For Immediate Release: Wednesday, May 17, 2023
The Montgomery County Council will meet on Thursday, May 18 at 9:30 a.m. to receive an update on FY24 revenues and expenditures and review property tax options before taking straw votes on the Fiscal Year 2024 Operating Budget and the amended FY23-28 Capital Improvements Program. In addition, the Council will review and is expected to vote on resolutions to approve FY24 Transportation Fees, Charges and Fares and the WSSC Water System Development Charge. The Council will also review and vote to establish FY24 Solid Waste Services Charges, FY24 Water Quality Protection Charge. Finally, the Council will vote to approve Regulation 8-23, Systems Benefit Charges Residential Waste Estimates.
More detail on each agenda item is provided below.
Introduction: Council Vice President Andrew Friedson, Council President Evan Glass and Councilmember Kate Stewart will introduce Expedited Bill 25-23, which would modify the calculations for impact tax rate adjustments by requiring a cumulative increase or decrease in the construction cost index rather than an annual average every two years. In addition, the bill would set a cap on the development impact tax rate for school and transportation improvements and allow certain carryover increases of the biennial tax rate adjustments. A companion resolution will also be introduced.
Councilmember Natali Fani-González is a cosponsor of Expedited Bill 25-23. A public hearing is scheduled for June 13 and the Government Operations and Fiscal Policy (GO) Committee is tentatively scheduled to review the bill on June 15.
Overview of FY24 revenues and expenditures
Status report: The Council will receive a status report on FY24 revenues and expenditures. The Council has completed its review and taken straw votes on the FY24 budgets for each agency, department and non-departmental account.
As of May 12, 2023, the Council has identified a total of $49.2 million in reductions to the Executive’s budget, identified $7.7 million in additional resources and has placed a total of $294.4 million on the reconciliation list. Items placed on the reconciliation list categorized as high priorities total $238.4 million. Included in this amount is $156.4 million for Montgomery County Public Schools (MCPS). Items recommended for the reconciliation list categorized as priorities total $56 million. Included in this amount is $44.6 million for MCPS. Items on the reconciliation list that were included in the Executive-recommended budget total $276.8 million. Items on the reconciliation list that were not included in the County Executive’s recommended budget total $17.6 million.
Each year as part of the final step in the budget process, the Council considers available resources and potential tax increases to determine which reconciliation list items can be funded. Final action on the budget is scheduled for May 25.
Property tax options: amount, rate, and Income Tax Offset Credit
Review: The Council will review and is expected to take straw votes on the amount of the Income Tax Offset Credit (ITOC) value for FY24 and the weighted average real property tax rate for FY24. In FY24, the County Executive recommends retaining the current ITOC at $692 and increasing the weighted property tax rate by 10 cents, from $0.9785 to $1.0785 per $100 of assessed value.
The County Charter requires an affirmative vote from all current Councilmembers to approve a weighted property tax rate for the next fiscal year that exceeds the weighted tax rate of the current fiscal year. Under state law, counties can exceed any charter limits on property tax rates or revenues solely to fund their local school boards by a simple majority vote.
If the Council adopts a weighted average property tax rate that is less than proposed by the Executive, it will need to make offsetting reductions to proposed expenditures in the Executive’s recommended budget. The Council has carefully reviewed proposed expenditures for each agency and department as part of the committee and full Council budget review process, and to date has recommended $49.2 million in reductions to the Executive’s budget and identified $7.7 million in additional resources. In addition, per the Council President’s budget review guidance, the Council has placed $294.4 million in proposed FY24 expenditures on the reconciliation list. This includes $238.4 million categorized as a high priority and $56 million as a priority.
Resolution to approve FY24 Transportation Fees, Charges and Fares
Review and vote expected: The Council will review and is expected to vote on review a resolution authorizing changes to transportation fees, charges and fares that are included in the FY24 Recommended Operating Budget. The proposed resolution extends fee collection hours for the Bethesda and Silver Spring Parking Districts, adds a permit fee to the Wheaton Parking District consistent with the Bethesda and Silver Spring Parking Districts, and creates a weekend permit in the Bethesda, Silver Spring and Wheaton Parking Districts, which will allow parking at long-term meters during certain hours. The Transportation and Environment (TE) Committee recommends approval.
