The local media are trumpeting the Montgomery County Council's new "Fiscal & Reserve Policy," which some elected officials have - falsely - claimed has magically eliminated the structural deficit.
Of course, any discussion of the county budget is always confusing at best in Montgomery County, because the county does not ever let you examine the budget online, in Web 2.0 format.
Let me try to present the facts about this "overnight austerity" 180 degree turn by the council, which - as of this hour - has still been unable to stop itself from uncontrolled spending and Madoffonomics.
First of all, the claim of 10% reserves doesn't take effect until the end of this decade. That is to retain spending power, and enable this council to kick the can down the road for the 1000th time.
Having said that, does it make sense at this particular point to have 10% reserves? My recollection is that Wall Street was furious that the council had dropped from 6% reserves to 5%. I don't recall them demanding a 10% reserve.
There is a lot of "fine print" on this reserve policy that needs to be gone over, and there appear to be loopholes. Such as, "Revenue above the required reserves can only be used to fund one-time expenditures." What precisely does that vague statement cover? It would seem to me that a council this clever could define a lot of things as "one time expenditures."
Beyond that, the definition of fiscal responsibility is not simply having a 10% reserve.
True fiscal responsibility means that the budget's size can remain constant in good times and in bad. We now have a sense of the baseline for future budgets. It would be a terrible mistake to increase spending much beyond that level even when a future recovery begins. As you can imagine, 10% reserves could only cover so much.
It's also important to take a powder puff press release and apply a real-world context to it. Think about it. If the county had to close libraries, take dentures away from senior citizens, cut bus service, eliminate school anti-drug programs, and remove police officers from high-risk public schools to meet a 5% or 6% reserve requirement... ...how in the name of Pete could the council possibly pay for a 10% reserve, if revenues remain low?!
Do the council and executive have inside information about the economy that even President Obama, Ben Bernanke, Tim Geithner and the rest of us don't know?
Hmm... This is another clue for you, the citizen, to ponder. A clue that, along with others, shows the size of the tax increases that are coming. If you recall that it took the largest Energy Tax increase in Montgomery County and Maryland history to get to 6% reserves in May, pause to contemplate the tax increase needed to get to 10%! Unbelievable.
That's because of the other problem with this "new fiscal policy" that the local media didn't question the council about: where are the spending cuts? Answer: So far, there aren't any.
So hold on just a minute here, Robert. You're telling me that we are going to 10% reserves, when we currently can't afford 6%?
And about those "recurring expenses?" Some councilmembers have dreamily told reporters that there is no shortfall next year. [No giggling, please!] Some people in the county have at least said that there is going to be a $200 million shortfall next year. [You're getting warmer!!]
Ready for the truth?
The budget shortfall for next May actually stands at $900,000,000 at this hour.That is BEFORE snow removal costs. That is BEFORE Martin O'Malley or Bob Ehrlich send part or all of the teacher pensions back to the counties next year (the state is broke -
this is absolutely going to happen, even if no one else wants you to know it before you vote this fall - for obvious reasons!).
In other words, the idea that all future shortfalls have been magically eliminated, and that we can realistically afford to have a 10% reserve (which won't actually even take effect until these councilmembers have all moved on) is sheer fantasy.
We cannot fix the structural deficit without fundamentally restructuring government. And cutting spending. And creating new revenue streams (my budget plan creates 8 new revenue streams, by the way). And, if necessary, addressing compensation and pensions for non-public safety employees.
And as far as reserves, we only need the amount of reserves that the rating agencies ask us to have. If we find ourselves in the (almost impossible to imagine) position of having a huge budget surplus...
...please remember when you go to vote what the incumbents, and all of the Democratic challengers (except for Hans Reimer, commendably) have NOT suggested we do with a large surplus:
Give it back to the People of Montgomery County.It's
your money. If government doesn't need it, and has met the practical reserve needs, it should return the rest to you, the taxpayer. Don't let any self-appointed "expert" tell you otherwise.
Any way you analyze this "new fiscal and reserve policy," it simply doesn't add up. Except as another excuse for raising taxes once the election is out of the way. And that is anything but fiscal responsibility.
But you can take action right now!
Watch my video message about fiscal responsibility, fundamentally restructuring government, and electing a government that does "the right things" (as opposed to trying to do everything), and
email it to 10 of your friends who live in Montgomery County today.
http://www.youtube.com/watch?v=Nnvmm1YNWfMThis will only take a few minutes, and then be sure to enjoy your Fourth of July weekend, knowing that you've done your part to restore the common sense and values that this county and nation were founded upon.
Take action today, and on November 2, to elect a new councilman who will restore real fiscal responsibility to Montgomery County: Robert Dyer!
