Monthly Archives: December 2020

Adam Pagnucco, mike miller, purple line, transportation

How Mike Miller Helped Save the Purple Line

By Adam Pagnucco.

The Purple Line is the subject of much drama today, but the truth is that the project has always been wrapped in drama and almost died several times. Indeed, it could have met its end back in 2013. The fact that it survived was a near miracle, and that is in part because of one critical person: retiring Senator Mike Miller. For the first time ever, here is the untold story of how Mike Miller helped save the Purple Line.

As the summer of 2013 approached, the Purple Line was facing a critical deadline: the state had to show the federal government that it could afford its share of the rail line’s cost to be eligible for nearly a billion dollars in federal funding. The problem was that the state didn’t have the money. Depleted by revenue declines during the Great Recession, the state’s transportation trust fund was broke. Without new money, we could never show the federal government that we could meet our part of the cost. Baltimore’s Red Line had the same problem. With no adequate state funding, the feds were bound to send their money to other projects around the country. Both the Purple Line and the Red Line would then die.

A group of advocates then put together a coalition called Get Maryland Moving to lobby for new transportation revenues. Our members included smart growth groups, environmentalists, business organizations and local governments from all over the state. We had a website, social media, press hits, lobbying, day-to-day coordination and all the accoutrements of a mass campaign, all thrown together in a few weeks. We wanted the Purple Line and the Red Line, but we understood that the rest of the state needed their projects too. Our approach was to get enough money for everyone because that was the only way new funding would pass.

Right off the bat, my contacts in the General Assembly told me that a transportation revenue increase was dead on arrival. The legislature had passed a variety of tax increases in the 2007 special session, leading to GOP gains in the House of Delegates in the following election. Nevertheless, the Democrats raised the income tax in 2012. Developer Larry Hogan, who had served in the administration of GOP Governor Bob Ehrlich, had founded Change Maryland largely on the tax issue and was a year and a half away from becoming governor. Democratic state legislators conceded privately that more transportation money was necessary, especially for the Red Line and the Purple Line, but they were extremely reluctant to raise taxes again.

We were underdogs but we had two aces in the hole.

Senate President Mike Miller

Miller seemed like an unlikely ally for MoCo as he had masterminded both an income tax increase and a teacher pension shift the year before, both of which disproportionately crushed the county. But Miller was an absolute warrior on the issue of transportation funding. He knew that the entire state had massive infrastructure needs that had no chance of getting built without more money. Ever since the state’s last gas tax hike in 1992, Miller had never stopped talking about transportation funding. As far back as 1997, Miller told the Baltimore Sun: “The money for these projects doesn’t come out of the sky… It’s going to take a tax increase. It’s a bad word, but it’s got to happen.” In 2008, Miller told me in an interview that he had pushed for a 12-cent gas tax increase, declaring, “We need to move forward as quickly as we can on mass transit.”

Miller never gave up when he cared about an issue, and he cared a lot about transportation funding. He also had no fear of Governor Martin O’Malley, who was reluctant to get out front on a revenue increase that voters opposed. In January, Miller introduced his own revenue bill and put O’Malley on the spot, telling the Washington Post, “This needs to be an initiative by the governor… It doesn’t poll well, but that’s what leadership is all about.”

To hell with the naysayers. We had Mike Miller on our side. That meant we had a shot.

Virginia Governor Bob McDonnell

Former Virginia Governor Bob McDonnell is now known primarily for his gifts scandal in 2014, which led to a conviction that was later overturned by the U.S. Supreme Court. But before that, McDonnell was a rising star in the national GOP who seemed to be going places. As unlikely as it seems now, in the world of 2013, it was not out of the realm of possibility that both McDonnell and O’Malley would someday be on the presidential tickets of their respective political parties.

In his final year in office, McDonnell put together a giant transportation funding bill, showing a level of boldness that contrasted with the reticence of his rival across the Potomac. Annapolis felt the pressure. O’Malley could not be seen as failing on transportation while McDonnell got a new funding package through a state legislature controlled by Republicans. And McDonnell did just that, scoring a huge success in late February as bipartisan majorities passed his multi-billion dollar transportation bill. McDonnell’s success in Virginia along with Miller’s constant urging prompted O’Malley to get off the bench, as he finally sent over an administration bill in early March. The train was starting to move.

But there was one more problem: Baltimore’s lawmakers were resisting the bill. We thought that the prospect of funding the Red Line gave them reason enough to support it. But some city legislators were indifferent to the Red Line, others were outright opposed, and one even told one of our organizers that the state would build it even without new money because “they owe it to us.” The city wanted something different: state school construction money to fix their aging schools. That could have meant the end of transportation funding right there as not everyone was enthralled with the idea of sending more money to Baltimore. And without the city’s votes, our bill would have died.

