Schoolyard fight brewing over furloughs in Montgomery County

ROCKVILLE, Md. - Will there be an education armageddon in Montgomery County if schools have to accept furloughs? Maybe not, but there could be a lawsuit. School Superintendent Dr. Jerry Weast says he's balking over furloughs because of the impact it would have on the education process.

"My major concern is the children."

But Councilmember Phil Andrews doesn't buy it. "It's not about the kids -- it's about protecting staff."

Weast says it's about a number of things. He insists that furlough days would hit teacher preparation and school operations. "We only have seven non-instructional days," Weast says. "You take five {days} away from our teachers -- you're going to have a lot of big glitches."

And Weast says the county's spending plan is below a state funding formula. If that's the case, it would be the second year in a row the school system risked a multi-million dollar fine. This time the fine could be as much as $51 million.

"If the school system did something to cause the county to have to pay a $51 million fine, I suspect there would be a lot of hullabaloo over that."

Weast says the schools are already losing roughly 400 positions, taking on 2,800 more students and have agreed to a budget cut of $137 million from the school system's request. Any more cuts this late would do what he calls "irreparable harm."

County Council President Nancy Floreen says taking furloughs is about fundamental fairness. "I'm taking a furlough, my staff is taking a furlough, bus drivers are being furloughed, the people who give shots to the children in the schools are going to be furloughed. We are in this together." Floreen also takes issue with the school system's take on state law regarding school funding. "They're wrong on their law. I don't think this is the time to talk about law, I think it's time to talk about service."

Weast says he's talking about the same thing.

"We're all trying to do the best we can. I just don't want to show up in the fall and not be able to deliver to the children what we promised them we'd deliver." SOURCE: WTOP

Trachtenberg Office Annual Retreat

The Trachtenberg Office held its annual Retreat on May 1, 2010. From left to right, Alan Bowser, Pat Salomon, Naomi Bloch, Saschane Stephenson, Duchy Trachtenberg, Wil Gutierrez, Laurie Edberg, and Emily Hoopes.

Montgomery County Council will furlough all agencies, also freezing pay

In actions reflecting the County’s severe fiscal situation, the Montgomery County Council today unanimously indicated its intent to freeze all employee pay in the coming fiscal year, FY11. The Council also unanimously adopted resolutions indicating its intent to reject all provisions in the collective bargaining agreements with County unions that have a fiscal impact on the County. These actions signal the Council’s determination to maintain the County’s AAA bond rating while preserving essential services during the worst fiscal crisis in the County’s history. The Council also unanimously indicated its intent to enact Expedited Bill 16-10, which would eliminate the continuation of the imputed pension adjustment beyond the current fiscal year, saving taxpayers an estimated $7 million a year. With respect to employee furloughs, the Council unanimously supported the principle of equitable treatment of all employees of all agencies serving County residents and directed its staff to provide a range of furlough options for review.

In indicating its intent to freeze employee pay, the Council concluded that in view of pending employee layoffs and furloughs, pay increases cannot be justified. In addition, the Council indicated its intent to support the Executive’s removal of funding for tuition assistance in FY11.

The Council also indicated its intent to enact Expedited Bill 16-10, which eliminates the continuation of an imputed pension adjustment beyond the current fiscal year, FY10. The imputed pension adjustment refers to basing the calculation of an employee’s future pension benefit, for the rest of the employee’s career, on a bargained FY10 general wage adjustment that was not funded. Enactment of the bill would save $7 million per year starting in FY11. The Council staff has begun work on a hard look at the structural deficit that the County faces, and the harder decisions the County must face to balance the budget in the future. (See http://www.montgomerycountymd.gov/content/council/pdf/SCANNED_DOCS/042910.pdf.)

Nancy Floreen: "This Council is facing very difficult decisions affecting thousands of lives," said. "The unforeseen 20 percent drop in income tax revenue and other revenue shortfalls are causing us to face curtailing or eliminating key services, laying off more than 400 employees, furloughing thousands more, and doubling the County energy tax. This is very painful for us all. These unprecedented fiscal facts mirror the pain that the County residents have felt in this recession. We would like to support bargained pay increases, but we agree with the Executive that under these severe conditions, that is simply not possible. We will come through this as a team, with everyone sharing the burden. . . . Furloughs and tax increases cannot be an annual event," Council President Floreen said. “We are prepared to face the future – now. I have spent my entire adult life advocating for working families and for access to quality public education,” said Council Vice President Valerie Ervin. “However, during this extremely challenging fiscal climate the Council has had to make some tough choices on behalf of the county taxpayers for the long term fiscal health of the county. The Council has come together in our commitment to serve our most vulnerable residents, to preserve our long-standing credit rating, and to seek long-term fiscal viability.”

Phil Andrews: “The Council’s support for Bill 16-10, which would eliminate the use of canceled cost-of-living-adjustments in calculating pensions, will save taxpayers $7 million next year, more than $200 million overall, and signal to the rating agencies that the Council is committed to addressing unsustainable pension costs."

Roger Berliner: “My colleagues and I are staunch supporters of our Montgomery County Public Schools. We have demonstrated that support year after year by approving 99 percent or more of the Board of Education’s budget and exceeding State Maintenance of Effort (MOE) requirements. We are now faced with unprecedented fiscal challenges. We cannot meet these challenges equitably and without imposing a devastating tax burden on homeowners, renters, and businesses unless the school system accepts further cuts to its FY11 operating budget. By willingly instituting furlough days for its employees, like all other County agencies have agreed to do, the school system can avoid further impacts to the classroom which would directly affect our students. The weeks ahead will be filled with many difficult decisions and I hope that we will be able to work collaboratively with our colleagues at MCPS to reach a mutually agreeable solution to the current fiscal crisis."

