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Putting progressive values in action with new county budget

I am pleased to share highlights from the county’s new budget for Fiscal Year 2016 (video), which will begin July 1st.

This year was a “same services” budget, with lower revenues due to a regional economic slowdown. The Council’s total budget of $5.07 billion increases spending by a modest 1.7% over last year’s budget.

There were, however, many bright spots. Some of the best news:

Education: The Council was able to supplement the Executive’s recommended education funding by adding $2 million for technology investments in MCPS and $7.9 million to reduce tuition increases at Montgomery College. Overall, MCPS received $31.9 million over last year’s budget, to support higher enrollment. Unfortunately, Governor Hogan has withheld $17 million in budgeted state education funding for MCPS, so MCPS still faces difficult choices this year.

Clean elections: The Council added $1 million as a down payment on the small donor matching system we established in law last year. Candidates for Council and Executive who refuse large contributions will be eligible for small donor matches for the first time in the 2018 election; we are projected to need $8 million in public matching funds for that election.

I am especially pleased and humbled that the final budget included funds for a number of my initiatives:

Child Care: The Council added funds to implement the recently passed Bill 13-15, including provisions I authoredcreate a new Child Care and Early Education Officer and to develop a Child Care Strategic Plan. We also added over $500,000 for additional child care subsidies for low income families.

Transportation: The Council added funding I championed to improve pedestrian and bike infrastructure (BiPPA’s), add five new RideOn buses to expand service, and improve sidewalk snow removal.

Fighting poverty: The budget increases our Earned Income Tax Credit, as required by Bill 8-13, which I introduced to restore the EITC after it was cut during the Great Recession. Montgomery County is the only County in the nation to offer an EITC match, which has been widely recognized as one of the most effective anti-poverty tools.

Other initiatives I championed, within a responsible budget framework:

I hope these initiatives give you a clearer sense of my work to meet our ever changing community needs.

On the question of taxes, county taxes as a share of personal income are virtually unchanged from last year. In order to keep property tax collections under the charter limit, property tax rates will be slightly reduced. As a result, for the two-thirds of property owners who do not have a revision in their assessed value this year, property tax bills will decline slightly. The average tax burden in real terms will be lower this year than in 6 of the last 9 years, and it is considerably lower than it was in 2007, 2008 or 2009.

Finally, as you may have heard, the U.S. Supreme Court has ruled against the county on an issue relating to our income tax collections. The issue, which affects those who earn income outside of Maryland, will reduce county revenue by more than $50 million next year. Significant budget challenges are ahead of us.

As always, I welcome hearing from you.

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Boosting economic growth in Montgomery County

I wanted to share an article about economic growth in Montgomery County that ran recently in the Examiner. It includes this quote by me:

Riemer warned his fellow lawmakers that the county’s tax base may be eroding. With that huge regional imbalance in job growth … we’re traveling further to job centers, so our residents who have choices will move closer to jobs elsewhere. The ones who have choices have higher incomes.

I am concerned about our rate of job growth in the county for many reasons. For example, we need to expand our commercial tax base in order to fund our government services and keep our general tax burden from rising.

The council recently passed legislation that Roger Berliner and I proposed, which would require the county to draft an Economic Development Strategic Plan that contains measurable goals on job creation, target industries and geographic areas, workforce education and training, growth in tax base and other factors. This plan must be approved by the County Council. All business incentives proposed by the Executive must be consistent with this plan. The County Council passed our bill unanimously.

My hope for this legislation is that it will result in a better strategic plan for economic development with stronger support for that plan from county leadership. A key goal is to provide a vehicle for the county’s leadership in the private and public sector to come together around a shared vision for how we move forward.

For Montgomery County to improve its competitive position, I believe we must do a better job engaging the private sector in our economic development work.

These kinds of planning exercises can work to build consensus about the problem and a solution agenda. The International Economic Development Council provides many examples of how local governments have improved their outcomes through smart planning.

I will continue keeping you updated about my work on these important issues and I welcome any feedback that you may have.

