Monthly Archives: February 2020

Adam Pagnucco, Robin Ficker, taxes

Who Are These People?

By Adam Pagnucco.

They look like the folks who were elected in 2018.  Their names match the names listed on the county website.  There is no evidence of alien abductions or replacement by clones.  And yet, they don’t sound like members of the Montgomery County Council.

Who are these people?

In a scene seemingly lifted from a strange dream, a majority of the county council convened yesterday to oppose two state bills giving them additional taxing authority.  One bill would let them raise the maximum income tax rate and establish brackets instead of the current flat structure.  Another bill would let them raise property taxes on different categories of property, including homes with more than 5,000 square feet.  Council staff recommended that the council support the legislation.

Six council members said no.

Who are these people?

The six individuals (assuming they are not cloned replacements) who said no are Council Members Gabe Albornoz, Sidney Katz, Nancy Navarro, Craig Rice, Hans Riemer and Andrew “Real Deal” Friedson.  The vote of Friedson, who has emerged as the council’s leading voice of fiscal sanity, is no surprise.  But Katz, Navarro, Rice and Riemer all voted for the 8.7% property tax increase of four years ago, an event that contributed to the passage of term limits.  The increase was supposed to close MCPS’s achievement gap, but a recent Office of Legislative Oversight report showed little if any progress on that issue despite the large tax hike.

Some members of past councils might have jumped up and down to be awarded more taxing authority by the state.  The constraints on both property and income taxes are real.  State law requires that counties charge one tax rate for almost all real property (although offsetting credits can be awarded and multiple taxes might be levied).  State law also requires that counties may charge a maximum income tax rate of 3.2% using a flat structure with no brackets.  The state bills advocated by Council Member Will Jawando and Delegate Julie Palakovich Carr do not mandate county tax hikes, but they do grant enabling authority to the council to devise them.  Certain options, like establishing a new top income tax bracket, could raise millions for county government.  And yet six council members said no.

Who are these people?

Let’s let them tell us.  Here are a few quotes from the council meeting at which the state bills were considered.

Friedson: “We need to demonstrate as a county, as a county council, as political leadership at this really important time for where we move forward that we are focused relentlessly on growing the tax base and not only focused on raising the tax rates.”

Albornoz: “We all read the report recently that our colleagues in Prince George’s County have surpassed us with regards to economic development here locally and so we are now not just competing with our colleagues and friends across the river and the District of Columbia, but we’re competing with local jurisdictions right here within the State of Maryland to actively and aggressively expand economic development opportunities here within the county.”

Riemer: “My concern at the moment is there is a really significant tax proposal that is already on the table, and that is to tax services.  And that is going to have a huge impact on our county’s economy.  I feel like we ought to not confuse the conversation about that issue with additional proposals.  I think we ought to let the state leadership kind of drive the train… We ought to just hang back at this time and let the state process do its work and not complicate that matter with trying to drive funding proposals from the county level that are really reaching to the same goal.”

Rice: “I don’t think that we should be continuously going to the well locally and asking our residents individually to be paying more when we realize that as a state we know we can do it the right way.”

Riemer: “I don’t quite understand the timing of this idea and really why we’re talking about it.”

Friedson: “It is the wrong message to be sending at the worst time.”

Left unsaid but no doubt on the minds of the council was the menacing specter of political heckler Robin Ficker, who was on that very day delivering 16,000 signatures on behalf of his latest charter amendment to limit tax hikes.  Past tax hikes helped Ficker pass two charter amendments in 2008 and 2016, but his newest one, which would prohibit growth in property tax collections from exceeding the rate of inflation, is the most draconian of them all.  Ficker cites a long history of county tax hikes in justifying his quest to bring them to an end.  They were, of course, passed by prior county councils.  This time, six council members declined to throw more red meat to Ficker.

Who are these people?

Could it be that they recall the harsh lesson of four years ago and are now more careful in considering the issue of taxes?

