Elrich (D) released his proposed operating budget of $5.9 billion — about half of which is for education — by a deadline to submit the plan. It includes a property tax rate of $1.0264 per $100 of assessed value, nearly 5 cents more than the current rate of $0.9786. A large chunk of this increase is a 3.1-cent supplemental property tax, which Elrich said would go exclusively to the county’s public schools, which are struggling with overcrowding.
Eight of the county’s nine council members, including Council President Sidney Katz (D-District 3), criticized the proposed tax hike in a statement released Monday afternoon.
Officials “must provide as much certainty and support as we can for county residents who understandably fear what the economic realities of this global pandemic will have on their jobs, retirement savings, small businesses and families,” the lawmakers wrote. “This is a time for cautious decision-making, not property tax increases.”
Council Vice President Tom Hucker (D-District 5) did not sign the statement. “The county executive’s proposed budget is 831 pages, so I’d like to read it and hear from the public before reacting to it,” he said.
Elrich’s budget director, Rich Madaleno, said staff have been working on the budget for six months, long before the virus first made its appearance in Montgomery in early March.
“Just to reiterate, the budget was released today because we had to,” he said. “Is it the best timing to release the budget today? No. But we had to.”
By law, the county executive has to submit his proposed budget to the county council by March 15 or if it falls on a Sunday, like this year, on Mar. 16.
The novel coronavirus — and drastic efforts to curb it — have led to declines in global markets as well as widespread layoffs, particularly at airlines, hotels, travel agencies and event companies.
“Now is not the time to be adding additional uncertainty when we don’t even know what the depth and magnitude of this crisis is going to be,” said county council member Andrew Friedson (D-District 1).
Friedson said he has spoken to company leaders worried about going bankrupt or having to let go of employees to stay afloat. He said the council should consider tapping into its $500 million reserves in line with Maryland Gov. Larry Hogan (R), who last week approved an emergency measure allowing him to take out $50 million from the state’s rainy day fund.
“This is a real, serious challenge,” Friedson said. “We need to make fiscal decisions that reflect that.”
In a statement addressing his budget, Elrich said the county will factor in the impact of the virus, but he stopped short of saying he would withdraw the proposal for the tax increase.
“The challenges we face in areas such as education, economic development and transportation will still be there long after this crisis is over, and we can’t take our eyes off the future no matter how hard those decisions will be,” he said.
Elrich proposed nearly $2.8 billion for Montgomery County Public Schools, a 4 percent increase from his proposal last year and close to the full request by the Board of Education. Madaleno said without a tax hike, it would be virtually impossible to provide the school system with the resources it asked for.
“A decade of slow growth nationally, unpredictable tax policy changes at the Federal level, and our severe Charter limit has left our schools playing catch-up on funding while absorbing an enrollment growth of more than 25,000 new students,” Elrich said in his budget overview.
The proposed budget also includes $85 million for affordable housing funds — the most in county history — and $66 million for the housing department, a 12 percent increase from last fiscal year.
Elrich broke ranks with regional leaders last year when he disagreed with affordable housing targets set by the Council of Government, the D.C. region’s government planning organization.
A 2019 report from the Urban Institute said that to help alleviate a regional housing crunch, Montgomery should build 23,100 additional low-income units by 2030 — the most of any jurisdiction.