Making my mark on the budget

Last week, the County Council passed a new budget for the year. As we steadily climb out of the Great Recession, we are beginning to restore critical services at a responsible pace.

My number one budget priority is education, and our new budget fully funds MCPS and Montgomery College. Our record funding amount of $2.28 billion will enable MCPS to reduce English and Math class sizes in the highest poverty schools and provide additional English for Speakers of Other Languages (ESOL) staffing in 21 schools. We are also investing a record amount of local money on school construction. Our capital budget includes 27 new or expansion school projects all over the county.

These funding improvements are made in the context of a budget that overall is responsible. We have met or exceeded our reserve requirements, and the rate of growth is affordable (in fact, it is less than the rate of growth in personal income).

As in years past, I put my own stamp on our county priorities. Following are several initiatives that I successfully spearheaded with support from my colleagues at the County Council, largely through my work on the Transportation and Environment committee.

1. An Increase in the County's Earned Income Tax Credit (EITC): nearly 35,000 families in our county depend on the EITC to increase their incomes by reducing their tax burdens. The EITC was cut during the recession, but I passed legislation to restore it. The average eligible family will receive a $526 local tax credit next year, a record amount, adding to their Federal and State returns to provide a substantial increase in their incomes.

2. I also successfully worked to expand the county’s Volunteer Income Tax Assistance service, which helps residents fill out their tax returns and claim credits owed to them like the EITC -- because you can’t claim the EITC if you don’t file taxes.

3. I created a new program in the capital budget that will help make Montgomery County more walkable and bikeable by funding bicycle and pedestrian improvements in the county’s more urbanized areas. The Department of Transportation will begin looking at improvements in Glenmont, Grosvenor, the Silver Spring CBD, Veirs Mill/Randolph and the Wheaton CBD and will then move on to the rest of the county.

4. I was stunned to learn that Montgomery County cannot expand bus service to meet our vision for transit because we are out of buses! I took action to add five more buses to our capital program. We discussed adding service to the 55 route from Germantown to Rockville as a high priority, among others.

5. One of the more important recommendations of our Night Time Economy Task Force was to improve the circulator services in our urban districts. So I took the lead to secure funding to expand and rethink the Silver Spring circulator, with a goal of creating a unified program across the county.

6. I also secured a funding increase for creating new natural surface trails in our parks -- I would like to see our county become more of a mecca for hikers and bikers.

7. Finally, the county will begin a new tree planting initiative that I am working with the County Executive to design. Seed funding for this program was created in this year's budget as well.

As you can see, I am working hard to fund public education and public transportation, our safety net, our environmental programs and more, while maintaining fiscal responsibility. Please contact me if I can be of service.

New Council Budget Highlights

The council’s budget this year was a great step forward.  Within a framework of fiscal prudence -- county spending did not increase faster than county resident’s average personal income -- we increased our funding for education, environmental protection, libraries, parks, public safety, human services and other key areas, and we also provided an additional modest reduction in the energy tax.

Every Councilmember gets the chance to make his or her own mark on the budget. I certainly made mine this year. Here are some of the ways in which I worked with my colleagues to make a difference:

1. Caring for our county trees: The council provided an increase of nearly $1 million for planting county trees, caring for them and grinding stumps.
2. Reducing traffic: We also secured $250,000 for optimizing traffic signals so that we can fight congestion with smarter solutions.
3. Boosting our EITC: After the County Executive recommended an additional $1.8 million to raise the county’s Earned Income Tax Credit (EITC), the council boosted that program by another $1 million.  This raised our EITC overall by 10%.
4. Child care: The council added funding for a new effort by the county to support child care providers with business consulting services.  We also provided an extra $338,670 in assistance to working poor parents to pay for child care.
5. Bike lanes: The council added $250,000 to our Department of Transportation’s budget to work with our bike advocacy groups to stripe new bike lanes in order to ensure that our new bike sharing program, which is coming very soon, will succeed.

I hope you are enjoying your summer. As always, please remember that if you need a county service or have a request for information about county services, just call 311 from any phone in the county or search the www.mc311.com website from your desktop or mobile phone. And of course email me for assistance.

Our county budget – what are your priorities?