If not, let’s call the aliens and ask what they did with our council members!

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Adam Pagnucco, Robin Ficker, taxes

Picture This

By Adam Pagnucco.

Picture this, dear readers: two events, both scheduled for today.

Picture 1: Robin Ficker, author of numerous charter amendments on taxes and term limits, has announced his intention to deliver 16,000 signatures in support of his latest anti-tax amendment to the county executive’s office.  Ficker needs at least 10,000 signatures to place his amendment on the ballot.  Let’s remember that no one in the history of Montgomery County has more experience in gathering signatures than Robin Ficker.

Picture 2: Just a short walk away in the county council building and almost simultaneously, County Council Member Will Jawando and Delegate Julie Palakovich Carr have announced a press conference in support of two state bills that would enable the county to levy tax hikes.  One bill would allow counties to set different property tax rates for commercial properties, industrial properties and residential properties with more than 5,000 square feet.  The other bill would allow counties to increase their maximum income tax rates from 3.2% to 3.5% and establish income tax brackets.

Picture 1 is to be expected; we have seen Ficker’s grandiose signature deliveries before.  Picture 2 is problematic for two reasons.

First, Jawando and Palakovich Carr justify their bills partly “in order to pay for the increased local share of education funding required under the Kirwan Commission.”  Counties around the state are concerned about how they might pay for any additional local obligations to schools stemming from the Kirwan Commission’s recommendations.  Those obligations are laid out in Appendix F of the Kirwan Commission bill’s fiscal note, which is reprinted below.

A careful look at the phase-in schedule shows that Montgomery County is not currently required to contribute any more to its public schools than it already has been doing until Fiscal Year 2027, which is MORE THAN SIX YEARS AWAY.  Why are these elected officials pushing tax hikes now?  One struggles to see how this is linked in any way to Kirwan.

Furthermore, even in years in which no tax hikes are levied, the Montgomery County government gets an average of more than $100 million in new revenue a year, and that excludes intergovernmental aid.  If the phase-in schedule above were altered to allow a more gradual phase-in for the county’s local obligations – say, $25-30 million a year instead of cramming it all into four years – the county might not have to raise taxes at all.  The county might have to restrain spending in other areas to allocate greater shares of new revenue to MCPS, but that would make up for the fact that local money for MCPS has been one of the slowest growing parts of the county budget for a decade.

Second, this plays directly into Ficker’s hands.  There was a time not so long ago when Ficker’s name was so radioactive due to his NBA heckling and his rampant placement of illegal campaign signs that his very association with a ballot question was enough to kill it.  Those days are gone.  In 2008, the county raised property taxes by 13%.  Voters responded months later by passing Ficker’s charter amendment requiring that nine county council members must vote in favor of any property tax increase breaking the county’s charter limit.  In 2016, the county raised property taxes by 8.7%.  Voters responded by passing Ficker’s charter amendment on term limits by a landslide.  Now, counting the bills supported by Jawando and Palakovich Carr as well as a separate bill by Council Member Evan Glass calling for new taxes on teardowns, there are three different bills pending that allow county tax increases just as Ficker is pushing for a new anti-tax charter amendment.

Ficker must be the happiest man in MoCo.

Ficker does not win passage of his charter amendments because voters love him.  He has run in almost every four-year election cycle since the 1970s, with just one victory (a 1978 Delegate race) that was reversed after a single term.  He has not come close to being elected since.  Ficker wins because he has deduced something that county politicians hate to admit, at least in public: voters are skeptical that our elected officials are capable of behaving responsibly with their tax dollars.  Indeed, the county has levied nine major tax hikes since Fiscal Year 2003, with only one (an energy tax increase in Fiscal Year 2011) occurring during a recession.  The most recent tax hike, the 8.7% property tax increase in 2016, was marketed in part as a way to close MCPS’s achievement gap.  Three years later, the council’s Office of Legislative Oversight found that the county has made little or no progress on the achievement gap despite the massive tax hike.

