Maryland Comptroller owes taxpayers a fine - with interest - for 1099-G data breach

Has an apology even gotten you out of paying your taxes, or fines, to the Internal Revenue Service or the Comptroller of Maryland? It's thought-provoking, then, that Maryland Comptroller Brooke Lierman believes that an apology is sufficient to cover a shocking data breach by her agency. "On February 4th, The Office of the Comptroller identified a printing malfunction that led to a limited batch of roughly 6,000 1099-G forms going to incorrect addresses," the Office of the Comptroller posted on its website yesterday. "The printing error did not impact other tax forms produced by the agency. There was no external data breach; this was an internal issue. Individuals who mistakenly received another person’s information should destroy the document immediately."

In other words, personal identification data and financial information of "roughly 6000" Maryland taxpayers was exposed to identity theft by the Office of the Comptroller. What is going to happen in terms of accountability? "We sincerely apologize for not catching the error and for any distress this incident may cause the affected individuals," the statement concluded. "We will be altering our process in the future on printing jobs to ensure this type of incident does not ever happen again." That's it?

Has that kind of response ever worked for you with federal or state tax authorities? Of course not. Has the Maryland legislature taken steps to hold Lierman accountable for the data breach in the last 48 hours? Negative on that front, as well.

Who does "public servant" refer to? Do our elected officials serve the public? Or is it the other way around? The latter seems to be the case virtually 100% of the time. Government believes it is entitled to an ever-increasing amount of the income you generate through your own labor and enterprise. Government cannot be held accountable, but it will bankrupt you, and throw you in prison for the same behavior.

The fact is, the Comptroller's office owes all Maryland taxpayers whose data was exposed a check. A fine, with interest added for each day that passes since February 4, 2025. Not surprisingly, the local lapdog media, and the Comptroller's elected friends in Annapolis, are not calling for this.

Maryland Democrats propose vehicle excise tax increase

Four Democratic legislators in the Maryland House of Delegates are sponsoring a bill that would increase the vehicle excise tax. If House Bill HB-167 were to pass and be signed by Maryland Gov. Wes Moore (D), the state's vehicle excise tax would increase from 6% to 6.75% of the fair market value of the vehicle. The higher tax rate would take effect on July 1, 2025. Delegates Lorig Charkoudian (D - Montgomery), Kris Fair (D - Frederick), Andrew C. Pruski (D - Anne Arundel), and Sheila Ruth (D - Baltimore County) are the sponsors of the House bill.

Montgomery County property tax hike proposed in County Executive's $6.8 billion FY-2024 budget

Montgomery County elected officials have raised property taxes on homeowners every year since 2010, except for FY-2015, when a 2014 election-year tax cut delivered a whopping average $12 savings to tax-whipped residents (gee, thanks!). It looks like they are going to do it again for FY-2024, as County Executive Marc Elrich (D) released his proposed budget yesterday, and he suggested the largest property tax hike since FY-2017. The extra payday would go exclusively to Montgomery County Public Schools, whose student performance has only declined as bigger and bigger budgets have been approved for it by the County Council. Money has never been the problem at MCPS, only incompetent leadership since the exit of Superintendent Jerry Weast, a clearly-failed curriculum, and an increasingly-stark lack of student safety and security.

There's an even greater problem about the record $3.2 billion outlay for MCPS in Elrich's budget. Due to the disastrous Maintenance of Effort law, the amount spent on MCPS can never go down from one year to the next. So, even as Elrich himself declares "a mild recession could take place later this year," his budget would lock in a required expenditure of at least $3.2 billion for MCPS in the FY-2025 budget - even if a recession deals a severe blow to County revenue. And we're not even talking about the worrisome situation in the banking sector, which is persisting despite a federal bailout of wealthy billionaires at Silicon Valley Bank earlier this week.

What that would mean, is that savings and cuts would have to be found elsewhere in the budget: police, fire, libraries, road maintenance, etc. And the County Council is already cruising toward a rude fiscal awakening, as it has convinced itself, the local media, and enough voters that its rosy budgets of the last few pandemic years were due to councilmembers' overwhelming talent and skill, and not the overwhelming federal cash that poured into the County to cover COVID-19 losses. That money is now being cut off by Uncle Sam.

You wouldn't know it from reviewing the proposed budget. And from a steep tax hike being proposed, you wouldn't know that a majority of County residents are being hit hard by persistent inflation. Not to mention that, for many County residents - particularly the elderly and others on fixed incomes - the current property tax has become the equivalent of a second mortgage they must pay off on their home.

There are other fanciful ideas in the budget announcement, such as the recent canard pushed by the County political cartel that Montgomery County residents are somehow paying less property taxes than some other jurisdictions. This is false, because the assessments on houses are so much higher in Montgomery County than in those jurisdictions that MoCo residents actually pay more. In reality, Montgomery County has the highest real property tax payments, and the highest total tax and fee burden in the Washington, D.C. region. We pay massive income and piggyback income taxes, real estate transfer taxes, energy taxes, cell phone taxes, rain taxes, and more - many of these being taxes that don't even exist in counties around us. 

