By Adam Pagnucco.
Despite getting 98 percent of his FY24 recommended budget funded by the county council, County Executive Marc Elrich went on the attack last week. He criticized the council on many issues including transparency, phantom cuts, restructuring, taxes and schools. This two-part series evaluates Elrich’s arguments. Was he right or wrong?
As it turns out, he alternated between both.
Let’s get started.
On budget transparency
Elrich criticized the council on its lack of transparency in the budget, writing:
First, despite statements to the contrary, this has NOT been the “most transparent” budget process ever at the Council. I served on the Council as an at-large member for 12 years and while there were some decisions made quickly at the end, those represented a tiny portion of the budget, generally between $10 and $20 million.
As Councilmember Mink pointed out in her statement regarding transparency concerns, the last-minute decisions this time had huge impacts – $78.7 million of the so-called “high priority” items were cut after the Council had agreed in public that they were high priorities.
These final cuts were done in secrecy without any record of which Councilmember voted for or against any of those items. The public has a right to know how people vote. Particularly when we’re talking about such a large sum of money.
Here’s the thing, folks: the budget process has never been fully transparent. The details at the end have always been decided before the straw vote. It was certainly that way when Elrich was a council member. I was a chief of staff at the council during Elrich’s second term. His chief of staff and I attended the same budget meetings and I don’t remember Elrich or his staff complaining about them. They participated in the exact same way that every other council office did.
Back then, the public never knew how Elrich (or any other council member) was voting on specific line items at the end of the budgets. If Elrich is going to criticize the council for secret votes, let him release his twelve budget mark-up sheets – assuming he still has them.
Let’s understand what’s really going on here, not just on the part of Elrich but also Council Members Kristin Mink and Will Jawando. They know very well that if every line item, even the tiniest ones accounting for less than $10,000, had a separate public vote that the council would approve more of them, thereby leading to bigger tax hikes. That’s what they want and that’s why Mink and Jawando voted against the 4.7% property tax increase – they both said they wanted it to be larger. In this case, transparency is a tactic used to pursue higher taxes. Expect it to be used again in next year’s budget.
On the phantom cut
Elrich picked up on my column about the phantom cut on utilities and even used the term to promote his statement. Here is what he said:
Additionally, some of the cuts are not real – they are items that will have to be funded. If the budget does not fund them now, they will come out of reserves at some point this year. For example, the Council’s last minute budget cut of $9.6 million for increased fuel and utilities. We – like everywhere in the country – are facing inflationary cost increases – we must pay the increased costs for fuel and utilities. I don’t think anyone wants us to turn out the lights, turn off the air conditioning and heating in rec centers and libraries, or stop providing Ride On bus service because we’re not paying for the fuel. We will pay these costs.
He is right about this. These costs will wind up coming out of reserves. That adds to the structural deficit for next year that Elrich created and that council staff estimated at a minimum of $145 million. When it comes to dealing with this issue, neither Elrich nor the council has clean hands.
On restructuring
In his first race for county executive, Elrich promised to restructure government to save money, thereby avoiding the need to raise taxes. On that issue, he wrote:
Some Councilmembers made an issue of me not doing enough on restructuring, but during the 3 years of Covid, it was not possible – or appropriate – to take on restructuring. Since then, we have begun those efforts in some of our departments.
Here’s what Elrich is not saying: there actually was a restructuring work group that he formed with the unions. It was called the “Cost Efficiency Study Group” and was serviced by Matrix Consulting Group. According to council staff, “The primary charge of the Study Group is to identify at least 100 vacant positions that can be abolished across various levels of County government without impacting service delivery.” The work group issued a report in April, 2021 that recommended eliminating nine positions. Not nine hundred. Not ninety. NINE.
Compare that to a report prepared for Baltimore County Executive Johnny Olszewski by Public Works LLC of West Chester, PA. The 447-page report contained 171 recommendations for savings. It stated:
…The total savings potential for all the recommendations in this report for which savings could be reliably estimated ranges from $75.8 million to $131.8 million for the first full year of implementation, and $444 to $732 million for the first five years of implementation. The average annualized projected savings from this report thus come to roughly $88.6 million to $145.6 million, or four-to-seven percent of a current County general fund budget of approximately $2.2 billion.
This report was issued in January 2022, meaning that work on it was proceeding during the pandemic. Baltimore County got it done, COVID notwithstanding. Why didn’t WE get it done?
On reducing the tax increase to 6 cents
Elrich wrote that his recommended property tax hike of 10 cents (equivalent to a 10 percent increase) could have easily been reduced to 6 cents. He wrote:
After I sent my recommended budget to the Council, I spoke with individual Councilmembers and offered ways to reduce the tax by about 3 cents without doing any real harm to the needs of the schools and residents. Additionally, using the schools’ reserves – which the Council did, and I agreed with – would have brought the tax rate to 6 cents.
One of my sources asked, “So why did he propose raising property taxes by 10% if he thought 6% would have covered everything he thought was important?”
Exactly.
We’ll have more in Part Two.