The Current Financial Mess Has Finally Caught Up to MoCo

Several recent news reports in the Washington Post point out the severity of the budget crisis and show that our worries in the past have come to fruition now with cut-backs and limits on unwarranted wage increases now necessary. See below:
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By Ann E. Marimow
Washington Post Staff Writer
Sunday, October 5, 2008; Page C08

Anti-tax e-mail messages lit up the Montgomery County Council inbox in the days after the panel signed off on a new budget in spring. The deal raised property taxes for the average homeowner by about 13 percent, increased the local energy tax and left raises for public employees untouched.

"You have exceeded our pain limit," Terry Fletcher of Silver Spring wrote. "We can't take any more."

"I want to reiterate my shock and dismay that the County Council has seen fit to increase our taxes once again," wrote Mitzi Schroeder of Darnestown. "You will hear from us at election time."

Neither County Executive Isiah Leggett (D) nor any council members are on the November ballot. But local politicians and labor and civic leaders fear that anti-tax sentiment and turmoil in the financial markets could fuel support for the latest incarnation of the Ficker amendment.
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Ficker refers to Robin Ficker, the political gadfly, onetime state legislator and Bethesda lawyer turned real estate broker who has spent thousands of dollars of his money to petition referendums to curb taxes in Montgomery County since 1976.

Voters will be asked Nov. 4 to decide whether to amend the county's charter to make it more difficult for the nine-member council to exceed the limit on property tax revenue. Ficker's proposal would increase from seven to nine the number of votes required to surpass the cap that ties increases to roughly the rate of inflation.

Ficker says his amendment would serve as a safeguard for Montgomery's homeowners and would empower individual council members to "make a difference" by essentially giving one person veto power in budget talks.

"The people in Rockville have showed no inclination to control spending," he said of the county's elected officials.

None of Ficker's low-tax measures has been successful. But opponents remember how close Ficker came to prevailing in 1994, when he tried to roll back the county income tax rate.

Jerry Pasternak, who worked to defeat Ficker's efforts as an adviser to former county executive Douglas M. Duncan (D), sees similarities to 1994. That year, Ficker won 49.4 percent of the vote. Then, as now, elected officials had raised taxes and trimmed government services in what Pasternak called a "deadly combination" for voters.

"That's when they say, 'A pox on all your houses.' It's going to be a tough, tough fight," he said.

Council members have busted the limit on property tax revenue four times since the cap was approved by voters in 1990, including this year. And budget problems persist.



Montgomery's fiscal forecasters project a $250 million gap for 2010. After raising state taxes on income, sales and corporations last fall, legislators in Annapolis anticipate having to plug a shortfall of as much as $1 billion.

Even as Leggett has warned of furloughs for county employees, he has pledged not to recommend that the council exceed the tax limit to balance the books for fiscal 2010. But Ficker is not convinced.

"He's dreaming when he says he's not going to raise property taxes next year," Ficker said.

Opponents say the amendment would severely limit the council's flexibility to make spending decisions about schools, roads and social services and give one member unprecedented power to hold up the budget.

"It leaves it up to just one person. That's just overly restrictive," said Leggett, who helped craft the existing tax limit during his council tenure.

Council member Phil Andrews (D-Gaithersburg-Rockville) called Ficker's amendment "a recipe for mischief-making" that could have the unintended consequence of driving up spending. Requiring a unanimous vote, he said, could allow one member to extract additional spending from fellow council members in exchange for a vote.
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Inside the headquarters of the Montgomery County Education Association last month, a coalition of union, business and civic leaders gathered to plot their opposition strategy. Among them was former Gaithersburg mayor Bruce Goldensohn, who like many in the room discussed his long history with Ficker.

"I've been watching and afraid of Ficker since at least 1980," he said.

The fear for opponents this year is that their message could get lost in the campaign clutter of the presidential contest and high-profile statewide referendum on legalizing slot-machine gambling, and, more broadly, that the anti-tax message resonates with residents.

The coalition aims to raise more than the $109,000 they collected four years ago to make their case to voters.

Ficker insists that his crusade is not about him. But the opposition has gotten personal in the past. A countywide mailing in 2004 read "Another bad idea from Robin Ficker."

This round, Ficker has had a head start. After his law license was suspended last year for failure to properly represent clients, Ficker combined his passion for cutting taxes with his new real estate business. He says he has visited thousands of homes, handing out glossy postcards that promote his business and the referendum campaign with the message "Save Our Homes!"

