State Budget Crisis Will Get Worse Before it Gets Better

Courtesy of State Senator Rich Madaleno (D-18), we present a grim reality to MPW readers: the state budget situation is getting even worse.

Over the last two years, Maryland politics has been dominated by a debate over how to deal with the state’s “structural deficit.” This deficit is a long-term imbalance between revenues and spending created by income tax cuts in the 1990s and an expansion of education spending in 2002. The Ehrlich administration was able to defer the consequences of these decisions because of a strong economy and repeated diversions of transportation funds. But Governor O’Malley decided to deal with the problem head-on early in his term, leading to the deficit reduction package of last year’s special session.

The problem is the weak economy. Every time the legislature takes action to correct the deficit, the Maryland Board of Revenue Estimates reports revenue shortfalls. And so the legislature must redo its work. If the shortfalls are serious enough between General Assembly sessions, the Governor will probably have to make unilateral cuts until they return to Annapolis.

Senator Madaleno brought the latest 90 Day Report, a review prepared by the State Department of Legislative Services, to our attention. The report had this to say about future state budgets:

As shown in Exhibit A-1.6, although there is a cash balance of about $226.4 million in fiscal 2009, there is a gap of about $350 million when comparing ongoing revenue to ongoing spending. As noted, action at the 2007 special session reduced the projected $1.7 billion structural deficit by about $1.4 billion through a combination of new revenues and spending reductions. Reductions adopted at the 2008 session largely offset downward revenue revisions that were received in March 2008 but did not make additional progress in reducing the structural deficit. There is a potential cash shortfall of about $243 million between revenues and current services spending projected for fiscal 2010. The shortfall is expected to widen to nearly $600 million in fiscal 2011, which mirrors the structural deficit. This is due mainly to the downward revision of revenue by BRE [Board of Revenue Estimates] in March, to an actuarial error in retirement contributions which adds nearly $70 million per year in additional spending for teachers’ retirement costs, and in the financing of health care expansion, enacted by Chapter 7 of the 2007 special session, which adds $70 million in general fund spending in fiscal 2011.

Based on the assumption that the constitutional amendment to implement video lottery terminals is approved by voters in the fall of 2008, the projected cash and structural shortfall narrows significantly by fiscal 2013. It is estimated that revenue from video lottery terminals will add nearly $500 million in revenue in fiscal 2012, increasing to an estimated $660 million in fiscal 2013. If the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.

Exhibit A-1.6 is reproduced below.


These numbers are by no means necessarily the ones that will be used by the General Assembly in next year’s budget decisions. The revenue numbers in particular may be adjusted more than once by then. But in general, here’s how this might play out:

1. More tax hikes are very unlikely. The bulk of the problem will be dealt with on the spending side.

2. The spending increases passed in the special session, such as the establishment of a fund to clean up the Chesapeake Bay and a health care expansion, will be especially vulnerable. Legislators will say, “We thought we had the money for those things but it turns out we don’t. So we will have to wait until the money comes in before funding them.” College tuition freezes and transportation spending will also be endangered.

3. Both the special session and the 2008 general session largely spared the counties from cuts to state aid. That may not be the case next time. The counties are especially wary of any attempt by the state to pass on obligations for teachers’ pensions. Education aid may also be at risk. If aid cuts happen, they would greatly complicate county budget problems, especially in Montgomery County.

4. Slots proponents will be sure to exploit the new data, especially the 90 Day Report’s statement that “if the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.” Even anti-slots legislators will shudder at the prospect of replacing that amount of money, especially as election year approaches.

5. A $243 million deficit is projected for FY 2010, which will be decided next year. But a $596 million deficit is projected for FY 2011, which will be decided in 2010 – an election year. The General Assembly is surely tired of dealing with budget crises every year and will be tempted to take a break in 2009. But if they do that, the 2010 elections will be kicked off by a truly painful debate over even more tax hikes and/or spending cuts – a teeth-chattering prospect for every politician in Annapolis.

Montgomery College Agrees to Neutrality - Or Does It?

Regular readers will recall how Montgomery College told its adjunct professors that they were "not public employees" in order to avoid allowing them a union election. Now the college is claiming to be "neutral." But is it?

Two days ago, the President of Montgomery College sent out the following memo to adjunct professors:

MONTGOMERY COLLEGE
Office of the President
April 14, 2008

MEMORANDUM

To: Part-Time Faculty
From: Brian K. Johnson, President
Subject: Service Employees International Union for Part-Time Faculty

Many of you are aware of the petition filed by SEIU Local 500, seeking to represent adjunct faculty for purposes of collective bargaining. I wanted to clarify the College's position in this matter. We are not anti union, we are neutral, and will respect the right of adjunct faculty to decide through a secret ballot vote on whether you wish to be represented by the union. Throughout this process we must perform our organizational and legal duties. This includes making sure that the unit proposed is authorized by Maryland law to do so and to make sure that the definition of the unit to be organized is sufficiently clear and appropriate so that elections can be conducted in accordance with the requirements of law. These steps followed in accordance with the requirements of Maryland law result in benefits to all concerned and eliminate tremendous legal and logistical problems in the future.

We are working with the Maryland State Commissioner of Labor and SEIU Local 500 to seek an expedited election process that will allow you to vote on this question as soon as possible. Information regarding the election procedures will be forthcoming from the Commissioner's office in the very near future.

Montgomery College has a rich history of harmonious labor relations with our employee unions. We are committed to that tradition continuing with SEIU or any other union, should they become your collective bargaining representative.

It is encouraging to hear the college proclaim its "neutrality" though I have heard such statements from anti-union employers many times over the years. The true test of neutrality is not what the college says, but what the college does.

The adjuncts are seeking an election prior to the end of the semester, which occurs in mid-May. The college states that it "must perform our organizational and legal duties," which include "making sure that the unit proposed is authorized by Maryland law to do so and to make sure that the definition of the unit to be organized is sufficiently clear and appropriate so that elections can be conducted in accordance with the requirements of law." If the college contests the definition of the bargaining unit - a common tactic used against workers who want a union - it can easily run out the clock on the semester. That would give the college all summer to plan a more aggressive campaign against the adjuncts in the fall.

If the college is genuinely neutral, it must agree to an election in the next couple weeks. Otherwise, its declaration of neutrality will be proven as baseless as its claim that the adjuncts are not public employees.

