This story was updated at 9:35 p.m. on June 17, 2020, to include additional comments from council members. A second update at 11:33 a.m. on June 18, 2020, included comments from Elrich. The story and headlines were updated again at 3:30 p.m. on June 18, 2020, to correct references to requests for cuts by MCPS and other agencies.

With a shortfall of up to $600 million in tax revenue expected for the current and next fiscal years, Montgomery County Public Schools, county departments, and Maryland-National Capital Park and Planning Commission are being directed to cut 6% of their approved budgets for next year.

Montgomery County Public Schools, Maryland-Capital Park and Planning Commission, and other agencies were asked to find savings as well. They were not given a specific percentage to meet.

The cuts are part of a revised spending plan County Executive Marc Elrich is creating to address the revenue gap.

On May 21, the County Council approved a $5.8 billion operating budget and a $4.4 billion capital budget for the next fiscal year, which begins on July 1.

Before approving next year’s budget, the council cut around $70.3 million from Elrich’s proposed spending to create a “continuity of services” budget, which doesn’t include most new programs or initiatives. Council members have acknowledged that they will have to revisit the budget in the summer or fall.


Elrich’s proposed budget was recommended in early March before the COVID-19 health crisis began in the county.

On Thursday morning, Elrich told Bethesda Beat in a phone interview that 6% was the target savings for the budget, but he said some departments may not be able to identify all the savings.

“It would be nice if we could hold onto more of our reserves at the end of the day because we know next year is likely to take a harder hit than this year,” he said. “If we can hold onto everything that we can … it will make next year’s budget easier.”


Elrich said budget staff members are also reviewing contracts and researching other reimbursement resources in order to save money. The county has sent in a few requests for reimbursement through the Federal Emergency Management Agency, or FEMA.

Beginning in April, several council members repeatedly called for Elrich to provide a savings plan for the next fiscal year to the council. They also criticized that they had to make cuts, instead of Elrich because of the lack of a savings plan.

At the time, Rich Madaleno, director of the Office of Management and Budget, said more information was needed on expenses and revenues. He said the administration also was seeking clarification on the requirements of the federal Coronavirus Aid, Relief and Economic Security, or CARES, Act funding.


The county received roughly $183.4 million in federal relief in late April. The money can only be used for expenses incurred between March 1 and Dec. 30 that are related to responding to the pandemic. It cannot be used to cover lost revenue.

In the initial draft of his budget, Elrich proposed a roughly 5-cent tax-rate increase — most of which would go to Montgomery County Public Schools through a 3.8-cent supplemental property tax. The council voted against the tax increase.

Elrich said Thursday that every budget he has sent over to the council has had to be changed. It’s assumed that it will be changed, he said.


“They made a few changes in a few areas. … Once you knocked out the tax increase and the school spending, most of the work was done,” he said. “There was some other things they knocked out, but it wasn’t a big deal.”

Elrich said the school spending and employees’ raises included in his recommended budget were affordable at the time they were proposed.

In a memo on Friday to the executive branch departments and office directors, Madaleno notified county employees that each department and office would have to cut 6% in its fiscal year 2021 budget.


The deadline for departments to submit proposed cuts to the budget department is June 26. The council is expected to approve a revised spending plan in late July.

According to the memo, another revised spending plan reducing PAYGO and tax-supported current revenue would be developed for the FY 21-26 Capital Improvements Program, a long-range look at projects. PAYGO refers to the principle of not adding debt when there is an expenditure.

On March 18, Elrich ordered a procurement and hiring freeze for all transactions not related to the pandemic.


For the first time in the county’s history, officials are considering opening a line of credit of up to $300 million because of financial impacts of the health crisis. A line of credit is used as “insurance” to address any cash flow problems.

“We are now in a difficult situation of balancing the County’s normal operations while expanding services to address the public health crisis during a time of great economic disruption,” Madaleno wrote in the memo. “To accomplish this task, the County Government must aggressively seek Federal and State reimbursement for any and all eligible costs.”

Madeleno said several proposals for more federal aid did not seem like they would pass in the U.S. Senate — meaning the county can’t count on more federal funds coming soon.


The county is searching for a study consultant who would work with six county employees. Berke Attila, director of the Office of Human Resources, and Gino Renne, president of the Municipal and County Government Employees Organization, or MCGEO, would be the co-leaders of the group.

“These reductions will be a challenge, and, in some cases, it will be difficult to identify the needed savings while minimizing adverse impacts on service delivery,” Madaleno wrote. “This effort is complicated by our efforts to return services to pre-crisis levels.”

Council Member Hans Riemer told Bethesda Beat on Wednesday that the county is going to experience a revenue decline and needs a savings plan as soon as possible.


“What was so frustrating about the budget process was the county executive [and] OMB director were arguing until the bitter end that they didn’t necessarily need to consider additional savings and that we could actually afford tens of millions of dollars for raises,” he said.

Riemer said the savings plan process should have been started in March.

“It’s now late June and every week since then has been a wasted week,” he said, adding that the savings plan should be sent to the council by early July.


It’s no surprise that the county needs a savings plan, Council President Sidney Katz said in an interview.

“Until you actually see what is being suggested, until we can actually work through [it] and they know the actual numbers and what it will affect, and how it will affect items, we need to wait,” he said. “We need to wait to see what they’re doing and then we will work with them to figure out what we will do.”

Council Member Andrew Friedson said Wednesday that the council knew more cuts would be needed to the budget.


“I think this is the step in the right direction. It’s needed,” he said. “We’ve talked a lot about how we need the county executive to step up in this moment and to put forward how, from a fiscal standpoint, we’re going to meet potential revenue [losses] that we’re expecting, and I’m glad to see how he’s done that.”

A cost efficiency study is underway to identify 100 vacant positions in the executive branch that could be eliminated during the first quarter of fiscal year 2021. Throughout the budget process, Friedson repeatedly brought up the need to eliminate vacant positions across county departments.

“I think we’re going to need to make tough choices about vacancies that may have some value,” he said. “But if we’re going to find cuts that are needed based on the potential revenue losses that we’re expecting, we’re going to have to go beyond what’s convenient. … in order to make the tough decisions that are tough to make.”


Elrich said the county has more than 700 vacant positions, and expects to be able to potentially eliminate more than the targeted 100.

Riemer said Elrich ran for office promising that he would rethink county government and do more with less, including reducing the head count of positions.

“It has taken the coronavirus crisis to get him to actually start working on it,” he said. “We’ll see what they actually come up with.”


Briana Adhikusuma can be reached at