Every year, the County Executive sends the County Council a recommended budget on March 15. The council spends two months hearing from residents, reviewing the budget and deciding on changes before finalizing it with a vote. We are now underway.

Resident input is invaluable to me and I am seeking comments on your priorities. The council has scheduled five hearings on April 9 through 11.  If you wish to testify, please call 240-777-7803. Additionally, I am excited to announce that for the first time citizens can now use our newest civic outreach platform, engageMontgomery, to voice their concerns on the proposed budget.  And as always, you can contact me directly at councilmember.riemer@montgomerycountymd.gov or by writing to me on my Facebook page.

The Executive’s recommended operating budget continues our recent work to regain what we lost during the Great Recession. Between 2010 and 2012, the county responded to a collapse in revenues by cutting spending significantly. Many departments took double-digit hits. In the new budget, as a result of very small annual increases in spending, many of those government functions are now about where they were before the recession hit.

We are balancing our restoration work with caution.  In the three years that preceded the recession, tax-supported spending grew by nearly 30%.  Over the last four years, the growth in our tax-supported budget has averaged 3.0% per year - not much higher than the average rate of inflation (2.4%).  Much of that growth has gone to savings programs such as our reserves and our retiree health benefits pre-funding.   We are also holding the line on our county’s total workforce, which is about the same size as it was four years ago, and doing everything we can to protect our AAA bond rating.  

As I begin my review of the Executive’s budget, my first focus is on those programs that impact the most vulnerable members of our community.  Here are two of them.

Working Families Income Supplement

Montgomery County is one of a tiny number of local jurisdictions in the country that provide Earned Income Tax Credits (EITCs).  Our county’s EITC is called the Working Families Income Supplement and complements the state’s EITC.  By putting money directly into the pockets of low-income workers, the EITC is one of the most successful U.S. anti-poverty programs.

During the Great Recession, the county cut its EITC by more than 30%.  The Executive has restored some of this money in his budget and deserves recognition for that, but there is more work to do.  I will be working hard to restore our EITC to pre-recession levels to help working families in our county cope with our exceptionally high cost of living.

Funding non-profit service partners

Our county partners with a large network of nonprofits to provide services to residents, including education, senior services, assistance to the homeless, housing, health care, children and youth services and much more.  These nonprofits are critical and cost-effective options for the county to multiply its efforts.  They are also a large part of the county’s economy as nonprofits employ over 40,000 people and have a combined payroll of $2.2 billion.

The Great Recession has generated enormous demand for the services of our non-profits.  At the same time, they have endured funding challenges.  In 2011, the county was forced to cut disbursements to non-profits by 5% because of revenue shortfalls.  We were able to restore 2% last year.  I, along with my colleagues, will be looking for ways to restore non-profit services further this year so that we can keep up with the needs of county residents who depend on them.

Your priorities

There are many big decisions ahead of us: education funding for MCPS and Montgomery College, tax rates, environmental measures such as stormwater fees, health care services, library services, parks, economic development incentives.  

 

What are your priorities?  Please let me know by at councilmember.riemer@montgomerycountymd.gov or writing to me on my Facebook page.

Stop the Cost Shift Cuts

Below is a statement put out by the Montgomery County Council announcing the launch of a statewide coalition's website opposing the State's plan to shift teacher pensions onto the counties. The site is www.stoptheshiftmd.com. Read on to see the statement and join us in fighting to protect key priorities here in Montgomery County. Thank you.

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Maryland's counties and school systems face a serious problem in Annapolis right now. Governor O'Malley has proposed shifting half the cost of teacher and other pensions from the state to the counties. The County Council, County Executive Ike Leggett, and Montgomery County Public Schools (MCPS), as well as our employee organizations and our counterparts throughout the state, strongly oppose this shift. As Board of Education President Shirley Brandman said on Feb. 14, the shift "will have an immediate negative impact on the important services that our local governments provide."

For Montgomery County, the proposed pension shift would cost $47 million in Fiscal Year 2013 and $315 million over the next five years. The measures proposed to help counties pay the cost are inadequate and may not be enacted in any event.

