MPW Banned by Federal Agency

One of our long-time readers has reported that a federal agency, the reader's employer, has blocked Maryland Politics Watch blog. The reader has asked us not to publicly name the agency for fear of potential waterboarding.

When the reader attempted to access our site, the following message came up:

SITE BLOCKED
This site has been blocked by the security team because it is listed by the vendor of our Web-blocking software as having one or more of the following among its content:

Web Chat Service
Web-Based E-mail Service
Pornography / Sexual Content
Gambling or Games
Illegal Activity / Drugs / Hate Propaganda / Violence
RealAudio or RealVideo Services

Hmmm... pornography, sexual content, gambling, hate propaganda, violence... Now Mr. Gillogly, have you been posting and deleting things in the middle of the night for your degenerate friends?

Which post got MPW banned? Was it our account of Itchy and Scratchy's appearance at a recent fundraiser? Those two are definitely violent enough to get banned. Was it our lampoon of Mike Miller's blogger tax? The Senate President is certainly powerful, but maybe not powerful enough to control a federal agency's Internet security team. The same goes for County Executive Ike Leggett, who probably can't wait for people to stop discussing his new bathroom. Or perhaps the feds saw Dana Beyer's hell-raising escapades outside the Bethesda Giant and judged us to be a national security threat.

I can't shake the feeling that MCDCC had something to do with this. Any comment from Alan Banov or Marc Korman?

Council District 4 Special Election by the Numbers

Many political observers inside Montgomery County are discussing the meaning of Donald Praisner’s victory in the Council District 4 special election. Our contribution to that debate focuses on mathematics. From that perspective, Mr. Praisner won because of turnout and demographics.

In the district’s total polling place results, Mr. Praisner received 3,288 votes, 348 more than Nancy Navarro (2,940). Steve Kanstoroom finished third with 804 votes and Pat Ryan trailed with 402. Overall turnout was 11.2%. But real insight requires an educated read of the precinct counts.

Council District 4 has 45 precincts. Of that number, Mr. Praisner won 22, Navarro won 21, Praisner and Navarro tied in 1 and Steve Kanstoroom won 1. (We predicted Kanstoroom’s win in Precinct 13-11 a week ago. Keep reading this blog, people!)

The precincts won by Mr. Praisner reported a combined turnout of 12.9%. Navarro’s precincts reported a combined turnout of 9.1%. That difference of 3.8 points contributed to Mr. Praisner’s margin of 348 votes.

But there’s more. Mr. Praisner won all five precincts reporting the highest turnouts, including Precincts 13-54 and 13-69 in Leisure World. Of the eight precincts reporting the lowest turnouts, Navarro won seven and tied with Praisner in the eighth.

The two Leisure World precincts had combined turnout of 20.5%, 9.3 points ahead of the district total. They reported 476 votes for Mr. Praisner (47% of their total), 323 votes for Navarro (32%), 166 votes for Kanstoroom (16%) and 45 votes for Ryan (4%). Leisure World by itself gave Mr. Praisner 44% of his victory margin.

Turnout was correlated with demographics. District 4 has seven precincts in which the Hispanic population topped 20% in the 2000 Census. Navarro won all seven. These precincts cast 267 votes for Navarro (50% of their Democratic total) and 179 for Mr. Praisner (34%). However, their turnout was only 7.6% - a full 3.6 points below the district’s total turnout.

District 4 has eleven precincts in which the black population topped 30% in the 2000 Census. Navarro won seven of these and Mr. Praisner won four. These precincts cast 583 votes for Navarro (47% of their total) and 509 for Mr. Praisner (41%). Navarro’s victory here is notable since Mr. Praisner’s biggest endorsement came from County Executive Ike Leggett, Montgomery County’s most prominent African American resident. These precincts reported a turnout of 8.4% - 2.8 points below the district’s total turnout.

