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June 2010

 

My Thoughts on the Budget - back to top

Yesterday we passed a final (and significantly reduced) budget for Fiscal Year 2011. Here are my thoughts:

This has been an extraordinary and unprecedented fiscal experience, due, in large part, to the 21 percent decline in income tax revenue, and a historic increase in unemployment. We are closing a fiscal gap that in the short span of six months went from about $600 million to nearly $1 billion.

For the current fiscal year, before we could even get into the FY11 budget, this council approved two savings plans totaling $100 million, and approved energy tax increases that will add $21 million in additional revenue to see us through to July. This budget has been a moving target, and we have responded nimbly. We have taken actions that address, not just the County Executive's March 15 budget proposal, but the reactions of the rating agencies we received immediately thereafter, and further revenue writedowns we were presented with in late April.

We have moved steadily and in unison, driven by our collective commitment to four basic principles--fairness to taxpayers, equitable treatment of employees, commitment to the goal of a 6 percent reserve and a balanced fiscal plan.

This budget achieves those goals.

We are reducing overall spending by 4.5 percent for the first time in recorded Montgomery County history. We preserve our highest priority services, especially in education, public safety and service to our most vulnerable. Cutting any further would devastate these critical services to our residents, so we have focused on the fairest way to ask our taxpayers to share the burden. We chose not to exceed the Charter Limit on property taxes this year and instead focused on revenue sources with the widest range possible--a rebalanced and reduced energy tax from the County Executive's proposal, a modest boost to the cell phone tax and the emergency medical transport fee.

We have resisted the pressures to rush to judgment, to choose sides, or to take an adversarial position. Instead we have listened thoughtfully and carefully, and we have balanced extraordinarily valid competing goals and priorities. I want to thank my fellow Councilmembers for their commitment to making the difficult (and in many cases unpopular) decisions that are in the best interest of the County. Everyone has proceeded with integrity and respect as we have worked through some of the most difficult choices any Montgomery County Council has ever had to face.

Not one of us has shied away from a single hard decision. In our worksessions we have made our best efforts to find cost effective consolidation of programs through the Regional Services Centers and Office of Community Partnerships, through the operations of the parks and county police, and through the coordination of services provided by the Department of Recreation and the Department of Parks. We heard employees' concerns about management levels and investigated their issues. We have worried about the fairest way to share employee pain in reduced salaries and have extended furloughs progressively and comprehensively across the widest range of employee groups within our control, including fire and police. We have asked for additional cooperation from the public school system, and they have partnered with us, in finding further reductions in spending that do not affect our commitment to the classroom or educational excellence.

Next month we will be taking up the balanced fiscal plan that results from these budget decisions as well as the County Executive's Reserve and Selective Fiscal Policies proposal that, together, will set the parameters of our fiscal future. And we are not done. We have committed to further work on governmental consolidation possibilities and fiscal structural deficit analysis.

That means we will be leaner for the foreseeable future. In spite of this year's difficulties, I am entirely optimistic about Montgomery County’s future, thanks in part to the forethought and wisdom reflected in this very disciplined budget. Moreover, in just the past two months, we have taken significant steps to expand the County's tax base. We have unanimously approved two master plans, approved a biotech tax credit, and will soon be establishing the Montgomery Business Development Corporation to advance job creation.

Certainly, this is not a time for celebration. We are acutely aware of the real and personal impacts this budget will have on residents and employees. But we can feel good about the fact that we are on the right track, that we will benefit from a new way of doing business, and that the values that make Montgomery County great are here to stay. It is a new era in Montgomery County, and our future looks bright.


 

The Budget--What's In and What's Out - back to top

Floreen thanking employeesIn an austere year caused by the deep recession, we approved a $4.3 billion total County operating budget for Fiscal Year 2011, which begins July 1. The total budget is 4.5 percent less than the approved budget for FY10, marking the first decrease in a total budget since the adoption of the current County Charter in 1968.

The overall tax-supported budget of $3.66 billion reflects a decrease of $191 million from the FY10 adopted budget, a decrease of 5 percent. This is the second consecutive year the tax-supported portion of the budget has decreased.

Since March 15, when the County Executive presented his recommended budget, we have worked to achieve equity in the allocation of limited funds. One way we did this was to reduce spending for Montgomery County Public Schools (MCPS) by $24.4 million, 1.1 percent less than proposed by the Executive. These funds will be used to mitigate deep cuts in the safety net and other vital services, including Montgomery College.

In a budget year complicated by the national and regional economic downturn, our budget protects core services and programs for the most vulnerable, but does not exceed the County's Charter Limit on property tax revenue. The budget includes a $692 property tax credit for owner-occupants of principal residences. It freezes pay for employees of County government, Montgomery College, the Maryland-National Capital Park and Planning Commission (M-NCPPC) and MCPS.