So state leaders cut a deal with the city: they would get a billion dollars in school construction money, financed with lottery proceeds, in return for voting for the transportation bill. The city got a great deal but the Washington suburbs got the Purple Line. (Hogan canceled the Red Line two years later, causing city leaders to cry injustice on behalf of a project that many of them never truly wanted.) O’Malley’s bill was amended and passed, generating hundreds of millions of dollars for transportation and keeping the Purple Line alive.

Raising transportation revenue required a team effort. Local governments, advocacy groups, the business community and key elected officials all played a part. But Mike Miller was absolutely critical to the effort. He was the first powerful state leader out of the box on the issue. He had talked about the necessity of raising money for transportation projects for years and years while many other politicians cowered under their desks. He wouldn’t let it go and he publicly took on a sitting governor from his own party to get the money. Having Miller in our corner gave us a fighting chance even when it looked like we would lose. When it was time to cut the final deal, we knew that he had both the desire and the capability to work with others and get it done. And he did. To this day, I believe the Purple Line wouldn’t have survived without him.

Here’s an idea. When the Purple Line opens, the state should name its station on the University of Maryland’s College Park campus for Miller. He loves the university, from which he graduated with two degrees, and he has done as much for the state’s infrastructure as any other Marylander. If anyone deserves recognition of this kind, it is surely Mike Miller.

Share
Adam Pagnucco, mike miller

Flashback: Mike Miller Meets the Bloggers

By Adam Pagnucco.

With the retirement of Senator Mike Miller, who ruled the Maryland Senate for decades, many stories are being told of his long tenure. This is one of many records he holds: more stories are told about Mike Miller than any other Maryland politician, hands down. My contribution comes from the archives of Seventh State’s predecessor and our first blog, Maryland Politics Watch. It relates what happened the first time I met Miller.

It was January 2008. Believe it or not, there were many more state and local politics blogs back then than there are now. (David Lublin, Just Up the Pike’s Dan Reed and I are some of the rare survivors.) Blogs were new back then and they were starting to get the attention of politicians and the mainstream press. So then-Senator Rich Madaleno convened a group of us to interview the Senate President on the record in Annapolis. Besides Miller and Madaleno, Senator Jamie Raskin and Delegate Kumar Barve also attended.

I was nervous as hell. This was Mike Miller after all! I had heard the stories of how he would chew out reporters when he thought they were wrong. I knew how powerful he was. Here was a man who was elected to the legislature when I was less than a year old and became Senate President when I was a bass guitarist in a high school rock band. He knew more about Maryland politics than the rest of Annapolis put together, much less a rookie blogger like me. So I put on my best suit and my favorite tie and tried to act like I knew I what I was talking about. I hope I amused him!

The passage I reprint below comes from a three-part series I wrote called “Mike Miller Meets the Bloggers.” The issues we discussed are long settled but were hot back then: the 2007 special session, slots, drivers licenses for immigrants, comparing Governors Ehrlich and O’Malley and so on. The interesting thing about the discussion is that it shows how Miller dealt with the media. Most politicians are careful, even guarded, when they are on the record with the press. They leave themselves wiggle room. They avoid antagonizing key groups. They might strategically antagonize some others. (How many Democrats are delighted to take on the gun lobby?) They speak in generalities. You know the drill. It’s politico-speak.

That was not Mike Miller’s way. He spoke in direct, sometimes graphic language. His positions were stark and understandable to everyone. His policy positions were often stated in provocative terms. (You don’t like slots? Fine. How would YOU pay for schools??) The press didn’t have to ask him a question twelve different ways to get something interesting from him. He would get right to the point with a pithy quote – sometimes without even having to be asked. Reporters may not have liked being called out from the rostrum as he sometimes did, but he made their jobs easier by explaining his side of the story in simple terms readily grasped by readers.

Why was Miller, the ultimate politician, so different from other politicians in dealing with press? First, Miller was unusual in that he was absolutely secure in both his Senate seat and his hold on the Senate presidency. Most politicians feel at least some insecurity related to their electoral prospects but not Miller. He could fire at will. Second, Miller was a busy fellow and he did not have time – or any appreciation – for BS. His personality was direct, sometimes to a fault, and he made no effort to adjust that for politics. Third, Miller was often doing his caucus members a favor by being so blunt in the newspaper. Suppose Senator X wanted to pass a bill badly and Miller said it was dead in the Baltimore Sun. No one blamed X for not rounding up the votes; he could say, “Mike Miller killed my bill.” That made life easier for X and no amount of heat could affect the Senate President. He would just go right on being Mike Miller – a role he created and no one else could play!

