Council Members Wary of County Executive’s Two-Year Budget Proposal

Council Members Wary of County Executive’s Two-Year Budget Proposal

Uncertain revenue projections, they say, make the practice challenging in Montgomery County

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Image via Flickr: 401(K) 2012 (CC BY-SA 2.0)

Members of the Montgomery County Council Tuesday expressed reservations about a proposal by County Executive Marc Elrich to transition to a two-year budget cycle.

Elrich proposed the idea after he took office in December, saying the longer budget cycle would allow county officials to determine which programs and services are under performing, and ensure money is being spent in the most effective way.  The initiative is one of several Elrich has proposed to make county government more efficient and does not require approval by the council.

Budget Director Rich Madaleno told council members the county would pass an “approved” budget for the first year of the biennium and an “endorsed” budget for the second year. The county executive and council would have the opportunity to amend the second-year budget. The model is based on the budget cycles in the jurisdictions of King County, Washington and San Mateo County, California.

The council set aside $100,000 in the current budget to pay for a contracted information technology worker and new budgeting software as a first step toward going to a biennial cycle. Madaleno said  initially only some departments would transition to the biennial cycle. Montgomery County Public Schools and Montgomery College would continue on an annual cycle, due to the need to meet the state’s maintenance of effort requirement, which mandates that the county spend the same or greater per pupil amount from year to year.

Council member Andrew Friedson, who worked for State Comptroller Peter Franchot before becoming a council member, said he doesn’t think the county is ready to implement such a large change yet.

“Nobody here seems to think you’re ready for what you’re talking about,” he said.

Elrich has yet to fill nine top-level department manager positions in county government, and Friedson said with so many new employees entering at once, transitioning to a two-year cycle could be overwhelming.

“You have many people that have to step into the new job and have to prepare two-year budgets,” he said.

Council Vice President Sidney Katz said he was open to the idea of the biennial budget, but that the executive branch should wait a year in order to demonstrate to the council it was capable of making the transition.

“The second year [of the budget cycle] can be a blueprint, which shows that we are planning things out. But I don’t think that you should do it next year,” he said.

Council member Hans Riemer said he is skeptical of a two-year budget due to fluctuations in income tax revenues. “I am not persuaded that a two-year budget works when you have huge volatility in your revenues, and when you look at the other jurisdictions that have embraced it, they don’t have income tax revenues,” he said.

Riemer said he was concerned that the executive branch would “spend an inordinate amount of time reinventing processes,” and likened the concept to a hamster that repeatedly spins its wheel but doesn’t go anywhere.

Council member Evan Glass said he was willing to give the two-year cycle a chance, but that he first wanted to receive more notifications about revenue projections in the county. He said it was troubling that council members recently learned a month after the fact that a Wall Street credit rating agency issued a warning due to the county deferring nearly $90 million from the retirees health insurance trust fund.

“There needs to be a doubling down of dialogue and data sharing with us where you are. Because having gone through this budget process and learned what we learned after the fact, it’s hard for me to jump headfirst into this,” he said.

Madaleno told Bethesda Beat Wednesday that the council’s approval is not required, but he hopes members will warm up to the idea.

“I think for it to deliver on its promise, for what it would bring for greater efficiency and attention to outcomes, it would work best with council fully on board,” he said. “That being said, an executive has the discretion to organize a budget process as he or she sees fit within the laws and policies of the county.”

Madaleno said the Elrich plans to implement the two-year budget cycle starting with the 2021 fiscal year, which starts July 1, 2020.

Dan Schere can be reached at Daniel.schere@bethesdamagazine.com

 

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