District 4 has fifteen precincts outside of Leisure World in which the white population was at least 60% in 2000. Mr. Praisner won eight of these, Navarro won six and they tied in one. These precincts cast 1,016 votes for Mr. Praisner (44% of their total) and 936 votes for Navarro (40%). Turnout was 10.9%, almost equal to the district’s total turnout (11.2%). In the end, these precincts plus Leisure World accounted for 233 votes of Mr. Praisner’s 348 vote lead, or two-thirds of his margin.

Mr. Praisner’s supporters are understandably pleased at his victory, but they have cause to worry about 2010. As Mr. Praisner has said many times, he will not be on the ballot again. His supporters and potential successors should consider the following relevant facts:

1. School board member Marilyn Praisner (in 1990) and American University professor Jamie Raskin (in 2006) both required year-long campaigns to knock off long-time incumbents. Nancy Navarro came close to defeating the 17-year-incumbent Praisner family in just six weeks. As someone who saw her operation up close, I was impressed by the discipline and tactical intelligence of her campaign. Now that Navarro has survived the fire of an occasionally acrimonious and difficult election, she should be an even more formidable candidate if she runs again.

2. Most voters knew who their candidate was when they arrived at the polls on Tuesday. This reduced the importance of MCEA’s Apple Ballot. This will not be the case in 2010.

3. District 4 is a majority non-white jurisdiction and is trending even further in that direction. Navarro’s strong performance in black and Latino precincts – even against the choice of a black County Executive – swims with the demographic tide of history. And if she chooses to run again in 2010, she will have much more time to get out the vote in those precincts.

Ironically, the best hope for Navarro’s opponents among non-white voters could be Pat Ryan. His work with Action in Montgomery has brought him into contact with many black, Latino and immigrant communities in the county. His hands-on advocacy for affordable housing is a good issue with these constituencies. But Ryan was discouraged from running by the establishment officials who backed Mr. Praisner. Starved for money and deprived of endorsements, Ryan garnered just 5% of the vote and finished last in 33 of the district’s 45 precincts. If Ryan or Steve Kanstoroom, who spent $24,000 of his own money only to draw 11% of the vote, is anointed to be Mr. Praisner’s successor, will either be able to overcome such a low finish?

How to Calculate Your Property Tax Increase (Updated)

Much is being made of County Executive Ike Leggett’s proposal for a property tax increase. Here’s how to calculate what it means for you.

Leggett’s property tax proposal has two components. First, he is increasing the property tax rate. Second, he is also increasing the property tax credit that homeowners receive for their primary residences from $613 to $1,014. The combination of the rate increase and the tax credit increase skews the resulting tax hike towards homes that are worth more money.

So here’s how to determine how much more taxes you would pay under his proposal. First, look up the gross assessed value of your property on the county’s property tax account website. (This will be the assessment listed on the county property tax line at the top of the bill.) Second, if your home is your personal residence and you have lived in it for more than a year, you will likely have a county homestead credit. This credit is designed to prevent your net, or taxable assessment from increasing by more than 10% per year. Find your county homestead credit, which will appear in the middle of your bill if you have one, and subtract it from your gross assessment. This is your net assessment. Third, multiply the net assessment by 10% to estimate its value as of 7/1/08. (This assumes that your net assessment is still “catching up” to where it would be without the restraint of the homestead credit. The homestead credit, after all, restrains but does not eliminate taxable assessment increases.) Fourth, multiply your 2008 net assessment by 0.008208 and then subtract $613. This would be your county property tax levy without Leggett’s proposal. (It does not include state taxes, solid waste or water charges.) Fifth, repeat the above exercise by multiplying your 2008 net assessed value by 0.009779 and subtracting $1,014. This would be your county property tax levy under Leggett’s proposal. The difference is your county property tax increase if Leggett’s proposal was passed by the County Council.

The County Executive states that the median assessment for a Montgomery County home is currently $343,200. Under the math above, that home’s county property tax would rise from $2,204 to $2,342, or 6.3%. That's an increase of 38 cents per day. A home assessed at $220,000 would see a tax bill cut from $1,193 to $1,137, or 4.7%. A million-dollar house would see a tax bill increase from $7,595 to $8,765, or 15.4%. (That’s a good size hit on top of the recently-passed state millionaire tax.) The break-even point is $255,331 in net assessed value (after any homestead credit). Homes worth more than this would see a tax hike while homes worth less would see a tax cut.

