Tuesday, December 5, 2017

Despite record tax hikes, bungling Montgomery County Council runs up $120 million shortfall

Montgomery County is facing a $120 million budget shortfall, despite record tax hikes on residents in 2016 and 2017. County Executive Ike Leggett has asked every government department to identify 2% budget cuts, and encouraged the Council to follow suit.

The shortfall seemed to take the Council by surprise, despite projections of a structural deficit as far out as the forecast goes. More knowledgeable observers know exactly why revenues are down - the County's private sector economy has been moribund for some time, and the wealthiest residents are fleeing to lower-tax jurisdictions like Loudoun, Fairfax, Frederick and Howard Counties. Montgomery has dropped far out of the Forbes Richest Counties Top Ten list in 2017.

Add in the heavy debt load councilmembers have run up, and the fiscal scenario worsens still. How much debt is there? If County debt was a department, it would be the third-largest department in Montgomery County government. Yikes.

The spendthrift County Council has also engaged in a hurricane of wasteful spending. In just one example, earlier this year they approved $22000 for a surveillance camera system that, in the real world, can be purchased and installed for under $1000. Importantly: this expenditure was not itemized in public budget documents, instead lumped into a $34500 line item. Multiply this by every budget item, and we could be talking about millions in wasted funds. Don't expect this Council to identify them!

What raised eyebrows among many who follow the County budget closely yesterday was the petulant insistence by some councilmembers that they would not make major budget cuts. Considering that taxes are at a record level, many are wondering what planet these folks are speaking to us from. Leggett warned at an NAACP meeting last week that the Council simply cannot use a tax increase to solve shortfalls in the coming years. He clearly knew then what became public yesterday - we have a $120 million shortfall.

Prediction: The County Council will use another tax increase to close the budget shortfall, as they have every year since 2010. Then they will be voted out of office in November 2018.

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