By Adam Pagnucco.
The county council has passed the Kicking the Can Budget, a budget that will go down in infamy because of its homeowner tax increase and the nearly $300 million structural deficit that it creates for next year. Budgets of this kind are more typical in the emergency conditions seen in recessions, but ponder this: we’re not in a recession. What happens when we are?
That said, every budget has winners and losers. Here a few in each column.
Winners
Renters
Renters are the biggest winners of the budget battle since a huge majority of them will get an income tax cut without having to give up the $692 Income Tax Offset Credit (ITOC) that most homeowners get. Their only problem is that if they want to eventually buy homes, that is now more expensive. See below for more.
Commercial property owners
It’s odd to think of both renters and their landlords as winners, but that’s what happened this time. Landlords would have had to pay County Executive Marc Elrich’s six percent property tax increase but they are unaffected by repeal of the ITOC. They should thank the council for pushing more of the tax burden onto homeowners rather than them.
County government unions
Council President Natali Fani-González proposed trimming their collective bargaining agreements. The unions said no. In the end, the entire council – including Fani-González – voted to fund every penny of their contracts. It was an impressive display of union power in an election year.
Council Member Andrew Friedson
Friedson was the only no vote on both the budget and the homeowner tax increase that paid for it. Some of his colleagues (including Fani-González) believe he wasn’t a particularly constructive player this budget season. They also point out that he voted against a tax increase but voted for the spending it financed three years ago. That may be legitimate criticism, but it’s also mostly inside-the-building chatter that won’t make it to the ears of many voters. For them, Friedson has the message he wants: no to taxes and no to fiscal insanity.
Losers
Homeowners
To pay for its income tax cut, the council abolished the $692 Income Tax Offset Credit (ITOC) received by most homeowners on their property tax bills. The math is clear – homeowners getting the ITOC will owe a tax increase and low income homeowners will face some of the biggest spikes in their bills. One wonders how many of them would have been better off with Elrich’s six percent property tax rate hike.
County Executive Marc Elrich
After eight years, a big majority of the council despises Elrich. They view him as someone who creates messes, dumps them in their laps and takes cheap shots at them as he heads out the door. He has never been so isolated as he is now. Most council members tune him out even when he’s right and they’re glad to see him leaving the executive branch. If he goes back to the council, an ice-cold reception awaits him.
Council Member Laurie-Anne Sayles
Sayles left for two conferences in Hawaii during the budget’s most critical week and her colleagues are irate about that. Their complaints led me to file a Maryland Public Information Act request revealing that taxpayers paid for part of the costs of her trip. Why didn’t she just stay in Rockville?
Taxpayers
They are going to bear the brunt of the nearly $300 million structural deficit next year. Like J. Wellington Wimpy, they should eat their hamburgers now while they last.
MoCo’s reputation
The county now has talk of tax increases (and sometimes actual ones), budget gimmicks, structural deficits and adverse rhetoric about its schools on a regular basis. Who wants to pay a million dollars for a house here to put up with all of that?
Push
Council President Natali Fani-González
The council president took a huge risk in putting out a plan to balance the budget without Elrich’s tax increases, but she also demonstrated real intellectual honesty. She then put in a herculean amount of work to assemble eight votes to approve a budget of any kind. One powerful interest group leader told me, “She can’t be bullied.” That’s one of the highest compliments that can be paid to a politician.
However, Fani-González endangered her relationship with county unions by proposing to reduce their raises and bears a lot of the responsibility for the big tax increase that will now be levied on most homeowners. Those things may come back to haunt her down the road.
MCPS unions
MCPS’s employee unions got as much money as they could for the school district given the circumstances. Whatever Superintendent Thomas Taylor does now, that’s a win.
However, it came at a price. Council Member Will Jawando, who has been endorsed by the teachers and SEIU for executive, came out with a plan to reduce MCPS’s request by $30 million early on. The unions were publicly quiet about that, beat up the rest of the council and even allowed Jawando to pose with a “Fully Fund our Schools” sign at one of their rallies. Now they are complaining about the council’s $36 million reduction to MCPS’s request, which is very close to Jawando’s proposal.
From left: Jawando, MCEA President David Stein and County Executive Marc Elrich at a rally on May 6. Note the signs saying “Fully Fund Our Schools.” Source: MCEA Facebook page.
I heard from a bunch of angry folks in the council building about this behavior and in particular the photo shown above. They thought that the unions were playing favorites by giving Jawando a pass and branding them the bad guys.
So will the MCPS unions pay a price for this? It depends on how well non-incumbents on the Apple Ballot do. If Apple candidates sweep the elections, the returning incumbents will grumble but move on. But if they don’t, the council could start to stray off the reservation during the next term. We shall see what awaits.