The Montgomery County Council will give final approval today to a fiscal 2006 budget that reduces the property tax rate while expanding full-day kindergarten, health care access for the uninsured and rental assistance for needy families.
Following weeks of wrangling over the $3.6 billion spending plan, the council agreed to adhere to the charter limit on property taxes for the first time in three years.
The charter provision, which seven of nine council members can vote to override, limits what the county can collect from property taxes to the previous year's total plus the rate of inflation and the cost of new construction.
The budget includes three kinds of tax relief: a 4-cent cut in the property tax rate, which is currently $1.06 per $100 assessed value; a $116 tax credit for all homeowners; and additional relief for those with low incomes.
But with property assessments soaring, most homeowners will still see their property tax bill increase in the fiscal year that begins July 1.
County Executive Douglas M. Duncan (D), who proposed exceeding the charter limit by $67 million, had proposed a 2-cent cut in the property tax rate and additional tax credits for homeowners who earn less than $58,000 a year.
The council tripled Duncan's proposed relief after cutting about $17 million from his budget and transferring about $30 million from the largely debt-financed capital budget. The capital budget is used to finance construction projects.
Duncan said the council's money-saving techniques were fiscally irresponsible because it in effect is using debt to pay for tax cuts. He said the council's action would cost taxpayers $13 million in interest.
"It is credit card government and it sets a bad precedent," Duncan said in a statement. "We can't operate the county on a credit card. The spending plan approved by Council will make it harder to balance next year's budget and provide additional property tax cuts."
Council members deny Duncan's assertion, saying they just transferred money that wasn't being spent immediately.
Even though Duncan's relationship with the council is strained, most of the county executive's priorities survived the budget fight.
Council member Steven A. Silverman (D-At Large) said the council budget is "a good balance" that is "a good investment in class size reductions, affordable housing and health care."
