Leggett Releases Operating Budget (Photos)
Montgomery County Executive Isiah Leggett announced on March 15 his recommended $4.8 billion operating budget for fiscal year (FY) 2014 that begins July 1. Leggett’s budget holds the line on property taxes at the County Charter level below the rate of inflation. His recommendation includes a tax-supported County government budget of $1.3 billion, up 3.9 percent, which is half of last year’s increase. The budget increases County spending for Montgomery County Public Schools (MCPS) to the level required by the State’s Maintenance of Effort law. The budget continues Leggett’s three-year plan to add 120 sworn officers and 23 civilians to the Police Department and doubles the number of School Resource Officers assigned to County high schools. It provides a 10 percent increase in Public Libraries, staffing newly-renovated libraries in Gaithersburg and Olney, increasing materials and adding hours at seven libraries. Following up on commitments made in his February 20 “State of the County” speech, Leggett expands the popular “Excel Beyond the Bell” program in his Positive Youth Initiative and boosts County funding to expand English language programs for County adults by 14 percent. Leggett’s budget also expands the County’s Earned Income Tax Credit (EITC) that assists the working poor.
The budget strategically restores some of the most critical and important services cut over the past six years as the County faced unprecedented budget challenges. The recommended enhancements balance the backlog of resident needs with the County’s new economic reality.
“When I was elected as to this office, County spending had increased during each of the previous four years by an average of more than 10 percent – an astounding 42 percent over four years,” said Leggett. “Simply put, that was not sustainable. Together, we faced the facts and made shared sacrifices. Over a six-year period, I have closed more than $2.7 billion in budget shortfalls.
“For my first five years, the rate of growth in the County’s tax-supported budget was zero. That’s right, zero – even while our population increased by eight percent and inflation increased by 12 percent. Our balanced approach to addressing these difficulties has helped bring us out of the worst of this economic crisis.
“As we restore some of our critical services and compensate our employees, we must do so strategically and in a sustainable manner. My recommended FY 2014 operating budget offers a blueprint for achieving this goal.
“Since taking office, I have abolished 1,254 positions in the County workforce, primarily between FY10 and FY12. These actions have saved us – in net savings from salary and benefits – $210 million between FY08 and FY13 and will continue to save us nearly $60 million every year.
“For four years, there have been no cost-of-living increases (COLAs) for County employees, saving the County $162 million; and for the past three years, giving no steps or increments has saved $62 million. All County employees were furloughed for between three and eight days, saving $11 million. Changes in cost sharing arrangements for health and retirement plans put more of the costs on employees, saving taxpayers $24 million.
“That totals another $259 million in savings since FY10.
“And, because base pay and benefits for County employees is lower on into the future, we will realize over $96 million in ongoing savings annually.
“Put those numbers together and we have saved, through reducing the County workforce, health and retirement changes and no increments and COLAS for that period, over $469 million since FY08 – with ongoing annual savings as a result of these actions of $156 million a year.”
Leggett emphasized that the County has maintained its coveted Triple-A bond rating and that his budget fully funds County reserves at $355 million, which is eight percent of the budget, sets aside $152 million in a trust fund to cover retiree health benefit obligations and funds PAYGO in the Capital Improvements Program at the policy level to match bond funding in the capital budget. Significant resources have been set aside in advance to address snow and storm costs, which were completely funded previously by drawing down reserves.
Recognizing the sacrifices made by County employees, the budget recommends funding the County’s collective bargaining contracts with unions representing general government workers, firefighters and police. For the first time in four years, a general wage adjustment and the opportunity for increases related to years of service are included.
“For the past year, I have said repeatedly that we needed to provide meaningful compensation increases for County employees if resources allowed,” said Leggett. “The extensive work we have done over the past six years to put the County’s fiscal house in order – boosting reserves, cutting the workforce, reducing expenditures and the hundreds of millions of dollars in savings we have gotten from pay freezes and benefit changes — has given us the room and the context to consider some compensation increases.
“I have not hesitated to impose pay freezes when I thought it necessary, even in the face of opposition from County unions and Councilmembers – as well as lawsuits filed against my actions. I would not hesitate to do the same in the future, if needed. That was the right thing to do then. This is the right thing to do now.”
