2020 | Government

Voters will consider two county tax policy changes on November ballot

Options are removing revenue cap, restricting increases to rate of inflation

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The Montgomery County Council approved places two county tax policy changes on November's ballot.

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Montgomery County voters will be faced with two ballot questions in November that could change how the county’s property tax rate is determined each year.

One proposal comes from the County Council. The other was proposed by Robin Ficker, a frequent candidate, former state delegate and current candidate for governor, who collected signatures to have his idea placed on the ballot.

County Executive Marc Elrich had a third potential method, but it was withdrawn at his request after he and the council reached a compromise on a proposed tax strategy.

On Wednesday, the County Council unanimously approved having the two methods placed on the ballot for the general election in November.

The vote on Ficker’s proposal was procedural, since it already had qualified to be on the ballot.

Ficker’s collected more than 13,500 signatures for a public referendum. The council approved having that measure on the ballot, a procedure it was legally required to take — but did not endorse it.

The council’s proposed ballot question is on removing the tax revenue cap and requiring all nine council members to approve a tax increase that exceeds the rate from the previous year.

Elrich — in the proposal he put forward, then withdrew — had recommended getting rid of the tax revenue cap.

Ficker’s amendment to the county’s charter would prohibit the county from raising property taxes above the rate of inflation.

The weighted average of the real property tax rate includes real property taxes and other property taxes, such as for fire, transit, and parks and planning services. The county’s current weighted average property tax rate is about 98 cents per $100 of assessed value.

Property tax is based on a levy, not a rate, according to the county charter. The charter limits any increase to a percentage equal to the growth in the Consumer Price Index (CPI) in the Baltimore-Washington region for a 12-month period ending Nov. 30 of the preceding year.

During the current fiscal year, tax revenues would only be allowed to grow by a maximum of 1.27%, because of the CPI growth. The maximum is estimated to be at 0.6% next year.

Assessment increases and tax base growth do not affect the limit.

At the council’s meeting on Wednesday, council members praised their collaboration with Elrich in coming to a compromise on a tax policy proposal.

Council President Sidney Katz said Elrich and each council member had many good conversations on the policy.

“I believe that this is the correct path forward,” he said.

In a memo on Wednesday to Katz, Elrich wrote that he is pleased that he and the council reached a consensus on a tax proposal.

“As you know, our charter manufactures austerity to create a system that is broke on purpose,” he said. “It leaves our residents and our business community with the false perception that we cannot manage our resources.”

Elrich said Ficker’s amendment would cause a “financial calamity for our community that will take decades to reverse.”

Council Member Nancy Navarro said the council’s proposed change would allow tax revenue to no longer be tied to inflation and instead be focused on growth.

“It’s going to have extraordinary implications as we are facing these unprecedented fiscal challenges,” she said, adding that it aligns the county’s needs with reality.

Council Member Andrew Friedson said the county’s current tax policy and the fiscal environment do not allow investing in priorities and maintaining a AAA bond rating.

“We are universally in agreement that we currently have a bad policy that is being proposed to be doubled down on [by Ficker], which would be a disastrous policy,” he said. “We have the opportunity to replace it with a simple, straightforward and much better policy. … It would also allow us to grow our priorities and revenues with our economy, with our businesses, so we better ourselves.”

The proposed change is also more easily understood, he said.

Council Vice President Tom Hucker echoed Friedson’s comment about Ficker’s amendment.

“Ficker’s new amendment would devastate our county government,” Hucker said. “It would threaten our AAA bond rating, which would cost taxpayers significantly more money for our capital projects and other borrowing. It would threaten our ability to grow our reserves, meaning less resources for our residents and business owners.”

Hucker said volunteers previously asked him to sign the petition for Ficker’s proposal, but they didn’t know the consequences of the change.

“I want the public to know the services that they count on and ask for more of each year in most cases, will be dampened through this and it will shrink — not all at once, but in small cuts year after year,” he said.

Ficker said in an interview on Wednesday evening that the council is trying to change the definition of a tax increase.

“There’s only one reason why they’re doing that,” he said. “They don’t have a motive to help the voters. They’re just trying to confuse the voters on the question.”

County officials are trying to use residents as an ATM, he said.

“They would not put their question on the ballot if they didn’t want to increase taxes,” he said. “What they should be doing instead of trying to confuse the issue on tax increases and, in a backward way, increase taxes. … they should be trying to convince the school system to open up, so these kids can get an education and learn how to read, so parents who are staying home with kids can go to work.”

Taxpayers aren’t getting their money’s worth with the doors to schools and libraries being closed, he said.

“Their 9% tax increase [in 2016] was catastrophic. They already had their catastrophe,” Ficker said. “We never again want a tax increase. Under their proposal, they can give us one. They haven’t controlled spending. … They use words. What they should remember is actions speak louder than words.”

During Wednesday’s meeting, Council Members Gabe Albornoz and Evan Glass called Ficker’s amendment “catastrophic” and “hocus pocus.”

But Ficker said during the interview that his proposal is “hardly a catastrophe.” If voters pass both ballot questions, then they will go to court, which rules for the interpretation that limits the government, Ficker said.

“My question — it’s not a tax cut. It allows increases up to the rate of inflation and has an exception for new construction ,” he said. “It’s not a tax cut. It allows tax increases. It’s just that they want unlimited tax increases. We tried that. We already have that catastrophe. They want to do it again.”

Katz said during the meeting that if residents wanted a “good life,” then they need to have a government that serves.

“We need proper funds. We need to tax properly. We need to make sure that what we do is using our dollars in the best fashion possible,” he said. “That is what government’s job is and it’s our job to make certain that the funds and that the resources are there, so people can have a better life that they need.”

Briana Adhikusuma can be reached at briana.adhikusuma@bethesdamagazine.com.