotiate slightly lower raises. Expect this issue to return if Elrich negotiates more mega-raises in the face of the county’s financial problems.

Grade: A

MCPS and Montgomery College funding (March through May)

When Elrich released his first recommended budget in March, two of the losers were MCPS and Montgomery College. MCPS received a stingy 0.9% local dollar increase while the college got an absolute cut. Council Member Craig Rice, who chairs the council’s Education and Culture committee, called the budget “an education last budget.” But the council didn’t do a lot better. Yes, it cashed a big state check containing Kirwan money to help MCPS. But local funding for MCPS went up by just 1.2% and the college still took a cut.

Grade: C

OPEB raid (March through May)

One of the biggest problems with Elrich’s budget was that it relied on a $90 million raid on the county’s OPEB fund, which pays for retiree health benefits. The council grumbled about it, but approved the raid on an 8-1 vote with only Council Member Andrew Friedson dissenting. The result was a comment from Wall Street credit agency Moody’s labeling the move “a credit negative.”

Grade: D

Accessory dwelling unit legislation (January through July)

Council Member Hans Riemer’s zoning text amendment to liberalize county restrictions on accessory dwelling units (ADUs) provoked fierce opposition from Elrich and some civic activists. In other years, the legislation would have been either killed or watered down into oblivion. But this time, the council tweaked it and passed it unanimously. The legislation probably won’t result in huge waves of new ADUs, but the council took an important stand on the need to build more affordable units. The issue of affordable housing will come back over and over again during this term.

Grade: A

Public safety communications project (May through July)

When Elrich vacillated on placing the final two towers for the county’s long-standing public safety communications project even after a crippling outage, the council sprang into action. After the council threatened to override Elrich and write the towers directly into the capital project, Elrich ultimately conceded. The council would have received a better grade on this if it had not had its own history of delaying this project, but the council did the right thing in the end.

Grade: B+

Police chief search (July through September)

After the retirement of long-time police chief Tom Manger, Elrich nominated former Portsmouth police chief Tonya Chapman to succeed him. Chapman had more baggage than an airport terminal. Once the council made clear that Chapman did not have the votes for confirmation, the administration considered another nominee who had a pension benefit issue that probably required a legislative fix. That nominee did not fly either, so Elrich ultimately nominated an acceptable choice to many on the council, acting chief Marcus Jones, whom Elrich had previously rejected. This was truly historic stuff. Never before has any council imposed its will like this on an executive to ensure a high caliber nomination for one of the county’s most important positions.

Grade: A+

Fox subsidy (November)

I have written about this again and again. It could take a while, but this decision is going to come back to haunt the council.

Grade: F

Overall

Setting aside OPEB and corporate welfare for Fox, the council’s record is pretty decent on a number of issues. And the council was magnificent in forcing Elrich to hire a competent police chief. Year two should be more challenging, especially if the county’s lackluster economic performance forces tough choices on the budget.

Overall grade: B

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Adam Pagnucco

MoCo Political Awards 2019

By Adam Pagnucco.

The year 2019 is in the books and it’s time for some political awards, both good and bad.  Buckle up!

Best Freshman Elected Official (County): District 1 Council Member Andrew “Real Deal” Friedson

Let’s go to the lab and create the perfect politician.  We shall start with brains and policy experience.  The person has to be a life-long district resident who roams it constantly, addressing issues large and small.  The person has to hire good staff.  The person has to have the guts to vote no when everyone else votes yes.  Fiscal expertise counts too.  Add it all up and we just created Andrew “Real Deal” Friedson, the new star of the county council.  As a freshman, Friedson is still at the beginning of his elected career.  But his ability is off the charts and the Real Deal has just begun living up to his nickname.

Best Freshman Elected Official (State): District 18 Delegate Jared Solomon

True story: when candidate Jared Solomon was running for a seat in the statehouse, he was one of the very few politicians ever who mailed me a hand-written thank-you letter after our introductory interview.  Since then, he has become an energetic and conscientious Delegate who jumped feet-first into his district’s two biggest issues: the Beltway project and school construction.  Solomon is both one of the smartest people in the room and one of the nicest.  That’s hard to pull off for anyone not named Jamie Raskin.