Marc Elrich: “Any solution has to fall on employees equitably. Every worker is valued and every worker does a valuable job. Every employee deserves to be treated fairly. I hope the Council will adapt a progressive solution that will impact those who make the least the least and those who make the most the most. I recognize the impact of lost days of work to a $40,000 per year employee is significantly different than a $100,000 employee. I regret that the New York bonding agencies seem to indicate that we need to replenish our reserves to a full 6 percent all in one year at a time when we have had an unprecedented decline in revenue. We are laying off almost 240 employees and abolishing another 500 positions. We are cutting programs far beyond what we believe we should, not because we have found waste but because we do not have the money. We must balance the budget. Years of spending without regard for sustainability coupled with a global economic meltdown got us into this situation. Since 2006, a new County Executive working with this Council has steadily decreased the growth in the spending. This year we will actually spend less than we did last year. Going forward, we must insure that spending is sustainable over the short and long term."

George Leventhal: "None of us is happy about the choices we are forced to make as a result of the precipitous drop in county revenues. We all look forward to the day our economy recovers. Making wise decisions now will enable Montgomery County to emerge from these budgetary challenges stronger and more prosperous in the future. The County Council appreciates the excellent service provided to our residents by the county's superb employees and we regret the necessity of sharing these sacrifices. Elected officials will reduce our own pay by whatever amount is finally arrived at for all county employees."

Nancy Navarro: “My colleagues and I value our employees’ dedication and hard work, especially while they are being asked to do more with less during these difficult times. Unfortunately, this unprecedented fiscal crisis forces us to look for new revenue sources and make extremely painful cuts. While these are not easy or popular decisions, it is our responsibility to preserve the current and future stability of Montgomery County.”

Duchy Trachtenberg: “I believe that we must be fair and measured in the difficult budget decisions that we will make. We would do well to remember that our County budget is a moral document - one that reflects our inter-connections as a community. It is important to note that the budget provides all of our neighbors benefit in some way, from the full range of public sources and resources we strive to maintain.” SOURCE: Montgomery County press release

Montgomery County Public Schools begin lawsuit to sue Montgomery County government

Montgomery County Public Schools begin lawsuit process to sue Montgomery County government. Montgomery Schools Draft Suit

Isiah Leggett and Nancy Floreen push furloughs for all County employees

FLASH: Montgomery County Considers Furloughs, with Nancy Floreen saying "everything is on the table." Energy tax is likely, along with mandatory time off, cutting services, and much more! County Council expects to furlough all employees, like police, park and planning, fire fighters, and the board of education.

SOURCE: News Channel 8

Vovak offers Knapp job of Mont. County Chief Admin. Officer

ROCKVILLE, MARYLAND - Last night at the Democrat Spring Ball, Daniel "The Whig Man" Vovak, a Bethesda Republican, offered the job of Montgomery County Chief Administrative Officer (CAO) to Councilman Mike Knapp (D-2 Upcounty). Should Vovak be elected as County Executive, the county charter allows him to appoint the job to a qualified person.

"Republicans need to work with Democrats, not against them," says Vovak. "Connie Morella set the example for electable Republicans in Montgomery County, and I will follow that example. Although Knapp has outgrown his job as a district councilman, with the new job as chief administrative officer, he will have the authority to implement many fiscal changes that he wants to do, but currently is overruled in doing."

Vovak approached Knapp when he was in an intense discussion with Delegate Brian Feldman (D-15). Feldman was openly asking riveting questions about Knapp's future, which includes a possible primary challenge to County Executive Isiah Leggett. Knapp's decision is the last major puzzle piece needed for Montgomery County elections. Knapp has four options: 1) Enter the private sector, 2) Face Leggett in a contentious primary for county executive, 3) Run for re-election in District 2, or 4) Accept Vovak's offer as chief administrative officer.

Knapp, a Blue-Dog Democrat, already faces Sharon Dooley in a primary. Should Knapp withdraw from the contest, he has indicated he will endorse Delegate Craig Rice (D-15 Germantown) for his current job. The winner will face Robin Ficker, a Republican running for Councilman in District 2. The top-paid job in Montgomery County at $266,000 per year, the CAO reports to the county executive, supervising all departments and offices of the executive branch and also advising the county executive on administrative matters. In addition, the CAO coordinates management review and decision-making on policies, programs, plans, budgets, legislation, regulations, and similar matters.


"Although I hold no resentment again Tim Firestine [the current CAO], I will stop Council's current spending binge," says Vovak. "Every elected official in Montgomery County is a Democrat, which is a monopoly killing our county fiscally. Leggett and Firestine have watched our county government have a $1 billion gap, which is an abomination. I don't know if Mike [Knapp] will accept my offer, but I would love to have him on my team, changing county government" says Vovak.

Councilman Mike Knapp's budget proposal

While the economy may indeed be recovering, it sure doesn’t feel that way for most of our county residents or government. Jurisdictions across the country are facing staggering budget shortfalls—and Montgomery County is no exception. As a result of declining revenue, the County is looking at a budget deficit as high as $600 million. Montgomery County has never seen a shortfall of this magnitude, even during the rough 1992 recession. Consequently, we’re already implementing a second set of mid-year reductions to County services. Next year looks even worse. We can solve our problems, as difficult as they are, if we’re willing to do things differently.

As we begin working on next year’s budget, I’m reminded of Albert Einstein’s admonition that you can’t keep doing the same thing over and over again and expect a different result. With that in mind, we can’t possibly address such an unprecedented fiscal crisis by traveling the same course and expect to solve our problem. For this reason, I’m proposing to do something we’ve never done before: work in the same room—from the beginning—on the budget.