The overall recommendations include:
- A total County budget (which includes debt service, grants, and enterprise funds) for FY14 of $4.8 billion, an increase of $190 million from the FY13 approved budget – or a 4.1 percent increase. This includes all agencies — MCPS, Montgomery College, Maryland-National Capital Park and Planning Commission (M-NCPPC) and County government
- An overall FY14 tax-supported portion of the budget of $4.188 billion (including debt service) that will increase by $168 million, or 4.2 percent, from the FY13 budget.
- A tax-supported County government budget of $1.31 billion, an increase of $49 million, or 3.9 percent – about half the increase approved by the County Council for FY13.
- Funding for MCPS will increase by $55.8 million – a 2.8 percent increase from FY13 and an increase of $28.7 million in County funding over last year. The budget provides a County contribution to MCPS that meets the requirements of the State’s Maintenance of Effort Law.
- The budget for Montgomery College increases by $9.2 million, a 4.2 percent increase. The budget funds 99 percent of the College’s tax-supported request.
- Funding for the M-NCPPC increases by $4 million, a 3.7 percent increase representing 100 percent of the agency’s tax-supported request.
“The strategic increases that I am recommending in FY14 do not restore the reductions that have been made to most of the County government departments over the past six years,” said Leggett. “Rather, they address serious deficiencies in our ability to provide basic services. While we still face fiscal challenges, County government will continue to defer some purchases, stretch out the life of technology, vehicles and other systems, defer maintenance on County facilities, and stretch our existing resources – human and otherwise – so as to cause the least disruption in services to County residents. We will continue to explore ways of performing critical services with fewer resources. Given the great budget uncertainty at the Federal level, and the potential impact this turmoil can have on the local economy, we must remain prudent in our spending.”
Following are the highlights of the recommended strategic increases in priority areas:
To support the enrollment of 151,354 public school students, the budget provides a County contribution to MCPS of $1,475.2 million, including $27 million of carryover funds and $34.5 million of local contribution to State retirement.
Leggett has set a goal of making classes available to any adult in Montgomery County who wants to learn English. He has stated that for every dollar invested in adult English language training, three dollars in higher productivity result. To help meet his goal, Leggett has recommended a 14 percent increase in the budget — to $816,000 — for the Montgomery Coalition for Adult English Literacy. This increase will help shorten and, in time, eliminate the long waiting lists for individuals seeking the opportunity to learn English and encourage County residents to become “teaching volunteers” in the County’s English language learning network.
The budget also adds one Linkages to Learning site at Georgian Forest Elementary School that will provide prevention and early intervention services, including physical and mental health, social services, and educational support to students and their families.
Additional funding will help define how to expand the successful model of collaboration at the Kennedy Cluster/ Neighborhood Opportunity Center between MCPS and the County government.
For the five years 2007 through 2011, crime in Montgomery County has fallen by nearly 19 percent, and serious crime is down almost 25 percent. To further improve public safety, Leggett’s recommendation increases the Department of Police budget by four percent. The proposal adds 40 more personnel – part of Leggett’s three-year plan to add 120 new officers and 23 police civilian employees. The budget also increases the size of the two police recruit classes in FY14, doubles the number of School Resource Officers, improves police response to calls related to mental illness and coordination with the mental health community, creates an investigative unit in the Sixth Police District, replaces expiring Federal grant funds for the Anti-Gang Unit and provides resources dedicated to missing person and animal cruelty calls.
Montgomery County civilian fire deaths dropped from 13 in 2009 to two in 2012. Over the past several years, response times to fires decreased by more than two minutes. For the most serious fires, response times dropped from 7.2 minutes to less than three minutes. To continue this progress, Leggett’s budget proposes a 5.9 percent increase for the Fire & Rescue Service. This funding provides staffing and operating funds for the opening of the new Travilah Fire Station, continues to fund two, 55-person recruit classes, and provides funding to ensure minimum staffing requirements are met and overtime is reduced. Additionally, the Department is starting year one of a three-year plan to convert 66 uniformed positions to civilian positions. Over three years, the changes will save the taxpayers an estimated $3 million and are consistent with the practices of many other jurisdictions.
Revenues from the Emergency Medical Services Transport Reimbursement Law will fund $17.6 million in service improvements and enhancements, including equipment and apparatus replacement; facility improvements; training, outreach and safety education services for seniors; and support for volunteer fire departments.