This kind of thing is why Ficker wins.

Let’s think of what is at stake.  In 1978, Prince George’s County passed an anti-tax charter amendment only a little more draconian than Ficker’s.  Five years later, in the wake of the devastating recession of the early 1980s and lacking an ability to raise taxes, the county had to gut services and lay off more than 500 teachers, laying the groundwork for decades of problems.  Heaven help MoCo if we proceed in that direction.

If MoCo’s elected officials want to avoid that sort of outcome, they need to behave responsibly.  Save the tax hikes for times of desperate need, like recessions.  The rest of the time, figure out how to live within your means just like your constituents do.  Above all, stop giving ammo to Ficker.

The alternative?  Picture this.  Ficker celebrates in November, bellowing in victory at the passage of yet another charter amendment.  And the county government, struggling in fiscal chains strung up by distrustful voters, becomes more vulnerable to the next recession.

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Adam Pagnucco, Apple Ballot, Board of Education, MCEA, washington post

Three Keys to School Board Races

By Adam Pagnucco.

Make no mistake: running for school board is TOUGH.  The MoCo school board has two at-large seats, five district seats and one seat elected by MCPS students.  Of the seven non-student seats, all of them – at-large and district – are subject to voting by the entire county electorate.  Three seats – one of the at-large seats plus Districts 2 and 4 – hold elections in presidential years, which attract tons more voters than gubernatorial years when elections for other state and county offices are held.  Since the school board seats are non-partisan, both primaries and generals can be real competitions.  Finally, Republicans, unaffiliated and third party voters can vote in school board primaries as well as generals.  So school board candidates have to communicate with waaaaaay more voters than county-level and state legislative candidates and they have a lot less money to do that.

Dear readers, think about all of the above before you decide to run for school board!

And so these races are distinguished by little money, large electorates and woefully inadequate press attention.  That’s why three factors are almost always key to deciding them.  They are:

1.  Incumbency.  This is an important advantage in most elections.  Incumbents have opportunities to learn the issues, assemble records, build relationships and accumulate name recognition.  School board races are no exception.

2.  The Apple Ballot.  The Montgomery County Education Association (MCEA) has long had the most advanced political program of any group that participates in MoCo elections.  Its centerpiece is the mighty Apple Ballot, an apple-shaped endorsement flyer that is widely distributed at election time.  Few if any groups care more about school board elections than MCEA since board members set policy, hire the superintendent and approve collective bargaining agreements.

A version of the Apple Ballot from 2006.  Note the placement of school board candidates at the top.

3.  The Washington Post endorsement.  The Post regularly endorses in school board races and the newspaper has a reach that extends beyond traditional Democratic voting constituencies.  The Post is also occasionally critical of MCEA although it sometimes supports the same candidates as the teachers.

Without the benefit of significant resources to communicate with vast numbers of voters, school board candidates with one or more of the above advantages are heavily dependent on them to differentiate themselves from the pack.  That’s why while all of the above advantages matter in any race, they may be especially critical to candidates for school board.

The table below shows candidates in contested school board races from 2006 through 2018 and the distribution of incumbency, the Apple Ballot and the Post endorsement.  In some cases, the primary was uncontested because there were two or fewer candidates while the general was contested.

A casual glance demonstrates the value of incumbency, the Apple and the Post endorsement but let’s be more explicit.  The table below shows win rates for all three, as well as combinations of some or all of them.

In every tabulation, candidates holding at least one of the above three advantages win at least 75% of the time.  Holders of more than one advantage often win more than 90% of the time.  Candidates holding both the Apple and the Post, whether or not they are incumbents, are nearly a lock.  The one recent exception was in 2016, when at-large incumbent Phil Kauffman had both the Apple and the Post and was still defeated by former Paint Branch High School Principal Jeanette Dixon.  In that race, Kauffman earned the Apple Ballot after the primary and the Post did not endorse him until October, possibly weakening the value of those endorsements.

