Montgomery officials hope that the state does no harm

December 25, 2011

At a meeting last month, three Montgomery County officials presented a sobering PowerPoint to the jurisdiction’s state legislators. Titled “Montgomery County’s Priorities for the 2012 Session,” it read more like a municipal leader’s worst fiscal fears.

A $200 million drop to income tax revenue. A $45 million drop to non-education state aid. A 10 percent reduction in county workforce.

Those were a few of the blows that buffeted Montgomery in recent years, county officials told the assembled legislators.

The presentation, looking to the opening of the Maryland General Assembly session next month, ended with an urgent plea to the state: Do no harm.

“The state’s working through a lot of stuff; we’re working through a lot of stuff,” said Melanie Wenger, Montgomery County’s director of intergovernmental relations. “Everybody is down to zero, so we have to work through this and not have things happen that completely knock us off balance.”

County officials are trying to protect themselves from potential cuts to state aid that could lead to tough budget decisions in the spring. They also are working to increase transportation funding for a backlog of road maintenance, the Purple Line and the Corridor Cities Transitway, an integral part of the county’s plans to build a 150-mile network of bus lanes.

“Economic growth in Montgomery County is going to require a significant partnership with the state on infrastructure investment,” Wenger said. “We cannot go at that alone.”

In recent weeks, county officials have beenpushing state officials in private meetings for a proposed statewide gas-tax increase and have been urging the state to waive a $26 million penalty on state education funding that is slated to be imposed next year.

The budget situation is not as grim as in years past, but county officials are nonetheless worried about projections from the state’s Board of Revenue Estimates. It announced this month that the state will take in $71 million less in fiscal 2013 tax revenue than what had been projected in September.

County Executive Isiah Leggett (D) and his administration are not making any potentially controversial budget decisions — such as keeping a countywide energy-tax increase that is slated to sunset next year — until after Gov. Martin O’Malley (D) proposes his budget next month. Assuming no change in state aid, county officials face an operating budget shortfall of at least $135 million.

The county also faces the $26 million penalty because local legislators approved a schools budget smaller than required by the state.

A law enacted in 1984 requires local governments to provide public schools a constant level of per-pupil funding over time as a condition of increasing state aid. But the county failed to make the minimum payments in recent years, leading to penalties that were ultimately waived or forgiven by state officials.

But in a controversial move, the county reset its annual obligation this year to a lower amount, arguing that it could not sustain higher funding levels after an economic downturn. The state imposed a penalty, and some county officials worry that it won't be waived this time.

Council President Roger Berliner (D-Bethesda-Potomac) said that he, Leggett, state legislators and Montgomery County Schools Superintendent Joshua P. Starr have been meeting over the past month to devise a unified strategy to combat the penalty.

“It’s just totally unfair to penalize this county for what it had to do,” Berliner said. He would not speculate on how county officials would deal with the penalty. “We are not going to have it.”

Wenger said state legislators from Montgomery are working on a bill to nullify the penalty.

State funding also has an impact on Leggett’s plans for infrastructure projects. Next month, he is expected to offer his biennial proposal for the county’s six-year capital plan.

For the first time in about two decades, the capital plan is expected to be lower than the previous one. County officials are already planning for cuts of at least $150 million.

According to the presentation, the county wants the state to provide $185 million for school capital projects and $1 million for the construction of a new library in Silver Spring.

To help fund the projects, the county wants the gas-tax increase and “other new, sustainable” revenue sources, according to the PowerPoint presentation. The county is also pushing to increase the state’s bay restoration fee on wastewater, colloquially called the “flush tax.” O’Malley is likely to champion both taxes.

Berliner added that he is trying to get state help to fund the county’s proposed network of bus routes, called the bus rapid transit system. He is part of a task force that Leggett established in part to determine how to fund the system. The group is expected to issue a report next month.

State Sen. Jamie B. Raskin (D), recently elected the Montgomery delegation’s Senate chair, said the group will serve as “careful champions” of the county’s interests.

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