We may have a few more things to say about the Senate President, but for now, I’ll reprint this column from January 2008. And I’ll leave you with this: whatever you think of him, let’s all recognize that there will never, ever, EVER be another Mike Miller.

*****

Mike Miller Meets the Bloggers, Part Two

In Part One, we laid the scene for you: on one side of the table sat the fearsome, powerful old bull, the indomitable Senate President Mike Miller. On the other side sat a gangly, geeky band of bloggers, united only by their common desire for a post-meeting trip to Ram’s Head Tavern.

A few comments on the Senate President. For more than twenty years, Mike Miller has reigned over the Senate with a gregarious combination of ego, fear and patronage. His personal magnetism is so overwhelming that he could likely charm a bird out of its nest and onto his open palm. But if the bird voted the wrong way on a must-have bill, the hapless creature would be quickly crushed and tossed to the back of the Senate chamber. This demonstrates the Miller Rule, which is a simple one: “Work with me and prosper. Work against me and suffer.” Most Democratic Senators respond to this rule predictably, although there have been exceptions.

We asked Miller a lot of questions, and he gave us a lot of answers. For the benefit of our readers, I did my best to keep up with the exchange. Following are the Senate President’s responses to a few of our prods and pokings. If anyone else in the room recollects it differently, please comment and we’ll adjust the record.

On Governor Ehrlich
A few people remember that at the beginning of Governor Ehrlich’s term, Miller was ready to establish a pragmatic working relationship with him. But that approach ran into problems. “Ehrlich was a nice guy, but he didn’t work, and the state suffered,” Miller grumbled. He was “surrounded by yes-men” and rarely came out of his office. “All he did was put bandages on things!” The old warhorse was clearly relieved to see him gone.

On Governor O’Malley
Miller gave O’Malley lavish credit for moving to act on a deficit that he inherited, even if it cost him politically. “O’Malley knew his numbers would go in the toilet no matter what he did, so he did the right thing.” Miller attacked some of the Governor’s opponents, criticizing them for being “mean-spirited” and spreading rumors. “The Governor is a very progressive person,” Miller insisted. But he warned, “This Governor, in order to get his numbers up, will have to do some things you won’t like.” As an example, he mentioned a new emphasis on crime prevention, not always the highest priority of liberals.

On Slots
As perhaps the greatest champion of slots in the state, Miller’s views are well-known. “We have got to have that money!” he cried. The Senate President predicted that a possible recession would hurt tax revenues, thereby making slots money all the more necessary. “We need to get the slots bill passed whether you like it or you don’t like it!” Miller thundered. So in case you were wondering if Mike Miller had changed his mind on slots, the answer is NOPE!

On Transit
I asked Miller if he had a choice to fund the Washington suburbs’ Purple Line or Baltimore’s Red Line, but not both, which of the two he would pick. I was sure he would dodge this one, but to his credit, he did not. “The Purple Line!” he declared. “You know, I was a University of Maryland – College Park graduate.” Miller pointed out that he proposed a 12-cent gas tax last year but he could not round up enough votes for it. “We need to move forward as quickly as we can on mass transit.”

On Illegal Immigration
“There aren’t more than 2% of the people that understand immigration,” Miller snorted. “If you crack down on illegal immigrants too much, they’ll just bring their families over here.” The Senate President does not support the draconian measures implemented in parts of Virginia, saying, “John McCain tells the truth on this issue.” As for drivers licenses, Miller says, “The Governor has spoken on this. He considers this a national security matter. It’s a tough issue.” Miller did not contest the Governor’s decision to abide by the federal RealID law and end the state’s practice of issuing drivers licenses to illegal immigrants.

On the Regressive Nature of the Special Session Tax Package
Regular readers will recall how I criticized the Senate President for the regressive character of the special session tax package. Leaping into the jaws of the lion, I asked him the following question:

“The tax package that was passed by the special session collected the majority of its revenues from raising the regressive sales tax. If you could have that one back and do it over, would you have taxed the rich a bit more to give the working people a break?”

Miller did not back down from the sales tax. He described it as “the most regressive but also the most acceptable” of the taxes, claiming that he received little protest on it. “But I wish I could have had more from the income tax.” Miller noted, accurately, that part of the Montgomery County delegation, backed by their County Executive, pushed back against the Governor’s rate increase for the top income tax brackets, thereby limiting the legislature’s ability to raise them. “You need 24 votes to pass something through the Senate and I didn’t have the votes to spare!” For the record, let’s stipulate that nobody – absolutely nobody – knows more about getting 24 votes in the Maryland Senate than Mike Miller.