More Wobbling on the Property Tax

While the great debate between David Lublin and myself over the property tax is now over, the great tumult over the issue on the County Council is just getting started.

The Gazette reveals that Council President Mike Knapp is now uncertain about his vote on the County Executive's property tax proposal. This follows votes against the tax in the Management and Fiscal Policy Committee by Council Members Duchy Trachtenberg and Phil Andrews and an abstention by Valerie Ervin. Council Member Nancy Floreen has also expressed doubts about the tax.

Because the District 4 council seat will not be filled until after the budget is decided, seven of the remaining eight Council Members must vote to break the charter limit to pass the property tax hike. So far, we count two votes against, two votes not committed and four votes with no expressed position. That's a bad sign for passage of the tax hike.

Do any of our readers know if it's possible for the County Council to turn down the property tax hike and not re-open the public employee contracts?

Foolio Demands a Union

A Navarro campaign worker who refers to himself only as “Foolio” is demanding union representation. Following is our exclusive interview.

Adam: Are you the same Foolio who has been posting comments on our blog?

Foolio: Yup, that’s me.

Adam: Why don’t you tell the readers your real name?

Foolio: I’d rather not, but Kevin Gillogly knows who I am. He’s still upset with me for not supporting him when he wanted to run for Council.

Adam: Foolio, why do you want a union?

Foolio: The working conditions here are awful. David Moon, Nancy’s campaign manager, is a tyrant. He keeps us chained up in Nancy’s basement. All we have to eat are little Hershey’s bars and Diet Cokes. He eats all the cheeseburgers himself. I want a cheeseburger!

Adam: Diet Cokes and Hershey’s? That’s all you get?

Foolio: There’s also a giant box of caffeine pills. It says, “Compliments of the Montgomery County Chamber of Commerce.”

Adam: What else is going on?

Foolio: The only time we get to leave the basement is when we canvass. Moon attaches ankle bracelets with GPS chips to all of us. If we wander off our canvass map, a pickup truck full of Carpenters Union members grabs us and brings us back to Nancy’s.

I think I’m getting carpal tunnel syndrome from all the door knocking. On top of that they now have me clicking away on this stupid Internet poll. But they won’t let me file for workers’ compensation because they’ve misclassified me as an independent contractor!

Adam: IPoCS (Internet Poll Clicking Syndrome) is a serious problem. Al Carr and Hugh Bailey are still recovering from it.

Foolio: Why is Moon so obsessed with these blogs? Everyone knows that no one reads them!

Adam: That’s true. I get emails from readers who say they don’t read our blog all the time.

Foolio: So we finally started calling unions to come organize us. But MCEA, SEIU Local 500 and MCGEO all said they weren’t interested.

Adam: Hmmm, that’s a mystery. I wonder why that is?

Foolio: Well, we’re forming our own union. Moon finally broke down and agreed to let us have a union election. It’s going to be on April 16th.

Adam: But Foolio, that’s the day after the primary. You’ll all be out of work by then.

Foolio: Dammit! I knew something was up with that. And I had to give Moon the last campaign cheeseburger to get him to give in!

Last Pre-Election County D4 Round-Up

By tomorrow night, this race will be over. Here’s the state of play one day out.

On press, coverage has picked up in the last week. The Post has written its last wrap-up article. Maryland Moment discusses a spat over an email sent by MCEA to its members. Dan Reed at Just Up the Pike has interviews up with almost every candidate. He will post an interview with Don Praisner tomorrow morning. Politicker Maryland has posted interviews with Praisner, Pat Ryan and Nancy Navarro’s campaign manager in the last few days.

On the ground, it appears that Navarro has sent out more literature than the other candidates combined. Some District 4 residents have reported receiving more than a half-dozen mailers from her over the last three weeks. Recently, Navarro lit has been showing up with “Endorsed by the Washington Post” stickers. The signs are more balanced among the Democrats; Praisner probably has a narrow lead with Navarro and Ryan close behind. Republican Mark Fennel may have more signs up than all the Democrats combined, with each accompanied by a “Robin Realty” sign. The three largest MoCo unions - MCEA, SEIU Local 500 and UFCW Local 1994 (MCGEO) - have several thousand members inside the district and are no doubt calling and emailing them on Navarro’s behalf. Don Praisner will be drawing on a list of everyone who has contributed to or supported Marilyn Praisner over the years and his campaign will be asking them to show up one last time for the family.

The great unknowable is who will arrive at the polls tomorrow. In the special election to fill the County Council District 5 seat in Prince George’s County, only 8% of the registered Democrats showed up. If turnout is less than that, Don Praisner will have the advantage. All sides concede that the Praisners have a devoted base inside the district who are sure to vote. But if turnout gets into the mid-teens, Navarro will close the gap.

So now the great call-out begins. Over the last several weeks, each of the candidates has been identifying their voters and earning their loyalties. Now they have to make sure that their people show up. That will determine the course of the election, the holder of the council seat and the political direction of Montgomery County for the next two years.

More Than You Ever Wanted to Know About Maryland's New Foreclosure Law

Calculated Risk Blog has a long post on one of Maryland's new foreclosure laws. The post examines the law's effect on actual foreclosure timelines and finds that it brings Maryland closer to national averages.

The legislature's foreclosure package is perhaps the most positive achievement from a general session that focused mostly on budget-cutting and the now-deceased-and-unmourned computer tax. But it's worth reading exactly what the new foreclosure legislation will do. If you are a real estate lawyer, you're really going to love the analysis.

Thank you to Joe Davidson for passing this along.

On Progressive Taxation and Property Taxes

David Lublin raised a number of good points on the property tax increase that deserve a response. Let’s take them in order.

(1) Lots of people have lived in homes for a long time that have appreciated substantially. Particularly for retirees on a fixed income, an increase of over $1000 (very easy to hit in SoMoCo) can be tough even if they live in a high-value home. Even if economic theory says they can borrow against their homes, people really hate that idea for understandable reasons. In any case, this market isn't the best one for realizing the profit.

David rightly points out that some people on fixed income could potentially receive a $1,000 property tax increase under County Executive Ike Leggett’s proposal. Under the formula in my previous post, a home receiving a county property tax increase of $1,000 would have a net assessment of $891,789 (and a much higher gross assessment and market value if the homestead credit applied). But the county provides residential property owners of at least 70 years in age a “senior property tax credit” of 25% of their combined state and county homestead credits. So a senior would be allowed to own an even more valuable home than a non-senior before being subject to a $1,000 property tax increase – perhaps even a home approaching $1 million in market value.