I performed this math on my own house in Silver Spring. If I had no homestead credit, my home’s assessed value on 7/1/08 would be $463,953. If Leggett’s proposal were passed, my county property tax bill would rise from $3,195 to $3,523 – an increase of $328. That works out to 90 cents per day. But with a homestead credit, my home’s assessed value on 7/1/08 will be $328,544. So my county property tax bill would rise from $2,084 to $2,199 – an increase of $115. Now that’s 32 cents per day.

Try the above formula for your own home. We all have different economic circumstances. Some of you will conclude that your potential property tax increase is unaffordable for your personal budget. If that’s your opinion, you should certainly contact the County Council. But I am ready to pay 32 cents per day - or even 90 cents per day - if it means maintaining quality public services in the county.

Update: In a work session of the County Council's Management and Fiscal Policy Committee yesterday, Chairwoman Duchy Trachtenberg and Council Member Phil Andrews voted against the property tax increase. Because of the District 4 vacancy, two opposing votes are sufficient to kill the property tax hike. If both council members stick to their votes, the County Council will have to locate $128 million in cuts to replace the tax.

Update 2:
In a comment on this post, District 18 Delegate Al Carr points out that the County Council is considering increasing fuel and energy taxes. In the staff memo he linked, Senior Legislative Attorney Mike Faden writes, "A resolution to increase fuel/energy tax rates, sponsored by the Council President, is scheduled to be introduced on April 15, 2008. This resolution would increase the rates currently in effect to produce $11.1 million more revenue. This resolution is introduced as a placeholder to allow the Council, if necessary, to adjust the rates of the fuel/energy tax."

This is big news and we are grateful to Delegate Carr for supplying it. Few household costs have been increasing more noticeably than electricity and natural gas. And a straight tax hike on fuel will ensnare many households at the bottom end of the income distribution that would escape the County Executive's property tax proposal. There may be at least as much resistance to increasing fuel taxes as there is to increasing property taxes. And if the property tax hike fails, then fuel taxes may be increased more as a result. Fuel tax increases are not subject to the charter limit and may be passed by a straight majority vote of the County Council. This is a very meaningful development and I hope the Gazette and Washington Post reporters who read this blog will follow up.

Thanks to Louis Wilen and Al Carr for correcting my earlier failure to account for the homestead credit. When readers correct and improve my content, I will credit them publicly.

Are MoCo Public Employees Overpaid?

Yesterday, the Post reported on growing disagreements between Montgomery County leaders over compensation paid to county employees. Labor costs account for 80% of the county’s $4.3 billion budget and the county is facing a $297 million deficit. As a result, some county officials are scrutinizing employee contracts.

Council Member Phil Andrews told the Post that the county’s collective bargaining agreements were “unsustainable, unnecessary and unrelated to real-world economic conditions,” and said they should be rejected. Council Member Duchy Trachtenberg wants to know exactly what the county’s future obligations are under the contracts so the council can figure out how to pay for them. And the Post reported this tense exchange between Council President Mike Knapp and County Executive Ike Leggett:

Council President Michael Knapp (D-Upcounty) said Leggett's approval of the contracts appears to run counter to his message about the need to slow down spending.

“One would have thought that a more conservative approach would have been taken,” Knapp said. “It looks like we're trying to play both sides. Do we have bad economic times, or do we need to have generous increases in our contracts?”

In a prepared statement, Leggett called the contracts “consistent with agreements throughout the region” and said Knapp does not fully understand collective bargaining. Leggett said he has limited flexibility because of past decisions by the council and the school system and because of the possibility of binding arbitration in the event of an impasse. He cited the council's approval in 2006 of a $13 million enhancement to pensions for school system employees.

“I believe the Council President voted in favor of additional pension enhancements and every collective bargaining agreement that has ever been placed before him, thereby establishing less than favorable conditions in which future executives must negotiate,” he said in the statement.

