Councilmember Stewart's FY24 budget overview

This week the County Council finished work on the Montgomery County FY24 Operating Budget and amendments to our FY24- FY28 Capital Improvements Program budget, as well as voting to set tax rates and set funding levels for our County government, Montgomery County Public Schools and other entities. 

This is the tenth budget I have worked on since being an elected official. Last week I talked about how I have approached budgets in the past, by asking myself how do we best address the needs of today and prepare for tomorrow?

Budget Context

We are in a tough year in Montgomery County. When we received the budget in March from the County Executive, I had some major concerns. I was concerned that the proposed budget not only had flaws related to a steep tax rate that was too high for residents, but it also relied on one-time revenue such as American Rescue Plan Act (ARPA) funds and spikes in revenues that will not last. Because of these factors, the budget may create long-term structural problems with our County finances.

As the Chair of the Government Operations and Fiscal Policy Committee, I have publicly and repeatedly spoken about my concerns about the use of one-time funds or reserves for continuing programs and operations that should either be tax-supported or funded through reliable funding streams. While we made some adjustments, the decisions we made related to the tax rate leave me very concerned, especially given the likelihood of an impending recession.

We are in a tough position. I respect my colleagues for their interest in lowering this tax rate. I agree and have stated my support for coming below what the County Executive proposed – and in fact I was not too far away from the final tax rate. However, it was decided to push to lower the tax rate by dipping into reserves that otherwise should be used for emergency spending, creating fiscal challenges. This is not sustainable.

In addition, I have concerns about two areas I do not believe we have funded sufficiently:

1. Unhoused residents – We have not included enough funding for overflow sheltering and assistance to the unhoused. We need to do more to support our partners with their work, such as Interfaith Works. Our unhoused population is growing, and we are not adequately planning for this increase.
2. Mental health – I expressed concerns from my first read of this budget about ensuring funding for mental health services. These are services that cut across different departments and committees. We do have different programs and places where there is funding, but we simply have not acknowledged or adequately addressed the mental health crisis taking place across the County. We must come back to this issue and make more progress.

For these reasons, I did not vote for the increased property tax rate. I did vote for the overall budget, because even with these concerns, we must fund and continue government operations. 

Capital Infrastructure Projects (CIP)  Budget and the Recordation Tax

We passed a new recordation tax plan that makes the tax more progressive and leaves the tax unchanged for any home sale below $600,000. These funds will help relieve our operating budget by creating dedicated funding for rental assistance and also back-fill funding for critical capital projects for our schools and for county transportation projects that would not be moving forward without this new source of funding. I want to give a shout out to my team and to Councilmember Natali Fani-González and Councilmember Sidney Katz for partnering with me to amend the bill originally authored by Councilmember Mink and Jawando who cosponsored the legislation to make this happen. For me, this is an example of how we addressed the short-term need to fund school projects and transportation improvements without delay and create a structure to assist with planning for the future.

The school construction, transportation, and other county construction projects that were kept on schedule by this more progressive recordation tax in District 4 are:

Schools:

• Charles W. Woodward HS reopening and the Northwood HS renovation that depends on Woodward opening first as a holding school
• Highland View ES addition
• Silver Spring International MS addition
• Planning and design of Eastern MS major capital project

Transportation:

• Planning for a second entrance for the North Bethesda Metro
• Bicycle-Pedestrian Priority Area Improvements to connect to the Purple Line
• Fenton Street Cycletrack
• Planning of Summit Ave Extension

Public safety:

• White Flint Fire Station 23 construction

Recreation:

• Revitalization of the Kennedy Shriver Aquatic Center
• Opening of the Silver Spring Recreation and Aquatic Center (late 2023)

I am very proud to serve as chair of the Government Operations and Fiscal Policy Committee and the work we have done this budget season. A few highlights include the community grants, Other Post Employment Benefits (OPEB) funding, public union contracts, and MCPS funding.

MCPS

I want to address our efforts related to the Montgomery County Public Schools budget. This year we are funding our school system at an unprecedented level, and we have included funding that is enough to fully honor the MCEA, SEIU and the Montgomery County Association of Administrators and Principals contracts. 

The budget we passed is about the people who make our County great. And, I want to be clear–when I cast my vote for the budget I did so asking MCPS to fully fund the contracts that have been negotiated – the whole contracts as negotiated.

It is also worth noting that, once again, with the work on the recordation tax plan, the funds needed to pay for school construction are included in our budget. We must make sure our schools are keeping up with the demands of enrollment and that we make sure facilities meet expectations of our community.  

Community Nonprofit Grants

The Government Operations committee had an excellent discussion about community grants and put forward additional bridge funding for nonprofits that will allow those currently funded some sense of certainty through December, as the county’s new Office of Grants Management comes online and creates new processes for county grants. These nonprofits often do critical work, managing to provide residents in vulnerable situations with assistance. I want our nonprofits to know that we appreciate all you do to augment county government in taking care of our neighbors. 

OPEB Funding

This is our non-pension benefits for retirees. We still have work to do, but we are meeting our commitment to put the needed resources into OPEB in this budget. While other pieces of the budget this year give me concern, our actions on OPEB outline a fiscally responsible plan for the future. 

Public Union Contracts

I am also happy that we were able to fund our public union contracts. The job market has become extremely competitive, and more than that, we are investing in the most valuable asset we have in Montgomery County - our workforce. While there are those who see our workforce as a line item on a budget, I see the people who are showing up every day as Montgomery County employees as a major part of our community. These folks are doing the important work of our government. I want to thank our County employees and let them know they are valued. 

Additional Highlights:

• The Working Families Income Supplement was funded to assist those most in need in our communities and to fight poverty.
• Increases were made for nonprofit security grants to assist in creating safe environments for people where they worship and gather.
• Youth after school programs, adult day care, and programs for the developmental disability community were also funded. 
• To take climate action, the County added Community Choice Energy consultant support. As the County implements this program to aggregate electricity purchasing for residents to get better rates and a mix of more renewably generated electricity, this will accelerate the top tool we have in our Climate Action Plan toolkit to reach the county’s ambitious emissions reduction targets in time. 
• We also added climate grant and incentive management positions to accelerate incentives to residents and businesses to switch to renewable, electric, and efficient homes, vehicles, and appliances.
• We ensured library staffing so libraries can be open on weekends, have digital content specialists to guide members of the public, and are fully staffed to serve residents.
• To improve pedestrian safety for our youngest residents, we added four crossing guard positions.

At the end of the day, after much contemplation, I cast a vote for this budget because we are a body of 11. I respect the work of my colleagues, and frankly, I want to move forward and continue our work together on behalf of the residents of Montgomery County.

Thank you to everyone who emailed, called, and met with us during the budget process. We look to our continued partnership.