The current process doesn’t encourage such cooperation. The County Charter says the County Executive submits a budget to the Council based on his own numbers, assumptions and priorities. The Council then crafts a budget reflecting its numbers, assumptions and priorities. Essentially, you’re working with two different budgets. In ordinary times, this convoluted approach works well enough to assemble a fairly reasonable budget, though historically it results in spending more money than the previous year. But these are not ordinary times—we actually have to reduce spending.

We must do all we can to minimize the damage severe reductions will have on vital services. You can’t simply ask every department or agency head to cut 10 or 15 percent from their individual budgets and expect things to work. Under my recommendation, we would all work together to develop a budget. The County Council, County Executive, Board of Education, the Superintendent of Schools, employee and union representatives, and the heads of our various government departments should sit down in the same room to first determine the magnitude of the problem we’re trying to solve. Once we all know, and agree on, the actual deficit, we can work to figure out how to close it. Only then we can have an honest conversation about spending priorities, including which programs and services might be reduced or eliminated.

This isn’t a gimmick, and it’s not an opportunity to score political points—we will be working together to make the “least bad” choices, which still won’t be popular. It is an opportunity to first tackle an enormous math problem and it then offers a chance to discuss real policy—and people—implications of shaping the equation. And for the first time, we won’t be working from two different budgets, but from the same one—a novel, but practical, approach. By working together, across government, we ensure that all of government is represented and that all stakeholders are contributing to understanding and solving our budget problems. In the end, the budget should not be something that’s done to any particular agency. Instead, it’s done with our agencies, to protect vital services, fund what is essential, and provide, to the extent possible, the services that residents need the most.

During difficult times we all say we can solve problems by working together. This year let’s not just say it. Let’s all get in the same room and do it. SOURCE: Mike Knapp

Trachtenberg: School system must furlough workers or face cuts

Montgomery County Public Schools officials must furlough employees or risk having their budget cut by the County Council, Councilwoman Duchy Trachtenberg said Thursday. Currently, the school system is the only county agency to spurn furloughs for its employees; however, its employees make up about two-thirds of all county workers. If MCPS furloughed all its employees for five days, it would save $33.7 million, according to data from council Staff Director Stephen B. Farber.

The school system's budget is $2.2 billion in fiscal 2010. "MCPS doesn't really want to play," said Trachtenberg (D-At-large) of North Bethesda. "We can't force the school system to apply a furlough plan. Obviously, we can reduce what we give to them in the way of funding, hoping they'll use furloughs as a way to realize savings."

The furlough issue was discussed Thursday at a meeting of the council's Management and Fiscal Policy Committee, which Trachtenberg chairs. Under Montgomery County Executive Isiah Leggett's proposed $4.3 billion budget, most county employees face 10 days of furloughs — saving $15 million. If all county employees were included, the same amount could be saved in 1.5 days. Montgomery County Public Schools officials must furlough employees or risk having their budget cut by the County Council, Councilwoman Duchy Trachtenberg said Thursday. Currently, the school system is the only county agency to spurn furloughs for its employees; however, its employees make up about two-thirds of all county workers.

If MCPS furloughed all its employees for five days, it would save $33.7 million, according to data from council Staff Director Stephen B. Farber.

The school system's budget is $2.2 billion in fiscal 2010.

"MCPS doesn't really want to play," said Trachtenberg (D-At-large) of North Bethesda. "We can't force the school system to apply a furlough plan. Obviously, we can reduce what we give to them in the way of funding, hoping they'll use furloughs as a way to realize savings."

The furlough issue was discussed Thursday at a meeting of the council's Management and Fiscal Policy Committee, which Trachtenberg chairs. Under Montgomery County Executive Isiah Leggett's proposed $4.3 billion budget, most county employees face 10 days of furloughs — saving $15 million.If all county employees were included, the same amount could be saved in 1.5 days.

Both Montgomery College and the Maryland-National Capital Park and Planning Commission are developing furlough plans, Trachtenberg said. The council is considering alternative furlough plans, including those that would require unpaid leave for school system employees. However, the decision to furlough MCPS employees is up to the county school board, which has resisted the idea. SOURCE: Gazette

Montgomery committee pushes for end to "phantom" COLAs, takes action on furloughs and salaries

Montgomery County's management and fiscal policy committee unanimously endorsed a bill Thursday that would end unusual employee benefits known as "phantom" cost of living increases. In the arrangement, which was put in place last year, the county pays retirement benefits for thousands of employees based on raises they did not receive. Ending the practice would save the county more than $7 million in the next fiscal year, and county officials said they believe Thursday's committee vote was another sign that the full council is moving toward passage of the bill next month. It was proposed by council member Phil Andrews (D).

Committee members Valerie Ervin (D), Nancy Navarro (D) and Duchy Trachtenberg (D) also endorsed a series of other budget steps that reflect the county's worsening fiscal picture. The committee supported a proposal in County Executive Isiah Leggett's budget not to fund a series of pay increases that are in contracts for public employees. The council has the power to decide whether to fund such contracts.

It also endorsed the principle of "equitable treatment" for county agencies, including the public schools, on the issue of furloughs. Schools officials oppose furloughs, but other officials say without the schools' participation, too much pain would be felt elsewhere. The full council is set to make many of its key decisions on the $4.3 billion budget proposal in three weeks, with a final vote May 27. SOURCE: Washington Post

Vovak campaigns for Montgomery County to legalize marijuana

According to The Daily Caller, Montgomery County, Maryland is ranked as the second most liberal county in America; however, if a 38-year-old Republican is elected as County Executive, it will probably surpass San Francisco for the top notch. Daniel "The Whig Man" Vovak, of Bethesda, will run for Montgomery County Executive against Isaiah Leggett, 66, a Democrat in his first controversial term. Vovak, a ghostwriter and screenplay writer, says he wants to legalize marijuana and grow it on county farms and gardens. It's the latest idea proposed to help the county close a $1 billion budget gap in one of America's richest counties, where not a single elected Republican lives.