So are Montgomery County’s public employees overpaid? Let’s examine a range of issues connected to their compensation.

Wages
The Post points out that many wage increases in the county’s contracts are actually intended to catch up to higher pay levels in other jurisdictions. As an example, the Post looks at fire fighters:

John Sparks, president of the Montgomery County Career Fire Fighters Association, said the county is playing catch-up for its 1,050 firefighters and paramedics. Rookie firefighters are paid $39,997, compared with $44,301 in the District, $40,784 in Prince George's County and $47,472 in Fairfax County. Among jurisdictions such as Montgomery with more than 500,000 people, the average salary nationally is $44,275 for starting firefighters.

Consider the county’s teachers. The Washington Area Boards of Education (WABE) estimates the total compensation cost of a teacher paid $60,000 in salary in nine of the metro area’s jurisdictions. Montgomery compensates such a teacher $81,792, above only Prince George’s County ($78,720). Montgomery trails Arlington County, the leader, by 7.1%.

WABE also reports the starting salary of a step 1 teacher with a bachelors degree in Montgomery as $44,200. The average sale price of an existing townhouse in the county was $364,000 a year ago. A simple analysis with a mortgage calculator and a spreadsheet generates some interesting revelations. If this starting teacher put down 10% of the townhouse’s value, took out a 30-year mortgage at a 6% fixed rate and paid $2,500 per year in property taxes, he or she would owe 59% of pre-tax salary per month to make the payments. A step 9 teacher with a masters degree makes $64,498 and would owe 40% of his or her pretax monthly salary for the mortgage and property tax payments on the same townhouse.

How can this be considered excessive pay?

You can view a breakdown of county salary schedules here.

Pensions
Government jobs used to be known for having modest salaries but great retirement benefits. This is not the case in Montgomery County. Since 1994, the county’s Employees’ Retirement System, its defined benefit plan, has been closed to new employees other than public safety workers. Currently only 5,294 of the county’s workers have county-funded defined benefit pensions. The county’s 11,486 teachers are covered by Maryland’s State Retirement and Pension System. This means that half of the county’s total workforce of 38,000 must rely only on a defined contribution pension plan for retirement. Most of Montgomery’s neighbors continue to grant their employees defined benefits.

Health Care
The county is projecting payments of $80.7 million for group health insurance premiums for its workforce next year (and that does not include school employees). It also projects $2.6 billion in future liabilities for retiree health benefits and is phasing in annual contributions towards those liabilities which will rise to $259 million after the next five years. Montgomery is not the only county facing a large liability for retiree health care: Howard reports a $477 million liability, Anne Arundel reports a $1.3 billion liability and Prince George’s reports a $2.7 billion liability. None of them approach Los Angeles County, California, which will have to deal with a $20 billion liability. This is clearly a lot of money so why not cut health coverage for county employees?

There are two problems with that. First, county employees already pay 20% of their health costs. Raising that percentage would be effectively a wage cut. Second, cutting health benefits will not decrease illness among public employees. They will continue to seek care in local hospitals. And in Maryland, state law provides that hospitals are reimbursed for their cost of uncompensated care (which totaled $734 million in 2006). Where does this money come from? About 90% is covered by allowing hospitals to charge higher rates that are determined partially by their uncompensated care experience. The remaining 10% comes from an assessment imposed on hospitals equaling 0.75% of their net patient revenues. Virtually all of this money comes back to taxpayers because government entities (like Medicare and Medicaid), premium-charging insurance companies and patients wind up ultimately paying the higher rates charged by the hospitals. In the end, if county employees get less health coverage, we will all pay for their health costs anyway. The only difference is that, with less coverage, county employees would be less likely to seek preventative care and more likely to use emergency rooms, thus driving up health care costs for everyone.