How much is $47 million? It pays for the jobs of nearly 500 teachers, firefighters, police officers, and other vital County personnel. It is more than the County's general fund budgets for housing, transportation, and environmental protection combined. Our entire budget for libraries is less than $30 million.

The recessionary County budgets of the past three years required painful cuts that have seriously affected our residents and employees alike. For the coming year we face a further budget gap of $135 million and more hard decisions. If we now have to absorb another large burden from the state, there will be real damage to all our vital services—our schools, college, police, fire and rescue, safety net, libraries, parks, housing, transportation, recreation, and many others.

We understand that the state too must balance its budget and faces hard choices. But it is the state that sets the basic structure of pension benefits. In 2006 the state raised pension benefits by 29 percent, retroactive to 1998, but failed to provide sufficient funding. In fact, the state's financial support for the pension fund has fallen short for many years. Counties should not be asked to assume financial responsibility for costs not of their making. We have cut services to the bone, and we have reached our limit on taxes.

Elected officials and concerned organizations throughout the state, including the Maryland Association of Counties, the school community, and employee organizations, have joined together to convey this message to the Governor and the General Assembly. The coalition's web address is www.stoptheshiftmd.com. There you can learn how you can make a difference. The General Assembly will make its decision on the pension shift soon, probably by mid-March. The stakes for all our County residents are very high.

Hearing on the Capital Budget

Today was jam packed with council session and a committee meeting on small business issues. Wheaton is very much on our mind as we sort through redevelopment ideas and county investments.

Tonight featured a hearing on the county capital budget. It was interesting and residents spoke compellingly about a diverse array of topics.

I expect that we are going to make significant changes to the capital budget. I am looking to protect the Purple Line and biking facilities, and I am waiting to hear about MCPS needs.

Meanwhile I am working hard on an effort to stop the Annapolis cost shift to county governments for pensions.

I'm continuing my focus on the Purple Line, working with my colleague George Leventhal to keep that priority on track.

I'm excited to tackle these big picture challenges while delving far into the weeds of capital projects. It's a nice mix.

Daily Journal (Silver Spring Transit Center, County Debt Limit, Small Business)

Today's T&E committee started with a briefing on a new agreement to govern the Blue Plains Waste Water treatment facility, where most of our sewage is treated.

Then we moved on to discuss the terrible news about problems with the construction at the Silver Spring Transit Center. We do not know yet how this will be resolved but there will be a long delay in opening the transit center. How long? Long. We don't know.

Then the full council met to discuss legislation that is pending in Annapolis. No real news there but we are working closely with our delegation to protect the county from a proposal to change who is responsible for funding teacher pensions. The state has been responsible for that for 85 years but has managed the pension badly and now wants to foist the pension deficit onto county governments. Montgomery County would be responsible for paying over $40 million in state pension funding in just the first year alone, and according to the state projections these costs are expected to increase about 10% per year.

In the afternoon, at a joint meeting of the GO committee with the Planning, Housing and Economic Development Committee we discussed concerns about small businesses and redevelopment. I was pleased to hear that the County Executive is depositing $2 million into the revolving small business loan program; I requested that the council discuss policy objectives for how those loans would be made. Can we fund clean-tech startups? Child care companies? Can we target the loans to problems we want to address, such as unemployment in the Hispanic community?

I was also pleased to learn that the County Executive is exploring partnerships with community banks to make loans, perhaps helping close deals on certain loans that the banks would not be able to fully finance themselves.

These are promising developments---we can and must do better to grow our own job creator right here in Montgomery County.

The day continued with a final committee meeting to set our assumptions for the capital budget. We set our annual borrowing for that budget at $295 million and addressed some technical issues that will likely result in reducing the funds available for the $4 billion capital budget by another few tens of millions.

To polish off the day, or evening, I met with a group of activists in the Chevy Chase area that calls itself the "District 1 caucus." Included among them was former Councilmember Scot Fosler. We had an interesting conversation about the nature of the County Executive position. Did you know that Fairfax County does not have an elected County Executive? They have a county manager type position. It was a treat to meet Scot; last Friday I met Bill Scher, also a former council member.