Our current tax structure and burden are two of the major reasons for our moribund County economy. Montgomery County's economic growth and strength have been at or near rock bottom in the region for more than a decade, as measured by every relevant federal indicator. No major corporation has relocated its headquarters to Montgomery County in over a quarter century. 

Taxes have also been the major cause for the flight of the rich out of Montgomery County, which caused the County's "Rodeo Drive" of Friendship Heights to crash, leaving behind vacant buildings and empty storefronts. Significantly increasing taxes and spending, as we've done and as is being proposed again here, is a reckless move in this context, and total insanity when you factor in the County's massive debt.

One positive thing Elrich's budget proposes? Providing the funding to restore the Office of the People's Counsel, a lawyer who can represent the people in land use matters. This is long overdue, but we don't need a $6.8 billion budget or a property tax hike to make that happen.

Montgomery County Council proposes property tax hike

The Montgomery County Council is proposing to raise property taxes in the FY-2021 budget. No councilmember has announced this publicly, but the planned tax hike was revealed in a newspaper announcement the Council is required by law to publish before raising taxes.

A 4.5% property tax increase has been proposed. The Council recently criticized County Executive Marc Elrich for proposing a tax increase, but now are proposing one themselves. A public hearing on the tax increase has been scheduled for 1:30 PM on April 21, 2020.

Despite the Maryland Department of Assessments and Taxation's guidelines to allow residents to testify live by telephone, the Council is currently not allowing residents to do so, despite the Council having used videoconferencing to promote themselves this week. Residents may only send written or emailed comments on the tax increase, or recorded audio/video statements, and have been banned from entering the Council Office Building since the coronavirus outbreak began in the county.

No one can yet predict the full economic impact of the coronavirus shutdown, but it certainly will be significant. Raising everyone's tax bills is certainly a bold move amidst a worldwide pandemic and economic collapse.

The Council has raised property taxes every year this past decade except in 2014, when they gave a paltry $12 average tax cut during an election year. In 2016, the Council raised property taxes a whopping 9%, which translated to 10 or 11% for a large number of residents, due to rising assessments. But the tax hike failed to generate the expected revenue. In fact, revenue is now declining, after many wealthy residents fled to lower-tax jurisdictions in the region.

Earlier this year, the Council sought new taxing powers from the Maryland General Assembly. They hope to be able to raise income taxes beyond the current limit allowed, and to add additional property taxes based on what category of property you own.

Montgomery County Republican Party Chair Alexander A. Bush called the proposed tax increase "obscene," noting the flood of unemployment claims being filed by County residents, and the many coronavirus-related business closures. Bush strongly urged the Council to allow testimony by telephone at the public hearing.

Montgomery County Council seeking authority for new property tax, income tax hikes

Montgomery County Councilmember Will Jawando (D - At-Large) will hold a press conference this morning to endorse two bills in the Maryland General Assembly that would broadly increase the Council's ability to hike taxes on property and income. If passed in Annapolis, the new taxing powers would allow the Council to hike property taxes even further on owners of homes 5000 SF or larger, or any subclass of property not specifically excluded in the bill, and to raise the County income tax and set multiple rates based on income. The proposed tax hikes come as County taxpayers are already paying the highest tax rates in history, and as large numbers of wealthy residents continue to flee to lower-tax jurisdictions in the region, resulting in declining revenue for the County as they take their money with them.

Last year, Councilmember Evan Glass (D - At-Large) proposed a "teardown tax," also known as a "McMansion tax." It would have taxed new construction homes that replaced existing homes, and then place an excise tax on the square footage added. The proposal was blasted by homebuilders, many of whom would have been forced out of business by the new taxes. Local media did their darndest to promote Glass and his tax, but rarely told the public that he did not even have the votes on the Council to pass it.

Jawando will endorse a bill today that brings the tax back in a new form - and then some. Applying to homes 5000 SF and larger, it again primarily targets teardown projects, by going after square footage. Jawando claims that 97% of County homeowners own homes less than 5000 SF in size, and promises that they would receive a "property tax cut." However, House Bill 1276 includes no such tax cut. There is also the possibility that the automatic assessment hikes each year would handily eclipse a nominal, tiny "tax cut." In that case, the "97 percent" of homeowners would continue to pay the same high property taxes they are now - and the ongoing annual increases.

The House bill is also much more general then what Jawando's press release would suggest. It could lead to all kinds of new property tax hikes on other kinds of property.

HB 1276 actually would allow the Council to create new, higher property taxes on any subclass of property. The bill appears that it could be used to sneak in the high taxes developers have sought for golf and country clubs that would run them out of business, forcing them to sell their club properties, to open up their vast lands for real estate development. In fact, under the current language, any subclass of property not exempted by the bill could face higher taxes of any amount sought by the Council.

