2019 | Government

Updated: ‘Points of Disagreement’ Loom Over County Budget Cut Plan

County executive’s wants $46 million trimmed, including $25 million from schools

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Marc Elrich

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Montgomery County Executive Marc Elrich has submitted his cost savings plan to the County Council and it calls for a $25 million cut to the current county school system budget.

In a memo to Council President Nancy Navarro sent late Monday, Elrich detailed cuts totaling $46.5 million in this year’s $5.6 billion county budget.

Days after he took office in December, Elrich asked county department heads to find savings of 1.5 percent in their current budget, warning of a projected $44 million budget gap.

“My goal is to retain the most critical and basic services for county residents,” Elrich wrote. “The savings initiatives identified for county government departments reflects minimized reductions to services.”

The county executive’s recommended cuts include:

– $25 million cut for Montgomery County Public Schools

– $2.8 million for Montgomery College

– $1.8 million for the Maryland-National Capital Park and Planning Commission

– $3.9 million for the county’s Department of Health and Human Services

– $3.7 million in the police department

– $1.3 million for public libraries

– $100,000 for the Housing Opportunities Commission

Elrich wrote the school board, community college, planning commission and housing commission “are in the best position to identify the budget actions that would have the least service impact.”

“These reductions will be challenging and present some difficult choices,” Elrich wrote.

Under a state “maintenance of effort” law, the county is not allowed to spend less on the school system or Montgomery College than in the previous year.

Rich Madaleno, the county’s budget director, said in an interview Tuesday that agency heads submitted and the school superintendent their proposals to the council just before Christmas.

The $25 million school system cut, he said, doesn’t go against maintenance of effort because that amount, he said, is a “balance forward” that represents unneeded funds and will be returned to the county at the end of fiscal 2019.

“I don’t want people to assume 1 percent of teacher’s are being cut. The school system, like most large organizations, carries a fund balance. They’re buffering their checking account,” he said.

“That [MCPS] is a large and important organization, but it does have a large budget from the county, and they were anticipating a degree of savings, and they are in essence returning it to us by the end of the year.”

The $25 million being cut represents about 0.96 percent of the total school system budget of $2.6 billion for the current fiscal year.

School system spokesman Derek Turner confirmed that the $25 million represents a fund balance that was set aside July 1 at the beginning of the fiscal year, which is allocated every year to help pay for the next year’s budget. Turner said the fund balance has been allocated every year since 1974,

“There’s no cut to our budget. It’s part of our regularly scheduled savings plan,” he said.

Savings plans have been necessary in recent years to make up for shortfalls in projected revenue.

Madaleno said the county is in a situation where revenues are volatile due to the number of high-income taxpayers whose income comes from volatile sources, along with gains and losses in the job market.

The council will vote on Elrich’s plan next, and the council’s nine members have final say on whether any changes should be made.

“They will have hearings and vote on it during the next few weeks, because all of this has to be approved by then,” Madaleno said.

County council member Hans Riemer (at-large) said Tuesday that he hadn’t looked at the proposal in depth, but his biggest worries were the cuts to the park and planning commission, along with cuts to child-care subsidy programs, which fall under the umbrella of health and human services.

“We can definitely handle savings plans, as we have in the past. We will move through this quickly, but there will be points of disagreement,” he said.

Riemer added that in the long term, the county must prioritize private sector growth in order to avoid future revenue shortfalls.

“The way out of this mess is with economic development and stronger tax revenues coming in from commercial real estate,” he said.

Montgomery County Education Association President Chris Lloyd said he wasn’t pleased with Elrich’s decision.

“He’s [Elrich] got a shorter runway than I know he would like to have. That being said, trying to cut $1 million a week is gonna be tough, and it’s gonna impact our classrooms,” he said.

Lloyd said that the ongoing work of the Commission on Innovation and Excellence in Education, or Kirwan Commission, in the state legislature, has found that county schools have  been underfunded by $500 million per year.

“When you’re struggling for funding already and you cut $25 million… the challenge is that after a while you have a hard time figuring out where to cut,” he said.

Lloyd said despite the assurance that the $25 million simply represents the school system’s fund balance and won’t affect any programs, he isn’t convinced the money couldn’t be better spent.

“I think the public would expect that if you’re asking for dollars, they are dollars that are going to our kids, and if you’re not using them all, tell us what changed from May of this past year,” he said.

This story will be updated

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