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Leggett FY18 Operating Budget Closes $138 Million Gap; Boosts Schools Spending by $54 Million; Holds Line on Property Taxes

For Immediate Release: Tuesday, March 14, 2017

Budget Boosts Investment in Public Safety, Business & Job Creation, Affordable Housing, Transit 

 County Executive Ike Leggett today released his Recommended FY18 Operating Budget of $5.4 billion for the year that begins on July 1, 2017 – a budget that increases County spending on the Montgomery County Public Schools (MCPS) by $54 million and holds property taxes at the Charter Limit by reducing the tax rate by 2.5 cents per $100 assessed valuation.  

“Over the last 11 years, I have closed nearly $3.5 billion in budget gaps while putting the County’s fiscal house back in order and making the investments necessary to build a better future,” said Leggett. 

“The hard work of fiscal responsibility is not complete. This budget provides a blueprint for a sustainable and comprehensive fiscal future for the County. It reflects a balanced approach to meeting the growing needs of our diverse communities and robust business sector while keeping faith with County taxpayers.  

“Given the continued budget uncertainty at the State and federal levels, and the potential impact any federal employment and spending reductions would have on the local economy, we must remain cautious in our spending.  Many of the Federal job centers located within Montgomery County are vulnerable to significant cutbacks and the potential resulting harm to the County’s economy cannot be overstated.   

“Last year, the Council increased property taxes by $33.7 million over what I had recommended and, in addition, increased the recordation tax in order to include additional spending. This created greater pressure on this year’s budget. Given these parameters I have chosen not to increase taxes either this year or next. 

“In addition, the outcome of the Wynne case has resulted in a loss of revenue estimated to be $30 million annually, with retroactive payments of an additional $27 million annually from FY19 through FY23. 

“Given that, along with continued uncertainty about the economic recovery and State and federal actions, I am limiting any new programs or significant program expansions to those that clearly achieve our shared priorities and best serve County residents.” 

Leggett’s FY18 total budget increases spending from $5.3 billion to $5.44 billion, a 2.7 percent increase.  

“Until last year, MCPS had been funded at, or below, the level defined as Maintenance of Effort (MOE) since FY09. That meant that on a per pupil basis, funding had not increased. In recognition of the longstanding need within MCPS to address its growing and increasingly diverse population, I recommended, and the Council approved, an increase of $87 million above MOE.  This additional funding has allowed the Board to begin to address the many needs of its approximately 159,000 students.  

“To build on this momentum, I am recommending an additional $25 million in resources above the MOE level of funding, for a total increase of 2.3 percent.  Of this $25 million, $19 million represents an increase in the local contribution, and $6 million represents the use of additional fund balances or end of year transfer.”  

Under the FY18 Recommended Operating Budget, the proposed property tax rate is $1 per $100 of assessed valuation -- 2.54 cents below the current rate. The median tax bill (for a house assessed at $400,000) will see an annual increase of $20 (from $4,106 currently to $4,126 in the coming year) -- due entirely to increased property values. This amounts to $1.67 a month. It includes a $692 tax credit for owner-occupied residences. 

“This budget continues my commitment to prudent fiscal policies critical to sound fiscal management,” said Leggett. “I have increased our reserve levels to cushion the taxpayer against any future unanticipated economic setbacks and included the required level of funding for retiree health benefits. 

“At the same time, I have focused available resources on priorities that meet the important needs of our growing community. I have increased funding for public education at all levels beyond what is required by State Maintenance of Effort laws, increased the size of our police force, expanded our Positive Youth Development programs, increased funding for programs critical to our growing senior population, boosted funding for our library system and continued to address the needs of our most vulnerable residents.  

“Since 2007, I have added 128 police officers to the Montgomery County Police Department.  These officers have helped to keep our crime rate at historic lows. Within Montgomery County, serious crime is down 7.1 percent over the last five years and 18.9 percent in the last 10 years.  Property crime is down 8.1 percent over the last five years and 34.9 percent in the last 10 years. Overall, total criminal incidents within the County are down 8 percent over the last five years and down 33.6 percent in the last 10 years.” 

Leggett’s recommended budget continues to restore funds and services to public libraries. The $42.7 million budget brings them to six percent above their pre-recession funding and represents a 50 percent increase in Library funding since FY12.  The additional funding will increase public service hours at three branches. 

“I am also providing the necessary funding for continued economic and job growth through both the newly formed Montgomery County Economic Development Corporation and the Worksource Montgomery organization.  Additionally, I have funded ongoing commitments in the Economic Development Fund and bolstered the MOVE program to include expansion opportunities.     

“Recognizing that government works best in partnership with the community, I have increased funding for the many worthy community organizations that provide services to our residents in ways government cannot – including our ‘New Americans.’ These organizations leverage private resources and are often able to provide critical services in a more culturally appropriate and effective manner. 

“These organizations provide services that include public health, behavioral health, safety net services, housing, the arts, early childhood, positive youth, seniors, veterans’ services, and many other community-building services. Montgomery County would not be the community we are without their existence.” 