Attorney and activist Robin Ficker
is mobbed by fans outside the
Council Office Building in Rockville

The property tax move is the Council's latest attempt to find an end run around attorney Robin Ficker's successful property tax cap ballot initiative, which requires the Council to vote unanimously to raise property taxes beyond the charter limit. When the Council did last did that, voters responded by voting to pass Ficker's ballot question allowing 12-year term limits on the Council and County Executive.

Ironically, Jawando's press conference is scheduled to take place at 11:45 AM this morning. Fifteen minutes later, at noon, Ficker is expected to deliver 55 lbs. of signed petitions for a new ballot question preventing the Council from passing another 9% property tax hike as they did recently.

But wait, we're not done talking about new taxes!

Jawando will also endorse House Bill 1494, which he claims will allow the County to increase the tax rate on incomes over $1 million a year from 3.2% to 3.5%. The Councilman says such a tax hike on millionaires would raise $88.4 million in new revenue annually.

One must ask, if true, why did the 9% increase of the already-progressive property tax only result in ongoing budget shortfalls each fiscal year since? Revenue is declining, not increasing, under the record-high tax rates now being paid. You can only get so much blood from a stone, especially when that stone has very smart tax advisors on retainer. Some on the Council continue to ignore what their own staff - past and present - has warned them about the impact of overtaxing, and their warnings are borne out in our declining revenue today.

One must also, again, read the actual text of the bill. In fact, under the language in the bill, everyone - that includes you! - could end up paying a higher income tax rate. "But Will Jawando says we won't," someone - likely an obsequious member of the local media or political cartel - might protest. As with the desperate Council attempt to create a Transit Authority last decade, it is key to ignore what the politicians say, and read what the actual bill says.

Under HB 1494, the Council could - for example - hike the income tax of all residents to 3.4%, and of "millionaires" to 3.5%. The bill has no language protecting "non-millionaires" from a higher income tax rate. It only says wealthier residents can't pay a lower tax rate than the people in the brackets under them, and allows the Council to create those brackets.

So even if you think the property tax hike on homes bigger than 5000 SF - and the income tax hike on incomes over $1 million - are good policy, you need to lobby your legislators to actually put those specific provisions into the bill. They aren't there as of this morning.

With no amendments to the text of each bill, both proposals will allow much corrupt mischief by the Council on property taxes, certainly hit local homebuilders and remodeling firms hard financially, and absolutely set up a potential income tax hike for every Montgomery County resident.

Will the proposed tax hikes destroy the Montgomery County economy? Probably not, because the County economy has already been destroyed. The new taxes will simply put a heavier layer of concrete atop the grave of the moribund economic corpse. And will make it all the harder for a future, competent set of new leaders to restore it once we have a free and fair Montgomery County election.

Democrats propose Netflix tax for Montgomery County

Democratic leaders in the Maryland General Assembly are poised to propose a new tax on the highly popular entertainment streaming services used by most Montgomery County residents. The officials announced the proposed tax quietly in a Friday news dump strategically arranged by The Washington Post, whose reporters were aware of the pending tax earlier in the week, another clear example of coordination between the Montgomery County political cartel and the Post.

Subscribers to Netflix, Hulu, Amazon Prime Video, Disney+, Apple TV, and other streaming services could find a hefty tax added to their bill as soon as this year. The Post reports that the new Netflix tax would be one of several new taxes slapped on residents of Montgomery County and the rest of the state to cover a new $6000-per-taxpayer spending hike for public education statewide. Montgomery County is already spending record amounts on public schools, and the County's own recent report shows that the declining school system has only gotten worse for all the high spending.

Now residents' Baby Yoda and You addictions are squarely in the tax crosshairs of the cartel. With property and income taxes at record highs, it is almost impossible for officials to add $6000 in hikes via those taxes. The county is now turning to these sin taxes, similar to those you pay on your cell phone service and the rain that falls in your home's yard, to get the same amount in sneakier ways. You may recall that the County floated a new Trash Tax in 2019, for example.

The Netflix tax will be hard to pass openly, however. Most of their constituents will be furious, and the tax will fall heaviest on young people, the poor and senior citizens - like all of "progressive" Montgomery County's regressive flat taxes.

MoCo Council hikes property taxes, slouches toward bankruptcy in disaster budget

Property tax bills will rise for almost all Montgomery County residents in the coming year, after the Montgomery County Council approved a disastrous $5.8 billion FY-20 budget Thursday. The vote virtually ensures future tax hikes will be necessary, as the Council also went on a spending spree despite starting off with a $208 million shortfall. Increases in spending on Montgomery County Public Schools, already proven to have no impact on student performance despite record-large MCPS budgets this decade, will be a major cause of tax hikes down the road. Once the MCPS budget is raised, state law requires the Council to maintain that level of spending going forward.

The fact that the Council had no qualms about spending even more than MCPS asked for despite that binding maintenance-of-effort state law raises questions of the councilmembers' fitness for office. Councilmembers approved the massive spending on MCPS while knowing that there are only two uncertain sources to pay the additional $16 million, and one of those is a one-time $5 million possible payment from the state for upgrading the County's long-failing 911 system. The other $11 million? LOL - they'll figure it out. And thanks to the law, we now have to give MCPS - the system that has declined in performance even as spending on it has surged - that amount every single year going forward. We already are in the red every single year as far out as the forecasts go as it is. Heckuva job, Brownie!