Recruitment and Retention
Consider the view of a talented prospective job applicant pondering whether to accept employment with the Montgomery County government. Unless that applicant is seeking a public safety or teacher job, he or she will not get a defined benefit pension. Unless the person is qualified for a top management job, he or she will be unlikely to afford a home in the county without assistance. He or she will be able to make more money in the District, Arlington County, Fairfax County or perhaps even Prince George’s County. For this applicant to commit to Montgomery, he or she will have to believe that Montgomery will one day pay at least as much as its neighbors and the applicant will someday be able to afford in-county housing. Otherwise, it makes little financial sense to work for Montgomery County and the best applicants will go elsewhere.

Competitiveness
Finally, an important part of the economic bedrock of Montgomery County is its superior level of government services – especially its public schools. When the county invests in its schools, it provides a powerful reason for businesses and residents to want to live here and create jobs here. Without top-grade public services, we will increasingly be seen as merely a high-cost jurisdiction in the metropolitan Washington area – and what happens to our economic competitiveness then?

It’s in the best interest of county taxpayers to attract and retain the best public employees to work for them. We do have to figure out how to pay for them. But spreading the mythology that county employees are overpaid will not get us there.

MoCo Property Tax Increase in Doubt

Last Friday, Montgomery County Council Member Duchy Trachtenberg flatly told the Gazette, "I do not support going over the charter limit." This is a serious blow against passage of a county property tax increase.

Article 3, Section 305 of Montgomery County's charter restricts property tax increases to the change in the Consumer Price Index with exceptions for "(1) newly constructed property, (2) newly rezoned property, (3) property that, because of a change in state law, is assessed differently than it was assessed in the previous tax year, (4) property that has undergone a change in use, and (5) any development district tax used to fund capital improvement projects." Seven out of the nine County Council Members must vote to override this limit and raise the property tax by a higher amount.

To close a $297 million county budget deficit, County Executive Ike Leggett offered a budget that combined spending cuts with a $128 million property tax increase. Leggett's property tax proposal combines a 7.5% rate increase with a hike in the property tax credit for homeowners from $613 to $1,014, thereby making the tax over-weighted towards commercial properties and higher-value homes.

Council Member Trachtenberg was the first member of the council to openly oppose the property tax increase. Instead, she favors scrutinizing the county's labor costs. According to the Gazette:

Montgomery County needs a "good black and white description" of how much employee salaries, health benefits and pay raises are going to cost the county as it faces a budget crisis, the chairwoman of the Management and Fiscal Policy committee said Thursday.

"It’s very important that we have the bottom line and we have a sense of how we’re going to pay for the wages and the cost of living increases over the next few years," said Councilwoman Duchy Trachtenberg (D-At large) of North Bethesda. "The problems we’re going to face are not for one year only."

Trachtenberg said the contracts with county employees should be honored.

"But I’m suggesting we need to identify what we’re going to pay in these contracts and how we’re going to pay for them," she said.

Council Member Nancy Floreen has also been skeptical of the tax hike, telling the Gazette, "My basic reaction is that I have to be persuaded that we need to expand the property tax rate as much as [Leggett] is proposing... Those are big dollars they are counting on to pull them through and I’m just not there yet." Last Friday, Floreen said on her blog, "Given that these [property tax] increases would be in addition to the State’s bump in income taxes and the sales tax, I’m not convinced the community can bear them. On the other hand, the alternative would be significant cuts in service, which I’m not sure folks are willing to do either."

If Council Members Trachtenberg and Floreen both oppose the property tax increase, it will fail. Because the winner of the District 4 vacancy will not be certified until May 23, after the budget has been passed, there will be only six other sitting members on the County Council when the tax's fate is decided. Seven votes are needed to break the charter limit.

The County Executive’s Bathroom: An Investigative Report

Greetings readers. I am joined live at the scene of the soon-to-be-constructed County Executive’s bathroom by special MPW correspondent and County Council staffer Dana Beyer. As you know, the Washington Post reported that the project would cost $65,000 and county staff said it was necessary for the security of the County Executive. Ms. Beyer has been investigating the project. Dana, what can you tell our readers about the new bathroom?

Dana Beyer: Well Adam, I have been unable to access the bathroom for three reasons. First, it is still under construction. I have seen several carpenters and plumbers hauling in platinum and gold fixtures but they won’t let me see what they’re doing.