But no one will want to pay that amount of property tax increase. So suppose we relieve the tax increase on seniors with homes approaching a million dollars in market value. If there is to be a property tax increase at all, someone will have to pay more as a result – perhaps seniors occupying homes worth $300,000. But suppose we relieve them too from the extra taxes. Then the burden will fall on young families – a group with substantially less wealth than seniors and significantly less retirement security. Where should the burden fall?

Progressive taxation, a bedrock principle of progressive economic philosophy, holds that tax burdens should advance with income levels. Recent events suggest that principle may be out of fashion in Montgomery County.

(2) Focusing just on the millionaires tax is a mistake. Don't forget all those sales and income taxes raised during the special session. Also don't forget all those fees which were jacked up under Gov. Ehrlich. The voters won't. All things being equal, Americans like having more disposable income. If this is done to maintain services, it will need to be convincingly explained--not necessarily an easy sell though it can be done.

I am not about to forget the tax package from the special session. Because it relied primarily on sales taxes, it was regressive. To quote once again the analysis by the Maryland Budget and Policy Institute:

The poorest 1/5 of taxpayers will pay nearly 0.8% more of their income in taxes. The middle 1/5 will pay half that percentage: just over 0.4%. The wealthiest 1/5 will pay between 0.3% and 0.5% of their incomes in increased taxes. This overall regressive distribution occurs because the regressive nature of the sales tax increase overwhelms the progressive features of the income tax changes.

The County Executive’s property tax proposal is progressive and may, in conjunction with the new state millionaire tax, flatten the tax burden. These two progressive tax proposals, which together total $238 million, have attracted immense opposition from a substantial portion of Montgomery’s political leadership. But the $700+ million regressive state sales tax hike passed without a whimper. That is a chilling but instructive development in this county’s political environment.

In any case, I agree that any tax hike, no matter its character, must be explained to voters. The public employee unions are not in the best position to do this since most people will perceive their defense of public services as a defense of their memberships, which is of course their role. It is the responsibility of the politicians to explain why county services are worthy of a tax increase if that is what they believe. That is especially true of politicians who were eager to accept the support and aid of labor during the last election campaign. For the most part, that defense has yet to begin.

(3) The debate has been cast as an either/or debate with no middle ground. Either taxes go up a great deal or services are cut substantially. Like all money issues, this one can be negotiated to all sorts of points inbetween. Both sides know this but are posturing right now is my guess.

I suspect the County Council will have to settle somewhere in the middle. Such is the way of legislative bodies. But the decision to surpass the charter limit truly is an either/or decision. If the council rejects the County Executive’s tax proposal, they will have to cut the budget by a further $128 million.

There is another option. As Delegate Al Carr pointed out in a comment on an earlier post, the County Council is considering increasing taxes on electricity and natural gas. This is a far more regressive option than the County Executive’s property tax hike and it does not need a super-majority to pass. The shade of Annapolis may be descending on Rockville.

(4) The recession may just be starting with next year's budget looking even more grim. As at the state level, the chances of getting both budget cuts and tax increases over the course of several years are starting to look pretty good.

A recession is a distinct possibility as we recently reported. People on the lowest rung of the income ladder, not those earning one million dollars a year, are on the leading edge of the downturn. The residents at the bottom will be sure to bear the brunt of any spending cuts. They should not also bear the brunt of the tax increases. Under the County Executive’s property tax proposal, many working-class people are indeed spared further tax hikes after their setbacks in the last special session. They will not be spared the lash of a home fuel tax hike.

I completely agree with David's judgement that the tax and budgetary choices are going to get tougher at both the state and county levels, not easier, in coming years.

None of this has any bearing on some key questions other have raised: (1) does labor deserve the pay increases, (2) does MoCo need to pay them to maintain quality services, and (3) can MoCo afford the pay increases. The first is a morality, not a market, question. The second is largely market driven. The third is driven by the tax base, economic needs, and taxpayer willingness to pay. I haven't thought much about any of these questions so I won't weigh in just yet.

On point (1):

Speaking as someone who has been involved in several union organizing campaigns, the notion of what a worker “deserves” is a very explosive question. Many public employees are starting to believe that their leaders think they are paid too much. This argument has been stated, or at least hinted at, by more than one of the Democratic candidates in the District 4 County Council race. Economic arguments can be conducted rationally but the question of what a worker “deserves” is a question for the heart. Right now, hearts are pounding inside the public sector workforce.

On point (2):

In a recent survey of county employee compensation, we learned that Montgomery faces potential problems competing for labor in the region. Fair-to-middling (at best) pay levels, a lack of defined benefit pensions and high housing costs may deter top talent from coming here in the future. The existing workforce, originally recruited in times when the county’s housing stock was more affordable, is still known for its excellence. But the entry level talent will gradually erode unless the county keeps up with its neighbors.

On point (3):

In 2006, Montgomery County reported the 8th-highest median household income of all 3,077 counties in the United States. The County Executive’s proposal taxes the median assessed household an extra 38 cents per day. Readers can form their own opinions on whether we can afford that.

But there is a much larger argument here: where does the county’s economic competitiveness come from? Montgomery is perceived to be one of the higher-cost jurisdictions for residents and businesses in the region. So why are people willing to pay those costs? One reason is the excellent reputation of the schools and public services. As a former resident of the District of Columbia and a rural area in upstate New York, I have a meaningful standard of comparison for the county’s service quality.

But Montgomery’s true competitors are jurisdictions like Fairfax – counties that also have good schools and abundant resources. We are never going to compete with Virginia by matching them on tax rates. Instead, we will have to equal or surpass them in our quality of education, planning, parks, police and other public services. Those services comprise a valuable, productive asset that preserves our standard of living, maintains our property values and protects our economic edge. The money we spend on the public sector is an investment, not money thrown down a black hole. Any investment has to be evaluated not merely on its cost but also on the return it generates for its holders. Why are we hearing so much about the cost but so little about the return?

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.

Washington Post Endorses Navarro

Will this make a difference in a tight, fiercely-contested race that will probably have low turnout? Read the language of the endorsement below.

A Critical Primary in a Changing County

Friday, April 11, 2008; Page A20

THE DEATH this winter of Marilyn J. Praisner, a wellspring of sound judgment, fiscal prudence and deep knowledge over her 17 years on the Montgomery County Council, left an enormous gap. It also left the council divided on critical questions involving the management and budget of a dynamic jurisdiction of almost a million people.