"The annual [property tax] bill for the average homeowner will increase," the Council's press release on the budget vote acknowledges - while not admitting the real-world dollar value of that increase, which is far more than the "average" cost cited often by the County. That tax hike comes after the Council and County Executive Marc Elrich promised voters they would not raise taxes. 

Bloated and filled with loot for the Montgomery County cartel, the budget maintains the corrupt Council's MO of "managing the decline," and continuing our slow slouch towards Gomorrah. The Council has failed to take a single action on our economic development crisis since taking office last December, forgoing for another year any sensible attempt to increase our revenue from commercial development or attracting major corporate headquarters - something Montgomery County hasn't been able to do for over twenty years. Instead, the County has sunk to rock bottom by every economic development benchmark, even behind tiny counties like Culpeper and Rappahannock. It's humiliating.

Considering the Council has raised property taxes every year except 2014, imagine what will happen when the national economy goes into a recession. We are now in the weakest position ever to confront such an economic challenge. Given the County's massive debt, the much-touted AAA bond rating will be in jeopardy as soon as bad times hit, and we are due for a bust cycle any month now. Remember: we have to maintain this level of MCPS spending and county employee pay hikes every year no matter how bad the revenue picture gets.

With that in mind, it's obvious that while our leaders may be tools, they aren't exactly the sharpest tools in the drawer. But that's the caliber of leadership you end up with when most voters don't bother to research the candidates before voting, and simply go by the party affiliation after the name. We can't go on like this.

Montgomery County Council proposes property tax hike

4.8% tax increase

planned

The Montgomery County Council, contrary to fake news headlines, is planning to raise your property taxes this year. A required legal announcement published by the Council confirms the planned tax hike in black and white, despite County officials' false claims of no increase.

"Notice of a proposed real property tax increase," the legal notice proclaims. "The County Council of Montgomery County proposes to increase real property taxes," it states. Despite annual false claims of "holding the line on property taxes," MoCo property taxes automatically increase due to rising assessments. The only way the Council could fulfill a promise of "holding the line," or "no tax increase," would be to lower the tax rate by the amount required to offset that automatic increase.

According to the Council's required legal statement, the Council "is considering not reducing its real property tax rate enough to fully offset increasing assessments." Instead, the Council is proposing to hike property taxes by 4.8%.

But while the Council is required by law to disclose their planned tax hike in the legal announcement, County officials and their friends in the media have been falsely claiming no tax increase is proposed. "No tax increases in Montgomery County proposed budget," blared a fake headline on WTOP.com. "It’s what residents don’t see in Montgomery County Executive Marc Elrich’s proposed 2020 budget that might impress them the most: no tax increases," the article falsely announced.

The Washington Post's Jennifer Barrios, who never wrote a single article covering the general election County Council At-Large race in 2018 (and unprofessionally didn't even respond to emails during the campaign), tells an even bigger whopper of a lie this morning on the Post website by claiming a tax cut. All three local media statements are entirely false, as these photographs of the actual legal tax hike announcement clearly show.

Fact Check: Because County elected officials and the County cartel-controlled media have told this lie annually for many years, Post fact-checking standards require me to award them the new "Bottomless Pinocchio" rating for those who "repeat a false claim so many times that they are, in effect, engaging in campaigns of disinformation.” 

MoCo Council bill would divert funds for the disabled, seniors to BRT slush fund

After voting to tax Uber rides to subsidize failing Barwood Cab, which ended with Barwood filing for bankruptcy anyway, now the Montgomery County Council is trying to convert funds the tax earmarked for seniors and the disabled into a slush fund it can use for the $10 billion Bus Rapid Transit boondoggle. Bill 13-18, sponsored by Council President Helpless Hans Riemer, would strip all language from the Uber tax that directed funds to transportation for the disabled, elderly and poor, and "instead allow use of the fund for any transportation purpose in the County."

We already knew that the Uber tax, as I warned in my testimony opposing it, would hurt County residents and Uber drivers alike. Exactly as I predicted, Uber rides became more expensive, Uber drivers are being paid less than they were a few years ago, and no new ride-sharing competitor has entered the Montgomery County market since the tax was imposed.

This also made the County less appealing to the young professionals the Council has tried to publicly claim they wanted to attract, as millennials overwhelmingly use Uber rather than taxicabs. To our stuck-in-the-60s Council, diesel buses and Barwood Cab are still considered state-of-the-art transportation.

But now the Council is adding insult to severe economic injury to the County. When passing the Uber tax, the bleeding-heart language related to improving transportation for the disabled and elderly was used by the Council in the media as a fig leaf, to cover the anti-progress, fight-the-future nature of the Uber tax.