The Senate President has a point and perhaps I was unfair with him. It is true that a substantial portion of MoCo legislators pushed back against the top income tax rate hikes but did not criticize the sales tax. If that part of the MoCo delegation did not protest the tax hikes on the rich, there would have been less need to rely on the more regressive elements of the package. And who knows? Perhaps there would have been less pressure to resort to the much-hated computer services tax.

So while I don’t agree with Miller’s assertion that the sales tax increase is in any way “acceptable,” I will no longer criticize him as primarily responsible for encouraging regressivity in the tax package. There’s plenty of responsibility to go around for that.

On the Computer Services Tax
“The computer tax is not a good tax, but it’s $200 million and I’m going to fight to keep it!” The principal reason for keeping it? “No one can agree on a replacement.”

So other than David Lublin’s Big Question, which I’ll address in Part Three, that’s what I have from Mike Miller. Even though many liberals occasionally disagree with the Senate President, let’s give him his due. He implemented a tough agenda of deficit reduction on the Governor’s behalf. He is more straightforward in answering questions than most politicians. And he keeps a lid on the natural parochialism that might otherwise prevail in the Senate through a hardened mix of guile, intimidation and pragmatism. With a weaker Senate leader, the special session may very well have failed and the need to raise taxes this year would be much greater. So you may not like Mike Miller. But you should respect him.

Even though Senator Jamie Raskin of District 20 (Silver Spring/Takoma Park) attended our blogger fest, we did not flay him as we did his colleagues. In Part Three, you’ll hear from House Majority Leader Kumar Barve.

Share
COVID-19

MoCo Gets the Vaccine

By Adam Pagnucco.

Montgomery County Government has announced that it has received its first shipment of Moderna’s COVID-19 vaccine. The first doses are earmarked for county health staff engaged in pandemic response with more shipments to come. The county’s press release is reprinted below.

*****

First Round of COVID-19 Vaccine Arrives in Montgomery County
For Immediate Release: Wednesday, Dec. 23, 2020

The first round of COVID-19 vaccine doses, manufactured by Moderna, arrived in Montgomery County this morning at the Department of Health and Human Services (DHHS). This initial shipment will be earmarked for County health staff engaged in managing the pandemic response.

The first group to receive the vaccine in Montgomery County is the core team of public health clinicians who will become responsible for vaccinating residents across the County once additional vaccine arrives.

The shipment that arrived today from the Maryland Department of Health is only a small fraction of the entire supply expected to ultimately arrive in Montgomery County and across the United States. This first, small round of vaccine is in addition to the supply that the six hospitals across Montgomery County have or will receive directly from the Maryland Department of Health (MDH). Once MDH receives vaccine from the federal government, DHHS will learn more details about how much vaccine the County will receive and when.

County Health Officer Dr. Travis Gayles will be among the first recipients this afternoon as the lead on the active response to the pandemic.

“​I think the vaccines are safe, and are a new tool to help alleviate the burden of COVID-19 in our communities, particularly in those communities hit disproportionately,” said Dr. Gayles. “I want to be candid and transparent in sharing my experience with the vaccine to help address any concerns, questions, or anxiety around receiving it.”

Montgomery County is following the priority designations outlined by Governor Larry Hogan and that all Maryland counties will follow:

1A: Frontline health care workers, staff and residents of nursing homes, and first responders
1B: Essential workers and residents over the age of 75
1C: Individuals over the age of 65

The process for identifying the order by which all recipients within Priority Group 1A will be vaccinated will be determined by the quantity of vaccine the County receives and when it arrives.

The second priority group includes people in critical, essential infrastructure roles as well as those people at moderately higher risk of severe illness. The general public will have the chance to be vaccinated when the initial priority groups have been fully vaccinated. It is estimated that the general public will have the opportunity to receive the vaccination sometime in the spring of 2021.

In addition to County-operated vaccination clinics, when there is an adequate supply of vaccine, there will be additional places to get vaccinated, including physician’s offices and other primary care providers.

Health care providers in the County should complete this survey to let DHHS know how many of their staff may need coverage.

Visit the County’s COVID-19 website for frequently asked questions about vaccinations. The page will be continually updated to reflect the latest information available on the ongoing effort to slow and stop the spread of COVID-19.

#

Media Contact: Mary Anderson, mary.anderson@montgomerycountymd.gov

Share
Adam Pagnucco, Marc Elrich, police

Who’s the Boss?

By Adam Pagnucco.