Among budget highlights: 

  • A tax-supported County government budget (not including the Retiree Health Insurance Trust) of $ 1.5 billion, a 3.1 percent increase over this year. A total Montgomery County budget of $5.44 billion, a 2.7 percent increase over this year; 
  • A budget of $2.5 billion for MCPS and a record County contribution of $1.66 billion –an increase of $54 million over last year, or 2.6 percent -- $25 million over the legally-required State MOE and 99.7 percent of the Board of Education’s request; 
  • Montgomery College would receive $309.3 million. The County contribution is $136.1 million – $2 million over MOE. With the recommended funding level, the County contribution to Montgomery College would increase by 44 percent in total and 71 percent on a per student full-time enrollment basis since 2013. The budget assumes an additional use of $709,000 in fund balance and reserve use and additional unanticipated State aid of $275,000; 
  • Reduces the property tax rate by 2.51 cents per $100 of assessed valuation (from $1.025 cents to $1). The median County residence, valued at $400,000, would pay an additional $1.67 a month -- or $20 a year;  
  • Provides $146.6 million -- a 3 percent increase -- for the Maryland-National Capital Park and Planning Commission; 
  • Includes savings and efficiencies totaling $9 million for County government, $20 million for MCPS, and $5.8 million for Montgomery College; 
  • Adds 13 new police officers, including five focused on suppressing gang activity  in Montgomery Village, and continuation of the important School Resource Officer program; 
  • Continues expansion of the enhanced Advanced Life Support service in our Fire and Rescue Service, providing a more responsive and efficient means of responding to the growing number of EMS calls; 
  • Boosts services in two major initiatives serving potentially at-risk populations – Positive Youth Development and Vital Living for Seniors – and continues to fund programs that protect the County’s most vulnerable; 
  • Increases funding by $53 million for the creation and preservation of affordable housing units  -- amounting to 2.5 percent of the County budget -- and bringing the total for affordable units created or preserved to 59,000 and the spending for new or preserved affordable housing during my administration to over $900 million, with a trend toward $1 billion by FY19; 
  • Increases support by $300,000 for “New Americans” through community grants that strengthen food pantries, immigration counselling, and mental health needs for children, while also boosting English literacy programs by an additional $100,000; 
  • Provides additional $1.6 million to enhance landlord-tenant outreach, tenant protections, and housing code enforcement, adding more program staff and outreach for the Office of Landlord-Tenant Affairs and funding enhanced housing inspections for the Office of Housing Code Enforcement, which performs thousands of inspections of the County’s single-family, multifamily, and condominium rental units to ensure safe and sanitary conditions; 
  • Provides resources to continue County efforts supporting the Great Seneca Science Corridor, the White Oak Science Gateway, and the White Flint Plan, as well as the transition to transit-oriented development around the Shady Grove Metro. These efforts will help create at least 100,000 new, quality jobs in Montgomery County and thousands of additional housing units;  
  • Increases funding by $1.4 million to the Montgomery County Economic Development Corporation and WorkSource Montgomery, Inc. to strengthen their efforts to market and develop target industries -- especially cybersecurity and information technologies – to match trained workers with identified needs, and to retain and attract businesses and talent in the County;  
  • Adds $125,000 to strengthen the County’s Rockville and Germantown Innovation Centers which are managed by BioHealth Innovation (BHI).  BHI, in collaboration with MITRE Corporation and Montgomery College, provides support to start-ups and attract early-stage companies in targeted technology industries. These partnerships will help position Montgomery County as a nationally recognized center of biomedical commercialization; 
  • Provides approximately $24.1 million to construct and enhance bus transit services on major County routes to support economic growth and employment opportunities; 
  • Provides capital and operating funding for ultraMontgomery, a high-speed fiber network that will connect people with opportunities and drive economic growth by linking our business, academic and federal institutions and transit-oriented smart-growth communities; 
  • Adds funds for the Stop, Triage, Engage, Educate, and Rehabilitate (STEER) deflection program to connect people to substance abuse treatment and direct them away from jail and into an intervention program; 
  • Implements a Monitored Exchange and Supervised Visitation program to provide a monitored safe exchange of children and/or supervised visitations for families where a supervised visitation or monitored exchange has been ordered by a judge; 
  • Adds funds for the East County Opportunity Zone, an initiative designed to enhance safety net services for the East County area and the Safe Space Program, to provide a safe space for the highest risk and currently gang-affiliated youth in the Germantown and East County areas to keep them off the street and provide critical programs and services to them; 
  • Provides funds to ensure that the wage paid to Developmental Disabilities providers is 124 percent of the County minimum wage; 
  • Funds two additional staff for the Adult Protective Services Investigative Unit; 
  • Supports 120-units of mixed-income senior rental housing at the East County Regional Services Center 
  • Funds Collective Bargaining Agreements for each of the three bargaining units within County Government; 
  • Fully funds County reserves at the policy level of $457.1 million – 8.9 percent of total revenues, continuing our shared commitment to keep Montgomery County’s finances sustainable; 
  • Funds PAYGO in the Capital Improvements Program at $34 million -- 10 percent of current revenue to match the amount of General Obligation Bonds to be issued in FY18, consistent with County fiscal policy; 
  • Maintains funding for the mandated level of funding to pay for future County retiree health benefit obligations; 
  • Retains the energy tax at the level approved by the Council for FY17, preserving an important, stable and broad-based revenue source that includes federal institutions based in the County that otherwise pay no taxes in exchange for County services. 

The full budget and highlights are available on the County’s website at reports.data.montgomerycountymd.gov/omb.

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Release ID: 17-439
Media Contact: Patrick Lacefield 240-777-6528