The Montgomery County Council, citing the unmet needs of a school system facing explosive enrollment growth and a widening academic achievement gap, voted Thursday to raise the average residential property tax bill by 8.7 percent — the largest increase in seven years.
The tax hike required a unanimous 9-to-0 vote because it exceeds the charter limit on tax revenue that the county can collect each year. The increased revenue will help underwrite a $5.2 billion operating budget for the fiscal year that begins July 1, with about half of the money resulting from the tax increase going to Montgomery County Public Schools.
The council set the property tax rate at $1.02 per $100 of assessed value, 3.9 cents above last year’s rate. With rising assessments, it means that annual residential property tax bills will rise, on average,. $326, to $4,075. The council will take a final vote on the overall spending plan May 26.
Lawmakers usually make only modest changes to annual budgets submitted by the county executive. This year, led by Council President Nancy Floreen (D-At Large), members turned that tradition on its head.
The council roiled the local real estate industry by raising taxes on home sales. It trimmed pay increases that County Executive Isiah Leggett (D) had negotiated with county unions, and prodded the Board of Education to do the same with unionized teachers, principals and support staff, and to redirect the money to classroom programs.
While the council backed Leggett’s proposal to fund the school system at record levels — about $90 million over the state-mandated minimum — it insisted that school officials have a plan to put that funding toward reducing class size and narrowing the achievement gap separating white and Asian students from black and Latino students.
The intent was to stave off what members saw as a tipping point for the 156,000-student system, which is expected to enroll an additional 10,000 students over the next five years — many of them speaking little to no English. To boost funding for school construction, the council on Wednesday agreed to fund nearly all of the district’s six-year,$1.73 billion capital budget request.
“I think this budget is a budget with its eye on the future,” said council member Craig Rice (D-Germantown), chair of the council’s education committee.
With its vote, the council follows Fairfax County, where the Board of Supervisors last month approved a tax increase adding $304 to annual homeowner bills, with most of the money going to schools.
The Montgomery council approved the hefty tax increases in a climate of sharp anti-government sentiment at the national and local levels. Several members spoke with unusual emotion about that hostility, and what they saw as their obligation to the county’s schoolchildren.
“In a time where, on the national level, extremists routinely malign principled and disciplined decision-making, you, my colleagues, stand out as a strong, collaborative and responsive team,” Floreen said, her eyes misty and her voice wavering.
Council member Marc Elrich (D-At Large) called the school system the county’s “premiere asset. . . . what parents look at in terms of our success as a county.”
He added: “There are no civilizations remembered in history for their tax rates.”
The tax hike will probably energize a campaign underway for term limits in Montgomery, where activist Robin Ficker, of Boyds, is gathering signatures to place a measure on the November ballot. Ficker’s proposal — a version of which nearly passed in 2004 — would limit the county executive and council members to three consecutive four-year terms.
Ficker plans to deliver more than the required 10,000 valid signatures to state officials by the Aug. 1 deadline.
Four council members would have to step down in 2018 if Ficker’s proposition made it to the ballot and passed: Roger Berliner (D-Bethesda), George Leventhal (D-At Large), Elrich and Floreen. They would not be barred from running for county executive in 2018, when Leggett is expected to retire. All four are regarded as possible candidates.
Leggett warned last year that a substantial hike was all but inevitable, given the needs of the schools and revenue losses that will result from a Supreme Court ruling that Maryland had unconstitutionally double-taxed income earned outside the state.
He initially proposed an 8.7 percent property tax increase, but reduced it to 6.4 percent after the General Assembly passed legislation easing the fiscal fallout from the Supreme Court decision. In the end, the council settled on Leggett’s original increase.
In addition to schools, the council added $25.5 million to Leggett’s original spending plan, including $2.1 million to supplement pay for workers serving the disabled, and $4.5 million to fund the publicly financed election system that will debut in 2018. The council added $500,000 to improve bus service in Tobytown, a historically black, low-income neighborhood in Potomac.
Leggett praised the council for the heavy investment in public education but warned that the additional new spending, along with the increase in the recordation tax, place the county in a difficult financial position next year.
“Absent a significant economic recovery that far exceeds expectations, this will mean potentially severe budget reductions next year because we have nearly exhausted all revenue possibilities to accommodate ongoing council spending increases in this budget,” Leggett said.