Public officials are promoting many options to raise revenue, most which involve tax increases and worker furloughs. Leggett (D) has proposed an alcohol tax, more than doubling the energy tax, raising cell phone rates by another dollar a month, an EMS fee, and increasing the gas tax. Confronting that logic, MCGEO President Gino Renne has said Leggett has an "obvious lack of vision." Meanwhile, Montgomery County Planning Chairman Royce Hanson believes Leggett is proposing "bad public policy and management" when trying to consolidate the county's police department with park police, under the bogus claim of saving $2 million a year. Additionally, Councilman Roger Berliner has proposed a carbon tax that will raise millions from only one factory: Mirant. Ironically, Council President Nancy Floreen has not recommended any major tax increases or cuts.

Vovak says, "If Councilman Knapp (D-Germantown) believes Montgomery County will make $2 million a year by opening liquor stores on Sundays, imagine what can be charged for user fees for growing marijuana and reselling it. I am approaching this idea purely because it is a county money-maker, though, as I have no intention of using marijuana after it becomes legal. For the record, I've never used marijuana or any illegal drug and only have used prescription drugs for brief illnesses. In fact, I've never even smoked a cigarette, though I do smoke an occasional cigar or tobacco pipe."

The marijuana topic is currently on the minds of elected officials throughout the country. In April, Maryland Senate Bill 627 to legalize medical marijuana passed in committee, making it the fifteenth State to do so. In Washington, D.C., medical marijuana use was supported with a unanimous vote by the city council just a week ago. In Philadelphia this month, officials made major steps to decriminalize marijuana, believing prosecuting it is a waste of time for policemen and courts. In November, California state-wide voters will decide if recreational marijuana should be legal. Moreover, on April 20, tens of thousands of Americans openly smoked marijuana in public parks.

Vovak says, "It is inevitable that many jurisdictions within the United States will legalize marijuana. If our county is ahead of the curve on legalization, then we will also be ahead of the financial curve on making a profit for our county government. I want the headquarters of America's largest marijuana businesses to be in Montgomery County, Maryland, like the equivalent of Phillip Morris and R. J. Reynolds. New county funding sources will come from selling permits to marijuana farmers then taxing county-authorized resellers and establishing a national distribution chain."

Vovak added, "In 1992, when then-Governor Bill Clinton declared he experimented with marijuana, it ended a taboo for candidates. Nearly two decades later, I'm proposing this idea because Montgomery County's Republicans and Democrats are educated enough to know legalizing marijuana is smart fiscal politics, especially when our county is a billion in debt and furloughing 6,000 county workers for two-week intervals."

Vovak is open to voter commentary, believing marijuana should be regulated under the Department of Liquor Control and parents should self-impose marijuana rules for their children. An avid gardener, Vovak says he will require a permit for growing marijuana for household use and an expensive permit for resale use. To build state-wide agricultural support, Vovak says he will contact the highest ranking elected official in each county and begin a task force to grow marijuana as a legal herb in Maryland.

Maryland's nickname, the "Free State," was created by Hamilton Owens, editor of the Baltimore Sun. In 1923, Congressman William Upshaw, a Prohibition supporter, denounced Maryland as a traitor to the Union for its defiant -- and continued -- support of alcohol. Owens wrote an editorial entitled "The Maryland Free State," arguing it was worthy of Maryland to secede from the Union rather than prohibit the sale of liquor. Vovak believes Maryland's historic national leadership for encouraging alcohol sales proves the State's population is full of national leaders -- rather than followers -- on new ideas.

"What are Leggett and Council's stances on marijuana?" asks Vovak.

Contact Vovak at 202-367-4835, DanielVovak@gmail.com or campaign website: BuildMontgomery.com.

Nancy Floreen wants to increase residents' share of new energy tax

Montgomery County Executive Ike Leggett is banking on an energy tax hike to help compensate for a $168 million decrease in income tax revenues, part of a much larger $1 billion budget gap. Leggett wants to double the energy taxes, a plan that would cost some of the area’s larger businesses — think coveted biotechnology firms — hundreds of thousands of dollars more a year. (The move is not unprecedented in trying budget times. Baltimore City Mayor Stephanie Rawlings-Blake also wants to increase energy taxes, but her proposal would cost residential customers an additional 60 cents a month).

Under Leggett’s plan, the county would bring in about $192 million in fiscal 2011 from the energy tax to businesses, a lot more than the $88.6 million Washington said Pepco collects in distribution rates from Montgomery County businesses each year. The rate is far from set. Now Council President Nancy Floreen is saying that the council could tinker with the formula, spreading more cost from businesses to residents.

The way it sits now, Montgomery’s energy tax falls mostly on the shoulders of businesses, which pay about 2.65 percent more than residential customers. Business customers pay 1.3843 cents per kilowatt of electricity and 11.9214 cents per therm of heating fuel a year, compared to residential customers, who pay a little more than half a cent per kilowatt of electricity and a little less than half a cent per therm of heating fuel.

Leggett had initially planned on seeking a 40 percent energy tax increase, and then bumped it up to 63.7 percent before deciding to ask the County Council to approve doubling the tax. Residents, businesses and the county’s largest power distributor, Pepco, testified against the requested 63.7 percent increase in a hearing last week. Under that plan, the average residential customer would see an increase in energy tax payments to $161, up from $99 a year; businesses would on average pay $4,157 a year, compared to the $2,618 they pay now. If Leggett gets to double rates, residents would pay $198 a year and businesses would pay $5,236.