These three factors don’t explain everything, but they explain a lot.  While it’s possible to win without any of these advantages, as Dixon demonstrated, it’s very difficult.  Keep an eye on these keys as this year’s school board races move forward.

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Adam Pagnucco, budget, transportation

How is MoCo Doing on Pedestrian Safety?

By Adam Pagnucco.

Pedestrian safety is arguably THE hottest issue in MoCo government right now.  With several recent high profile pedestrian deaths and residents swarming a county council meeting on the subject, alarmed elected officials are terming pedestrian crashes a “public health crisis” and demanding action.  The county has responded by hiring a full-time pedestrian safety coordinator and is promising more to come.

Pedestrian safety has been a challenge in Montgomery County for decades.  How well is the county doing on this issue?

First, let’s look at MoCo’s rate of pedestrian involved crashes in comparison to the rest of the state.  The table below, sourced from data provided by the Maryland Department of Transportation, compares the average annual number of pedestrian crashes by county to county populations.

Three of the top four counties on a per capita basis – Baltimore City, Baltimore County and Prince George’s County – are among the most urbanized jurisdictions in the state.  The other county in the top four – Worcester – has an unusual amount of pedestrian activity on the Ocean City boardwalk.  MoCo ranks 7th of 24 counties on crash rate but its average annual crash rate per 1,000 residents (0.44) is below the state average (0.54).  Admittedly, the state average is skewed upwards by Baltimore City.

It’s interesting that MoCo’s pedestrian crash rate is similar to less urbanized jurisdictions like Wicomico, Dorchester and Washington Counties.  Urbanized counties should have greater volumes of pedestrian activity because of a greater abundance of walkable districts.  MoCo certainly has more of those than Wicomico, Dorchester and Washington Counties.  That suggests that MoCo isn’t a relatively bad performer on this measure given its substantial (and increasing) urbanization.

One thing MoCo does is spend significant amounts of capital money on pedestrian projects.  The table below compares capital budget spending on pedestrian and bikeway projects (the two are one category) to total capital spending excluding the Washington Suburban Sanitary Commission in the last 16 Capital Improvements Program (CIP) budgets. 

MoCo’s spending on pedestrian and bikeway projects steadily accelerated from $44 million in the FY7-12 CIP to $225 million in the FY19-24 CIP.  Major projects like the Metropolitan Branch Trail, the MD-355 BRAC crossing and the Capital Crescent Trail are partially responsible for these increases.  However, the FY21-26 executive recommended budget is a step back.  The six-year total pedestrian and bikeway spending of $181 million is the lowest since the FY13-18 amended budget.  So is the percentage of the total capital budget accounted for by pedestrian and bikeway projects.

All of this gives rise to two questions.

1.  MoCo spends a lot of money on pedestrian projects, but is the county getting a good return?  A 2007 county council press release states that the county averaged 430 pedestrian collisions per year from 2003 through 2006.  The Maryland Department of Transportation estimates that the county averaged 459 pedestrian crashes from 2014 through 2018.  Between the two periods, the county’s population rose by 13% while its pedestrian crashes rose by 7%.  Is that a sufficiently positive result from the enormous sums the county has spent in recent years?  Given the significant needs in this area and the limited resources in the capital budget, the county may wish to study the most cost-effective ways of promoting pedestrian safety and direct its funding accordingly.

2.  As noted above, the executive’s new recommended capital budget decreases pedestrian and bikeway spending to its lowest level in seven years.  One reason for that is that the overall level of capital spending is declining.  (That’s a subject for a future series.)  With all areas of the capital budget under stress and the looming possibility that school construction delays will trigger residential moratoriums, it’s extremely difficult to add or even maintain funding for any program, not just pedestrian and bikeway projects.  That said, county elected officials will look terrible if they declare pedestrian safety to be a “public health crisis” but then cut funding for pedestrian and bikeway capital projects.