Which reminds me that today I got a call from former Governor Parris Glendening, who is inviting me to join a select group of local officials from around the country in a program hosted by Smart Growth America, the non-profit policy organization that he founded. I was thrilled to get the Governor's call and I'm looking forward to getting involved with this effort to support and build smart growth champions around the country.

Meanwhile tomorrow at full council session I am introducing a new bill that I drafted on big box retailing issues and considering recommendations I want to make for our county cable plan operations. And tomorrow our T&E committee will return, and possibly conclude, the issue of take home vehicles for county employees that I have been working on for some time.

Lots going on!

On the Governor’s Budget and Teacher Pensions

The Governor has released his budget for Fiscal Year 2013. There is no question that the state is in a tough spot and the Governor had to make some tough choices. He and the General Assembly have to figure out how to close a billion-dollar deficit in a $15 billion general fund budget. The Governor is proposing to close the gap through a combination of tax hikes and spending cuts, none of which will be popular. Many state and local governments have had to make similar adjustments over the last few years, including Montgomery County.

Nevertheless, one proposal of the Governor’s warrants concern: he would like to shift part of the responsibility of paying teacher pensions from the state to the counties. This would cause great harm to Montgomery County.

For several decades, the state has assumed the responsibility of providing for teacher pensions as a way to help the counties afford competitive salaries for teachers. This system has worked well for many years, and it is partly responsible for Maryland’s public schools being named first in the nation four years in a row.

However, a few things have changed over the last decade. In 2002, the state began underpaying its contributions to its pension fund by $100-200 million a year. As a result, the percentage of future pension liabilities the state could afford to pay dropped from 101% in Fiscal Year 2000 to 79% in 2008. Then, the stock market crash drove the state’s funding ratio down even further, to 64% in 2010. The state’s overpayments to mediocre investment advisors did not help. Much of the damage to the pension fund was self-inflicted.

Nevertheless, this past year the state continued its pattern, this time raising contributions from teachers to pay for benefits while simultaneously cutting its required contributions to the fund by $120 million.

Now the state wants the counties to fix the problems it caused by passing the buck for its mistakes. They want the counties to pick up a large part of the bill.

That’s wrong, plain and simple.

Under the Governor’s plan, the counties would have to pay half of the state’s teacher pension costs: a new mandate totaling $239 million. Montgomery County’s share of that liability will start at $41 million next year and will rise steeply thereafter. The county simply cannot afford this new permanent liability. If we have to pay it, other programs – including the schools – may have to take cuts If the state forces us to raise taxes to pay it, the county’s economy will suffer. Either way, Montgomery County residents will be unfairly punished for the state’s inability to deal with its problems.

The County Executive and the County Council are unified in opposing this plan. We are working with our state legislators to stop it. If you can add your voice to ours and weigh in with our state legislators, we have a chance to win.

I’ll be in touch as we learn more.

Hans Riemer

Council Member At-Large

Daily Journal (Capital Budget or CIP)

Today we received the county executive's proposed capital budget (called the CIP). This is a six year, $4 billion budget used for investments in new school buildings, county buildings, transit projects, roads, technology, and so forth---expenses that are not operating expenses (like compensation) but rather assets that we build.

The County Council will review the exec's proposal intensively for the next two months or so and then final passage will be at the same time as the operating budget, in May.

Needless to say, my office, as well as activists and organizations around the county, are pouring through the details and assessing how various projects have fared. I'll be commenting on these issues a lot in the coming weeks as we work through the details. This is also my first CIP, as the budget is on a two-year cycle.

One of the undercurrents of debate on this issue is the amount that the county borrows in order to fund the capital budget. I have been on the record saying that while I believe over the long term our borrowing will need to come down as our debt service costs are very high, this is not the year to start cutting back on construction spending. For example, MCPS has stated that school construction prices have dropped from more than $280 per square foot to $217. We should be taking advantage of that opportunity.

What the country and our county needs is for government at every level, Federal, state and local, to work together to boost economic activity. These projects create jobs right here in Montgomery County and of course they also create first-rate classrooms, greater mobility through enhanced transportation, stronger communities, and a better place to live.

Governor O'Malley has called for more capital spending at the state level, arguing that these projects will create jobs as well as improve the state's economic position.

The county needs to pull its weight as well.