The Department of Public Libraries received the deepest reductions of all County government departments during the economic downturn — 26 percent between FY07 and FY12. To continue the process begun last year of rebuilding the most essential of library services, spending is recommended to increase by more than 10 percent and adds 34 positions. Leggett’s budget restores hours to the newly renovated libraries in Gaithersburg and Olney and adds hours to the libraries in Poolesville (extending closing times from 8 p.m. to 9 p.m. Monday through Thursday) and Long Branch (adding Sunday hours from noon to 5 p.m.). The recommendation includes funds to supplement last year’s increase for materials acquisitions and expands hours at libraries open on Sundays to five hours. Funding is also provided for two additional Sundays a year at libraries open on some Sundays – increasing openings to 47 Sundays a year. The budget also restores longer hours (9 a.m. to 9 p.m.) in the Rockville, Quince Orchard, Wheaton, Bethesda, and Germantown libraries.
Youth, Seniors and the Most Vulnerable
Two initiatives implemented by Leggett cross departmental lines of responsibility – Positive Youth Development and Vital Living for Seniors – and are targeted in the budget for a more holistic, comprehensive and coordinated approach. At the height of the recession, funding for these initiatives was reduced significantly and as a result, essential services were eliminated or reduced. The proposed budget adds resources to continue last year’s service restoration.
The Positive Youth Development Initiative provides opportunities for at-risk youth and intervention to keep kids out of gangs and prevent gang activity. The program has resulted in an almost 50 percent reduction in gang-related crimes from 2007 to 2012. Funding was increased from $7.2 million in FY12 to $8.8 million in FY13. An additional $3.15 million is proposed for FY14.
Leggett recommends an increased investment in the County’s high school students by funding two new high school wellness centers in Gaithersburg and Watkins Mill high schools that provide coordinated medical care, academic support, job readiness, leadership development and other health-related services to students and their families. Funding for two additional school-based health centers at Viers Mill and Weller Road elementary schools is also included.
In addition to the existing five “Excel Beyond the Bell” middle school sites, funding for a sixth site is proposed and the summer component of the program will be added to all existing “Excel” middle schools.
For seniors, Leggett is aggressively moving to implement the “Senior Agenda,” advanced by the County’s Commission on Aging. The agenda is an action-oriented blueprint designed to make Montgomery County a community for a lifetime. Highlights of the budget include a public/private partnership with the Jewish Council for the Aging to significantly expand transportation options for seniors; restoration of the extremely popular senior mini-trips; and $4.5 million in additional funding (the second year of a total $6 million commitment) to help develop 140 to 150 units of senior housing in Silver Spring.
To further strengthen the County’s safety net, Leggett’s budget also includes a recommendation to add nearly $1.8 million to the County’s Refundable EITC to expand support for low-income working families in Montgomery County. The EITC will serve nearly 39,000 residents in the County in 2014 and increase the match of the State’s EITC from 75 to 80 percent.
The budget also continues and expands Leggett’s strong and essential partnership with the non-profit community, leveraging large amounts of private funding and providing an even stronger safety net for the County’s most vulnerable residents.
Montgomery County has constructed or preserved nearly 8,000 affordable housing units in the past five years and the County preserved affordability for another 6,000 working families with rental assistance — despite the national recession. The County has been one of the most successful local jurisdictions anywhere in America at heading-off foreclosures, conducting nearly 400 workshops and counseling over 13,000 County residents.
This budget includes $26.5 million for the Montgomery Housing Initiative to create and preserve more affordable housing, bringing the total allocated under Leggett’s administration to over $272 million.
Economic Development, Pedestrian Safety, Transportation and Recreation
The budget provides resources needed to continue County support of the Great Seneca Science Corridor, the White Oak Science Gateway, the transition to transit-oriented development around the Shady Grove Metro, as well as to maintain the White Flint Plan. These efforts will help create at least 100,000 new, quality jobs in Montgomery County and add thousands of housing units, including affordable housing.
The County’s Economic Development Fund will also receive an increase to help meet economic development goals and create and retain jobs that further strengthen the County’s tax base and contribute to its future fiscal health.
To continue making the County’s streets safer for walkers and cyclists, Leggett’s recommendations include continued and enhanced funding for pedestrian safety. Great progress has been made over the last five years in reducing pedestrian fatalities from a high of 19 in 2008 to six in 2012;
reducing collisions by 45 percent in targeted locations; reducing the number of collisions resulting in severe injuries; and significantly reducing collisions within a quarter-mile of schools under the “Safe Routes to Schools” program. The budget continues funding for pedestrian safety and adds funds for education efforts to target locations and individuals at higher risk of being involved in collisions.