According to Maryland Politics Watch, Pepco representative Charles Washington testified applying the 63.7 percent rate hike to the bills of some customers: As demonstrated below using actual randomly selected commercial accounts, this increase will have a real impact on County businesses. One restaurant in Silver Spring will see an increase of over $3,000 a year. A hotel in Bethesda will see a tax increase of approximately $41,000 a year. The County’s successful Biotech companies will see increases of hundreds of thousands of dollars of year, with at least one projected to see an increase of over half a million dollars. SOURCE: Maryland Daily Record

Are Sunday booze sales coming to Montgomery County?

Montgomery County residents looking to get their hands on the hard stuff no longer would have to head for the county line on Sundays under a proposal from one County Councilmember. Councilman Mike Knapp, D-Germantown, said the county can make an additional $1.5 million to $2 million a year by opening its liquor stores on Sundays. That is extra money the cash-strapped county, which has a budget hole of nearly $1 billion, can't afford to overlook, Knapp said.

"That's not taxing anybody ... it's just providing access to a product people already want to purchase on Sundays as opposed to not having it available on Sundays," Knapp said. "That seems to be pretty much a no-brainer."

Proponents said the money raised may be small compared with the county's budget hole, but it's an easy way to raise revenue that shouldn't be overlooked -- especially in light of County Executive Ike Leggett's proposal to double the county's energy tax to raise $100 million.

"Every little bit helps," said Council President Nancy Floreen, D-At Large. Alcohol sales are tightly controlled in the county. Spirits such as tequila, whiskey and vodka can be bought only at county-owned liquor stores. The county also acts as a wholesaler and distributor to restaurants and private stores that sell beer and wine. The Department of Liquor Control has made more than $200 million for the county in the last 10 years. Leggett said he's open to the idea of opening liquor stores on Sundays, but showed little enthusiasm for a similar proposal two years ago. The problem, said Leggett's spokesman Patrick Lacefield, is that it's not clear whether the "juice is worth the squeeze."

Lacefield said the profits could turn out to be lower than $1 million a year through Sunday sales because customers may be accustomed to buying spirits on other days of the week. And the increased competition might hurt privately owned beer and wine stores and restaurants, Lacefield said. The Rev. Wade Martin, senior pastor at Montgomery United Methodist Church, said Sundays are meant to be days focused on one's faith and families, not for drinking.

"Alcohol can take us away from the intent of what Sundays are all about," Wade said. Wade's church is in Damascus, a dry jurisdiction in Montgomery County where the sale of alcoholic beverages is prohibited -- a prohibition that has survived numerous referendums. SOURCE: Washington Examiner

Hundreds of MontCo workers bring in six figures

Montgomery's top managers make more than those in Fairfax. The top brass in Montgomery and Fairfax counties are raking in big bucks.

In Montgomery, nearly 1,200 employees make more than $100,000 when overtime is included in their pay, according to fiscal 2009 data obtained by the Washington Examiner. Fairfax would not release its overtime pay, but still has nearly 800 employees bringing in salaries of more than $100k a year. The high salaries for so many public workers is "out of balance" with what private companies pay, said Dee Hodges, chairwoman of the Maryland Taxpayers Association. Hodges said the traditional trade-off of public-sector employees forgoing higher wages for more job security is long gone.

"Now they have both the job security and more money," Hodges said.

Still, leaders in Montgomery are making bank compared with their counterparts in Fairfax. Department heads in Montgomery are paid upward of $40,000 a year more than their colleagues across the Potomac, raising questions from taxpayer advocates and union officials about whether the high pay is appropriate given Montgomery's dire fiscal situation. Montgomery is facing nearly a $1 billion gap, and has been warned that it may lose its AAA bond rating. In response, County Executive Ike Leggett has proposed doubling the county's energy tax, raising taxes on cell phones and slashing county services. SOURCE: Washington Examiner

Montgomery Co. looks to curtail budget woes

ROCKVILLE, Md. -- It wasn't news to anyone in Montgomery County government that there was a big budget problem. The county's been wrestling with hundreds of millions of dollars in shortfalls all year. But this month, the county got hit with a surprise shortfall of $168 million that quickly ballooned to nearly $200 million. How did that happen? Council member Mark Elrich offered a short and sweet explanation during a meeting with County Executive Isiah Leggett.

"I think it's important for people to realize that essentially, you change the numbers when the check comes in from the state, and it's not what the state told you the check was going to be," Elrich said.

That's a result of state income tax revenues that have dropped all year long. Leggett said no one could have predicted just how big a bite the revenue shortfalls would take out of the county's budget.

"Had I walked over here (before the council) a few months ago, and said to you, 'I wanted to cut the budget across the line,' you'd have said 'What are you smoking?'"

So what was the solution? Leggett suggests the county "liquidate encumbrances" and in very simple terms, it means taking a look at county contracts and cutting where possible. He thinks the county can save up to $35 million that way. SOURCE: WTOP

Leggett urges council to double cell phone tax & energy tax

Montgomery County Executive Ike Leggett proposed doubling energy taxes and raising cell phone taxes by more than 50 percent to help close the county's newly discovered$168 million budget hole. Leggett argued for the tax increases and a number of other quick budget fixes on Thursday, two weeks before the County Council is scheduled to submit a final fiscal 2011 budget that closes a nearly $1 billion budget gap. "You get to the point of diminishing return, where you have to decide whether it's worth further reductions to services," Leggett said. "We need to shift a little bit of this money ... across the board." The county executive also suggested reducing the earned income tax credit by 33 percent, which would slash average annual credits from $530 to $353. SOURCE: Washington Examiner

Berliner proposes carbon tax on major emitters

As drops in buckets go, this is very small drop in a very big bucket. Just in time for Earth Day, Montgomery County Council member and longtime energy lawyer Roger Berliner (D-Potomac-Bethesda) is proposing an excise tax on major carbon emitters in the county. He said his goal is to spur faster action to address global warming. And if he can raise millions of dollars a year with the carbon tax, he said, that will be another welcome byproduct. The proposal would put a $5 tax on each ton of carbon dioxide sent skyward by "major emitters." In Montgomery, that means one facility: the 843-megawatt Dickerson generating plant that Mirant runs near Poolesville.