Alan S. Rosenthal, a retired federal government worker from Kensington, has consistently opposed Ficker's proposals. But after the council's vote in May, he said he would be hard-pressed to make a convincing argument against limiting the council's taxing authority.

Rosenthal warned in an e-mail to the council then that future anti-tax measures would have "little difficulty in persuading the electorate that given the irresponsible action taken by the council in 2008, the time has come for its adoption."

Marvin Weinman, head of the Montgomery County Taxpayers League, said Ficker's amendment would probably have little practical effect because all but two of the budgets in the past 14 years have had the unanimous support of the council.

Even so, he urged voters to view the measure as a referendum on how Leggett and the council are managing the county's finances. The outcome of the election, he said, could answer the question: "Is the public fed up enough with the fiscal situation to make a statement that it's time for a change?"
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And a second article about school system cut-backs came a few days later.

MONTGOMERY COUNTY
School System Cannot Afford Raises, Chief Says


By Daniel de Vise and Ann E. Marimow
Washington Post Staff Writers
Tuesday, October 7, 2008; Page B02

Montgomery County's schools chief has told principals that the system cannot afford to fund scheduled pay raises for the coming budget year, underscoring grim economic conditions that could also have repercussions for thousands of other local government workers.

School Superintendent Jerry D. Weast has said that labor contracts will have to be renegotiated, and Board of Education President Nancy Navarro said yesterday that planned raises of 5.3 percent for teachers are probably unrealistic when the county faces a projected $250 million shortfall for fiscal 2010.

"The financial situation is such that everything is on the table," Navarro said. "Obviously, what we have in place right now looks like it will not be viable."

Weast's chief of staff, Brian Edwards, confirmed the superintendent's private warnings to school principals. "Dr. Weast is having very frank conversations with staff, with union leadership, with parent leadership that next year's budget situation is a dire one," he said.

During a contentious budget battle last spring over raises for government workers, union contracts became a symbol to some critics of overspending and the power of labor leaders. The school board was able to honor the contract for this fiscal year by cutting and reassigning positions and scaling back academic initiatives.
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Montgomery teachers are in the second year of a three-year contract that awarded a pay raise of 5 percent this year. Roughly two-thirds of teachers also received annual step increments of between 1.9 and 5.5 percent. The average salary for Montgomery teachers was $70,011 a year as of fall 2007, the highest figure of any Maryland county, according to state data.

Tom Israel, executive director of the Montgomery County Education Association, said the labor group has not agreed to renegotiate the contract and will not do so based on economic forecasts.

"Obviously all the indications are we are already in very difficult times," he said. But "we will make decisions based on the actual data, not just on forecasts, because time and time again, the forecasts have proven wrong."

The superintendent is legally required to fund the negotiated pay raise absent a mutual agreement with union leaders. No elected official or union leader would publicly discuss breaking the contract, which is regarded as one of the most sensitive topics in upcoming budget talks. Privately, though, several officials said the contract cannot be funded.

Teacher pay is central to the budget blueprint that Weast must present to the school board in mid-December and sets the context for the overall spending plan that County Executive Isiah Leggett (D) sends to the County Council in March.

Four months ago, council members signed off on a $4.3 billion budget for the current year that increased property tax bills for the average homeowner by about 13 percent and left union contracts untouched. But the sentiment from school system leaders was echoed yesterday by Leggett and council members, who have the final say on Montgomery's budget.

Council President Michael Knapp (D-Upcounty) is preparing a preliminary framework for closing the shortfall that considers rolling back or eliminating pay raises for all county government workers. Wiping out so-called cost-of-living adjustments would shave as much as $125 million.

"All the unions recognize where we are," said Knapp, who called labor leaders his partners. "There's going to have to be some element of employee participation."

Leggett said that in meetings with union leaders "the message has been clear" about the county's fiscal constraints.

"We will be asking them to make some adjustments," he said, "in order to avoid severe cuts in services."

To close a budget gap five years ago, leaders of the unions representing county government and school system employees agreed to defer pay raises for several months.

Union leaders agreed with the assessment of the local, state and national economic outlook, but said it was premature to talk specifics.

"I'm never excited about the prospect of going back to the bargaining table," said Gino Renne, president of the Municipal and County Government Employee Organization. "That said, we look at the numbers just like everybody else does. This is a different year."