Editor’s note: This story was updated at 10:16 a.m. to reflect the County Council’s budget vote Thursday.
The Montgomery County Council voted to approve a budget funded by a 4.7% tax increase Thursday, but some councilmembers are concerned this plan will cause problems for the county later down the road.
“We are really going to face some fiscal challenges moving forward, especially if we hit a recession,” said councilmember Kate Stewart (D-Dist. 4).
During a straw poll last week, Stewart and fellow councilmembers Andrew Friedson (D-Dist. 1), Kristin Mink (D-Dist. 5) and Will Jawando (D-At-large) voted against the 4.7% proposal.
The County Council faced a budget this year that many councilmembers referred to as “unprecedented.” The budget proposed by County Executive Marc Elrich relied on a 10% property tax increase, with much of that extra funding intended to go to Montgomery County Public Schools. Council President Evan Glass (D-At-large) and other councilmembers have been critical of Elrich’s proposal, saying it put the council in a very difficult position.
There were other factors that made this budget season tricky, councilmembers say. Mink said this is partly due to federal COVID-19 relief funds drying up, and that she’s spoken to government leaders in other jurisdictions who are facing similar challenges.
“Issues like housing aren’t going away with the pandemic,” Mink said. “We can’t tax away issues. We need more systemic solutions that are going to help to solve these issues.”
Mink said the county would have to make tough decisions about what programs previously funded through relief money, such as American Rescue Plan Act funds, can still be funded by the county, and how.
Councilmembers who support the proposed tax increase say it’s a good compromise between Elrich’s proposal and constituents who are concerned about raising taxes.
But the tax increase will not cover everything. The County Council has been making numerous cuts and adjustments to the initial proposed budget, organizing line items into “high priority” and “priority” categories. To fund all “high priority” items, the council would need to pass a 5.7% increase, council budget staff said May 18. To fund all “high priority” and “priority” items, the council would need to pass an 8.2% increase.
The 4.7% increase will cover all budgetary commitments the council promised, including the Montgomery County Public Schools operating budget, county budget staff said.
Stewart said she’s concerned this is going to result in an overreliance on county reserve funding to finance programs previously funded by the federal relief funds.
“According to our policies, using money from reserves is very appropriate. However, you should use that money to fund one-time expenses, not ongoing programs, because that money doesn’t have a reliable source. Potentially, we’re not going to see that money again next year. So if you start using that money this year to fund ongoing programs, we’re going to have a real issue next year,” Stewart said.
Even councilmembers who support the 4.7% increase have said it is nearly impossible to fund everything that is needed.
“The sad reality is we will never be able to afford as a county government to address all the needs that exist within our communities,” councilmember Gabe Albornoz (D-At-large) said last week, saying he voted for what he saw as a compromise.
During a media briefing Wednesday, Elrich said he could “go on and on” about why he feels the council should have passed a higher tax rate. He said he’s concerned the cuts made don’t address key needs in the county.
“It’s not sustainable,” Elrich said. “For example, the council cut money for homeless sheltering. So you get a report saying you’ve got a record number of homelessness, and then the budget responds to reduce the sheltering funding. Those two things don’t match.”
Elrich said he is concerned that MCPS will have to overly rely on Elementary and Secondary School Emergency Relief (ESSER) COVID-19 funding from the federal government, which will run out.
“That’s all fine and well for this year. Next year when the assets or funds are gone, either you’re going to ask the school system to fire people they hired this year, or you’re going to have to plug the money into the budget next year again and have a discussion about taxes again,” Elrich said.
Both Mink and Stewart said they would have supported an increase between 5% and 5.7%, saying that one cent could make a big difference.
Stewart said she specifically hopes when looking at this budget moving forward, the council will figure out ways to better support the unhoused population in wake of the homelessness crisis, as well as mental health services.
“We’re going to have to make sure that we’re putting enough resources in so that we are providing the services we are supporting,” Stewart said. “These areas are of great concern to me.”
Looking to the future, Mink said the council will have to make some “tough decisions.”
“We need to figure out ways that we can cut costs over the next year without sacrificing services for our residents. I think that we need to be very savvy about this,” Mink said. “Tough decisions also means being able and willing to talk with our residents or constituents about what we know about the taxes that they need to levy in order to get some of the things done.”