That sets the context for an unusually important and hard-fought Democratic primary on Tuesday to fill Mrs. Praisner's empty seat in District 4, an exceptionally diverse area that includes Aspen Hill, the Route 29 corridor from White Oak to Burtonsville and a grab bag of neighborhoods between Wheaton and Olney. Since the district's 200,000-odd constituents are overwhelmingly Democratic, the victor in that party's primary is almost assured of winning the general election May 13. We believe that the best candidate is Nancy Navarro.

Ms. Navarro, current president of the county's Board of Education, is the only public officeholder among the candidates in the primary. That alone doesn't make her the best choice, but it does inform an outlook that is moderate, sensible and sensitive to an array of competing constituencies. In a slow-growing county that has nonetheless been gripped by venomous battles over growth, she possesses a vision broad enough to understand that the challenges facing the county may not replicate the debates of the past.

The Post opposed Ms. Navarro when she ran for the school board in 2006, thinking her too enamored of confrontational politics. We were mistaken. On the board, where she has twice been elected president, she has played a constructive role in guiding one of the nation's largest and best school systems, impressing colleagues with the care of her preparation and her passion for excellence. On the council, she would face a steep learning curve to master county government issues. But she has already shown a capacity for detail-oriented leadership that would serve her well.

Four members of the current council, as well as County Executive Isiah Leggett, have endorsed one of Ms. Navarro's primary opponents, Don Praisner, widower of the late council member. Their choice partly reflects a concern that Ms. Navarro, who has received much of her financial backing in this race from organized labor, would be in the unions' pocket. It's a legitimate worry, particularly during the county's current budgetary squeeze, when public employees unions, among others, will have to bear some of the burden. Ms. Navarro makes no bones about her alliance with labor, but we hope she will be sufficiently independent-minded to see that annual pay increases of 8 percent are simply not sustainable in the current budgetary environment.

Kanstoroom Reports Finances to MPW

County Council District 4 Candidate Steve Kanstoroom is the only Democrat in the race for whom the State Board of Elections is not displaying a finance report. After I mentioned this fact to him last night, he explained that he sent in his report on time but the board was not returning his calls asking that it be posted. Kanstoroom promptly emailed me his finance report and the details will surely interest our readers.

As of 3/30/08, Kanstoroom’s campaign recorded $24,520 in total receipts. All but $520 are loans from Kanstoroom himself. The campaign spent $20,553.86, mostly on printing and campaign materials ($16,462.57). Its cash balance was $3,966.14.

While Kanstoroom’s ending balance was low, his receipts surpassed Don Praisner ($22,030) and Pat Ryan ($10,825) but fell short of Nancy Navarro ($34,446). His extensive loans and former ownership of an IT business suggest that Kanstoroom is the one candidate in the race who can self-finance his campaign. In the handful of days left, volunteers are more important than money, but cash can still buy robocalls and print ads.

I saw Kanstoroom and several other candidates at a late-night forum sponsored by the Northwood-Four Corners Civic Association, which represents the neighborhood just north of the hellacious University Boulevard-US 29 intersection. The forum followed another debate in Burtonsville that ran late, and the bleary-eyed candidates staggered into the North Four Corners Recreation Center after 9:30 PM. The neighborhood is locked in a bitter battle with the County Council and the Parks Department over a plan to construct a soccer field in their current tree-filled park. The park is THE ISSUE in this part of District 4, much like the Intersection of Death is the big issue in my area.

Precinct 13-11, which conforms to the neighborhood boundaries, had 2,668 registered Democrats in the last primary. It had the 7th-highest voter turnout rate in the 2008 Democratic primary and the 5th-highest voter turnout rate in the 2006 Democratic primary among County District 4’s 45 precincts. However, Kanstoroom and Nancy Navarro were the only Democrats to show up for the civic association’s forum. Kanstoroom, a legendary foe of Park and Planning, cleaned up with this group. But the absence of Praisner and Ryan was noticed.

Back in 2006, my civic association jam-packed an apocalyptic public meeting at Holy Cross Hospital covering various issues connected to the reviled Georgia Avenue-Forest Glen intersection. We recorded the attendance by politicians on our website. We never forgot which politicians came and which ones didn’t. I imagine that the residents of Northwood-Four Corners will react the same way.

One more quick tidbit. Don Praisner has begun reporting contributions received since his last campaign filing on his website. I don’t understand why the individual contributions are reported as ranges (for example, the County Executive gave him “$1,000+”). But this is still more information than his rivals are disclosing and he deserves credit for that.

Disclosure: I am the Assistant to the General President of the United Brotherhood of Carpenters. Our local affiliate, the Mid-Atlantic Regional Council of Carpenters, endorsed Nancy Navarro.

Columbia Country Club Promises “Grass Roots Campaign” to Defeat Purple Line

In a letter to members of the Columbia Country Club in Chevy Chase, club President J. Paul McNamara promises to launch a “grass roots campaign” to defeat the Purple Line.

Part of the Purple Line transit project is planned to run along an abandoned CSX right-of-way that stretches from Silver Spring to Bethesda. The right-of-way is currently used as a popular pedestrian and bicycle route known as the Capital Crescent Trail but was originally intended to be used at least partially for transit. The right-of-way runs through the country club’s golf course and thus defeat of a rail line is one of the club’s top priorities. Just Up the Pike ran an epic series on the issues surrounding the Purple Line and the trail last year and Silver Spring resident Wayne Phyillaier covers the trail-rail relationship regularly on his Finish the Trail blog.

In his letter, McNamara tells the country club members:

Regarding the issue of the Purple Line and the proposed light rail connecting Bethesda, Silver Spring and New Carrollton, as I indicated at our annual meeting, this is a very critical issue for our Club. As a result, we have increased our community and government relations effort at both the state and federal level and will be working on several different fronts to promote the Club’s position and protect our long term interests. Specifically, we will be helping to launch a grassroots campaign to identify and organize a broad and diverse coalition of opponents to the current proposal for the Purple Line. Once organized, we will be partnering with neighborhood associations, citizens groups including those working to save the trail, as well as businesses and elected officials who will be impacted by this issue.

As you would expect, the implementation of this effort requires a commitment of financial resources. The Board of Governors believes that it is in the best interest of the Club to fund this effort. However, we are doing so within the context of a balanced budget for the fiscal year. We do not expect that this expenditure will have a material impact on the long term finances of the Club. We will keep a tight control on the spending for this effort and all funds will be allocated from our capital budget.