Resolution to establish FY24 Solid Waste Service Charges
Review and vote expected: The Council will hold a worksession and is expected to vote on FY24 Solid Waste Charges. The County’s solid waste programs are primarily funded by various solid waste charges that support the dedicated enterprise funds. Single-family charges are recommended to increase from 1.8 percent to 9.2 percent depending on the services provided. Multi-family charges are recommended to increase from 1.2 percent to 1.8 percent, depending on the services provided. Non-residential charges have a recommended 5.6 percent reduction. The transfer station tipping fee for refuse under 500 pounds is recommended to increase from $60 to $70 per ton and transfer station tipping fee for refuse in open top containers is recommended to increase from $76 to $84 per ton.
The TE Committee recommends approval FY24 Solid Waste Service Charges as recommended by the County Executive.
Resolution to establish FY24 Water Quality Protection Charge
Review and vote expected: The Council will review and is expected to vote on Water Quality Protection Charge Equivalent Residential Unit rate (ERU) for FY24. The County Executive recommends an ERU rate of $128 which is an increase of $8.50, or 7.1 percent from the FY23 approved rate of $119.5. During an initial review, the full Council preliminarily supported an FY24 ERU rate of $126.
The Council created the Water Quality Protection Charge in 2001 as part of Bill 28-00 and made changes to the charge in 2013 as part of Bill 34-12. The Council is required under County Code to set the ERU rate each fiscal year by resolution. The resolution must be adopted no later than the date the Council approves the annual operating budget.
On May 4, 2023, the TE Committee recommended approval of the Water Quality Protection Fund, and on May 10, the full Council reviewed and preliminarily recommended approval of the fund. The recommended FY24 Operating Budget for the Water Quality protection Fund is more than $33.9 million, which is an increase of more than $2.9 million, or more than 9.4 percent from the FY23 Approved Operating Budget.
The Water Quality Protection Fund accounts for 77 percent of the total Department of Environmental Protection (DEP) budget, which is more than $43.9 million. This is due to expenditures to address the requirements of the County’s current National Pollutant Discharge Elimination System (NPDES) Municipal Separate Storm Sewer System (MS4) permit.
Resolution to approve WSSC Water System Development Charge
Review and vote expected: The Council will review and is expected to vote on a resolution to approve the WSSC Water System Development Charge (SDC). The SDC is paid by new development to cover the impact it has on WSSC Water infrastructure. WSSC Water proposed keep SDC rates for FY24 at current FY23 levels, raising the maximum allowable rate by 5.5 percent to give WSSC and the counties flexibility to raise rates in the future to cover gaps in growth funding versus growth expenditures.
The full Council met on May 8, 2023 regarding the FY24 WSSC Water Operating Budget and SDC rates and concurred with WSSC Water's recommendations. The Council held a bi-county meeting was held on May 11, 2023 with Prince George’s County Council and jointly approved WSSC Water's FY24 Budget, WSSC Water’s FY24-29 Capital Improvements Program and the FY24 SDC rates.
Executive Regulation 8-23, Systems Benefit Charges – Residential Waste Estimates
Vote expected: The Council is expected to vote on a resolution to approve Executive Regulation 8-23, Systems Benefit Charges - Residential Waste Estimates. The systems benefit charges assumed in the Executive’s FY24 Recommended Budget for DEP, Recycling and Resource Management Division and in the Council’s preliminary approval of the FY24 Recycling and Resource Management FY24 Operating Budget on May 10 are based on an estimated annual generation of 1.8730 tons of solid waste per single family residence and 0.8567 tons of solid waste per multi-family residence.
In accordance with County Code, the County Executive must establish by regulation the estimated amount of solid waste generated per County household. Estimates of per household solid waste generation are necessary to calculate the single-family residential and multi-family residential base and incremental system benefit charges.
Release ID: 23-181