The Montgomery County Council voted 7-2 yesterday to approve a massive property tax cut for developers, estimated to cost taxpayers from $400 million to upwards of a billion dollars over the next 15 years.After overturning County Executive Marc Elrich's veto of the developer tax cut, the Council is now seeking to cut hazard pay for police officers, firefighters, Ride On bus drivers and other frontline essential employees who are at high-risk of contracting Covid-19 daily during the coronavirus pandemic.
Yesterday's vote continues two disturbing trends by the Montgomery County Council: a continued shift of the tax burden from developers (who contribute to all nine councilmembers' campaigns) to workers and homeowners, and the ongoing practice by the Council of breaking labor agreements.
While property taxes on homeowners have risen each year except 2014 (in which the average homeowner got a $12 tax cut - gee, thanks!), large developers have enjoyed tax cut after tax cut on property and impact taxes over the last decade. It started with a $72 million developer tax cut in 2010. Remember how your energy taxes were hiked, and an ambulance fee levied, around the same time to make up for that developer giveaway? Yep.
Combined with the County's failure to attract high-wage jobs or a single major corporate headquarters in over 20 years, outsize spending by Council, and the flight of the rich due to record-high tax burdens, the developer pay-days have blown an atomic bomb-size hole in the County budget. The result is a structural budget deficit as far out as the forecasts go.
So we've known by the last decade that massive residential development results in a deficit, as the costs this new housing creates for services like schools, infrastructure and social spending far outstrips the revenue it generates.
We also know there's little demand for luxury apartments, as a large percentage of the new units delivered since 2010 are filled with airbnb hotel guests, college students and corporate contract residents, none of whom pay full-freight rent. In fact, the Council admitted there's no demand for high-rise housing atop Metro stations when introducing the new tax cut - and they're going to bust the budget and hike your taxes to build something nobody wants, just so they and their developer sugar daddies can still make a profit on it.
And we've learned that the affordable housing "crisis" isn't actually a crisis, because the Housing Opportunities Commission was able to move hundreds of people out of The Ambassador apartments into vacant units elsewhere and demolish the building, while the owners of affordable Halpine View said they have no takers for their vacant units in Rockville. Whoops!
The shift in revenue burden has also moved from the large, international development firms that contribute to the Councilmembers' campaigns to the mom-and-pop developers who live in the community and build or expand single-family homes. Not only did the Council hit them with new regulations and tax hikes like the recordation tax, but they've recently sought to levy an all-new "teardown tax" on these small building firms. When you know that the Council's long-term goal is to change zoning to allow urban development in existing single-family-home neighborhoods, you can understand why they're trying to clear the construction field for the big guys.
But the Council isn't done spreading the unfairness around!
Now it wants to take hazard pay away from first responders and frontline employees that is in already-negotiated labor agreements. While the Council hides at home on Zoom meetings, these police officers and firefighters are responding to calls and speaking with often-unmasked citizens on a daily basis. Ride On drivers are helping similarly-essential personnel get to work, and low-income residents get to medical appointments, while exposing themselves to the virus on every shift.
The same Council didn't even give our police officers a sufficient supply of PPE and hand sanitizer. How interesting that the same councilmembers - Hans Riemer (D - At-Large) and Andrew Friedson (D - District 1) spearheading the $1 billion tax cut for developers yesterday are also leading the charge to cut hazard pay for cops and firefighters.
Now, even as the councilmembers' own $140,000 paychecks increase year after year, they want to again renege on labor agreements. County employees are counting on these agreements when planning the financial future of their families. The Council wants to take food off their tables during a pandemic, and turn it into cash for their campaign donors - and into future campaign checks for themselves.