Now the Council is cravenly plotting to steal the money out of the hands of the disabled and elderly, and use it to fund their struggling $10 billion BRT boondoggle. The County, currently facing a $208,000,000 budget shortfall, has been unable to find enough funds for the BRT scheme. They failed to create an independent transit authority twice, which would have had unlimited power to tax and spend with no oversight by any elected official. Recently, they tried and failed to have their allies in Annapolis give them "quick-take" land seizure authority, which would have allowed them to seize homes and businesses - not only for the demolitions BRT will require along each route, but which could also have been sold to generate more money for the unfunded BRT boondoggle.

Desperate for money, the greedy Council will now try to pry it from the hands of disabled, poor and elderly residents, and put it into the pockets of themselves and their developer sugar daddies, whom the whole BRT scheme was dreamed up to profit.

It's outrageous.

It's bad enough Uber and Lyft riders have had to pay more, and via the tax pay Barwood Cab even if they weren't using their services. But to then find out the Council used the disabled and seniors to actually gain a new revenue source for their BRT boondoggle, this is a new low for even this corrupt Council.

Montgomery County Council to raise property taxes, after claiming they wouldn't

Remember when I reported that the Montgomery County Council would raise property taxes again this year, despite elected officials' and the local media's claims otherwise? More proof is in. Here is the announcement the County Council is required to print in local newspapers before they can raise your taxes, and it reads, "The County Council of Montgomery County proposes to increase property taxes."

It also details what I had explained: The County's tax scheme deviously increases taxes automatically each year, in an attempt to trick the public into thinking the Council had nothing to do with it. In fact, as the announcement notes, in order to avoid the automatic tax increase, the Council would have to "reduce its real property tax rate enough to fully offset increasing assessments. The proposed budget does not provide such a reduction.

CLICK HERE to learn more about the
County Council candidate who will lower
taxes, and leave more money in YOUR pocket,
instead of the corrupt County Council's!

Hence your tax rate for FY-2019 will be 4.1% higher, and the Council will steal an estimated $56,120,926 from their constituents' bank accounts in the coming year, on top of what you payed last year. The Council's historic 2016 8.7% tax hike walloped many County homeowners at effective 9%-10% rates based on their rising home assessments. Councilmembers had falsely claimed the increase was for "education," but student performance and graduation rates have actually continued to decline after the tax hike, as they have throughout the decade.

If you re-elect Helpless Hans Riemer and 3 new equally-controlled At-Large candidates chosen by the MoCo political cartel, wait until you see the tax increase you'll get in 2019, 2020, etc. A better choice would be to vote for Robert Dyer, who will offer a #DyerTaxCut, repealing the 2016 property tax and 2010 energy tax hikes incrementally over 4 years. Riemer's own former chief of staff recently noted that the energy tax hike appeared to have a devastating effect on the net number of new businesses created in Montgomery County this decade. MoCo had a net increase of only 6 new businesses, while D.C. and Fairfax enjoyed a net addition of 3000 new businesses each.

Mismanaged Montgomery County finances end up in the red again with $200,000,000 budget shortfall

Regular readers of this website know that Montgomery County government is stuck in a structural budget deficit as far out as the projections go. So those folks won't be surprised at all to find out that their incompetent and spendthrift County Council managed to yet again spend more than they took in - way more. The budget shortfall heading into the FY-2019 budget process is a whopping $200,000,000.

County Executive Ike Leggett released his proposed budget yesterday, and it includes not a dime of tax relief for residents now paying the highest taxes in County history. No property tax cut, no energy tax cut - not even a rain tax cut! Property taxes will increase automatically; unless the County Council changes Leggett's proposed tax rate, you will be guaranteed to have a higher property tax bill.

Happy Tax Paying from Montgomery County!

#ThrowTheBumsOut
#ElectRobertDyer

MoCo Council prevents Robin Ficker from testifying on tax bill

Email from Montgomery County Council
President Hans Riemer to Robin Ficker on
Christmas night; there is no mandated limit
on how many speakers can testify at a hearing

Montgomery County Council President Hans Riemer rejected County resident Robin Ficker's request to testify at a hastily-scheduled public hearing Tuesday on a bill that would allow pre-payment of property taxes before December 31. Ficker is running against several members of the Council for the office of County Executive. This was a clear conflict-of-interest for the Council in excluding Ficker's testimony, as he would surely have discussed the Council's record property tax hikes in his remarks, and the narrow tax relief the bill would provide for only one tier of taxpayers. Some of his opponents on the Council used the taxpayer-funded Council public relations office to issue statements praising themselves following the hearing Tuesday, despite being the ones who forced County residents to pay more than $10,000 in property taxes in 2016.

Ficker is mobbed by supporters
outside the Council building earlier
this year

Ficker's exclusion raised eyebrows because the Council had all day to listen to testimony; this was an emergency session and there was no other item on the agenda, as anyone can confirm by examining it. The Council recently used a similar tactic to limit public participation in the debate over a proposed expansion of Old Angler's Inn, which left more observers in the hearing room than actual speakers.

