Duncan Objects to Shift Of Funds for Tax Cut
By Tim Craig
Washington Post Staff Writer
Thursday, May 26, 2005
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."
"I understand [Duncan] is disappointed, but we agreed with him on 99 percent of it," Silverman said.
In its final budget, which is expected to pass unanimously, the council largely approved Duncan's request for a $1.7 billion schools budget, a 7 percent increase over this year.
The money will be used to expand all-day kindergarten to 20 more schools and reduce elementary school class sizes by about two students. Assistant principals will be added to 15 elementary schools.
The budget also includes a 10.7 percent increase for Montgomery College, fulfilling a Duncan priority to expand access to higher education.
But the council nixed Duncan's proposal for a higher education czar to oversee the county's growing network of public and private institutions, including Montgomery College, the University of Maryland system and Johns Hopkins University.
Duncan's proposal for a minority business liaison was approved.
In several areas, the council opted to use county funds to maintain several human service programs after federal and state budget cuts.
A previously federally funded program that offers drug treatment to women will receive $441,000 in county funds. The council also decided to replace state and federal money that had been used by the Children's Assessment Center, which provides medical services to children who were abused.
"It's a sign of the times that local governments are left holding the bag when the state and feds decide to punt on third down and pull their teams off the field," said Council President Tom Perez (D-Silver Spring).
With 7 percent of Montgomery's residents younger than 18 and older than 65 living below the poverty line, the budget also includes several initiatives that target the needy.
The county plans to expand the rental assistance program, which helps low-income residents pay for housing, so it can serve an additional 83 clients next year.
Several services for senior citizens, such as in-home assistance, are also being expanded. But the council didn't go along with Duncan's request to add personnel at several senior centers.
Although the council shaved a half-million dollars off Duncan's request, the county's affordable housing fund will grow by about $2.5 million next year. The fund, which will be about $19.5 million in fiscal 2006, helps residents pay for housing costs, such as down payments.
About two dozen nonprofit organizations -- including the Montgomery County Coalition for the Homeless, the Mental Health Association, Community Ministries of Montgomery and Impact Silver Spring -- will also be awarded grants to help bolster the county's social service safety net.
The county plans to spend $315,000 to boost security at the Jewish Community Center of Greater Washington and $200,000 to upgrade technology at the Wheaton headquarters of Casa of Maryland, a Hispanic advocacy group. In the area of public safety, the council increased the police department's budget by $18 million, an 11 percent increase. The allocation will allow the department to create 34 new police positions, 18 fewer than Duncan had requested.
Duncan had wanted seven of those unfunded police positions to go toward formation of a seven-member gang task force. But the council decided to fund only one of those positions to save about $375,000.
The council eliminated funding for Duncan's proposal to create an Outdoor Adventures Program and a youth employment center for at-risk youths to help combat gang activity.
The Fire Department's budget is growing by $340,000 next year. The money will be used to increase staff and improve response times.
The council also appropriated nearly $7 million to combat a backlog of infrastructure maintenance projects. The money will be used to resurface streets and replace guardrails, sidewalks and streetlights, roofs and park equipment.