Saturday, November 27, 2010

You and Me: Montgomery County's Overdraft Protection Plan

I have read the executive summary and gone through the powerpoint presentation of the Montgomery County Office of Legislative Oversight's report on achieving a “Structurally Balanced Budget.”

Wow, are we, the citizens of Montgomery County, in big trouble. The rate of expenditure increase over the past decade and the projected rates of increase over the next five years for local government and school system employee wages, employee and retiree group insurance, retirement and pension plans and debt service have a strangle hold on our local government. I urge everyone to read this report!


Personally, I found the fiscal health examination particularly interesting in light of this week's public hearing on the sale of the old Peary High School site to the Berman Academy.


I'm not even arguing the merits of that sale. Consider the obvious.


All parties agree (even school officials) that Berman took a disgusting abandoned dump of a school building and turned it into a nice, perfectly serviceable, school for $9 Million dollars. That is about 1/10 of what MCPS currently spends to modernize a high school.


Such fact strongly suggests the school system and county government ought to take a hard look at our modernization program and reconsider renovation versus the current practice of “tear down and rebuild”.


The five year projections by our Office of Legislative Oversight show debt service increasing from $260M to $400M per year. Over half of that debt service expenditure is for the school system (but be aware that debt service is not in the school system's budget, County Government pays it for them). It appears quite obvious that our County can no longer afford to maintain its current school modernization practices. A new model is required, perhaps one that favors improved maintenance of what we own and partial renovation and expansion over the wrecking ball.

The report is loaded with many other eye-popping revelations about our county finances, and the give-aways of the past. Consider as a few examples:

Between 2002 and 2008 annual increases in local government spending were 7 to 9 % per year.

Between the decade 2002 – 2011 county budget grew 59% while the population grew just 12% and household income grew just 21%.

According to the report, County debt service has grown so much that it can now be considered the fifth county agency, in addition to Schools, County Government, the College, and Park & Planning. Debt service grew by 47% from 2002 to 2011. Further, it is targeted to grow by another 50% by 2016, by which time it will exceed the annual operating budget of the college and M-NCPPC combined.

2002 to 2011 personnel costs increased 64% while the number of workyears only increased by 10%. In MCPS, workyears increased by 14% while enrollment only increased by 6%.

In sum, the chickens have come home to roost in Montgomery County. Jerry Weast wrote checks that we can't cover. Time to see who in county government is a leader, and who is a follower.

Bob Astrove

3 comments:

  1. and who is really good at punting. oh, wait...

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  2. Thanks for taking the time to read this important report and giving us this informative digest, Bob.

    If memory serves me right, Ben Kramer was the one candidate, during the special election for District 4 last year, who kept pointing to the unsustainable growth of personnel costs in the county. Being lucid and brave did not help him win in the primary election -- former BOE president Nancy Navarro won the Democratic nomination (though not by much) and, this being Montgomery County, was elected in the general election. (As the song goes, "people hear what they want to hear and disregard the rest.")

    I am wondering how many retired MCPS and other county employees are on the list of MCPS consultants and thus get paid twice by taxpayers. If former MCPS employees have such valuable skills, why don't they pass their skills and knowledge to current employees who could take over after the retirees leave?

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  3. Ben Kramer spoke in favor of selling the 19.5 acre Peary High School site for a bargain basement price is a special sweetheart deal last week.

    Ben Kramer is clearly over any worry about the County budget.

    ReplyDelete

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