Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts

Thursday, March 16, 2023

Montgomery County property tax hike proposed in County Executive's $6.8 billion FY-2024 budget


Montgomery County elected officials have raised property taxes on homeowners every year since 2010, except for FY-2015, when a 2014 election-year tax cut delivered a whopping average $12 savings to tax-whipped residents (gee, thanks!). It looks like they are going to do it again for FY-2024, as County Executive Marc Elrich (D) released his proposed budget yesterday, and he suggested the largest property tax hike since FY-2017. The extra payday would go exclusively to Montgomery County Public Schools, whose student performance has only declined as bigger and bigger budgets have been approved for it by the County Council. Money has never been the problem at MCPS, only incompetent leadership since the exit of Superintendent Jerry Weast, a clearly-failed curriculum, and an increasingly-stark lack of student safety and security.

There's an even greater problem about the record $3.2 billion outlay for MCPS in Elrich's budget. Due to the disastrous Maintenance of Effort law, the amount spent on MCPS can never go down from one year to the next. So, even as Elrich himself declares "a mild recession could take place later this year," his budget would lock in a required expenditure of at least $3.2 billion for MCPS in the FY-2025 budget - even if a recession deals a severe blow to County revenue. And we're not even talking about the worrisome situation in the banking sector, which is persisting despite a federal bailout of wealthy billionaires at Silicon Valley Bank earlier this week.

What that would mean, is that savings and cuts would have to be found elsewhere in the budget: police, fire, libraries, road maintenance, etc. And the County Council is already cruising toward a rude fiscal awakening, as it has convinced itself, the local media, and enough voters that its rosy budgets of the last few pandemic years were due to councilmembers' overwhelming talent and skill, and not the overwhelming federal cash that poured into the County to cover COVID-19 losses. That money is now being cut off by Uncle Sam.

You wouldn't know it from reviewing the proposed budget. And from a steep tax hike being proposed, you wouldn't know that a majority of County residents are being hit hard by persistent inflation. Not to mention that, for many County residents - particularly the elderly and others on fixed incomes - the current property tax has become the equivalent of a second mortgage they must pay off on their home.

There are other fanciful ideas in the budget announcement, such as the recent canard pushed by the County political cartel that Montgomery County residents are somehow paying less property taxes than some other jurisdictions. This is false, because the assessments on houses are so much higher in Montgomery County than in those jurisdictions that MoCo residents actually pay more. In reality, Montgomery County has the highest real property tax payments, and the highest total tax and fee burden in the Washington, D.C. region. We pay massive income and piggyback income taxes, real estate transfer taxes, energy taxes, cell phone taxes, rain taxes, and more - many of these being taxes that don't even exist in counties around us. 

Our current tax structure and burden are two of the major reasons for our moribund County economy. Montgomery County's economic growth and strength have been at or near rock bottom in the region for more than a decade, as measured by every relevant federal indicator. No major corporation has relocated its headquarters to Montgomery County in over a quarter century. 

Taxes have also been the major cause for the flight of the rich out of Montgomery County, which caused the County's "Rodeo Drive" of Friendship Heights to crash, leaving behind vacant buildings and empty storefronts. Significantly increasing taxes and spending, as we've done and as is being proposed again here, is a reckless move in this context, and total insanity when you factor in the County's massive debt.

One positive thing Elrich's budget proposes? Providing the funding to restore the Office of the People's Counsel, a lawyer who can represent the people in land use matters. This is long overdue, but we don't need a $6.8 billion budget or a property tax hike to make that happen.

Tuesday, April 7, 2020

Montgomery County Council proposes property tax hike

The Montgomery County Council is proposing to raise property taxes in the FY-2021 budget. No councilmember has announced this publicly, but the planned tax hike was revealed in a newspaper announcement the Council is required by law to publish before raising taxes.

A 4.5% property tax increase has been proposed. The Council recently criticized County Executive Marc Elrich for proposing a tax increase, but now are proposing one themselves. A public hearing on the tax increase has been scheduled for 1:30 PM on April 21, 2020.

Despite the Maryland Department of Assessments and Taxation's guidelines to allow residents to testify live by telephone, the Council is currently not allowing residents to do so, despite the Council having used videoconferencing to promote themselves this week. Residents may only send written or emailed comments on the tax increase, or recorded audio/video statements, and have been banned from entering the Council Office Building since the coronavirus outbreak began in the county.

No one can yet predict the full economic impact of the coronavirus shutdown, but it certainly will be significant. Raising everyone's tax bills is certainly a bold move amidst a worldwide pandemic and economic collapse.

The Council has raised property taxes every year this past decade except in 2014, when they gave a paltry $12 average tax cut during an election year. In 2016, the Council raised property taxes a whopping 9%, which translated to 10 or 11% for a large number of residents, due to rising assessments. But the tax hike failed to generate the expected revenue. In fact, revenue is now declining, after many wealthy residents fled to lower-tax jurisdictions in the region.

Earlier this year, the Council sought new taxing powers from the Maryland General Assembly. They hope to be able to raise income taxes beyond the current limit allowed, and to add additional property taxes based on what category of property you own.

Montgomery County Republican Party Chair Alexander A. Bush called the proposed tax increase "obscene," noting the flood of unemployment claims being filed by County residents, and the many coronavirus-related business closures. Bush strongly urged the Council to allow testimony by telephone at the public hearing.