The Columbia Country Club has a long history of fighting the Purple Line. Between 2001 and 2006, four of the club’s current officers – President McNamara, First Vice President Joseph J. Brigati, Second Vice President Eugene A. Carlin and Secretary Martin Wiegand II – collectively contributed $4,600 to former Governor Robert Ehrlich and $550 to Senate Budget and Taxation Committee Chairman Ulysses Currie. (One can only imagine how much more was donated by the club’s full membership.) In September 2003, Ehrlich reciprocated, declaring that the Purple Line “will not go through the Country Club.” Robert Flanagan, his Transportation Secretary, explained, “The Governor happens to love golf.”

At the same time, then-District 18 Delegate and Chevy Chase resident John Hurson struck a deal with Ehrlich to route buses along Jones Bridge Road as a substitute for the Purple Line. In return, Hurson reversed his position on slots from opposition to support, matching Ehrlich’s agenda, and was promptly rewarded with a fundraiser by racetrack owner William Rickman Sr. Hurson and Ehrlich’s arrangement infuriated many Montgomery County politicians but no doubt delighted the country club’s members. The club’s announcement promises the potential for more events like the above.

To evaluate the club’s letter fairly, MPW readers need to remember three facts.

1. There is plenty of genuine grass-roots opposition to a Purple Line alignment on the trail. Whatever the country club’s membership, it is surely less than the 10,000 signatures collected by rail opponents.

2. Non-grass-roots interests exist on both sides. Ed Asher, President of the Chevy Chase Land Company, serves openly on the board of Purple Line Now. Asher is no mere train enthusiast – his company seeks to develop the land around a proposed Purple Line station on Connecticut Avenue. Asher is a prolific contributor to politicians, giving $12,000 to state and local candidates since 2000. The Chevy Chase Land Company gave $5,950 more.

3. The truth is that while the country club and Asher participate in Purple Line campaigns, neither controls them. Organizational leaders like the heads of the Greater Bethesda-Chevy Chase Coalition and Action Committee for Transit are the true strategists and seek suitable allies when they are available. This is a reasonable approach for anyone seeking to organize a civic (or labor) coalition.

But the universal rule of coalitions is this: you are judged based on your associations with other coalition members. If Purple Line opponents publicly (or even privately) embrace funding from the Columbia Country Club, they will damage their credibility in the long run. No Democratic Party or civic activist from outside Chevy Chase will harbor any sympathy for an effort they perceive to be connected to wealthy country club members – or through them, to former Republican Governor Robert Ehrlich.

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.

More Union Busting at Montgomery College

I’ve seen quite a few union-busting tactics in my time but the latest one used by Montgomery College against its adjunct professors ranks as one of the most creative.

A couple weeks ago, we ran a four-part series on Montgomery College’s efforts to break a union organizing campaign by its adjunct professors. The college’s adjuncts earn maximum pay of $10,560 per semester and do not have health insurance. When they told the college they wanted to vote on representation by SEIU Local 500, the college reacted by hiring an expensive “union-avoidance” attorney and sending out misleading propaganda to the adjuncts. But as we predicted, Montgomery College’s union-busting campaign had only begun.

It’s common practice for a union-busting employer to argue about the definition of the bargaining unit – that is, the group of workers who would be covered by a collective bargaining agreement. Some employers want to shrink the unit. Others want to subtract employees that they believe to be pro-union or add employees that they think are anti-union. But Montgomery College’s definition of the bargaining unit is simple: there isn’t one.

In a letter to SEIU shown below, Montgomery College’s union-avoidance lawyer Darrell VanDeusen states, “The College has determined that the employees named in the SEIU’s petition are not considered public employees for the purposes of collective bargaining.” So since there are no eligible employees, there should be no election.


Section 16-412(a)(14) of Maryland law states, “Public employee means an employee employed by the public employer except: (i) Employees involved directly in the determination of policy; (ii) Supervisory or confidential employees; and (iii) Student assistants.” Which one of these exceptions applies to the adjunct professors? Conveniently, VanDeusen does not say. Perhaps a further exchange of letters will smoke him out.

But that would play into the college’s hands because the clock is ticking. SEIU Local 500 wants to hold an election before the semester ends and the adjuncts leave campus. And who knows if the college will allow the pro-union rank-and-file leaders among the adjuncts to return next year? After all, it’s hardly unknown for union supporters to suddenly receive unfavorable performance evaluations after many years of sterling service.

Now that its public employees are not really public employees, we should expect Montgomery College to say that it’s not a college. Or maybe that Montgomery County is not a county. Or maybe even that the institution does not actually exist on Planet Earth in contrast to the mistaken beliefs of some. Clearly, they will say anything to avoid a free and fair election for their adjunct professors.

So here’s our question for the County Executive and County Council: why are you allowing this deplorable farce to continue? And how much of our property tax increase will go to pay for all this union busting?

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.

Navarro, Praisner Campaign Contributions Provide Ammo for Both Sides

Last Friday was the deadline for the final campaign finance reports before the County Council District 4 special election primary. Both the Navarro and Praisner camps will find them useful.

Nancy Navarro reported contributions from individuals of $12,196, the Hispanic Democratic club of $250 and Maryland PACs of $22,000 for total receipts of $34,446. Her campaign reported $28,380.81 on hand. Sixty-four percent of her contributions came from labor unions, including the Mid-Atlantic Regional Council of Carpenters ($6,000), the Montgomery County Career Fire Fighters ($6,000), UFCW Local 1994, also known as MCGEO or the government employees ($5,000), SEIU Maryland/DC State Council ($3,000), SEIU Local 500 ($1,000) and the Metropolitan Washington AFL-CIO ($1,000). The fact that Navarro received nearly two-thirds of her contributions from labor rebuts the allegation that she is “developer-controlled.”

However, one name on her individual contributor list truly stands out: Aris Mardirossian, who gave her the maximum contribution of $4,000. Mardirossian is the developer of Crown Farm in Gaithersburg. He is notorious for once suing Montgomery County Civic Federation President Wayne Goldstein when Goldstein wrote him a letter inquiring about tree removal on his property. The lawsuit, widely viewed as a frivolous slap suit in MoCo’s civic community, still causes many anti-growth activists to make the sign of the cross whenever Mardirossian’s name is uttered in their presence. Navarro’s campaign made a mistake by accepting this contribution. Her opponents are sure to jump all over it despite the fact that Mardirossian also once gave $3,000 to Marilyn Praisner.