Daily Journal, MCPS School Construction (Rock Creek Forest edition)

Yesterday I joined a great event organized by the PTA and MCPS called "Reading Rocks". I got to read to a group of kindergartners, and I read Three Billy Goats Gruff.

Trying to explain my job to 5 year olds wasn't exactly easy, so I settled on saying that I worked with the government as an elected official and asked if any of them had gone with their parents to vote. Not many raised their hands – parents take your kids to the polls! It's habit forming from an early age, according to research.

In discussion with the PTA leaders I learned that the school is at the front of the line for reconstruction. We will see if the County Exec includes enough funding for it when we get the capital budget on Monday.

I was glad to see that the governor is proposing more funds for school construction this year than last year, arguing that the economic activity will generate jobs. The county should follow O'Malley's lead and stretch our limits until the economy picks up.

Daily Journal, 01-04-12 (MCPS School Construction)

Back from some holiday down time! After breakfast with new Rockville City Councilmember Tom Moore and former Council Member John Britton, I headed down to Garrett Park Elementary School for the opening of a newly modernized school there. The students were actually on their first day in the new building, and we joined a few classrooms to watch the students working with their teachers in the new environment. It was gratifying to see so many happy kids... the county's funds well spent... and our community values artfully articulated there in brick and mortar, advanced classroom technology, and even geothermal energy.

School construction is certainly on my mind as we prepare for the "CIP" budget, which is our six-year capital improvements budget. Last fall the County Executive proposed to cut about $150 million over six years from that budget, and is preparing a plan based on the lower spending amount now. The Council approved that amount although I voted against the cut. MCPS, meanwhile, has requested a near 10% increase in construction spending for the new capital budget. The council will have a tough time balancing it all together and I look forward to hearing from the community about the most pressing priorities as we receive the Exec's new budget on January 17.

Photo by Patch

Daily journal, 12-7-11 (MCPS budget)

The big issue of the day was the budget proposal from the new superintendent of MCPS, Dr. Joshua Starr. I talk to Josh when I can at events in the community, and I've been impressed by his approach but also appreciative of his educational and child development philosophy. He has offered a specific critique of the prevailing dogma around education reform and No Child Left Behind that I and many parents also share.

A "budget address" by the MCPS superintendent is, for some reason, a very big affair. Hundreds of MCPS stakeholders gather to hear a presentation that feels sort of like a (government) version of Steve Jobs unveiling the next iPhone. I wonder if the County Executive has ever thought about doing something like that. The benefit of the address is it gives the chief executive the chance to explain the values, mission and strategy of the organization. The county government could use an exercise like that.

Theatrics aside, the new MCPS budget is a constructive proposal and one that I hope will get all parties working together in the right frame of mind. There are very modest compensation increases for MCPS employees, who have gone 3 years now without a raise. My hope is that the increase can be generally matched for county agencies (i.e., Department of Transportation, HHS, Libraries, and so on).

I don't know if we can afford any improvements yet because we don't know how much money we will have to work with. Nevertheless, the proposal is certainly reasonable and provides a good basis for discussion going forward.

One issue that we will have to work on is the $26 million state aid penalty resulting from the council's reduction in per-pupil local spending. The reduction was necessary to bring spending down from levels that were sustained only by revenues from a real estate and financial markets bubble. If the state does not waive the penalty, the council will have to examine ways to offset it. At the same time, competing priorities such as police, fire service, parks, libraries and more - which also have taken heavy hits during the recession - will need adequate funding. So we will have a lot on our plate in coming months! Please keep in touch as we put together our budget.

Daily journal, 09-26-11

Today was jam-packed with tough policy issues. First, a conversation
with the Fire Chief as a follow up to our committee meeting last week
on vehicle policy issues. Then a Gov Ops committee meeting where we
debated the level of borrowing we can afford to finance construction
of capital projects like schools, libraries, etc. I recommended, as
did Council president Valerie Ervin, that we should not reduce our
spending in this area because it will shrink our local economy. The
Count Executive is recommending $50 million in cuts to these projects
over the next 2 years.

Then a meeting with community advocates in the BCC cluster who are
opposed to the site that has been chosen for the middle school. I have
to give a shout out here to Cathy Fink, a local musician whose album
Pillow Full of Wishes is absolutely one of our family favorites. It's
tough getting lobbied by the lady who sings your kids to sleep!