That facility accounts for about 2.33 million tons of carbon dioxide yearly. The nation's annual greenhouse gas tally has hit about 7 billion tons in recent years. Mirant officials appear ready for a fight. The firm generates power across Maryland, in Alexandria, in California and beyond. Asked whether company executives are prepared to pay the tax, a Mirant spokeswoman said simply: "No."

Berliner said that the tax would help county coffers in a time of serious fiscal challenges and that Pepco officials told him that the tax would have no discernable impact on rates. The county is paying to reduce its emissions, and the biggest emitters should pitch in, he said. "We are spending, and will be spending, millions of dollars on carbon-reducing programs," Berliner said. SOURCE: Washington Post

Some county employees to be offered $35,000 to retire early

Some Montgomery County government employees will be offered $35,000 to retire early — a plan that officials say will save the county money if those positions are not refilled within three years. Just how much is not yet known because it is still unclear how many employees would take advantage of such a program. However, a document presented by the Office of Legislative Oversight on Monday shows that the proposal would save the county money — correcting an objection to last year's proposal, which OLO found would have cost the county money over time.

County Executive Isiah Leggett (D) proposed the retirement incentive to help reduce the need for layoffs in his fiscal 2011 budget proposal. He is calling for as many as 232 layoffs. During a council committee meeting Monday, council Vice President Valerie Ervin (D-Dist. 5) of Silver Spring asked what would be done to ensure that employees were not rehired within three years — a move that would negate budget savings. SOURCE: Gazette

What recession? Leggett approves pay increase for helicopter staff

Montgomery County Executive Ike Leggett has approved a raise for police officers who serve on a proposed helicopter unit, a move that signals Leggett's continued interest in a program the County Council says is too expensive. Leggett approved paying pilots an additional $3,500 a year, and observers $1,500 per year as part of a labor agreement with the Fraternal Order of Police union. The extra pay, which would total about $10,000 a year, would be paid only if the proposed helicopter unit gets off the ground, county staff said. Leggett's spokesman, Patrick Lacefield, said a lack of support for the program from the County Council and current budget problems -- the county is facing a budget gap of nearly $1 billion -- have stalled the program, but only temporarily. SOURCE: Washington Examiner

After diving into almost $1 billion of debt, Leggett makes some cuts

Montgomery County Executive Isiah Leggett today announced his recommended $4.3 billion operating budget that closes a $779 million gap for fiscal year (FY) 2011 that begins July 1. Leggett’s budget focuses on protecting essential services and his priorities of education, public safety and the safety net for the most vulnerable, but includes significant reductions in services and staffing levels. Leggett’s hard choices resulted from the continued severity of the economic recession; doubling in the local rate of unemployment; declining residential and commercial development; ongoing, sharp declines in tax revenues and state aid; and emergencies such as the H1N1 flu outbreak and snow removal from this winter’s historic blizzards.

“Our region is not immune from the tough economic times in which we live,” said Leggett. “Neither are our families. And, neither is County government. Leadership means making the hard choices now that address our current problems, without resorting to quick fixes. Leadership also means fighting to meet the challenge of putting the County on a future path that is fiscally responsible and sustainable. We need to make the right decisions now if we are to lay the groundwork for our County to come out of this downturn in the best possible position. But let there be no mistake, there is pain in this budget – for our community and for County employees.”

Leggett’s budget brings the County government’s tax-supported growth rate down from a 14.1 percent increase in FY07, the year before he took office, to an historic minus 6.1 percent in the FY11 Recommended Budget compared with the current year. The overall 3.8 percent decrease for all County agencies from all sources represents the only reduction in the annual County budget in modern County history -- since the adoption of the current charter in 1968. In the four budgets Leggett has prepared, he has closed budget gaps of nearly $2 billion to address shortfalls every year – which is unprecedented. The magnitude of the problem is reflected in the County’s income tax revenue annual rate of growth. In FY07, income tax revenue increased by 21 percent. In FY10, it decreased by more than 15 percent.

Leggett’s previous cost reduction efforts preserved direct services as much as possible, but even these services will now be affected with this year’s looming deficit. This budget proposes cutting costs by eliminating 452 government positions, providing no pay increases of any kind for County government workers, furloughing non-public safety County employees for 10-days, realizing cost savings from all County departments, and reducing current revenue funded expenditures in the capital budget. All told, between position abolishments, leaving positions vacant, and reductions in overtime, Leggett’s budget would reduce the County government budget by 750 work-years.

“When I first took office, Montgomery County’s spending was out of control and unsustainable,” said Leggett. “And that was before the economic downturn. It was clear that we had been living beyond our means. Over the last four years, I have worked aggressively to restore fiscal prudence to our County government by dramatically slowing the rate of growth of both the operating and capital budgets. As the economic news has worsened, I have continued to press ahead on long-term cost savings that minimize the future burden on taxpayers.”

The recommended budget keeps faith with Leggett’s commitment to continue to hold the line on property taxes at the Charter limit, including a credit of $693 to lower the burden on homeowners and maintain a more progressive property tax. Under the recommended budget, the property tax rate remains unchanged.

“Past cost reduction efforts have focused on preserving my priorities of public safety, education and the safety net for the most vulnerable,” said Leggett. “Although I reduced the budget by $1.2 billion over the last three years, the size of this year’s budget deficit leaves no alternative now but to include more reductions in County services across all programs. To address our long-term budget challenges, I have reached out to our partners in Montgomery County Public Schools, the Park and Planning Commission, Montgomery College and the Washington Suburban Sanitary Commission. Through 20 focus groups, a cross-agency committee collaboratively created resource-sharing and cost-cutting ideas to structurally improve the County’s budget.”

