Nov. 19, 2014: “Montgomery County: Spending Wisely and Effectively”

Montgomery County Taxpayers League Meeting – November 19, 2014

Topic: “Montgomery County: Spending Wisely and Effectively”

Questions sent to speakers in advance of meeting Nov. 19, 2014

Speakers:  Phil Andrews, Council Member and Sidney Katz, Council Member-Elect, both from District 3, Montgomery County

1.  What impact will the election of a Republican governor have on Montgomery County?  His campaign emphasized reduced spending and taxation.  Will Montgomery County follow suit?  Are we prepared to handle statewide cuts?

Phil Andrews said that the state faces a budget shortfall of $900 million over the next two years , and our county will feel the effects. So far this year, distribution of state tax revenues to the county is down by $86 million . In addition, the case before the Supreme Court on out-of-state taxes could affect Montgomery County adversely. Labor contracts will cost the County $80 million .

Sidney Katz noted that there could be an opportunity to “work” with Governor Hogan. He noted that Mr. Hogan did not win in Montgomery County, Prince Georges County and Baltimore City. He envisions the new Governor will spend funds wisely and not increase the budget.

2. What is your position on Maintenance of Effort (MoE) spending?  Should it be tied to improved school outcomes?  Is there any likelihood that the Maintenance of Effort law might be amended?
Sidney Katz said that the County cannot afford to go above MoE.

Phil Andrews referred to MOE as a flawed law that is not likely to be changed. The County provided a half billion dollars above the MOE requirement to the school system before the downturn and the County needs to be given credit for it. “MOE is or should be the ceiling.” The County must stick to limiting MOE and work for changes. MCPS will get $30 million more just because of additional students in the school system. There is, of course, no maintenance of effort law for any other increases to the population of the County.

3.  There is abundant statistical evidence that “good” teachers have pupils who learn more than the average year by year throughout their careers, whereas ‘poor” teachers have students who learn less than average every year.  Recent studies have shown that students fortunate enough to have had good teachers earn more than their peers 20 or 30 years later.  Given all this statistical evidence, why does Montgomery County not move towards paying “good” teachers (measured by comparative value-added scores which correct for student quality) more than “poor” teachers?  We understand that the County Council has little influence over the actions of the School Board (except through the power of the purse); how would you be able to make this happen?

Phil Andrews noted that reports by the Office of Legislative Oversight have shown little change in outcomes despite substantially increased investments in the school system during the last 12 years. When asked what the Council could do to impact the school system, Mr. Andrews said that since the School Board is elected, the Council can only affect the school system in the very broad budget categories. But that it should do more to focus on evaluation of teachers. The Montgomery County Education Association (teachers union) has a good system for evaluation.

Sidney Katz said that teacher evaluation was very difficult. He speculated about what would happen if you took teachers from top performing schools and moved them to the lowest achieving schools whether the evaluations would change. He mentioned that his wife is a pupil personnel worker in MCPS.

4. Health and Human Services – What is your position on extending Kennedy cluster family social services (free health care, food, rent and utility assistance) to the Watkins Mill family cluster before doing a study to determine if these services have indeed improved Kennedy cluster academic performance?

Phil Andrews said that he and Council member Leventhal are questioning whether to expand the Kennedy cluster and have proposed that it be evaluated before extending it to another cluster. It was pointed out that the system lacked criteria to test innovations. It is a $2.5 billion system. Why extend experiment to other charters without having evaluations or assessments? Phil Andrews suggested that just as the Taxpayers League has raised these questions with him and Sidney Katz that we raise them with the School Board.

5.  Transportation – What is your position on spending in anticipation of the Purple Line?  For, example, Art Holmes told us in a meeting a year ago that $80M had been spent on elevators to connect riders with the Bethesda Metro stop that will serve only 450 riders a day.

Sidney Katz does not want to drop the Purple Line despite the fact that $80 million will be spent on elevators serving 450 riders at the Bethesda stop. He said that we need to move ahead on transit.

Phil Andrews said fortunately that the cost had just dropped to $59 million. He went on to note that Governor-elect Hogan has said that he prefers highways over bus rapid transit, the latter costing about half as much as the proposed Purple Line. He also noted that in 2009 the County Council approved a proposal to add two reversible lanes to I-270; Mr. Hogan may support that. Phil Andrews referred to the tightened requirements for tapping designated State Transportation Funds that had been dipped into in the past for other purposes.

Attendee Jay Harding said he knows both Larry Hogan and his father and that his father advocated smaller government and control of spending. He believes the younger Hogan will espouse similar goals and will reach out to various audiences. Blair Lee is on the transportation transition team and that could help Montgomery County.

Phil Andrews speculated that the governor-elect may deal with gerrymandering.

6.  How do you reconcile the fact that county taxpayers who do not live in municipalities are subsidizing those who live in municipalities specifically through the 17% income tax rebate?  Could this funding be creating pockets of wealth, particularly in the smaller municipalities, to the detriment of the needs of non-municipal residents?

According to Sidney Katz municipalities offer a wide range of services and are responsible for their own planning, zoning, code enforcement and get no financial support by the county for municipal police services. A question was raised about whether or not the County might be subsidizing the 22 municipalities ,especially some of the smaller ones , and Sidney Katz suggested looking at each municipality. Apparently, the Town of Chevy Chase has a $4.9 million operating budget and a fund balance of $8.1 million . Sidney Katz indicated he does not know about this.

Jay Harding , an attendee and a former mayor of New Carrollton, mentioned that municipalities absorb many costs. Jay said that Prince Georges County was one of the first counties to establish municipalities and that Howard County has none.

7.  What is your position on Montgomery County getting out of the liquor business?  A recent report by WRC TV (channel 4) of DLC truck driver beer thefts for private resale raises questions about DLC’s internal controls.  Can this county operation ever be sufficiently incentivized to install strong controls?  Why did the County’s Internal Audit Department’s review of inventory controls (July 2014) miss this control weakness?  Does this strengthen the case for privatization?

Phil Andrews said that liquor control was governed by the State of Maryland. Within Montgomery County, the County Executive has legal authority over the DLC; the County Council can only offer suggestions. He also opined that the County does a pretty good job plus they have less incentive to sell to minors. Additionally, County liquor control does give Montgomery County $25 million in profits while the sales tax revenue goes to the state. The current system avoids an excess number of liquor stores in the County. The manager, George Griffin, is a good manager.

Sidney Katz doesn’t think Montgomery County wants a liquor store on every corner like Baltimore and suggested checking with Prince Georges about what revenues they make on liquor stores and licenses. Mr. Katz recommended looking at various models and options on the issue of liquor control but the bottom line is that the Montgomery County system is workable and ultimately any changes would have to be made by the State of Maryland.

8.  Given the steadily increasing number of advertisements regarding Montgomery County services related to entertainment, how do you view the county’s role in the provision of entertainment services.  How much does the county spend on such services and could those funds be used elsewhere?
The conclusion by both speakers was that this was “small stuff” and had very little effect on the budget and that it might make sense to focus on bigger issues.

Next meeting: December 17, 2014


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