One of the challenges of running the executive branch is to present a unified front to the public. The executive branch has thousands of employees and hundreds of subject matter experts in fields ranging from transportation to IT to law to environmental management to social services to… you get the idea. It’s incredible how much the county government does and how much its employees know. But at the same time, it works for one person: the county executive. He or she is the ultimate policy maker for the executive branch. After hopefully listening to input far and wide, the executive’s decision on an executive branch position is final. And every person inside the executive branch must respect it.

Or at least that’s the theory.

This principle broke down in full public view with regards to MC 4-21, a state bill affecting only Montgomery County introduced by Delegate Vaughn Stewart (D-19). The bill would enable, but not mandate, the county to transfer administration of speed cameras from the police department to the transportation department. Stewart believes it makes sense to have one agency in charge of both traffic safety and road improvements, and since the police department does not manage road projects, he thinks the transportation department should do both. County Executive Marc Elrich supports the bill and there is no indication in documents sent to the county council that he has any reservations about it. That should be the end of the story; the executive (as well as the council) supports the bill and the state delegation, which will decide its fate, will take that into account when deciding how to vote on it.

But that’s not the end of the story. The county’s director of intergovernmental relations wrote this to the council in addition to noting the executive’s support:

The Office of the County Attorney (OCA), the Department of Transportation (MCDOT), and the Department of Police (MCPD) have expressed concerns about MC 4-21. Specifically, OCA explained that while the local bill is only enabling, “DOT is not a law enforcing agency and is not equipped to act as one.” It pointed out that the bill “would have Montgomery County as the only jurisdiction in the State where no law enforcement individuals are reviewing speed camera citations and signing off on violations.”

Well, OK. The bill is an enabling bill, not a mandate. If the bill passes, the executive would have a voice in determining whether the shift in responsibility is actually implemented. Is the Office of County Attorney arguing that its boss – the executive – should not have that voice when the executive openly desires it?

There is more. When the MoCo state legislators’ land use committee convened to consider the bill on December 17, representatives of the police department acknowledged that the executive supported the bill and then proceeded to argue against it. Among their statements were that Baltimore City allegedly screwed up a similar program, the MoCo police had 15 years of experience in speed camera management that was a “national model,” and the state legislators should “make sure this is not an emotional decision.” They also characterized D.C.’s speed camera program, which was shifted to their transportation department, as “the worst program in the nation, hands down, by far.” One police official proudly declared, “We do not succumb to political influence!” in front of – you guessed it – seven state politicians in the meeting. He concluded that a transfer of responsibility “would do irreparable damage to this program as well as programs throughout the state.”

But the executive supports the bill.

Set aside the specifics of the bill for a moment. When the executive makes a policy decision, such as whether to support legislation, it is not merely a personal gesture. The executive is elected by voters to make decisions on behalf of the executive branch. Its employees are bound to carry out those decisions. Sure, the executive branch doesn’t exist in a bubble – it has to respond to other governmental bodies as well as a host of outside circumstances. But within its boundaries, the executive’s decisions must be respected. If not, then the departments turn into free agents and no one is really running the place.

You can bet that when the police openly tried to kill a bill supported by the executive, the state legislators who witnessed it noticed. They are not the only ones. The county council knows about it. No doubt other departments are watching. It’s impossible to say what gave rise to the police rebellion. Do they feel that the executive does not listen to them? If so, the executive’s information gathering process needs improvement. But if the executive does not remind his subordinates who their boss is, then the executive branch won’t have a boss. And that would make the county damn near ungovernable.

Share
Adam Pagnucco, Corporate Welfare, Development, Economy, taxes

What Happened to White Flint?

By Adam Pagnucco.

Ten years ago, White Flint was regarded as the future crown jewel of MoCo. With a shiny new master plan, a tax district for infrastructure and an assortment of regulatory breaks, the area was supposed to create new high-end high-rises combining office, retail and residential uses that would generate billions of dollars in county revenues over coming decades. Everyone who lives here knows that vision is still largely unrealized. And now a new report by county planning staff lays out why.

First, let’s revisit what White Flint was envisioned to become in its 2010 master plan: a smart growth, walkable mecca around a transformed Rockville Pike which would be transit-heavy and pedestrian friendly. The plan required substantial infrastructure investment including streetscaping, a new road network and a bus rapid transit route. Unlike many county master plans, this one had a mechanism for financing infrastructure: a new special taxing district. Properties inside the taxing district would pay into a fund used to pay for the new infrastructure needed to bring the plan to life. In return, impact taxes were set to zero. The council set an infrastructure project list through a resolution and projects in the district were exempted from county traffic reviews. This combination of high density, infrastructure investment and regulatory exemptions was revolutionary for MoCo at the time and still has not been fully replicated. MoCo politicians love to throw around the word “bold” like peanut shells, but White Flint (now marketed as the Pike District) truly deserved the adjective.