Carpenter: Youse have to have a union card to get in! Widdout one… fuhgeddaboutit.

Former County Executive Candidate Bob Fustero: Do you hear that? I was right about those unions!

Dana: The second reason is that the transgender bill is still tied up by Citizens for a Responsible Government so I might not be allowed in even after it’s built.

Michelle Turner, CRG Spokeswoman: We have to protect the children from Dana! Errr, assuming any are actually allowed in the County Executive’s bathroom…

Adam: Dana, what is the third reason?

Dana: After the Post article, the County Executive’s office became quite sensitive about the project’s cost. So they instituted a fee schedule for access to pay for it. The fees operate on a sliding scale depending on exactly how one uses the bathroom.

Adam: Can you give us the details?

Dana: I’d rather not. After all, this is a family blog. I understand the fees are quite expensive and council staff are not paid enough to afford it.

Michelle Turner: That’s not a problem for us. We’ll just take it out of the per diem we receive from the Family Research Council.

Adam: Look! We now have a special guest – it’s County Executive Ike Leggett!

County Executive Leggett: Who are you people and what are you doing here?

Adam: Sir, we are reporting on the bathroom project. It’s part of our effort to follow your example in maintaining transparency in county government.

Leggett: Security, get them out of here!

Hitting the Loo in Style

Readers, I just could not resist this Post article about the County Executive's new bathroom. Among other things, it contains some intimate details about the "private business" habits of several of our current and former politicians.

A variation of an old joke comes to me. What can you do in a $65,000 bathroom? Apparently, whatever the hell you want! And if that didn't make you grimace, check out the crude attempt at irony in our labels to this post.

Praisner vs. Navarro: It's On

The campaigns of both Donald Praisner and Nancy Navarro made major announcements this week in the race for the District 4 County Council seat.

Donald Praisner, 76, kicked off his campaign at the County Council building on Monday. Backed by County Executive Ike Leggett and several council members, Mr. Praisner plans to hold the seat only for the remainder of his wife's term.

Navarro's campaign responded with this press release:

##FOR IMMEDIATE RELEASE##
March 4, 2008
Nancy Navarro Recruits Top Staff for
Montgomery County Council Campaign
Navarro Promises to Bring Vigorous Volunteer-Energy and Fundraising to Big-Tent Campaign

--------------------------------------------------------------------------------
Contact: Nancy Navarro
Phone: 301-628-7705
Email: nancy@nancynavarro.org

SILVER SPRING, MD - Montgomery County Board of Education President, Nancy Navarro, today announced the hiring of top staff in her campaign for the vacant District 4 County Council seat.

Having retained Congresswoman-elect Donna Edwards' field director and Sen. Jamie Raskin's campaign manager, Navarro promises to run a first-rate campaign and to raise the resources necessary for victory on April 15th.

Navarro has already recruited dozens of volunteers and a high-profile list of endorsers to be announced in the coming weeks.

The campaign plans an official kickoff event on Monday, March 10th. Details to follow.

The Gazette article also reports that District 19 Delegate Ben Kramer is still considering entering the race. And the Post has more on the continuing dispute between Steve Kanstoroom and the Planning Board.

Next up is MCEA's endorsement, which could come this week. The union could endorse a candidate or sit out the race entirely.

Update: The Post's coverage is here.

Latest on County Council D4

Don Praisner will be endorsed by County Executive Ike Leggett and County Council Members Marc Elrich, Phil Andrews, Duchy Trachtenberg and Roger Berliner at his announcement on Monday. The Washington Post talked to Praisner and Leggett.

Steve Kanstoroom has been subpoenaed by the Montgomery County Planning Board to provide communications he has had with news organizations over the Sandy Spring road dispute.

No assumptions should be made at this point about MCEA's endorsement. The union could endorse a candidate or sit out the race entirely.

As of 4:40 pm today, Kanstoroom, Pat Ryan, Cary Lamari and Republican Mark Fennel have filed papers to run.