Overall, MoCo’s record on pedestrian safety is not a bad one when compared to the rest of Maryland.  But funding constraints could hinder its prospects for improvement.

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Adam Pagnucco, budget, Economy, MCPS

MoCo’s Moratorium Madness

By Adam Pagnucco.

The Montgomery County government is currently plagued by a $100 million operating budget shortfall and a shrinking capital budget.  So what is the county doing to revitalize its economy and earn more revenue?

Potentially, imposing more moratoriums on housing construction!

County development rules require moratoriums on housing construction inside school clusters or individual school service areas when projected public school enrollment accounts for 120% or more of capacity five years into the future.  Additionally, elementary schools must be 110 students over capacity and middle schools must be 180 students over capacity to trigger moratoriums.  Projects that are already approved are not halted by moratoriums but new project approvals are not granted.

Last year, the county imposed moratoriums on four high school clusters and 13 individual elementary school service areas.  Those areas accounted for roughly 12% of the county and included high-profile markets in Downtown Silver Spring and North Bethesda, thereby directly thwarting the county’s transit-oriented development strategy.

The problem with stopping residential development is that school impact taxes collected from new units can be a major source of revenue for school construction.  As recently as the FY15-20 amended capital budget, school impact taxes accounted for 15% of MCPS’s school construction budget.  Unfortunately, that is no longer the case.

In a memo to the Montgomery County Planning Board, planning staff noted that the county executive’s new recommended FY21-26 capital budget underfunds MCPS’s construction request by $61 million in FY21, $93 million in FY22, $93 million in FY23 and $57 million in FY24.  One of the biggest reasons for the underfunding is that school impact tax receipts have fallen by more than half since FY14.  The planning staff indicates that if the underfunding results in delayed projects, nine elementary school service areas (Bethesda, Clarksburg, JoAnn Leleck, Rachel Carson, Strawberry Knoll, Summit Hall, McNair, Page and Burnt Mills), one middle school service area (Parkland) and seven high school clusters (Quince Orchard, Richard Montgomery, Albert Einstein, Montgomery Blair, Blake, Northwood, Walter Johnson) may be at risk of moratoriums.  For the Blake, Blair, Einstein and Walter Johnson clusters, this would be the second straight year of moratorium, threatening projects in North Bethesda and Downtown Silver Spring.

The cruel fact here is that reducing residential construction has historically had little if any impact on MCPS enrollment increases.  The chart below shows MCPS enrollment (red line and left axis) and residential units permitted in Montgomery County (blue line and right axis) from 1994 through 2018.  MCPS enrollment comes from the county executive’s recommended budget while permitted units comes from the U.S. Census Bureau.  Over this 24 year period, housing construction has been falling while MCPS enrollment has been rising.  The contrast between the two trends has been most pronounced in recent years.  Housing units permitted has fallen from 3,981 in 2012 to 1,947 in 2018 while MCPS enrollment has grown from 146,497 to 161,470.  It defies logic to blame school crowding on housing construction when homebuilding is in an era of decline.

And so here is the effect of MoCo’s moratorium policy.  Housing construction drops, causing school impact tax payments to plummet and depriving school construction of needed funding.  The county reacts by delaying school projects, triggering moratoriums.  That causes housing construction to decline further and the cycle continues.  None of this helps more schools get built but it definitely constrains housing supply, thereby driving up home prices and making the county even more unaffordable to live in than it already is.  Another effect is that it makes the county radioactive to the real estate and investment communities, thereby pushing them into competing jurisdictions.  It’s no wonder that Prince George’s County Executive Angela Alsobrooks is celebrating her county’s passing of Montgomery County in job creation.

Using residential moratoriums to prevent school crowding is like treating lung cancer by amputating the patient’s legs.  The treatment does nothing to solve the original problem but it definitely causes new problems to arise!

If you wanted to stop economic growth and make it harder for people to live here, it would be difficult to devise something more attuned to such goals than MoCo’s insane moratorium policy.  The county must bring it to an end.

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