Ficker's successful ballot
questions limiting Council terms
and tax increases have enraged
councilmembers, who prevented
him from testifying Tuesday

The tax bill passed 7-1 yesterday, with Councilmember Craig Rice voting against it, and Councilmember Tom Hucker absent. It remains uncertain if all or any taxpayers who pay more than $10,000 in property taxes will be ultimately be able to prepay and/or save money. But councilmembers were forced to reverse their opposition after other local jurisdictions quickly allowed their residents to prepay. Many of those paying that amount were only put over the $10,000 mark by the Council's record 2016 and 2017 tax hikes. While the Council took pains to blame Donald Trump, who is unpopular in blue Montgomery, it was the Council themselves who put so many of those affected by the federal tax changes into that position.

Despite record tax hikes, bungling Montgomery County Council runs up $120 million shortfall

Montgomery County is facing a $120 million budget shortfall, despite record tax hikes on residents in 2016 and 2017. County Executive Ike Leggett has asked every government department to identify 2% budget cuts, and encouraged the Council to follow suit.

The shortfall seemed to take the Council by surprise, despite projections of a structural deficit as far out as the forecast goes. More knowledgeable observers know exactly why revenues are down - the County's private sector economy has been moribund for some time, and the wealthiest residents are fleeing to lower-tax jurisdictions like Loudoun, Fairfax, Frederick and Howard Counties. Montgomery has dropped far out of the Forbes Richest Counties Top Ten list in 2017.

Add in the heavy debt load councilmembers have run up, and the fiscal scenario worsens still. How much debt is there? If County debt was a department, it would be the third-largest department in Montgomery County government. Yikes.

The spendthrift County Council has also engaged in a hurricane of wasteful spending. In just one example, earlier this year they approved $22000 for a surveillance camera system that, in the real world, can be purchased and installed for under $1000. Importantly: this expenditure was not itemized in public budget documents, instead lumped into a $34500 line item. Multiply this by every budget item, and we could be talking about millions in wasted funds. Don't expect this Council to identify them!

What raised eyebrows among many who follow the County budget closely yesterday was the petulant insistence by some councilmembers that they would not make major budget cuts. Considering that taxes are at a record level, many are wondering what planet these folks are speaking to us from. Leggett warned at an NAACP meeting last week that the Council simply cannot use a tax increase to solve shortfalls in the coming years. He clearly knew then what became public yesterday - we have a $120 million shortfall.

Prediction: The County Council will use another tax increase to close the budget shortfall, as they have every year since 2010. Then they will be voted out of office in November 2018.

MoCo Council passes tax hike budget, bloated with payoffs to donors and allies - and themselves

The Montgomery County Council yesterday unanimously passed another budget that will raise your tax bill for FY-2018, in order to cover their highest-in-the-region salaries, and taxpayer-funded giveaways to political allies in the non-profit and contracting fields. Buried in the Council press release is a legally-required admission that your tax bill will increase, not decrease. That's because, while the Council can technically claim they "held the line on taxes," the corrupt tax system they've put in place automatically hikes taxes based on increased real estate assessments.

Allies of the Council in the local media went even further than the Council's own press release Thursday, falsely declaring that taxes had decreased - even as the release stated otherwise. Fake news. In fact, the Council posted a required ad in local newspapers several weeks ago announcing a budget with an increase in taxes. This follows last year's all-time-high property tax increase of 9% (which many County homeowners found actually translated into tax hikes of 10% or more, based on - yep - those automatic tax hikes that happen whether the Council increases the rate or not), and a major hike in the recordation tax.

So "holding the line" in this case means we're still at the highest level of taxation in Montgomery County history. The Council didn't have to move a muscle to get all that, and a little bit more, from your wallet for this budget.

As I reported a few weeks back, the budget massively overpays for procurement purchases, and funnels money to key donors and political allies in often-duplicative non-profit social services. Some who receive salaries from those non-profits turn portions of their tax hikes into campaign donations for the very councilmembers who voted to approve the funding for their organizations. Funding for a new microlending "Bank of the County Council" can also be "paid forward" by recipients to the campaigns of councilmembers. Those involved in determining who receives the microloans are either directly appointed by the Council, or are within their direct orbits of political influence.

Whether you pay taxes in Montgomery County can also depend on who you are. As I reported this week, developer Regency Centers was found to be in arrears to the County, having not paid their tax bills on two Westbard properties. Yet their development proposals are being pushed through the approval process, at taxpayer expense. As you know, ordinary citizens like you and me can be denied various government benefits and services if we are delinquent on our taxes.

There's a lot in this budget for the beleaguered County taxpayer to review, and perhaps even more for the FBI to examine. Such an examination could turn the Council's unwarranted budget victory lap into a perp walk outside of 100 Maryland Avenue.

Westbard developer delinquent on taxes to Montgomery County

Developer Regency Centers, which plans to redevelop over 20 acres of land in the Westbard area of Bethesda, is in arrears to Montgomery County. Alexandre A. Espinosa, MoCo's Director of Finance, reports that the entity "Equity One (Westwood II), LLC" owes the County and/or state $904.05 on a 46,609 SF property at Westbard, and $384.98 on a second, .34 acre property there. Equity One was recently acquired by Regency Centers.