Regards,

Hans Riemer
Councilmember, At-Large

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Daily Journal (Silver Spring Transit Center, County Debt Limit, Small Business)

Today’s T&E committee started with a briefing on a new agreement to govern the Blue Plains Waste Water treatment facility, where most of our sewage is treated.

Then we moved on to discuss the terrible news about problems with the construction at the Silver Spring Transit Center. We do not know yet how this will be resolved but there will be a long delay in opening the transit center. How long? Long. We don’t know.

Then the full council met to discuss legislation that is pending in Annapolis. No real news there but we are working closely with our delegation to protect the county from a proposal to change who is responsible for funding teacher pensions. The state has been responsible for that for 85 years but has managed the pension badly and now wants to foist the pension deficit onto county governments. Montgomery County would be responsible for paying over $40 million in state pension funding in just the first year alone, and according to the state projections these costs are expected to increase about 10% per year.

In the afternoon, at a joint meeting of the GO committee with the Planning, Housing and Economic Development Committee we discussed concerns about small businesses and redevelopment. I was pleased to hear that the County Executive is depositing $2 million into the revolving small business loan program; I requested that the council discuss policy objectives for how those loans would be made. Can we fund clean-tech startups? Child care companies? Can we target the loans to problems we want to address, such as unemployment in the Hispanic community?

I was also pleased to learn that the County Executive is exploring partnerships with community banks to make loans, perhaps helping close deals on certain loans that the banks would not be able to fully finance themselves.

These are promising developments—we can and must do better to grow our own job creator right here in Montgomery County.

The day continued with a final committee meeting to set our assumptions for the capital budget. We set our annual borrowing for that budget at $295 million and addressed some technical issues that will likely result in reducing the funds available for the $4 billion capital budget by another few tens of millions.

To polish off the day, or evening, I met with a group of activists in the Chevy Chase area that calls itself the “District 1 caucus.” Included among them was former Councilmember Scot Fosler. We had an interesting conversation about the nature of the County Executive position. Did you know that Fairfax County does not have an elected County Executive? They have a county manager type position. It was a treat to meet Scot; last Friday I met Bill Scher, also a former council member.

Which reminds me that today I got a call from former Governor Parris Glendening, who is inviting me to join a select group of local officials from around the country in a program hosted by Smart Growth America, the non-profit policy organization that he founded. I was thrilled to get the Governor’s call and I’m looking forward to getting involved with this effort to support and build smart growth champions around the country.

Meanwhile tomorrow at full council session I am introducing a new bill that I drafted on big box retailing issues and considering recommendations I want to make for our county cable plan operations. And tomorrow our T&E committee will return, and possibly conclude, the issue of take home vehicles for county employees that I have been working on for some time.

Lots going on!


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Daily Journal (Capital Budget or CIP)

Today we received the county executive’s proposed capital budget (called the CIP). This is a six year, $4 billion budget used for investments in new school buildings, county buildings, transit projects, roads, technology, and so forth—expenses that are not operating expenses (like compensation) but rather assets that we build.

The County Council will review the exec’s proposal intensively for the next two months or so and then final passage will be at the same time as the operating budget, in May.

Needless to say, my office, as well as activists and organizations around the county, are pouring through the details and assessing how various projects have fared. I’ll be commenting on these issues a lot in the coming weeks as we work through the details. This is also my first CIP, as the budget is on a two-year cycle.

One of the undercurrents of debate on this issue is the amount that the county borrows in order to fund the capital budget. I have been on the record saying that while I believe over the long term our borrowing will need to come down as our debt service costs are very high, this is not the year to start cutting back on construction spending. For example, MCPS has stated that school construction prices have dropped from more than $280 per square foot to $217. We should be taking advantage of that opportunity.

What the country and our county needs is for government at every level, Federal, state and local, to work together to boost economic activity. These projects create jobs right here in Montgomery County and of course they also create first-rate classrooms, greater mobility through enhanced transportation, stronger communities, and a better place to live.

Governor O’Malley has called for more capital spending at the state level, arguing that these projects will create jobs as well as improve the state’s economic position.

The county needs to pull its weight as well.