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Leggett pleads with Montgomery Council not to add more spending

Montgomery County Executive Isiah Leggett in May 2014. (Nikki Kahn/The Washington Post)

Montgomery County Executive Isiah Leggett (D) made a rare personal appearance before the County Council on Wednesday morning to warn members against adding new expenditures to his proposed 2016 budget.

Leggett often sends budget-season letters to the council urging fiscal prudence, and he did so again last Friday. But to underscore his concern about possible state funding cuts, a potentially costly tax case pending before the Supreme Court and projections showing little to no growth in revenue over the next two years, he asked Council President George L. Leventhal (D-At Large) for the 30-minute breakfast meeting. It was advertised as an addendum to the agenda of the council’s Tuesday legislative session.

Montgomery budget would hold 2016 spending at 2015 levels

Last month, Leggett proposed a $5 billion “same services” budget for the fiscal year beginning July 1 that raised spending by 1.4 percent. Since then, council members have proposed a series of reductions and new spending that amount to a net addition of $21 million to the fiscal plan, scheduled for final action May 21.

The add-ons include $10.9 million for Montgomery College, $2 million for the county’s new publicly funded campaign finance system, $1.7 million for parks improvements and $541,000 in grants to arts and humanities organizations. At the same time, the council is considering a proposal by council member Nancy Floreen (D-At Large) to reduce the county’s fuel energy tax rate by 10 percent. The cut would decrease projected revenue by $11.5 million, Leggett said.

Leggett likely to propose property tax increase

Leggett told the council that the addition of ongoing costs without revenue to offset them will only increase the size of what is likely to be a significant property tax increase in next year’s budget. But he also said he will be sending his own supplemental appropriation requests, including $6 million for new voting machines and upgrades to the fire department’s emergency communications center. He is also asking for $4.8 million to cover snow removal costs from this past winter.

Leggett told the council that there would be added expenses from new labor contracts that will be negotiated this year, and that if talks with unions go to arbitration, recent court rulings will force him to accept the arbitrator’s decision.

Maryland braces for $200 million tax hit in Supreme Court decision

In his letter last Friday, he also warned the council of possible consequences of the upcoming Supreme Court decision in Comptroller v. Wynne. The court will rule on a challenge to the constitutionality of Maryland's income tax law, which does not provide a full tax credit to residents for money earned outside the state. The case involves the county segment of the state tax, the so-called "piggyback tax" collected by the state and redistributed to localities.

Should the court overturn the law, Montgomery could be on the hook for an estimated $115 million in refunds and interest, plus an annual revenue loss of about $24 million.

Leggett said an adverse decision in Wynne could force changes in the fiscal 2016 budget.