Donald Praisner has also filed an interesting finance report. His campaign reported contributions from individuals of $16,280, Council Member Phil Andrews’ campaign account of $750, and a loan from Mr. Praisner himself of $5,000 for total receipts of $22,030. His campaign reported $17,551.67 on hand. Mr. Praisner’s biggest contributors are Council Member Marc Elrich’s chief of staff Dale Tibbitts ($2,000), County Executive spouse Catherine Leggett ($1,000), former Council Member Duchy Trachtenberg staffer Bobbie Walton ($1,000) and Nicholas Miller of Bethesda ($1,000). (Geez, Dale, how much is Marc paying you?) Tibbitts, Leggett, Walton, Andrews, County Executive spokesman Patrick Lacefield ($200) and former Marilyn Praisner staffers Claire Iseli ($150) and Sherry Kinikin ($100), along with Mr. Praisner, comprised a core group of contributors who together accounted for 46% of his campaign’s funding.

Mr. Praisner told the Gazette last week that Navarro was the only candidate taking money from developers. His supporters have lambasted Navarro on this blog for failing to abstain from development money despite Marilyn Praisner’s ready acceptance of it. But two of Mr. Praisner’s contributors are connected to the real estate industry.

Nicholas Miller of Bethesda, who gave $1,000 to Mr. Praisner on 3/26/08, is a telecommunications lawyer with Miller and Van Eaton PLLC. According to its website, the firm’s clients include the “Building Owners and Managers Association, International, the Institute of Real Estate Management, the International Council of Shopping Centers, the National Apartment Association, the National Multi-Housing Council, the National Realty Committee, and the National Association of Real Estate Investment Trusts.” Now this has nothing to do with development, right?

Gregory Eisenstadt of Brookeville gave $100 to Mr. Praisner on 3/24/08. Eisenstadt has been a steady supporter of Marilyn Praisner over the years, giving $314 to her campaigns between 2001 and 2005. Eisenstadt is the owner of Privacy World, a housing complex just north of the Glenmont Metro station due to be redeveloped by JBG Companies. The Privacy World redevelopment will be one of the bigger projects in District 4 if the County Council allows it to proceed. Eisenstadt’s relationship with the Praisners makes sense for him although his contribution runs afoul of Mr. Praisner’s pledge to avoid development money.

Let this be a lesson for all the aspiring politicians who read this blog: the worst thing about making a pledge is actually having to keep it!

Democrat Pat Ryan has raised a total of $10,825, of which $4,000 came from the Montgomery County Career Fire Fighters Association. (Yes, this is the same union that gave $6,000 to Navarro.) Ryan is his own biggest individual contributor and gave his campaign $2,000 in seed money on 3/10/08. Ryan had $9,632.52 on hand, slightly more than half Mr. Praisner’s total and over one-third of Navarro’s holdings. Republican Mark Fennel has raised $1,705 with all but $300 coming from the candidate. Republican Thomas Hardman gave himself $100, the sole contribution to his campaign. Financial reports for Democrat Steve Kanstoroom and Republican John McKinnis are not yet available.

Now that the finance reporting deadline has passed and the special primary is fast closing in, District 4 voters will be treated to their most intense week of politicking since Marilyn Praisner defeated Mike Gudis way back in 1990. Lock your doors and let the answering machine fend off those robocalls!

Disclosure: I am the Assistant to the General President of the United Brotherhood of Carpenters. Our local affiliate, the Mid-Atlantic Regional Council of Carpenters, endorsed Nancy Navarro.

Electric Schemes, Nuke Dreams

On Thursday, the Maryland Senate endangered the Governor’s settlement with Constellation Energy by voting to amend it. Here’s why the Governor’s deal is worth passing.

When the administration and Constellation, parent company of electric utility BGE, settled their lawsuits against each other, the deal had several components. First, BGE’s residential customers would receive $187 million in one-time rebates, or $170 each. Second, individual Constellation investors would be permitted to own up to 20% of the company each. Third, BGE customers would see limits on electricity distribution charges in the future. Fourth, BGE agreed to add two independent seats to its board. Fifth, the deal cut the liability faced by ratepayers for eventually decommissioning the Calvert Cliffs nuclear plant from $5.2 billion (which Constellation is permitted to collect by the 1999 deregulation law) to $3.7 billion (the current estimated shutdown cost). This will save Marylanders $1.5 billion. There are additional smaller components but these are the most important parts of the deal.

The Governor’s settlement was contingent on passage by the legislature. Constellation’s position was that the deal had to pass without changes. But the Senate thought better. On a 27-18 vote, the Senate added an amendment to regulate the sale of electricity from any new plants built in the state, essentially a limited rollback of deregulation. Senate President Mike Miller and the Governor claim that this vote endangers the deal because it changes its terms. Now it’s hard to blame the Senators who voted for the amendment. Deregulation has been a disaster for Maryland ratepayers and has created shocking wealth for the power companies and their CEOs. But the best reason for sticking with the Governor’s deal is its least-mentioned and most-important provision: the $1.5 billion reduction in the Calvert Cliffs decommissioning liability.

As someone who works for a union that gets carpenters and millwrights hired onto nuke jobs, I can tell you that these jobs are really, really expensive. All trades workers that set foot into a nuke plant must pass background checks and drug tests. And those checks and tests are repeated over and over. All of the workers have completed or are enrolled in four-year apprenticeship programs and numerous journey upgrade and safety courses. (We actually own a gas turbine at our international training center that our instructors practice dismantling and assembling.) Many workers also need to get haz-mat (hazardous materials) certifications. Often, there’s not enough qualified workers in the local area so out-of-state people are flown in. Those guys get per diems and sometimes even signing, retention and head-hunting bonuses. Everybody gets top scale and massive amounts of overtime. Even the laborers are rolling in dough. And part of the decommissioning will include clean-up and storage of radioactive waste. You don’t want to know how much that costs. All of this will go on for years at a decommissioning site.

I can’t tell you how much my guys like this kind of work. These jobs are an apprentice’s fancy, a journeyman’s love and a local union business manager’s dream. The last remnant of America’s working-class aristocracy may be the tens of thousands of “boomers” – traveling super-skilled electricians, pipefitters, boilermakers and millwrights – who fan out across the country to work nuke shutdowns and turnarounds. The boomers can make six-digit annual incomes and set themselves up for fat pension checks and lakeside retirement cabins.

