Monday, May 19, 2008


Apologies, I haven't had much of a chance to post anything lately as the Council worked to conclude its actions on the FY2009 budget. To make up for it, this will be a little longer than normal. But bear with me, I think you might find it of some interest. As you may have read in The Washington Post or the The Gazette, the County Council hit a few bumps in the road as we came down the homestretch -- so I thought I'd provide you with insights on what worked and what didn't as we worked to wrap things up.

As kind of a quick re-cap, the County Executive sends his budget recommendations to the council on the 15th of March. After that, the council holds public hearings and then starts committee work sessions on the individual departments and agencies in April. In May, we move to full council deliberation on the departments and agencies. This year, we were scheduled to take final action on the budget on May 22. As always, we scheduled a "straw" vote -- or tentative approval -- the week before the final vote, so that council staff can work with the County Executive's staff to make sure all of the numbers add up and that all of the details are correct.

It was during this straw vote process that things started to slowly erode.

As is often the case, individual councilmembers have specific issues that are important to them during the budget process. This year it became clear early on that because a number of our revenue sources had declined (the recordation and transfer taxes, and the income taxes), we would likely need to increase use of property taxes. That, in turn, would likely mean exceeding the Charter limit.

As a result, a number of councilmembers had indicated that they would like to scale back the cost of living allowances (COLAs) for our county employees and have some element of employee participation to balance the increase in property taxes. There were two other important elements that councilmembers identified: (1) reinstating some of our core services that the County Executive had proposed reducing (i.e. community policing, fire and rescue services to name a couple) and (2) reducing the property tax increase proposed by the County Executive.

Interestingly, as the council proceeded through April and May, everyone did a pretty good job of not adding too much back into the budget. And so, as the full council adopted the various elements of the budget there was general agreement . . . until the week of the straw vote.

The tussles began on Wednesday, May 14. On the table was a proposal to reduce employee COLA's by $40 million, which would have resulted in reducing COLAs by about 40-50%. That was voted down by a vote of 6 to 2, in a boisterous work-session with about 300 county employees in attendance. While there was no other motion made, there was a clear split in the council, with some councilmembers seeking some contribution to the budget from county employees, and others not wanting to break the negotiated contracts with our employees.

The next day -- Thursday, May 15 -- the council proceeded to the straw vote. Given the way the votes had fallen so far, there had been no huge disagreements. So, as Council President, I made a motion to approve the overall budget - usually a formality at that point - and it went down on a 4-4 tie.

Houston, we have a problem.

As I indicated a little earlier, this budget would exceed the Charter Limit -- and as such, it required an affirmative vote of seven councilmembers to pass. Remember, because of the passing of the Councilmember Praisner earlier this year, there are only eight councilmembers; therefore, I needed to have seven of eight councilmembers in agreement in order for Montgomery County to have a budget for the next fiscal year which begins on July 1. A 4-4 split is a long way from that endpoint.

So, at about the time we should have been celebrating a successful resolution to a difficult budget season, the council adjourned until 9:00 a.m. Friday morning, May 16, and all of the councilmembers retired to their respective offices with no clear way to achieve resolution. This was about 4:00 p.m. on Thursday.

Eventually, councilmembers began to knock on each other's office doors, making tentative inquiries about what each might need in order to approve a final budget. Before we had adjourned, Council Vice President Phil Andrews had proposed looking at including two furlough days (effectively two days when County government would close down) in the budget, for an estimated savings of about $20 million dollars. This became the starting point for conversation, but by 6:00 p.m., there was no real consensus on what such a proposal might look like.

One councilmember ordered pizza, and people started to emerge from their offices. With no clear end in sight, a few councilmembers went to other events. Soon it was 7:00 p.m., and no progress had yet been made -- but there was one factor out there -- the fact that we would be in session 14 hours later, at 9:00 a.m., to debate these issues in Council session. That likely wouldn't be pretty.

Shortly after 7:00 p.m., then, I started talking with one councilmember about trying to figure out different ways to reduce $20 million in spending that could get some votes. We looked at one furlough day -- to save about $10 million -- and another $10 million in reductions from the current reconciliation list. As we looked at some other variations on that theme, a third councilmember came in, and the three of us continued the brainstorming.

Things were starting to turn. Shortly thereafter, a fourth councilmember came in and said he and a few other councilmembers had reached roughly the same conclusion that we had: a proposal that would reduce property taxes by $20 million and require savings in MCPS and Montgomery County government in the area of employee costs, but would do so without breaking existing contracts with our employees.

All of a sudden we went from a 4-4 split to five members in agreement -- but that was still a long way from the seven we needed. The phone calls started, and by 9:00 p.m., we had general tentative agreement of seven councilmembers. Then we had to put it in writing.

I stayed until about midnight on Thursday, putting the final touches in place and calling the County Executive, members of the Board of Education, the MCPS Superintendent, and the representatives of our employee organizations to discuss our agreement. I was well aware that if anyone had a big problem with what was tentatively proposed, it would be very easy for two councilmembers to stop the budget. But after my round of calls and conversations, I felt certain we were on our way to an agreement.

I got to the office at about 8:00 on Friday morning, and things were still going pretty well -- but as councilmembers drifted in, there were still a number of questions about the specific language, the final numbers, and how the property tax reduction would be shown. As 9:00 a.m. approached -- the time we were to go back into session -- calls continued to come in, and more questions arose. Councilmembers kept talking and the clock kept ticking.

Finally, it appeared that everything was okay, and the council slid into session at 9:45 a.m. After a fair amount of deliberation and discussion, the council tentatively approved the FY09 operating budget for Montgomery County an hour later. We had our budget.

I'll go through the details of what is actually in the budget in my next blog, but I thought this story might be more interesting for starters.

My thanks to all for their hard work on the budget!