This report, “Utility Benchmarking and Organizational Efficiency Review“, examines the Washington Suburban Sanitary Commission. The Montgomery County Taxpayers League will will have a position paper shortly.
This report (2016-7) from the County Council’s Office of Legislative Oversight describes the “Individual and Business Tax Burdens in Local Jurisdictions”. The report analyzes the tax burden for individuals living in and businesses based in Montgomery County compared to Prince George’s County (MD), Fairfax County (VA), Howard County (MD), The District of Columbia and Frederick County (MD).
“In the negotiations over the final version of the bill, House negotiators offered to cut the highest tax bracket (affecting households making over $300,000) to 5.69 percent from the current rate of 5.75 percent. The Senate countered with a reduction to 5.65 percent. That difference proved too much, and the tax legislation died upon adjournment.”
The difference between a tax rate of 5.65% and one of 5.69% on a taxable income of $300,000? Exactly $120: $17,070 – $16,950. So tax reduction was done in by $120.
We invite comments.
From the Washington Post of May 26, 2016:
“The Montgomery County Council gave final approval Thursday to a $5.3 billion budget that includes the biggest property-tax hike in seven years, trims pay raises the county had promised to unionized workers and pours record funding into the school system….The budget, which takes effect July 1, includes a nearly 9 percent property-tax increase that will add $326 to the average residential tax bill. It is also supported by a rise in recordation taxes that will add $455, for example, to the cost of buying or selling a $500,000 home.”
Feel free to comment below.
From the Washington Post of May 19, 2016:
“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 9-0 vote because it exceeds the charter limit on tax revenue the county can collect each year. That 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 the average annual residential property tax bill will rise $326, to $4,075.”
Feel free to leave your comment below.
From the Bethesda Beat May 16, 2016:
“The council then pledged unanimous support of a $2.45 billion schools operating budget that is nearly $90 million more than the minimum required by state law…Council members made clear the spending approved Monday is dependent on the council’s approval of a 6.4 percent property tax increase and an increase of the county’s tax on home sales,…“We are about to do three things that some of us said we would not do again,” council member Roger Berliner said, referring to the proposed property tax increase above the county’s charter limit and home sales recordation tax increase as well as funding the school system over the minimum required by the state’s maintenance of effort law.”
From the Washington Post of May 10, 2016:
“The Montgomery County Board of Education is nearing an unusual agreement with unionized teachers and other school staff to divert $37 million earmarked for pay hikes into initiatives to reduce class size and otherwise improve instruction…..[County] Members are considering a $2.4 billion school appropriation for 2017, about $90 million above the minimum annual spending required by state law. In exchange for the robust funding increase, however, the council said it wanted to see more money spent on programs to reduce class size and narrow the achievement gap.”
MCTL President Joan Fidler sent the following email April 25, 2016, to Nancy Floreen, President of the County Council, asking the Council to vote against any tax increase:
Dear President Floreen,
We have been listening to the various Council committee hearings on the FY 2017 budget and it appears that all 9 members of the Council are headed towards an increase in property taxes above and beyond the charter limit. We urge you and the members of the Council to listen to voices such as ours by voting in favor of the taxpayers of the county.
– The bulk of the tax increase is slated for the salary increases of county and school employees. While we do not deny them a COLA increase tied to inflation, we do question the percentage of the step increase and the absurdity of a make-up increase – something unheard of in the world of work. So why support a tax increase?
– Funding MCPS over the Maintenance of Effort level re-bases the per pupil cost – in perpetuity. We believe that the purpose of the MoE mandate was to help children. Instead it has evolved into a method of guaranteeing the compensation levels of staff in the school system, among the highest paid in the region. Also adding to the salary demands of MCPS staff are the extraordinarily high share of their healthcare premiums paid for by the MCPS budget. This level of benefit is not available to county staff who pay 25% of their premiums. If there were no discrepancy between the two, huge savings would accrue. So why support a tax increase?
– Why do employees of the school system need a supplemental pension – one not offered to any other school system in the state? How much of the MoE overage is tied to this extraordinary form of largesse? The savings from the healthcare premiums and the supplemental pensions alone would save $80 million. So why support a tax increase?
– The Council claims it has little control over the school system. Yet, when an opportunity, such as this, arises for the Council to exercise that limited control, why would you fund the school system beyond the MoE limit? The school system exists to educate our children, which it does well in certain quarters. But it fails miserably in closing the achievement gap and in reducing class size. Given the gargantuan percentage of the budget of the school system that goes directly to compensation, is it any wonder that the system cannot afford to hire more teachers in our low performing schools thus possibly narrowing the achievement gap. Is it possible that the school system has reached the point where additional funding goes almost solely to cover compensation demands? How would funding the school system beyond mandated levels solve the achievement gap? Has the school system delineated the budget allotted to the achievement gap? Have you seen strategies tied to this achievement gap budget? Have you seen achievement gap performance measures that will allow you to make decisions on funding now and in the future? If not, why support a tax increase?
We know that you and your colleagues in the Council help make Montgomery County a great place to live. We know that you are serious people, so we urge you to give serious consideration to the issues we have raised. This proposed tax increase above the charter limit leaves a host of questions unanswered. So why support a tax increase?
Montgomery County Taxpayers League
From Bethesda Beat April 21, 2016:
“With a property tax increase looming, a majority of County Council members on Thursday recommended against some already negotiated salary increases for county government employees set to kick in next fiscal year….[County Executive Ike] Leggett’s $5.27 billion proposed budget includes the county’s first property tax increase since 2009, in large part to help fund the school system at almost $90 million over the minimum spending required by the state.”
Testimony by James Zepp on proposed FY2017 budget before the County Council on April 5, 2017.