Employees at all agencies except MCPS will be asked to take unpaid furlough days in FY11. Furloughs for County Government employees, including elected officials, will be progressive: three days for employees whose salaries are less than $50,000; five days for those with salaries of $50,000 to $100,000; and eight days for those with salaries greater than $100,000.

The budget includes a plan to consolidate recreation facility and athletic field permitting, class/program registration and additional recreation programs into County Government from the Department of Parks to create a more streamlined and user-friendly system for County residents. The Council believes this consolidation, over time, will lead to budget savings and operational efficiencies.

The budget re-establishes the reserve at 6 percent, which should help maintain the County's AAA bond rating. The reserve had been reduced to 5 percent in FY10.

On the revenue side, although we chose not to exceed the Charter Limit on property tax this year, some other taxes and fees will go up.  The energy tax will increase by 85 percent with the increase split between residential and commercial users, and the tax on wireless phones will increase from $2 to $3.50 per month.
 
In this difficult budget year, we are all in this together. Despite a record drop in revenue, we have worked to develop a budget that is fair--fair to our residents who rely on County services, fair to taxpayers and fair to employees. In allocating sharply reduced resources, we have given top priority to our school children--the MCPS share of total agency spending is 57 percent, up from 55 percent in FY10 and over the last decade--as well as Montgomery College, public safety and the safety net.

For more details, see the press release.


 

Some Good News - back to top

Although this budget has been difficult and certainly will have real impacts on residents and employees, we made these decisions with an eye on safeguarding the County's financial future.  The good news is that we are already seeing some positive outcomes of this very disciplined budget.

On May 24, I joined the Executive and staff as well as my colleague, Duchy Trachtenberg, in meetings with the County's bond rating agencies in New York.  This is important because our bond rating determines our rate for future borrowing and therefore our ability to invest in infrastructure and fund the operating budget at the least expense. The rating agencies showed strong interest in the hard decisions we made on the FY11 budget as well as our longer-term fiscal plans.

Then on Tuesday I joined the Executive, the Board of Education President and the Superintendent for the State Board of Education's meeting on the County's FY11 Maintenance of Effort waiver request.  Board members asked us pointed questions, but we were united and effective in our presentations.  And the very good news is that the Board approved the County's waiver request that same day.


 

Council Appoints New Planning Board Chair - back to top

We voted unanimously to name Francoise Carrier of Rockville to a four-year term as the new chair of the Montgomery County Planning Board. She will take office on or after June 14 and will be the first woman to assume this full-time position.

Ms. Carrier is a director and hearing examiner with the Montgomery County Office of Zoning and Administrative Hearings. She has worked for that office since 2001, carrying out the functions of an administrative law judge in land use and human rights cases, presiding over approximately 15-25 trial-type hearings per year and managing pre-hearing procedural matters. She issues detailed recommendations in cases decided by the County Council or another agency, and opinions in cases decided directly by the County's hearing examiner

A graduate of Stanford Law School with a background in economics and land use law, she previously worked for three Washington, D.C., law firms over a period of 17 years.

The Planning Board serves as the Council's principal adviser on land use planning and community planning, so this is a particularly important position to us. I congratulate Ms. Carrier and look forward to working with her.


 

Fast Fact - back to top

Tropical storm and hurricane season starts on June 1. We urge residents to plan for a more active hurricane season this year since weather forecasters are predicting as many as eight major storms in 2010. Be alert to weather advisories and be prepared for high winds and flooding, as well as power outages. A "watch" is issued when there is a threat of hurricane conditions within 48 hours. A "warning" is issued when hurricane conditions are expected in a specified area in 36 hours or less. Hurricane conditions include winds of 74 miles per hour or greater. To learn more about the County's emergency preparedness, visit the Web site.


 

Green Tip of the Month - back to top

Enter now in the Keep Montgomery County Beautiful community beautification awards.  The contest is open to community groups, businesses, public institutions and other organizations undertaking landscaping projects that enhance the appearance of commonly owned sections of commercial or residential properties.  Landscaping can also take place along County roadsides, medians or other public locations. For more information, please visit the Department of Transportation's Web site.  While you are there, check out the amateur photography competition too.


 

Let's Talk - back to top

Is your community organization hosting a public meeting?  Please let me know how I can help.  I am happy to assist residents in understanding pending bills or in finding ways to get involved in the political process.  Even more important, I want to hear about what matters to you.  Send your meeting notices to councilmember.floreen@montgomerycountymd.gov or call 240-777-7959 if you would like me to address a particular topic with your group.