Montgomery County Taxpayers League

The Voice of Taxpayers of Montgomery County, Maryland

MCEA

MCTL Vice-President Testifies in Opposition to FY2017 Budget

MCTL Vice-President Gordie Brenne testified April 6, 2016, before the County Council in opposition to the proposed FY2017 budget: 

Testimony on Proposed FY 2017 Budget for Montgomery County

April 6, 2016

In the years leading up to the 2008 economic collapse, bankers, Wall Street, and mortgage originators got too greedy and were subsequently found guilty of fraud after the banks were bailed out.  Where were the regulators when this was happening?  Today, our county government is playing fast and easy with the people’s money, and the Executive has asked for a 9% property tax increase to bailout excessive payroll increases.  You, the Council are the regulators and we’re looking to you to reverse compensation contract mistakes made by MCPS and Executive management which imperil our kid’s education and bloat our payrolls.

MCPS is a snake eating its tail with solutions that fail our kids.  Payroll costs have gone up 37% over the last ten years (OLO Report, 2/23/16), in spite of the recession.  This is largely because annual step increases that will cost $55M next year, drive teachers average salaries over 12% above their peers in Fairfax and Howard counties (WABE FY2016 Guide), and force planned hiring cuts to pay for them.  When we spend more on existing teachers and overhead, there’s less money to hire new teachers.  It’s that simple.

Incredibly, there’s another step increase in this budget request, accounting for over half the increase above Maintenance of Effort (MoE), and overhead takes another 45 cents of every dollar (MCTL Study).  The problem with one-size-fits-all solutions is that more expensive teachers in west county mean fewer new teachers in east county, larger class sizes, more reliance on para-educators to tackle the achievement gap and a widening gap. Ironically, teachers on the front line for closing the gap are paid on average 6% less than teachers in our wealthier west county schools (OLO Report, 9/22/15) .

Board members will tell you that in hindsight, last year’s step increase contributed to growing student teacher ratios, yet they seem powerless to do anything about it (OLO Report 2/23/16, pg 14).  But you’re not powerless.  Ask yourself if your arguments over the last 8 years against spending above the MoE level are still valid; and, if not why not?  Our parents aren’t stupid.  Explain the value proposition to east county parents who make less than teachers and have only 10% of their kids graduate college-ready (4/14 OLO report).  Say no to more across the board pay raises.  If you can’t do that, at least tie any spending increases to a requirement that MCPS sponsor an independent review of its gap-closing plans and costs.

General county government doesn’t look any better.  Over three years (FY14-16), public safety employees have seen a 30% boost in pay, and other county employees have received 20% increases (Farber, 11/13/15 memo to Council).  (After the third round of pay raises last year the Executive was forced to implement unprecedented spending cuts to the FY’16 budget just approved.  Unfortunately, the cuts were to non-recurring expense items, postponing cuts needed to balance the FY’17 budget.  He then promised to cut spending by 2% in the FY’17 budget request, but failed to deliver, even though the Budget Director and Chief Administrative Officer reiterated this approach in the 12/8/15 Council meeting).

Where are the productivity increases to justify labor costs growing faster than inflation?  Our county’s health, transportation, and public safety haven’t seen dramatic improvements to justify big pay raises, while our safety net struggles to keep up with immigrant population growth, and our tax base hasn’t grown significantly.)

Lastly, budget request revenue projections could again prove to be too high (projections assume increases in the rate of personal income growth, 4.5% vs. 3.5% last year, that drives income tax revenues, and property tax revenues are projected to increase 10%- table pg. 3-8).  Recently projected budget shortfalls (December 2015, Dept of Finance, $179M) were largely due to overly rosy revenue projections last June, not the Wynne Case (those shortfalls were already in the June 2015 projection).  This could happen again. Scale back overly generous salary increases that keep bloating our enormous budget base and risk new budget deficits.  Be regulators, not enablers.

“Maryland county wants to ease the burden of student debt for its residents”

From the Washington Post of December 13, 2015:

A teacher “is exactly whom lawmakers had in mind when they developed legislation that would allow Montgomery to establish a loan authority, a move that would give the county the ability to leverage its municipal borrowing power to extend rock-bottom rates to its residents.