So what happened?

In simple terms, the planning staff describes a negative, self-reinforcing feedback loop that has no identifiable end. The loop functions like this. Low levels of development led to low proceeds for the tax district. It was supposed to raise $45 million in its first 10 years but only generated $12-15 million. Low tax district revenues held back the construction of some of the transportation improvements and other infrastructure necessary to make the area more attractive to investment. Developers seeking financing for projects were hindered by the inadequate infrastructure along with the “prominence of underutilized properties.” One of those properties, the mammoth White Flint Mall site, was tied up by years of litigation. The lack of financing, along with construction costs and market conditions, has held back development. And of course the lack of development holds back tax district revenues necessary to pay for infrastructure, so the cycle continues.

This map from the report shows the vast majority of land in White Flint is underutilized (areas marked in red and orange) relative to its zoning.

The most interesting part of the report summarizes comments from White Flint property owners, who comprise a who’s who list of prominent MoCo developers. First, let’s identify what they don’t complain about. They don’t complain about the plan itself; indeed, they think the area still has potential. They don’t complain about market demographics; they find the wealth and education levels in the area attractive. They don’t intend to sell their existing properties, which generate enough cash to cover operating costs and taxes, but they’re not in a hurry to redevelop them. And not a single one of them complained about taxes or requested a tax abatement.

Here are a few excerpts from the report on their take on White Flint’s problems.

*****

All developers interviewed cited Montgomery County’s limited job growth as a fundamental challenge to continued construction in the Pike District. Low levels of new jobs limit the number of new families seeking to occupy units in the county (household formation), decreasing demand for new development. In addition to limited employment growth, construction costs increased dramatically since 2010, office users occupied less space per employee, and retail demand declined with the rise of online shopping, all factors that continue to reduce demand for or limit the financial feasibility of new development.

Multiple developers noted without providing details that their firm managed to solve issues of high construction costs in other submarkets where there is a higher pace of job growth and household formation, which in turn supports rent growth.

Developers interviewed affirmed that the Pike District is accessible to fewer jobs within a reasonable commute than its peer non-downtown submarkets, and that this reduced access to job centers limits demand for additional multifamily units.

All developers interviewed cited Montgomery County’s limited job growth as a fundamental challenge to continued construction in the Pike District. Low levels of new jobs limit the number of new families seeking to occupy units in the county (household formation), decreasing demand for new development. Developers cited the reduced pace of household formation as a key contributor to stagnant rents, a major concern for the feasibility of future projects.

Several developers independently stated that the attraction of a major employer to the Pike District, such as a life science campus, would significantly increase the feasibility of new multifamily projects.

Developers are not currently willing to build speculative office projects in Montgomery County due to the lack of underlying job growth and the uncertainty about the future of the office sector. Several developers mentioned that they would still consider speculative office construction in Tysons and along the Silver Line corridor, highlighting the continued job growth in Northern Virginia and the contrast with suburban Maryland.

Several interviewees contrasted recent Northern Virginia economic development wins, such as the expansion of Microsoft in Reston, with news that a large distribution center project in Gaithersburg for Amazon is in jeopardy due to delays in the entitlement process. These interviewees stressed that while the number of jobs in these deals is modest, there is a constant drumbeat of positive economic news from Northern Virginia that is unmatched from suburban Maryland.

*****

Let’s boil this down to three words: jobs, Jobs, JOBS. Employment growth was the dominant theme for these developers, but they had a few things to say about business climate and regulations too.

*****

Interviewees related that development projects ultimately deliver equivalent profits as similar projects in neighboring jurisdictions, but that Montgomery County’s reputation as generally “a difficult place to do business” limits developer interest.

Developers agreed that the difficulty of the business environment issue is primarily about perception rather than the ultimate profitability. Interviewees cited as examples a range of policy issues such as a minor energy efficiency tax that Montgomery County leadership presented and implemented as a temporary measure but that never expired.

Multiple interviewees stated that in competitor counties they feel that the entitlement review process is oriented to enabling and facilitating a project, whereas in Montgomery County it feels like an oppositional relationship. Related to this, developers feel the County continually creates new policies and initiatives that adversely affect development, and which ultimately encourages them to focus on assets elsewhere in the region.

*****

The county council and the planning staff are focused on tax abatements as a way to stimulate development, especially housing. But developers in White Flint weren’t complaining about taxes. In fact, tax revenues are NECESSARY to finance infrastructure required to make development happen and function well. It is the absence of tax revenues that resulted in under-financing of infrastructure in White Flint, a key part of the area’s negative feedback loop.