If the money owed isn't paid by 4:30 PM on June 9, the County will hold a public sale of the tax liens on both properties. The unpaid funds raise a new issue - Does the County allow applicants who haven't paid the required taxes and/or fees on a property to proceed through the development approval process? If so, why? Regular taxpaying citizens can find themselves ineligible for various government services if they owe taxes. Is there a double standard for developers?

Montgomery County wants to increase your Rain Tax by 9.7%

Your rain tax may be about to increase. Bigly. Montgomery County continues to have an annual Water Quality Protection Charge, determined by the "total impervious area for each property." After the County's original, illegal rain tax was struck down by the courts in 2015, the Montgomery County political cartel simply figured out a legal workaround, and brought it back again.

County Executive Ike Leggett is recommending a whopping 9.7% increase in the Rain Tax, er, "Water Quality Protection Charge," for FY-2018. The County has already determined the amount of impervious surface on your property to determine your charge, by looking at an aerial photo. Very scientific.

You'll also pay higher property taxes this year, as rising assessments create an automatic tax increase even when the tax rate doesn't change. And the County Council gets another salary increase, just like Bell, California. The difference is, Bell's Council is in prison, and ours is still free and on-the-take.

Throw the bums out. Or #LockThemUp.

Montgomery County Council stealing money from senior citizens via "tax credit"

Montgomery County falsely asserts that its proposed FY-2018 budget "holds the line on taxes," and reduces the property tax rate "by 2.5 cents." In reality, homeowners will pay more in property taxes, due to rising assessments. That's not the only doublespeak in the budget. Olney resident Louis Wilen has done the math, and found that the theoretically-generous Homeowners Tax Credit of $692 actually raises the tax bills of senior citizens over 65 who make less than $60,000 a year.

Worksheet by Louis Wilen showing
comparison of issuance of $692 flat credit
versus non-issuance of $692 flat credit
(click to enlarge for greater detail)

Seniors aren't aware of this, Wilen says, because the Homeowners Tax Credit worksheet is not usually provided to homeowners, meaning that the tax credit calculation is hidden from them. For those seniors under the $60,000 income level, that calculation turns the $692 tax credit into a $346 tax increase. Wilen will ask the Council at tonight's budget public hearing to replace the flat $692 credit with a decrease in the property tax rate, to solve the problem for the affected seniors.

Wilen's finding fits a long-time pattern of this County Council, which has a history of imposing flat taxes and fees that hit residents with low or fixed incomes hard countywide. Taking advantage of senior citizens won't help the Council erase the severe trust deficit it has with its constituents, which led to overwhelming passage of term limits last November.

Save the date for tax day savings at the Shops of Wisconsin Place April 17

Celebrate completion of your tax returns on Monday, April 17, 2017 with rewards at the Shops of Wisconsin Place in Friendship Heights. When visiting that day, say the phrase, "Shops tax break" at the following businesses for:

• Anthropologie - Light bites & beverages while you shop
• J.Jill - Free style session 
• Rock The Reformer - Free Chapstick 
• Sephora - Free mini facial 
• Talbots - Free VIP Style Session
• The Capital Grille - Complimentary calamari appetizer card
• Whole Foods Market - Free cup of coffee

The Shops of Wisconsin Place are located at 5310 Western Avenue, atop the Friendship Heights Metro station.

Should developers get tax cuts as County faces "perfect storm" of development, school overcrowding?

The first public discussion of two proposed massive tax cuts for developers took place before the Montgomery County Planning Board last night, but we won't have a sense of where this scheme is heading until we hear what the commissioners themselves have to say about it. That discussion will take place at a worksession next Thursday, June 9.

But to hear from parents and PTA officials at last night's public hearing, the school facility needs are great. And according to County Executive Ike Leggett, the County Council's disastrous FY-2017 tax-and-spend-and-tax-again budget means there will be no extra money next year.

The thought of cutting even a dime of taxes for developers - as taxes were just hiked to record levels on residents last week - should not even be under consideration by any credible public servant. We should be talking about an equal tax hike for developers, not a tax cut.

"The idea that growth and density are the solution to all problems" is the problem, suggested resident Max Bronstein. A representative of the Bethesda-Chevy Chase cluster called the massive pending redevelopment in downtown Bethesda, Chevy Chase Lake, Westbard and Lyttonsville "the perfect storm," which will have great impacts on individual schools. He and Bronstein both noted that those single-school impacts often can be hidden from attention by the County's policy of measuring capacity by cluster averaging, rather than by each school's capacity.

Edward Johnson, a public school parent who lives in Bethesda, said the proposed reductions in what developers will pay related to school capacity "stands out as a loss to the County. We already don't have adequate funding" as it is. If anything, Johnson suggested, fees paid by developers should be going up, not down. "The developers are building the houses," said a representative of the Springbrook cluster, and should be contributing toward the cost of the students they are generating.