So Constellation says the Calvert Cliffs decommissioning will cost $3.7 billion? Horsepuckey. It will cost four billion, five billion… aw, who cares how many billions as long as my members get the work!! (If you were wondering what “bread-and-butter unionism” is, that statement is a good example.)

But enough about my nuke-worshipping hardhats. My point is that if you are a Constellation/BGE customer, you do not want to be on the hook for all of these costs. Let Constellation’s shareholders and/or its merchant generation division pay some of them. The decommissioning liability reduction is a far more valuable asset to BGE ratepayers than the rebate and it is worth protecting.

So my advice to the General Assembly is to approve the Governor’s deal as-is and come back to re-regulate the power industry next year. That way the ratepayers will get their rebates, the residents will get the protections of regulation and BGE customers won’t have to pay $1.5 billion in extra billings. And what about my boomers? We’re all going to strap on our toolbelts and head down to Calvert Cliffs for some of that overtime!

The author is the Assistant to the General President of the United Brotherhood of Carpenters. He wishes he was as well-paid as the boomers.

County Council District 4 Round-Up

OK everybody, with less than two weeks to go, here’s the latest.

1. The Prince George’s County Council District 5 special election has MoCo campaign operatives’ tongues wagging. In that seven-candidate election, Theresa Dudley defeated Adam Ortiz by 171 votes at last count with a turnout of 8.2% of registered voters. If that turnout holds in MoCo District 4, roughly 8,400 voters will show up. So a competitive D4 candidate will have 3,000 votes and a sure winner will cross the 4,000 mark. These are small, small numbers folks, and anything could happen.

2. The Post and the Gazette have churned out quite a few articles in the last week. Among them are reports of County Council staffers getting cozy with Don Praisner’s campaign manager, a recounting of last Saturday’s candidate forum and a discussion of the challenges of time and name recognition. Additionally, this blog has made MCDCC Vice-Chairman Alan Banov a multi-media star as he has been interviewed by the Gazette about the illegal robo-calls first reported here. Hopefully Mr. Banov will remember who launched his ride to fame when one of us runs for a state legislative appointment!

But the biggest story of the week is the Gazette’s report on two meetings at the home of MoCo Superintendent of Schools Jerry Weast attended by education union leaders a month ago. The Gazette reports, “At the first meeting, Weast said that the unions should endorse Navarro for the County Council, according to a person who talked about what happened on the condition of not being identified.” The Gazette quoted Merle Cuttita, President of SEIU Local 500, as saying that the meeting was primarily about budget issues but she added, “He let us know that she would be a good candidate for county council ... that Nancy Navarro would be a good candidate for the council.” Nancy Navarro and County Council Member Valerie Ervin attended the second meeting, but Navarro denied that any endorsement was discussed there.

My father was a special education teacher, an assistant principal, a principal, an Assistant Superintendent of Schools and a school system controller in upstate New York. He never endorsed politicians or asked his unions to support any of them. He had a sound reason for that policy. In my rural county, voters directly approved school budgets. If my father had ever gotten too close to a politician, it would have made the local paper and his budget would have been killed. So he never, ever went there.

It is perfectly natural for the Superintendent to meet with the President of the Board of Education (Navarro), a County Council Member on the Education Committee (Ervin) and the leaders of the unions to discuss the schools budget. But Jerry Weast is playing with fire if he indeed asked the unions to support Navarro. First, he will run afoul of the County Executive, who is supporting Don Praisner. Second, Navarro’s opponents will be sure to remember Weast’s political apostasy if one of them wins. Third, he is giving Navarro’s rivals a good issue and Steve Kanstoroom raised it at Wednesday night’s debate. (And check out my blog-brother Kevin Gillogly's searing rant about this, which is forthcoming.) Mr. Weast, take it from the son of a career public school administrator: stay out of politics.

3. District 4 resident Dan Reed of Just Up the Pike is the best interviewer in MoCo blogdom. He has a talent for picking up on the little things that tell you a lot about a person. Check out Rockville mayoral candidate Drew Powell’s relentless hunt for a security guard, Steve Kanstoroom’s making change for a homeless guy and former County Council candidate Hans Riemer’s pho-drenched denunciations of limousine liberals. Dan has posted interviews with Navarro, Kanstoroom and Republicans Mark Fennel and Thomas Hardman with more on the way. Do yourself a favor and bookmark Just Up the Pike.

4. Nancy Navarro and Don Praisner are getting most of the attention but Steve Kanstoroom and Pat Ryan deserve mention. Both are strong and attractive candidates. Kanstoroom is crazy-earnest and combines green eye-shades with a warm heart. He is a beloved figure among the Sandy Spring activists he is helping. Would he really wring greater efficiencies from MoCo government as he claims? I don’t know, but speaking as a fellow dirt-digging researcher, it would be fun to watch him try.

As for Ryan, he may be the true heir to Marilyn Praisner from a policy perspective. I have seen him at two debates and he espouses the Praisner position package: fiscal restraint and caution on growth. After picking up the Gazette’s endorsement, Ryan glowed with confidence at Wednesday night’s debate. If you are a District 4 voter who agreed with Marilyn Praisner’s agenda and would like to see an advocate carry it out for the long run, you should seriously consider Pat Ryan.

5. Don Praisner did not show up at Wednesday night’s debate. County Council Member Duchy Trachtenberg told the audience that he was sick and had gone to the hospital. The Gazette is reporting that Mr. Praisner will not be attending tonight’s taped debate.

6. And if you guys really need more of this, here’s the schedule for the remaining debates:

FRI 4/4: 6:00 Montgomery Community Television/LWV Televised Forum @ MCT Studios, 7548 Standish Place, Rockville, MD 20855

SUN 4/6: 3:00 Sandy Spring Forum, Sherwood Elemenatary School, 1401 Olney-Sandy Spring Road (Rte 108), Sandy Spring, MD

TUE 4/8: 7:00 LWV Debate @ Sandy Spring Friends School 16923 Norwood Rd, Sandy Spring, MD 20860

WED 4/9: 7:00 Burtonsville Debate @ Paint Branch High School, 14121 Old Columbia Pike, Burtonsville, MD 20866

WED 4/9: 7:00 Northwood-Four Corners Forum @ North Four Corners Park Recreation Center, 211 Southwood Ave, Silver Spring, MD

THU 4/10: 2:00 Riderwood Debate @ Performance Hall of Lakeside Commons at Riderwood Village, 3150 Gracefield Rd, Silver Spring, MD

THU 4/10: 7:30 Leisureworld Debate @ Club House 1, 14901 Pennfield Circle, Silver Spring, MD

Disclosure: I am the Assistant to the General President of the United Brotherhood of Carpenters. Our local affiliate, the Mid-Atlantic Regional Council of Carpenters, endorsed Nancy Navarro.