Instead of taxes, the key issue identified by White Flint developers is the absence of job growth, which they believe would stimulate demand for housing and eventually make the economics of housing construction work even with high construction costs. In short: if you want more housing, create more jobs. All of these developers know what we have been saying on Seventh State for years: MoCo has one of the worst records on job growth and business formation of any large jurisdiction in the metro area.

The county’s terrible record on job growth and business formation must be reversed.

All of this points to the need for a strategic decision. MoCo can focus like a laser on job creation, doing everything possible to help entrepreneurs grow their organizations and create employment for residents. If the county does that, the vision of White Flint and other smart growth plans can be realized. Or MoCo can keep handing out tens of millions of dollars in corporate welfare as it has done for decades, thereby depleting its ability to construct infrastructure that facilitates economic growth. Or it can do nothing.

Those are the choices. What will MoCo choose?

Share
Adam Pagnucco, Corporate Welfare, Development, Economy

Is Smart Growth Getting Married to Corporate Welfare?

By Adam Pagnucco.

On October 27, the county council overrode County Executive Marc Elrich’s veto of Bill 29-20, which mandates 15-year property tax breaks for developers at Metro stations. This seemingly ended – for now – the debate over whether huge tax abatements should be written into law for transit-accessible development projects. But in fact, the debate may just be getting started. That’s because a little-noticed discussion eight days before offered a prelude of many more tax expenditures than just the amount contained in that one bill.

On October 19, the council’s Planning, Housing and Economic Development (PHED) Committee held a work session on the upcoming Thrive Montgomery 2050 Plan. The plan, still in its early stages, is conceptualized in a mammoth 167-page public hearing draft authored by planning department staff. Among the MANY recommendations in the draft is this goal:

Goal 5.2: Ensure that the majority of new housing is located near rail and BRT stations, employment centers and within Complete Communities that provide needed services and amenities for residents.

And one of the action steps recommended for this goal is this one:

Action 5.2.1.a: Provide appropriate financial incentives, such as tax abatements, Payment in Lieu of Taxes (PILOTs), and Tax Increment Financing (TIFs) to increase housing production in targeted locations near high-capacity transit.

The adjective “near” is not defined.

At the PHED Committee’s work session, county planning director Gwen Wright commented on before and after sketches of development on Georgia Avenue and said:

One of the items, and I put this specifically because I know we’ve had a very challenging conversation just recently, about the idea of PILOTs to try to target development near high capacity transit. To do, to change what you see on the left into what you see on the right is going to take more than just zoning. It is going to take financial incentives. It is going to take different kinds of public investment.

Wright’s comments on incentives start at 38:27 of the video below.

It’s worth remembering one of the rationales for the Metro property tax break bill. Supporters of the bill said that its tax abatement was necessitated by the unique costs of building on top of Metro stations. They stressed over and over that the bill would not apply to other sites. It’s clear now that much broader tax abatements for all kinds of sites – not just Metro stations – have been under consideration by at least the planning staff and maybe other actors too for some time. Back on September 24, I wrote, “Developers of sites near but not on Metro stations might demand concessions too. As with the county’s Economic Development Fund, which began by handing out small grants to companies twenty years ago and eventually distributed 7-digit and 8-digit grants, the subsidies in the current bill may only be the beginning.” It didn’t take long for that prophecy to amass evidence of its accuracy.

Another rationale for the WMATA tax break bill is that it applied to largely empty Metro-owned sites that were not generating tax revenues. Supporters of the bill said that waiving taxes on new development did not cost the county real money if the new development would not have occurred without the tax break. But that argument does not apply to areas around Metro stations, which tend to have low-rise, mid-rise and – in Downtown Bethesda – high-rise buildings in existence now. These properties pay property taxes. Offering tax abatements to them to redevelop converts them from revenue generators into non-payers. It would actually SHRINK the tax base. This contradicts one of the primary reasons why economic development is good for the county: it is supposed to ADD to the tax base. That wouldn’t happen under the planners’ proposal.

Sure, this is just a staff draft. And sure, the draft has not been approved by the planning board much less the county council. But this is how policy is formed – it starts as a proposal, it turns into a recommendation, it is incorporated into official planning and then it becomes law. Unless something changes, these are the first baby steps towards what could ultimately become billions and billions of dollars in subsidies that the rest of us will pay for.

In MoCo politics, the number one attack made against smart growth organizations and activists is that they are supposedly tools of developers. It’s a line of argument used to shut down – and shut up – anyone who wants to see more commercial development or more housing here. It took smart growthers many years to get beyond the epithets, to present their agenda of community building, walkability, environmental preservation and sound transportation management and to truly break through into the county’s mainstream. It helped that transit-oriented projects were supposed to make money for the county’s budget. Ten years ago, redevelopment in White Flint was predicted to generate $6-7 billion of revenue over the next 20-30 years.

