Montgomery County’s Financial Problems—and Your Opportunity
Expand the economic pie or face more tax increases
Editor’s Note: The following view is that of the writer and does not reflect the opinions of Bethesda Beat staff.
The impending departure of Discovery Communications from Silver Spring and the discussion of attracting Amazon’s second headquarters is a great time to reflect on where we are as a county and where we are going. Montgomery County has tremendous assets. They include a highly educated workforce, good schools, one of the nation’s best community colleges, substantial wealth in some of our neighborhoods, low crime and virtually no public corruption. Few places in the nation can say they have all of these things. With all of those advantages, we should be a national leader in economic strength.
But we’re not.
Why is that? For all of our advantages, we have a lot of problems and they are structural. And everyone knows that to deal with problems, you have to recognize them first.
We have a jobs problem. According to the U.S. Bureau of Labor Statistics, Montgomery County’s total employment grew by 3.1 percent between 2001 and 2016. We ranked 20th of 24 jurisdictions measured by the bureau in the Washington area. In 2016, the state registered just a small number of new business filings for a county of this economic size. How are we going to create lots of new jobs unless we create lots of new employers? With our highly educated workforce, why doesn’t one national accounting/consulting firm such as Accenture, Deloitte, E&Y, KPMG, etc., have a presence in Montgomery County?
We have a taxation problem. Over the last 16 years, the county has levied five property tax hikes, two energy tax hikes, an income tax hike and a recordation tax hike. Raising taxes should be a last resort, but in our county, raising taxes is sometimes a first and only resort.
We have a commercial tax revenue problem. When examined over the last decade, the county’s tax base from commercial office real estate grew anemically by barely more than 1 percent a year; and 75 percent of this growth came just from the Bethesda and Friendship Heights corridor.
We have a debt problem. Over the last 10 years, the county debt has been growing more than five times the rate of inflation. In 2017 alone, our expenditures for debt service were nearly $400 million, a whopping 14 percent growth rate.
Our revenues are weak, our debt is soaring and our schools, human service and infrastructure needs are growing. How else do you explain an 8.7 percent property tax hike enacted in one year and a $120 million budget shortfall occurring in the next year?
Here’s the bottom line: there are only two ways to pay for government. You can grow the economic pie so that everyone, residents and businesses together, can share the tax burden. Or you can raise taxes on residents. That’s it. Which one would you choose?
The good news is that election time is coming. Because our county is heavily Democratic, the next county executive and County Council most likely will be elected in the June 26 primary. Now that you know about our problems, take your opportunity and vote!
Charles K. Nulsen III is the president of Washington Property Co. in Bethesda and co-founder of Empower Montgomery, a nonprofit county advocacy group.
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