Reporter of the Year: Caitlynn Peetz, Bethesda Beat

You might think that news on public schools is boring.  If so, you have never read Caitlynn Peetz’s riveting stories on the rapes at Damascus High School and parental clashes over MCPS’s boundary study.  Peetz loves her vocation and it shows.  She digs deeper and works harder than just about anyone else in local media.  She also happens to be a kind, generous and funny person.  How does someone like that wind up in the press?

Will Not Fade Away Award: Brandy Brooks

Most of the county council candidates who did not win in 2018 have faded from the public eye, at least for now.  Not Brandy Brooks.  She maintained her profile with a strong, though unsuccessful, run for planning board and has retained a loyal following among many county progressives.  Last year, I predicted that Brooks would have a great chance to win if she ever runs again and I am now more confident of that than ever.

Most Meaningless New Law of the Year: Liquor Monopoly Name Change

As of July, the county’s Department of Liquor Control was renamed Alcohol Beverage Services.  Does anyone care?  Aside from whatever companies were paid to change the name on the signs and business cards, the answer is a big fat NO.

Whiplash Award #1

In November, the council voted in favor of a bill mandating 30-hour work weeks for some janitors that its own staff predicted would “likely” kill building services jobs.  Two weeks later, the council passed a resolution calling for a renewed commitment to economic development.

Whiplash Award #2

Also in November, the council unanimously passed a new law mandating consideration of racial equity in all county activities.  A week later, the council voted to give $500,000 in tax money to a subsidiary of Rupert Murdoch’s Fox Corporation.

Labor Union of the Year: MCGEO

How do you get a 6% raise?  You jump up and down and demand a 9% raise, and then when you get 6%, you grudgingly accept it and resolve to come back for the rest later.  2019 will go down as yet another year when MCGEO proved its immense value to its members.

Activists of the Year: YIMBYs

In most years, Council Member Hans Riemer’s bill to liberalize restrictions on accessory dwelling units would have encountered rough sledding and maybe outright defeat.  Not in 2019, as MoCo’s YIMBYs – the acronym stands for “yes in my backyard” – sprang into action and helped get the bill passed.  YIMBYs, unlike NIMBYs, believe MoCo needs more housing and they have emerged as one of the county’s more effective, albeit loosely organized, issue groups.  Additionally, the YIMBY MoCo Facebook page has become one of the most interesting venues for policy and political discussions in the county.  If the YIMBYs get more numerous and better organized, they could have a real impact on the next county election.

Do Not Mess with Me Award: Bob Dorfman

When Council Member Hans Riemer released information showing that county liquor stores were losing money, Alcohol Beverage Services Director Bob Dorfman blew him to smithereens.  Read this quote from WUSA Channel 9 but hide the children first!

“We have an ill-informed councilmember who has got a politically motivated campaign that’s taking something purely out of context because he as a councilmember should have been smart enough to know that a plan had already been put in place almost a year ago that addresses each of the components of the loss,” Alcohol Beverage Services Director Robert Dorfman said.

Dorfman said the county has already cut the stores’ losses by $2-million a year, and hopes they’ll turn a $5-million dollar profit within a few years.

He said Riemer was needlessly panicking employees who work at the stores. “Mr. Riemer, by putting out all this stuff to the press, is causing those employees, hard-working, good, county employees, that he supposedly represents, obviously he’s not doing it very well, obviously he doesn’t care much, those employees are getting calls from customers and family members asking them whether they’re going to have jobs,” Dorfman said.

This is not the first time Dorfman has slammed a liquor monopoly critic.  He once went after Seventh State founder David Lublin too.  All of this has me feeling jealous.  I’m one of the fiercest opponents of the liquor monopoly around and I have written countless columns denouncing it.  What do I have to do to get you to spank me, Bob?

Retirement of the Year: Glenn Orlin

Former county council deputy staff director Glenn Orlin is one of the great heroes of county government who is unknown by much of the general public.  In a decades-long career in both the state and county governments, Glenn has become one of the foremost experts on capital budgets and transportation in all of Maryland.  The council relied on his incredible institutional knowledge, his expertise and his good judgment as much as any other single staff member.  What makes Glenn truly great is not just his competence and experience, but his patience, generosity and ability to teach others.  His legacy includes a huge portfolio of transportation projects, including his beloved Purple Line, as well as generations of folks who have learned from him – including me.  Glenn is still doing contract work for the council, but whoever eventually succeeds him will have very big shoes to fill.

That’s all until next year!

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