If smart growth indeed becomes married to corporate welfare, some of that political progress will be lost. The smart growth movement will be cast by its opponents as anti-progressive and in thrall to corporate masters whose primary goal is tax avoidance. It will face increasing impediments to its political growth and hence its ability to affect policy and influence votes. That is exactly what opponents of transit-oriented development want. The push towards corporate welfare plays right into their hands.

All of this will be a huge political gift to County Executive Marc Elrich, the man who built his career on voting against transit-oriented development and whom many smart growthers desperately want to see out of office. Elrich relishes vetoing tax abatements and tax cuts for developers because it reminds a large part of his base why they voted for him. The only thing that could be better for Elrich is if the next round of huge tax breaks is proposed in legislation a couple months before the next primary.

Share
2020 elections, Adam Pagnucco

Methodology Note: Precinct Analysis

By Adam Pagnucco.

In coming days, I’ll be crunching precinct-level results from the 2020 general election. This post summarizes the methodological choices I made and I’ll refer back to it in the future.

General election precinct results for candidate races and ballot questions are available here for every county in Maryland. In prior years, precinct results were available only for election day voting. For this year’s general election (but not the primary), they are available for all voting modes. That’s an improvement but it means that precinct results for this year aren’t strictly comparable to earlier years.

This year, Montgomery County has 258 precincts. Three of them are “ghost precincts,” which do not report results because no people live in them. If you see the number of precincts alternatively represented as 258 or 255, the three ghost precincts are the reason. Don’t worry about it because vote tallies are unaffected.

All precincts are assigned to congressional, state legislative and council districts. Their town designation is determined by the location of the voting place. This gets a little blurry at times as folks from one town can have a voting place in another, but this shouldn’t have a huge impact on geographic results.

The Democratic Crescent, a term I used two years ago to identify regularly voting downcounty Democrats, includes precincts in Bethesda, Cabin John, Chevy Chase, Kensington, Takoma Park and Silver Spring inside the Beltway. Upcounty includes precincts in Brookeville, Clarksburg, Damascus, Dickerson, Gaithersburg, Germantown, Laytonsville, Montgomery Village, Olney, Poolesville, Sandy Spring and Washington Grove. Residents of smaller nearby communities vote in these precincts, including people who live in Ashton, Barnesville, Beallsville, Boyds and Goshen. Wheaton includes zip code 20902. Glenmont/Norbeck includes zip code 20906, except for Leisure World, which is tracked separately. Silver Spring East County includes all other Silver Spring precincts outside the Beltway and located in zip codes 20901, 20903, 20904 and 20905.

I may refer to how precincts voted for term limits in 2016. Term limits voting is correlated both with partisan turnout and certain other voting behavior this year.

I included estimates of average household income by zip code from the Census Bureau for the five-year period of 2014-2018. I wish I had recent estimates by precinct but that will hopefully be released with the next batch of decennial census data.

Finally, I took a shot at demographics by precinct. This was a huge and imprecise exercise. Using 2010 census data, I matched census blocks to precincts. This is challenging because the two frequently don’t match exactly and precinct definitions have changed over the years. After a great deal of work, I was able to generate rough estimates of percentage Asian, Black, Latino and white for each precinct’s population and use them to gauge crude patterns of voting associated with race. I can’t stress how rough and dated this is and I look forward to getting updated 2020 census data to plug in.

That’s about it. We’ll start digging into data soon!

Share
Seventh Congressional District

Klacik Didn’t File Required Financial Disclosure

Like Members of the U.S. House, congressional candidates are required to file financial disclosure forms. Kim Klacik, who made quite a splash as the Republican sacrificial lamb against Rep. Kweisi Mfume, never filed one according to the Clerk of the U.S. House of Representatives.

According to the Clerk’s office:

Financial Disclosure Reports include information about the source, type, amount, or value of the incomes of Members, officers, certain employees of the U.S. House of Representatives and related offices, and candidates for the U.S. House of Representatives.

These reports are filed with the Clerk of the House as required by Title I of the Ethics in Government Act of 1978, as amended. 5 U.S.C. app. § 101 et seq.

Klacik touts herself as a “Republican strategist” and the founder of a nonprofit, Potential Me, but her sources of income remain unknown and vague. Her failure to file the legally required report tends to confirm the impression that she intends to remain in the limelight and earn a living based on her failed campaign.

Campaign finance watchdogs will also want to watch carefully where the nearly $1 million in unspent funds in her campaign account goes. Unusually for a serious congressional challenger, not all of her impressive fundraising went to the campaign.

Share