Then to T/E committee to discuss the issue of artificial turf fields.
There have been a lot of concerns raised about them. My conclusion is
that the science certainly raises enough concern to implement testing
but not enough to warrant a moratorium. I am pleased that the parks
department is implementing a rigorous test on runoff and environmental
impacts. That will tell us a lot. I requested lead tests for all our
existing fields and that we explore alternatives to tire crumb for
filler for these fields.

Now I'm prepping for a vigorous discussion tomorrow on the CR family
of zones. We are working to bring new plans to life for communities in
Wheaton, Kensington and Takoma/Langley but we need to get the zones
right or the investment will not come.

I love this job!

Daily journal, 09-14-11

Today I had a number of meetings and discussions on the topic of employee take home vehicles. Ever since I first learned that a number of employees had vehicles that they could take home at night and the county government was not forthcoming with information about them, I have been pushing hard for answers and reforms. We are getting ready for a committee hearing next Monday that will cover both public safety vehicles (except police vehicles) as well as county vehicles. We asked the executive branch to revise the policy and reduce the take home vehicle fleet significantly last spring, and now we are getting a revised policy. It has taken a long time, I have to say. I think we are going to make some real progress on this issue next week and put some changes in place that will save some real money.

Daily journal, 09-13-11

Today was the first council session since the end of July. Its been so long since I sat at my seat on the dais that I have to confess I was a bit nervous all over again. We started the day though with an open-press discussion with the County Executive, Ike Leggett. I was a few minutes late as I was getting an interesting update from Marc Elrich about his BRT plans as well as economic development issues, where we have some common interests. The session with the County Executive turned into a bit of a fracas over the issue of whether we should pursue a municipal power authority that would take over for Pepco. I strongly support pursuing this idea -- I think the residents will be very interested to see the option laid out before them (yes? no?). It appears to me there is enough support on the Council to go forward, regardless of the Executive's objections.

Another focus today was on capital spending and the capital budget --- where we borrow money to pay for long term investments such as schools, transit technology, roads, parks, libraries, etc. The County Executive is proposing a cut in the amount of money that we borrow. I am concerned about any proposal that would slow the pace of job creation in the county, and there is no question that building projects create jobs (good ones, too). We will be taking a closer look at this but my general philosophy is that we should spend every penny we can on job creation, within the bounds of affordability.

We also discussed a bill that I have introduced, along with six other co-sponsors (so far), that would change the timing of when impact taxes are paid to allow builders to use more of their seed capital to start projects. The timing would change so that builders do not have to pay taxes up front, but rather when they are ready to occupy and sell. This will mean more projects and more jobs, as well as more single and multi-family housing for our workforce, and more housing for companies looking to expand or locate here. It won't cost the county or taxpayers a dime --- in fact, as Council Vice President Roger Berliner noted, it will generate more tax revenue over time by improving the investment climate.

We are in a national employment crisis that demands an aggressive response from every level of government. I'm interested in any ideas you have for how we can spur job creation here in Montgomery County.

Montgomery County's New Budget

Dear Supporters,

This morning, the County Council unanimously passed a new budget for the next fiscal year. As I cast my vote, I believe the Council has met its responsibility of balancing our residents’ priorities and keeping the government on a sustainable path.

Here is information that I think you might find useful.

Responsible Spending

The $4.4 billion total budget increased 2.2% from last year, but is still below the level of two years ago (FY 10). With workforce reductions now totaling nearly 10%, the county is becoming more efficient in order to protect priorities that really matter.

$31 Million Increase to MCPS

Tax-supported funding for our public schools will increase by $31 million, from $1.92 billion to $1.951 billion. As a result of this funding increase, class size will not increase even though enrollment is growing. As in past years, MCPS will receive more than half (56%) of all tax-supported spending for government agencies.

Council Service Restorations

The County Council made many program restorations to the Executive’s recommended budget. These were some of my priorities:

1. Libraries: The council restored $2.3 million in the public libraries’ budget. That includes $1 million for materials and a variety of staffing restorations to prevent significant cuts at theSilver Spring, Long Branch, Twinbrook andChevy Chase libraries. Friends of the Librarydeserves great credit for their advocacy.