“Tom Israel, executive director of the Montgomery County Education Association, surveyed members of the teachers union in the spring and found that half of the 800 who responded had more than $40,000 in student debt.

““Montgomery County should not be a loan-shark county,” testified Jerry Garson, of the Montgomery County Civic Federation. “Why we are setting up an authority that will add millions of dollars in administration costs . . . when we cannot maintain our current roads . . . and we keep reducing our current services?””

 

 

Questions for Meeting of September 16, 2015

                    Montgomery County Taxpayers League Meeting
                                              www.mctaxpayersleague.org
                               Wednesday, September 16, 2015  –  7:00 – 9:00 pm (note time  change)
                                                 3rd Floor Conference Room,  Council Office Building
                                    
                    100 Maryland Avenue, Rockville, MD 20850
                                                                       
Questions sent to the speakers in advance of the meeting of September 16, 2015.

Topic:        “Smash the Charter Limit on Property Taxes? Or Decelerate Spending?”

Speakers:  Steve Farber, Council Administrator, Montgomery County Council
                  Joseph Beach, Director of Finance, Montgomery County Government

1.       There is a widely held belief that Montgomery County has been an ardent follower of Parkinson’s Law:  “expenditure rises to meet income”.  Now that the income situation is bleak, what are the approaches being used by the County Executive and the County Council to cut expenditures.  Are there any analyses of programs that have outlived their original intent but continue to linger on?  Are most budget reductions just a nibbling around the edges?  What are some of the criteria used to analyzing existing programs?  How many programs have actually been cut by more than 50%?  How many exist despite those cuts?

2(a).   Personnel costs are growing faster than inflation.  The savings plan proposed by the Executive and the plan adopted by the County Council provide little relief from ever climbing  personnel costs and have focused instead on non-recurring costs like the Capital Improvement Plan projects funded with current revenues, new programs and special project costs.  How should the 2016 budget process and contract negotiations address out of control personnel costs to avoid the need for bigger cuts to services or possible furloughs?

2(b).   Most retiree taxpayers will likely not receive any increase in 2016 retirement annuities due to a negative or flat Consumer Price Index (CPI).  Most working taxpayers will not receive generous salary increases.  The current system of contract negotiations with unions is tilted heavily in favor of the unions as there is no representation by the taxpaying public.  Collective bargaining has an enormous impact on the County’s fiscal situation.  How open is the County Executive and the County Council to making these negotiations more transparent and to including a few taxpayers in the negotiations process?

3.       Income tax revenue increases are driven largely by capital gains, which have been in a slump since the 30% run up in the S&P index in 2013.  Recent stock market indications point to even lower results for 2016, creating a need for further spending cuts or property tax increases above the charter limit.  How much in further spending cuts are needed in FY 2016 to avoid busting the charter limit, assuming Wynne case projections are correct and income tax shortfalls are the same as last year?  Regarding the Wynne decision, where Maryland was found to be double-taxing business owners, does the political leadership find it ironic that this ill-conceived decision to double tax might lead to even greater taxation of all taxpayers to fill the gap?

4.      Taxpayers have suffered from slow economic growth and reductions in their investments and are aging, which reduces their ability to pay higher property taxes.  We have seen our county grow dependent on income tax revenues, bloated by non-recurring capital gains not economic development, to annually increase operating budget and CIP expansion driven debt service costs.  Now that the income tax revenue strategy has collapsed, the County Executive is talking about a 10% property tax increase, and even creating a new Transit Authority that would circumvent the charter limit.  Taxpayers are losing confidence in the budget process and spending controls.  How can the budget process for FY 2016 be changed to cut inefficient and ineffective spending and to make these allocation decisions more transparent?

5.      County taxpayers are providing funding for migrant support services for education, affordable housing, food stamps and medical services.  While these are seen as legitimate needs and the County has stepped up to this responsibility, how much of the county budget goes towards funding these needs?  How much does the County get reimbursed by the Federal Government?  By the State?

Next meeting: TBA

“Getting the school system we pay for”

From the Gazette of July 10, 2013, a letter to the editor by MCTL Board member Gordon Brenne:

We’ve also shown there is no correlation between what teachers are paid and student performance improvements. And, because our teachers are paid 20 percent more than teachers in Howard and Fairfax counties, we can afford fewer of them, increasing our reliance on paraeducators to teach in underperforming schools.