Funding for the Department of Transportation will fully implement the first phase of the County’s bikesharing program, which will provide a vital transportation resource to residents and visitors by making safe bicycle transportation available in some of the County’s most traveled corridors.
The recommended budget includes funds to reopen the renovated Plum Gar Community Recreation Center and provides programming funds for the Ken-Gar Community Center.
Employee Staffing and Compensation
The Leggett administration has saved County taxpayers $459 million since FY08 by reducing the size of the County workforce, making health and retirement benefit changes and not funding increments and general wage adjustments.
The savings from these changes will continue into the future because base pay, including benefit costs, for County employees is lower as well. By reducing these compensation obligations, the County will realize $156 million in ongoing savings every year. During the past two years, most area local governments or agencies gave cost-of-living and/or steps to their employees. Montgomery County did neither.
“For FY14, I am recommending funding the collective bargaining agreements I have negotiated with each of the County’s bargaining units,” said Leggett. “They are the end result of fairly negotiated agreements that avoided binding arbitration which, I believe, would have been far more costly and legally risky.
“Recent court rulings in Prince George’s County and Anne Arundel County make taking contract disagreements to binding arbitration less attractive and more risky. And the increases given by other jurisdictions also militate against our winning an arbitration decision on wages. A Prince George’s judge granted their County police a 12 percent increase in a single year to make up for four years of no increases. An Anne Arundel court case effectively ordered their County Council to fund decisions by labor arbitrators giving employees negotiated raises – regardless of the County’s ability to pay.
“And, several weeks ago, the Maryland Court of Special Appeals ruled against the County – and in favor of the three unions – in three related cases that involved my refusal to forward arbitrator-awarded union contracts to the County Council in FY12.
“My judgment is that if we had failed to reach agreement and the matter went to arbitration, the result would likely be arbitrator-mandated decisions on raises that could double or triple the rate of raises contained in the package I negotiated with our unions.”
The cost of negotiated compensation changes for FY14 is $31.6 million, a $15.3 million increase over what the County spent for one-time lump-sum payments to employees last year. The $15.3 million difference is one-third of one percent (.32 percent) of the County budget.
This year, Leggett is also recommending the strategic restoration of 128 positions. One hundred eleven of the positions — 81 percent — are for either public safety or libraries.
Funding the Budget
Leggett’s proposed budget holds the line on property taxes for County homeowners by keeping revenues within the Charter limit, resulting in only a $6.67 increase in the monthly property tax bill based on the average property assessment. Over the last two years, the average property tax bill has increased by 3.7 percent — well below the rate of inflation for that same time period of more than 4.6 percent. The property tax for each owner-occupied residence will include a credit of $692 to limit the burden on homeowners and maintain a progressive property tax structure in the County.
Recommended for the Washington Suburban Sanitary Commission (WSSC) is a budget that will increase the average monthly bill by $5.05 – a water and sewer rate increase of 7.5 percent in FY14, in accordance with the budget recently approved by WSSC.
Leggett’s FY14 budget assumes the Water Quality Protection Fund (WQPF) charge is consistent with Bill 34-12. This legislation brings the County’s WQPF charge into compliance with State law by extending it to all commercial properties, providing a reduction for properties that install effective storm water management devices and implementing a hardship waiver provision. With the fund revenues, the County continues to expand outreach, inspection and remediation efforts to comply with the requirements of the State’s Municipal Separate Storm Sewer System (MS4) permit requirements. The MS4 permit requires the County to upgrade existing stormwater management facilities and improve efforts at controlling stormwater runoff, especially through the use of low-impact design approaches.
“As I begin my seventh year as County Executive, I have never been more optimistic about the future of Montgomery County,” said Leggett. “We have navigated through a mighty economic storm, one that ravaged our nation and, yes, deeply affected us. But for all of these challenges, the job market is expanding, our foundation is strong again, and our public school system is excelling as we pass the one million mark in our general population. We have wrestled with deficits and downturns in our County but because we have made difficult choices, we are now emerging ever stronger from the recession.”
To view the budget highlights and the full budget, go to the Office of Management and Budget homepage on the County’s website at www.montgomerycountymd.gov/omb.