Among County government departments, the largest reductions from FY10 levels are in the Regional Service Centers and the Office of Human Resources (both 33 percent reductions), the Commission for Women (27 percent), the County Executive’s Office (26 percent), Housing and Community Affairs (24 percent), Transportation (23 percent), and Libraries (22 percent). Among the lowest reductions were Fire and Rescue (2.6 percent less than in FY10), Police (4 percent), Correction and Rehabilitation (4.5 percent), Department of Transportation/Transit Services (6.8 percent), and Health and Human Services (10.6 percent). Under the Recommended Budget, funding for affordable housing through the Housing Initiative Fund, a priority of the County Executive, would be reduced by $10 million as compared to FY10 levels. Noyes Library would be closed, library materials reduced, and overall library hours cut by 8.7 percent.

County recreational facilities, except for pools, would be closed one day each week. Senior mini-trips and outdoor adventure programs would be eliminated. After-school Sports Academies and Recreation Extra programs would be reduced. Eighteen Ride On routes (three weekday, 10 Saturday and five Sunday) would be eliminated and another 16 restructured, saving $2.7 million, and the Call-N-Ride program would be reduced to one coupon book a month. The County Volunteer Center would be reduced and restructured.

In public safety, one Fire and Rescue truck and one ambulance would be taken out of service and the new recruit class will be delayed. Forty Police positions, including 24 sworn officers, would be eliminated, and 16 of the 33 officers stationed in Montgomery County public schools will be cut. Nine of the 40 police positions, all non-sworn, would transfer to the MC311 Call Center. Four satellite police sub-stations would be closed. Thirty-three Corrections positions would be eliminated. The budget includes reductions in the Montgomery Cares program that provides health care to the uninsured, as well as reductions in home care, school health aide hours and payment to disability development providers. Funding for the County’s tuition assistance program would be eliminated. Non-emergency tree maintenance would be curtailed and, except for buses, the County would purchase almost no new vehicles or computers during the coming years. Maintenance in County facilities will be reduced. Pedestrian safety education monies would be drastically curtailed.

“To those who object to these reductions, I have a simple message: I do not like these any more than you do,” said Leggett. “Hard choices must be made, and not just talked about, in this difficult economic and fiscal environment.”

Closing the Gap

“In my first budget as County Executive in FY08, we faced a $200 million budget shortfall, so I reduced the tax-supported rate of increase in spending by the County government from 14.1 percent to 6.9 percent,” said Leggett. “In FY09, the projected shortfall increased to $401 million, so we imposed a hiring freeze, produced mid-year savings of more than $30 million, abolished over 225 positions, implemented a retirement incentive program, and slowed the rate of growth to 1.6 percent. Last year, we faced a daunting gap of $590 million that was closed without a tax increase by reducing costs, abolishing nearly 400 positions and eliminating general wage adjustments for most employees. This year, we face an even more staggering deficit of $779 million that my recommended FY11 budget successfully closes.”

Overall, the recommended budget includes:
• Decreases for Montgomery County government of $76.5 million, a 6.1 percent decrease;
• Reductions of $79.5 million, a 3.9 percent decrease, for Montgomery County Public Schools (MCPS), funding 96 percent of the Board of Education’s request;
• Funding decreases for Montgomery College of $8.3 million, a 3.8 percent decrease; and
• Funding reductions for the Maryland-National Capital Park and Planning Commission of $15.1 million, a 13.5 percent decrease.

As a last resort to avoid further reductions in County services or additional layoffs, Leggett also recommended an increase in the County’s energy tax to raise an additional $50 million. The energy tax is paid by all utility users, including federal facilities in the County that pay no other major County taxes. For the average homeowner, this means an increase of about $3 a month. However, as the tax is based on consumption, the amount of the tax can be lessened through reduced energy use. To minimize the impact of this increase on low-income households, Leggett included additional funding in the County’s Energy Assistance Program

As part of closing the shortfall, Leggett recommended once again reducing tax-supported reserves from six percent of resources to five percent, freeing up approximately $37 million to help balance the FY11 budget and sustain critical services.

“I have found it necessary to recommend budgetary strategies that I have strongly resisted in the past, including temporarily reducing reserves,” said Leggett. “I take this action with the expectation that we will replace the reserves as quickly as possible and return them to the six percent policy level. The choices I have had to make aren’t easy – and some of them aren’t popular. But, we also have an opportunity to strengthen our financial position and take advantage of future opportunities for renewed economic growth and recovery.

“We have to keep in mind that the economy has not yet bottomed out. More state budget cuts may be on the horizon. And, even if the Council approves my recommended budget just as it is, we are already projecting a fifth straight year of budget shortfalls next year of over $200 million.”

Wages and Benefits

“Wages and benefits for County employees represent 80 percent of our budget,” said Leggett. “I am very proud of our workforce – its professionalism, dedication, and work ethic. However, fiscal prudence dictates hard choices in reducing compensation costs. That’s why this budget includes no cost-of-living or service increment increases for any County government employee. I regret that I have to take this action because I know how hard county employees work, how seriously they take their service to the public, and the difficult conditions under which they must provide public services.

“I am also recommending abolishing 452 positions, bringing the total of positions I have abolished to nearly 1,000 over the past three years. Of the 452 positions, 232 of them are currently filled. We will continue the hiring freeze instituted over two years ago. We will implement a 10-day furlough for non-public safety government employees and recommend that the other County funded agencies also adopt this cost reduction strategy. We will introduce a new retirement incentive program targeted at those positions abolished to lessen the impact on affected employees.”