"We are many, many years behind constructing elementary school capacity" in the County, said Melissa McKenna, the Chair of the Capital Improvement Program committee of the Montgomery County Council of PTAs. "Please keep in mind that 2500 students are enough to fill three-and-a-half elementary schools," she said.

One mechanism being used to deliver the massive tax cuts to developers is to only count student generation from developments built in the last 10 years, rather including homes built before then. McKenna asked the board to "reconsider using all-year rates" instead, which the planning staff's own report shows would generate as much as 60% more revenue for school construction - and even that isn't enough, as that's the tax level we're at right now for developers. As it stands, McKenna observed, developer school payments "strike me as under-received."

Clearly the County Council and planning staff are aiming to shift the cost burden of school construction from developers to residents, as the new FY-2017 budget proves. A massive tax hike for you, while giving a massive tax cut for developers, is simply immoral. If we are in as bad of a shape with infrastructure as we are told, what sane person would proposed reducing the burden of developers? What is the argument? To encourage more development with even less revenue to cover costs? Nuts.

A separate issue in the Subdivision Staging Plan that contains the developer tax cut proposals is whether or not to extend the tax exemptions for developers currently allowed via an Enterprise Zone in downtown Silver Spring.

One resident noted that it has cost the Silver Spring community severely in lost adequate facilities revenue, citing the "unintended consequences of the enterprise zone." Twenty years of exemption from school payments and taxes has had "consequences for our schools."

But representatives of downtown Silver Spring projects already in the works say it would be unfair to change the rules now. Attorney Bob Dalrymple, representing Washington Property Company, said his client's profit margin is already "razor-thin" on its Ripley public-private partnership project that includes a new Progress Place facility. "The real issue is the economic viability [of the project] and general fairness here," Dalrymple testified. He suggested the Board grandfather the WPC project to retain the enterprise zone tax terms.

Attorney Pat Harris, not testifying for a particular client, agreed that grandfathering would be a solution. Getting rid of the enterprise zone in the middle of the development process "creates an incredible burden" for existing projects.

After approving historic tax hike, County Council now wants new Metro tax

"It's not just, 'no,'

it's 'hell no.'"

Will the massively-inconvenient Metro "safety project" scheduled to begin this weekend actually produce results? That is hardly clear. What is clear, is that the inconvenience is in part designed for a goal beyond safety - softening up you, the taxpayer, for a major tax increase.

We've already dealt with one "urgent" Metro crusade to fix long-delayed mechanical and safety issues throughout the system, leaving many weekend riders standing for hours in stations or taking shuttle buses instead. The results of that were zero, squat, zilch, as the current safety crisis proves.

But the big talk we've been hearing about the need for extreme measures like shutting down whole lines for months just happens to be coming from some of the biggest proponents of new taxes to fund Metro, including D.C. Councilman Jack Evans and Montgomery County Councilmember Roger Berliner.

Funding increased Metro capacity - expanding to 8-car trains, in particular, and increasing capacity on the Red Line north of Grosvenor - was something many transportation advocates have supported. The idea of simply pouring a whole lot of additional money into the bastion of incompetency known as WMATA, however, is a completely different prospect. It is very similar, coincidentally, to the Montgomery County Council's irresponsible decision to massively raise taxes on residents, and bust the bank by going $90 million over the required funding level for Montgomery County Public Schools - without a dramatically-different strategy to tackle the achievement gap than the failed one being utilized now by MCPS. Money down a toilet, in other words.

It's no surprise, then, that some of the loudest voices calling for a massive new tax for Metro are on the Council.

“We hope to have a plan ready to present by the end of September,” Councilmember Roger Berliner told The Washington Post. “Between now and then, we’re going to work with our jurisdictions to see if we can come up with unanimity with respect to a mechanism — a sales tax, a gas tax." 

Are you kidding me?

WMATA has shown zero results, and zero evidence to prove it is changing its ways. The agency is probably in need of a federal takeover, but even the feds don't want to touch this mess.

You'll also note that, once again, no proposal under consideration involves taxing developers, just the residents.

While many local leaders and media types are almost giddy about the pain you are going to feel using public transit starting this weekend, I have a more sobering prediction.

This really, really bad PR campaign designed to make you believe we really need to pour more money into the coffers of an entity ranking somewhere between Barwood Cab and the County liquor monopoly in terms of public popularity, is actually going to deal already-declining Metro a mortal blow. A grand strategy to get more cash is actually going to end up costing WMATA cash.

Because, starting this weekend, folks are going to be getting into their cars, not out of them. They're going to be buying cheap used cars. To a lesser extent, they're going to be biking or using Zipcar or Uber (don't tell the County Council). 

And many, many months from now, they're going to consider the calls for new taxes for a Metro slush fund. And they're going to consider the latest fare increases being proposed for the same service that ain't worth it at half the price.

And you know what they're going to say?

Their reaction will be exactly what Del. David Albo of Fairfax County's was: 

“It’s not just no, it’s ‘hell no,’ ”