2. Planning: The county needs a robust Planning Department in order to channel future growth towards transit, thereby enhancing our economy while protecting our quality of life and environment. The council restored $1.58 million to Planning’s budget, enabling them to fill 8 vacancies and proceed with analysis of a new county-wide rapid transit system. We also restored cuts to our parks.

3. Montgomery College: The council restored $4.6 million in proposed cuts toMontgomeryCollege’s budget to protect academic programs, student services, and more.

4. Public transportation - Kids Ride Free: This program allows students to use Metrobus and RideOn for free on weekdays between 2 PM and 7 PM. Kids Ride Free was suspended last year, but the council has now restored it, which will greatly help young people who want to participate in extra-curricular activities, earn income, and provide care to family members.

5. Health care: Working with non-profit clinics, Montgomery County provides a low cost health service for patients who are uninsured and cannot get Medicaid. We restored cuts that would have required us to turn patients away for the first time.

Restructuring Employee Benefits

The county is proud to provide its employees with health and pension benefits that exceed those provided by many other employers. These benefits are a major reason for the county’s outstanding retention rate and its excellent service provision. But over the next five years, their cost has been projected to rise by 48% while the county’s revenues are projected to rise just 2% annually. In order to preserve these benefits, we had to begin to restructure them. This was a tough decision, but it was superior to recurring layoffs, service cuts and tax hikes.

Fiscal Responsibility

Montgomery County’s general obligation bonds are rated AAA, which enables the county to borrow at some of the lowest interest rates in the nation, freeing up tax dollars for education, libraries, and so forth. But that privilege comes with the responsibility of demonstrating that the county is committed to prudent financial management. The council did just that by increasing its reserve contributions, saving money for future retiree health costs, creating a dedicated fund for snow removal and controlling its benefit costs. Nationwide, governments have failed to face up to their fiscal reality. California, Illinois, Michigan and many other states are paying the price for years of mismanagement. Nassau County, New York has been taken over by its state government. Even the federal government’s bond rating is apparently threatened. None of this is going to happen in Montgomery County.

There is no question that this was a difficult budget year. Reasonable people can disagree on some of the council’s budget actions. But I believe that our residents should feel confident that they have a responsive and effective county government. Unlike some governments, we can tackle our big challenges.

This council has met its responsibility by protecting residents’ priorities, controlling costs and carefully managing the county’s money. And we are doing that while protecting progressive priorities like education, public safety, the environment, the safety-net and a world-class quality of life.

Please continue communicating with me and if you find this helpful, consider sharing it with other residents.

Yours Sincerely,

Hans Riemer

Council Member At-Large

P.S. I want to thank the hundreds of readers who responded to my last email about our budget challenge with their personal stories, insights and priorities. I took what you said to heart as I worked through the budget process. Thank you.

Montgomery County's Budget and a Pepco Update

Dear Supporters,

With County Executive Leggett’s budget in hand, the Council now has until the end of May to pass a final plan for spending and taxes. My commitment to you is to do the best that I can for all of our County priorities -- schools, libraries, public safety, safety net services, parks, public transportation and more.

I will let my sense of fairness guide me and work hard not to burden any particular group with doing more than their share to get through this economic crisis. I will look for solutions that uphold our progressive values while putting the county on a stable long term financial path.

Now is the time for you to speak out. As a Councilmember, my job is to make the best decisions I can based on getting all of the information available. That’s why I read every email that comes to me. I strongly encourage you to email me and the entire County Council with your thoughts on what you want from your county government at this difficult time. What principles, values, and priorities do you think should guide the Council’s decisions?

Reply to me directly at councilmember.riemer@montgomerycountymd.gov with your thoughts and if you want all nine Council offices to receive your email, cc: county.council@montgomerycountymd.gov.

As you follow the story in the news and your neighborhood email lists, I want to provide some background that I have found useful.

The County Executive is proposing an increase to the county's budget from $4.271 billion to $4.347 billion, a net hike of 1.8%. Last year, the county's budget fell by 4.5.%. These two years have seen the lowest rate of budget growth since at least the early 1990s.