  Read the full story at the Gazette.

 

Questions sent to Janette Gilman in advance of the meeting of February 28, 2013

Questions sent to Janette Gilman, President, Montgomery County Council of Parent Teacher Associations (MCCPTA), in advance of the meeting of February 28, 2013

1.  How does the MCCPTA define “full funding” for MCPS?  What would you consider the “floor” for the MCPS budget?

2.  What is MCCPTA’s role in determining the MCPS budget?  Is there a tripartite budget committee (MCPS – Unions- MCCPTA) that negotiates and approves the budget prior to its release? Have there been any instances where the MCCPTA did not agree with the MCPS and Union proposals or are you in lock step with them?

3. There are no targets in either the MCPS budget or the MCPS strategic plan for reducing the achievement gap?  Does the MCCPTA support an “equity” budget where funding allocations would favor those schools that have disproportionately high African-American, Hispanic and FARMS concentrations with relatively low performance outcomes? How confident is the MCCPTA that the placement of teachers is strategically determined? What is the MCCPTA position on allocating our most highly-paid, senior and most experienced teachers to red zone schools where the achievement gap is most pronounced?

4.  What is the MCCPTA position on sharing administrative services with the Montgomery County Government – services such as procurement, IT, human resources, etc.?  Are you confident that the costs related to these duplicative  administrative entities are justified and are not stealing resources from the classroom?

5.  Montgomery County has acquired a reputation for the quality of its public schools.  What does the MCCPTA consider the top 3 performance indicators for the success of its students?  How do these indicators compare with Howard and Fairfax counties? 

 

 

“School board member speaks out about union contracts minutes before vote”

From the Montgomery Gazette of June 14, 2012:

"School board member Laura Berthiaume (Dist. 2) said Thursday that, although she believes school employees should be recognized for their work, the school system should not make promises that it can’t keep….Robert Monsheimer, of the Montgomery County Taxpayers League, told board members Thursday that, while the county might have been able to give the raises this year due to cost savings, the move is equivalent to buying a car because enough money exists for a downpayment but without worrying about payments in the future.

“This has longterm implications that the taxpayers will pay,” he said."

Read the full story at the Montgomery Gazette.

Teachers’ Union Pres. Defends Lobbying

Teachers’ union president defends the union’s lobbying, but did he inadvertently betray his own cause?

When the economy crashed last year and a contract we had bargained in better economic times was no longer feasible, MCEA members voted overwhelmingly to forgo $89 million in pay raises for the current school year. We know that the recession has made it necessary for everyone to make sacrifices.

The coming years won’t be much rosier.

Read the full op-ed at the Washington Post »

Post: “Cash on the barrel”

The Post’s editorial board wants to know whose interests the Council really serves

In effect, local officeholders are so beholden to the union that they have forfeited their obligation to exercise independent oversight over contract negotiations. One result is that the average salary for a Montgomery County teacher, $76,483, is the highest among suburban school systems in the Washington area…But what confidence can the public have that officeholders in Montgomery are carefully weighing competing interests when most of them are held hostage to the overbearing influence of a single union?

Read the full editorial at the Washington Post »

Gazette: “County, labor union at an impasse in contract negotiations”

The Gazette reports on the contract fracas between the county and the MCGEO employee union:

Gino Renne, president of The United Food and Commercial Workers Local 1994/Municipal and County Government Employees Organization [said] ‘But the county will have to get off their high horse and take a leap of faith with their work force,’

Doug Prouty, president of the Montgomery County Education Association, which represents teachers [said] the teachers’ union is aware of the county’s financial difficulties, but would not rule out seeking pay raises…

‘We do not have resources to pay for additional employee compensation this year,’ [Nancy] Floreen [Montgomery County Council President (D-At large) of Garrett Park] said. ‘I do believe everybody understands that.’

County Executive Isiah Leggett (D) also has said it would be difficult to give pay raises to employees…

Councilman Philip M. Andrews (D-Dist. 3) of Gaithersburg … criticized by Renne last year — when Andrews served as council president — for saying the county could not afford cost-of-living or step pay increases for employees…said Monday that pay raises remain unaffordable.”

Read the full article at the Gazette »