Leggett’s budget also saves $64 million by deferring the scheduled increase in contributions by the County to a multi-year plan to fully fund retiree health benefits.

Setting Priorities

Faced with tough choices for public safety, this budget averts more serious reductions in first response Fire and Rescue Emergency Medical Services (EMS), because it includes instituting an Emergency Medical Services Transport Fee that will provide an estimated $62.2 million over the next four years.

“Without the EMS Fee, there is simply not enough money to meet the demands for fire equipment, additional staff for new stations, volunteer enhancement, recruitment and retention, additional staff for four-person staffing of equipment and compensation, and benefits for firefighters and emergency medical technicians. The EMS Fee will be billed directly to an individual’s health insurance, Medicaid, or Medicare. Because County residents already pay taxes to support EMS service, no County resident will pay a dime, or even receive a bill. No County resident who is unable to pay will have any out-of-pocket expense for transport to the hospital. The program also will be structured to have no impact on the development and growth capabilities of local volunteer fire and rescue departments.

“Nearly all our surrounding jurisdictions have a similar fee and are using those resources to improve service and save lives – with no adverse effects. Montgomery County should do the same instead of leaving tens of millions of dollars in insurance reimbursements uncollected.”

The facts about the EMS Transport Fee are available at: www.montgomerycountymd.gov/emstransportfee. On education, Leggett’s budget meets 96 percent of the Board of Education’s request. The County will again this year apply for a waiver from the State “maintenance of effort” requirement that will lower the County’s contribution by $58.2 million and still qualify for increased state K-12 education aid.

“Superintendent Dr. Jerry Weast, the Board of Education, and the MCPS employee organizations have contributed significantly in helping to close the shortfall we all face,” said Leggett. “I appreciate their close collaboration.”

Leggett continues to invest in programs that are building more effective government, saving millions of dollars, boosting customer service, and restructuring government through reorganizations and modernization of core business systems.

“Our approach to balancing the budget should not strictly be a matter of cost reduction, but we should make every effort to make our operations more efficient, productive, and cost effective. To accomplish these objectives, I have instituted several measures to make Montgomery County government even better and more efficient in how we operate and provide services to the community.”

For example, the CountyStat initiative has successfully cut overtime hours by 19 percent, saving the County $7.8 million. A paper reduction initiative saved more than $1 million over the last year. Implementation of the 311 Call Center later this year will significantly enhance community services and provide the County with important information that will guide future decisions about the use of scarce resources.

“Despite the extraordinary challenges we are currently facing, I remain very optimistic about the future of our County. We will continue to take advantage of every opportunity to produce savings and preserve and enhance services for the residents of this County.”

To view the budget highlights and the full budget, go to the Office of Management and Budget homepage on the County’s website at www.montgomerycountymd.gov/omb. SOURCE: Leggett's Office

Montgomery County loses $4.6B in taxable revenue, leaving budget gap at almost $1B

Millionaires fleeing state tax cause 82 percent of income drop

Montgomery County, Maryland's richest county, is facing a budget shortfall of nearly $1 billion as high-income residents flee the state's millionaires tax. Budget officials told the County Council on Tuesday that Montgomery must once again write down its projected income tax revenues, this time by $44 million for this fiscal year and $100 million for next fiscal year, which starts in July. Those write-downs come up on top of a $24 million income tax reduction disclosed last week for the current fiscal year, and are in addition to a nearly $800 million budget gap projected for next fiscal year.

The budget holes have threatened the county's AAA bond rating and prompted County Executive Ike Leggett to propose raising energy taxes by 63.7 percent, eliminating 18 bus routes and closing a public library in Noyes. A weak economy that ate away at capital gains and slowed the growth of small businesses can account for much of the county's fiscal woes, but county officials said the state compounded the problem by raising taxes for millionaires to 6.25 percent from 5.5 percent in 2008.

"Their timing couldn't have been worse," said Councilman Mike Knapp, D-Germantown, who said the millionaires tax has had a "devastating" effect on the county's budget. "Talk about cutting yourself off at the knees."

A "major factor" for the county's budget woes is the loss of its millionaire taxpayers, according to county economist David Platt.

Montgomery lost $4.6 billion in taxable income from tax years 2007 to 2008. More than 82 percent of that drop comes from taxpayers with incomes of $1 million or more, county records show. County data show that 216 millionaires who filed taxes for 2007 did not file with the state for 2008, compared with an average of 119 in previous years. While some of those not filing may have died or decided not to file a tax return, county officials said there is plenty of anecdotal evidence that Maryland's millionaires moved to more tax-friendly states.

"It's pretty clear that people did take their income someplace else," said Tim Firestine, chief administrative officer, noting that the loss of just a handful of millionaires has a disproportionate effect on the county's revenues.

Worse yet, Knapp said, was the likelihood that many millionaires who left won't come back when the tax expires at the end of the year, leaving the county's tax base smaller.

"Even if the economy gets better, we're going to have less money," Knapp said.

The millionaires tax may become a campaign talking point. Former Republican Gov. Bob Ehrlich already has criticized Gov. Martin O'Malley, a Democrat, for his strong support of the tax.

Also in Montgomery » The County Council gave preliminary approval to a revised "Science City" plan that supporters hope will make west Gaithersburg an epicenter of the life-sciences industry. Council members voted 8-1 on a straw vote, with Councilman Marc Elrich opposed, for a plan that scales back the county planning commission's proposal to 17.5 million square feet of development from 20 million. The plan also includes new safeguards against traffic congestion.

» A former County Council aide who sued the county for $5 million for allegedly violating an anti-discrimination law she helped write has dropped her lawsuit. Dr. Dana Beyer had charged in court records that the county discriminated against her because she is a transgender individual.

SOURCE: Washington Examiner