Many important services are facing their second straight year of tight budgets. The Executive’s recommendation for the public schools is higher than last year’s amount but is lower than what the schools received two years ago, despite higher enrollment. The fire and rescue service, libraries, transit and health and human services are facing their second straight year of cuts. Library staffing, for example, is down over 30% in the last two years. These reductions will cause real-world problems for county residents.

County employees, who make less than private sector workers with the same education, have gone two years without a salary increase, and did not ask for one this year. In his budget, the Executive recommended that employees bear a much larger share of their health and pension benefits. If the council approves a measure resembling the Executive’s recommendation, that could add up to thousands of dollars less in take-home pay for workers making as little as $50,000 per year.

The county’s fiscal solvency is improving, but we are not yet where we need to be. Last year, the county almost lost its AAA bond rating, which enables it to issue bonds carrying the lowest possible interest rates on our billions of dollars in debt for constructing schools, roads, parks and more. The county was able to preserve its rating by establishing a plan to steadily increase its reserves and meet its future obligations, especially for pensions and retiree health care.

Today, we have to make tough choices. I have not made up my mind on many of the key policy issues as I carefully consider the implications. But policy is not our only challenge.

This debate is also a test of progressive leadership. Can we get through our budget crisis without needlessly pitting residents against one another, without making victory for one concern a defeat for another, without dividing and conquering? As your Councilmember, that is what I am working to do.

When I ran for Council I said that we have to listen to everyone because our collective wisdom is our greatest asset. That’s why I’m asking for your input.

I also said that we should not turn every argument into a zero sum game, because we all have to live with the outcome of every decision, together.

Even in tough times, I believe that it can be done.

While I work through this crisis, I am keeping my eyes on the long term. Our budget is in dire straits because our tax revenue is dependent on two sources of income that have both suffered severe market “corrections”: property taxes and income taxes. Each of these revenue sources are down to a lower, corrected base. They are not going to rebound to their bubble highs.

That is why I strongly believe that we must expand our commercial tax base in this county in order to build a more resilient revenue stream. Fairfax has 200,000 more jobs than Montgomery. If we can add a strong commercial tax revenue stream to our property and income tax revenues, the county will be in a much stronger position to make the investments we need for our quality of life. County County

I consider these times a true test of our progressive values and our ability to put them in practice. Through it all, I keep reminding myself, as others have said to me -- if we can’t figure it out here in Montgomery County, then where?

The stakes are high.

PEPCO UPDATE

Pepco’s power reliability is an issue of continuing concern for its customers. As of this writing, 1,093 people have signed our petition calling on regulators to establish performance standards and not approve a rate hike until the company’s service improves. Thank you to all the petition signatories and we hope even more residents will sign. Soon, we will be sending the petition to both Pepco and the Maryland Public Service Commission.

At the moment, the Maryland House of Delegates and the Maryland Senate have passed two different bills aimed at establishing reliability standards for Pepco. The Senate’s bill is far better. The Senate would begin levying penalties in 2012 whereas the House would levy them starting in 2014. The Senate would impose penalties totaling up to 2.5% of Pepco’s transmission and distribution revenues whereas the House would only allow a penalty of $10,000 per day per violation. The Senate and House must now agree on a compromise. If you would like the legislature to pass a bill more closely resembling the Senate’s version, you should email your state legislators as soon as you can.

Finally, Pepco continues to shower their executives with endless compensation and perks even as the company fails its customers. Pepco’s latest filing with the U.S. Securities and Exchange Commission shows that the company gave its top five executives a combined 20% increase in compensation in 2010. Its Chief Executive received a 14% increase and has an employment agreement that prohibits the company from cutting his salary or revoking any of his salary increases. Company executives also receive a long list of perks including car allowances, parking, tax preparation fees, financial planning fees, executive physical fees, club dues and spousal travel.

Clearly, Pepco has a long way to go before it makes itself truly accountable to its customers.

Reply to me directly at councilmember.riemer@montgomerycountymd.gov with your thoughts and if you want all nine Council offices to receive your email, cc: county.council@montgomerycountymd.gov.

Sincerely,

Hans Riemer