Politics and Policy

County Revenue and Budget

Issue-The 2022 Budget: The County Executive has issued his proposed budget for FY2022. It recommends no tax-rate increases, includes a reorganization of the county’s police department, and targets funding to support recovery from the pandemic.

Latest Updates:

  • See summary report on the proposed budget in Bethesda Beat
  • The recently passed federal aid bill will provide the county with over $200M in operating budget funds; county municipalities will receive an additional combined total of over $100M. See details in this Seventh State blog posting.
  • County Council unanimously adopted a proposal by Councilmember Friedson to create a Revenue Estimating Group to help it in reviewing the Executive’s proposed budget.
  • In January the County was projected to have a sizable budget deficit for FY2021, which ends in June. See the staff report here.
  • The County staff report on affordability guidelines for 2022 is here

Issue-Revenue:  How can the county increase revenues over the longer term so it can meet its budget requirements while balancing concerns for the environment, transportation, and schools.

Background: For several years, the county has been experiencing low economic growth because of the lack of job creation and a low rate of establishment of new businesses in the private sector in comparison to nearby counties and other jurisdictions. Two 2020 council initiatives aimed at improving the county’s long term economic condition were passed recently over the County Executive’s veto.

  • Council Bill 29-20 offers 15-year property tax breaks on Metro development projects in the hope that this will spur high rise development activity near Metro stations. 
  • The Council modified and then accepted the County Planning Board’s updated Subdivision Staging Policy, now referred to as Growth and Infrastructure Policy.  See this website for details. This policy requires the government to evaluate public infrastructure capacities, such as schools and roads, to determine whether they are sufficient to support a proposed development project before approving that project.  According to some, the changes to the policy reflect more of an emphasis on growth rather than on balancing the infrastructure to support new development. 

information added 12/07/2020

Budget Outlook – State

Issue:  What is the state budget outlook for FY2021 and beyond?

Background:  The economic fall-out of COVID-19 has affected workers and businesses in different ways.  Many white collar workers and large businesses are doing fairly well. Many service sector workers and smaller businesses like restaurants are barely hanging on. The net result for Maryland is a better than expected tax revenue figure as capital gains look good (the stock market is up); sales taxes look good (the lack of use of services–which we don’t tax–has shifted more spending to goods–which we do tax); but corporate income tax is down, and other revenue sources are a mix. However, Maryland’s revenue picture for the next few years still does not match our currently budgeted spending, to say nothing of all our additional needs in rental assistance, business support, education needs.

FY2020 closed with $704M general fund balance; FY2021 is expected to be close to a $547M balance; the FY2022 deficit will be $855M.  There are structural deficits forecast thru 2026 and FY 2023 and 2024 deficits are projected to be over $1B deficit.

[Source of the above on the state budget is Senator Craig Zucker, a member of the Senate Budget and Taxation Committee.]

Latest Update:  Will be posted after the General Assembly convenes and begins work on the budget.

More Information:

See this article from Maryland Matters and this table from the Maryland Board of Estimates.

updated 01/05/2021

State Legislative Plans – 2021

Issue: What are some of the major issues that the General Assembly will be addressing in its 2021 session?

Background:

  • Economic recovery and the state budget
  • Unemployment compensation
  • Racial and social justice
  • Health care
  • Police reform and accountability
  • Education, including funding for K-12; school construction; override of the veto of the Kirwan Commission recommendations for schools and school construction [$400M projected for Montgomery County]

Latest Update: More information will be posted as the General Assembly works on the budget and its legislative agenda.

More Information:

  • Unemployment compensation. According to the Washington Post, the majority leader of the state Senate and the Speaker of the House have introduced proposals to fix the state’s “broken” unemployment system. [“Maryland has fallen woefully short of meeting federal guidelines, which requires 87 percent of applicants to receive their first payment within 14 to 21 days after applying. In the fourth quarter of 2020, Maryland was at 27.9 percent. The national average at the time, according to a review by the Brookings Institution, was 52.6 percent.”
  • Police reform and accountability, see Community Issues/Safety/Police Procedures
  • Education, see Community Issues/Schools/Funding: State

updated 02/06/2021

2020 Ballot Questions

Both the State and the County had important constitutional and charter questions on the 2020 ballot.

State Ballot Questions

Background:  In November 2020 Maryland voters approved two state ballot questions: 1]  A constitutional amendment that authorizes the General Assembly, beginning in FY2024, to increase, diminish, or add items to the budget as long as it does not exceed the proposed budget submitted by the governor; and 2] A referendum to approve the expansion of commercial gaming in the State of Maryland to authorize sports and events betting for the primary purpose of raising revenue for education.

More Information:  See the PRA Fall 2020 newsletter.

County Ballot Questions

Background:  In November 2020 Montgomery County voters approved two county ballot questions:  1] To remove a cap that limits how much the county’s property tax revenue can increase in a single year. Requires all nine council members to approve an increase in the tax rate; and 2] To expand the council from nine seats to 11 seats. Seven members would be elected by district. The other four seats would remain at large.

More Information: See the PRA Fall 2020 newsletter.

updated 01/05/2021