The Politics of Paranoia

One charge made with increasing ferocity against County Council District 4 candidate Nancy Navarro is that she is allegedly a “tool of the developers.”

Stuart Rochester, a District 4 resident supporting Don Praisner, told the Gazette:

“I’m finding that although there is a good deal of respect for Navarro, there is a concern that she is identified, fairly or not, with the pro-business and pro-development forces in the county,” Rochester said. “For that reason she may not be relied on to carry on the positions that Marilyn had.”

Takoma Park activist Mike Tabor, who does not live in the district, wrote the following to the Gazette in endorsing Mr. Praisner:

The problem that many have with this election is the quiet support of the fast, uncontrolled growth activists for Navarro. She openly accepts contributions from developers, PACs, special interests and land use attorneys. She is not willing to place limits on those contributions.

My belief is that this could lead to a conflict of interest any elected politician making decisions regarding land use issues.

The fear of many of us is that if Navarro is elected, the faster, uncontrolled growth advocates will have a majority on the council once again. Furthermore, a Navarro victory might enable a more developer and business-friendly majority on the council to fill the two vacant positions on the Park and Planning Board.

The issue erupted at the People’s Community Baptist Church forum last weekend. The Gazette reports:

During the only negative exchange in the meeting, Praisner took issue with a Navarro comment in response to a moderator’s question about campaign financing and avoiding undue influence. Navarro had said she was financing her campaign as Marilyn Praisner had, with contributions from many sources, including business interests.

“I resent how you represent Marilyn Praisner and her influence,” Donald Praisner said. “In her last year, she was disappointed with you because you were not an independent voice.”

After the meeting, Navarro said she only meant to show she was financing her campaign in the same spirit as Marilyn Praisner had. “I’m not sure why he took my comment negatively,” she said. “I was only referring to public campaign information. If we’re going to talk about financing campaigns, this is what the record shows.”

On Monday, Donald Praisner said that only Navarro is taking money from developers and that Navarro may “undo some of the work my wife did,” referring to provisions supported by Marilyn Praisner and passed by the County Council designed to slow the pace of growth.

Neighborspac, a MoCo activist group that opposed overdevelopment, raised the issue of politicians and development contributions starting in the 2002 county races. Neighborspac began tabulating contributions from development-connected people or entities and reporting them as a percentage of the total receipts for each candidate. Neighborspac had a point: if a politician received an overwhelming percentage of his or her support from one industry, like real estate, voters had a right to know that. I certainly looked at Neighborspac’s data in 2006 before casting my votes.

But since then, the issue has mutated. Now the standard is not whether a politician accepts an overwhelming majority of his or her contributions from business, but whether a politician accepts any contributions from business at all. Because Navarro has refused to rule out any business contributions, she is accused of being controlled by them. This is a difficult test for any politician to pass, including a very prominent one who is relevant to this race: the late Marilyn J. Praisner.

According to state board of elections data, Mrs. Praisner raised a total $78,056 between 2001 and 2008. Of that total, $32,769 – a full 42% – came from businesses, business owners or corporate lawyers. See the graphic below for the specific contributions.


Among Mrs. Praisner’s contributors was Bryant Foulger, head of construction and real estate giant Foulger Pratt, who gave her $200. That firm is a partner in Downtown Silver Spring developer PFA, against whom a First Amendment demonstration was launched last summer. Companies and relatives of Aris Mardirossian contributed $3,000 to Mrs. Praisner. Mardirossian, developer of Crown Farm in Gaithersburg, is infamous in MoCo for suing civic grand-daddy Wayne Goldstein for the mere act of writing him a letter. Three Linowes and Blocher lawyers contributed a total of $975. And four limited liability companies from Colorado gave Mrs. Praisner a combined total of $2,000 in 2006.

Does any of the above make Marilyn Praisner a “tool of the developers?” Hell no. As I wrote in my tribute to her, “She was a woman of incredible intelligence, great fairness, and most of all, unquestioned honor. Nobody was smarter, tougher, harder-working or more honest.” Mrs. Praisner was a fearless crusader for her constituents and nobody was stupid enough to accuse her of being anything different. She could have taken a million dollars from Mardirossian and she would still have told him “NO.”

So what has Nancy Navarro done to justify treating her differently? Why is she the only candidate to be attacked by illegal, anonymous robo-calls? Why is she the only one accused of being controlled by “special interests?” Why are her critics making an issue of this before she has filed a single campaign finance report?

What we have here is the Politics of Paranoia. Taking a single dollar from a business buys off your integrity and makes you their slave. Or at least that’s what Navarro’s enemies would have you believe.

My advice is to vote the old-fashioned way. Grab the politicians by the lapels. Determine whether they agree with you on the majority of things that you care about, whether they are capable enough to deliver on those priorities and whether you think they are people of good values. If they pass those tests, vote for them. If they don’t, find someone else to vote for. No political jihads. No illegal robo-calls. Just you, your brain, your heart and your vote.

Disclosure: I am the Assistant to the General President of the United Brotherhood of Carpenters. Our local affiliate, the Mid-Atlantic Regional Council of Carpenters, endorsed Nancy Navarro.

Computer Tax at Death's Door

Yesterday the Senate's Budget and Taxation Committee voted to replace the computer tax with a package combining a surcharge on residents earning at least $1 million a year, transportation cuts and budget cuts. The Post and the Sun have the details. The package is very close to the Governor's proposal and so these predictions may be coming true.

Mike Knapp, Just Say No to Bloggers

Poor Mike Knapp. Montgomery County’s current Council President really stepped in it this time. He did the worst thing imaginable with another blogger: he acknowledged his existence and did what he wanted. Oh boy, now it’s never going to end.

Do you remember the annoying kid in the back of the class who wouldn’t shut up? You know, the one who made faces, sat on top of his desk and wouldn’t stay put? Now I’m not admitting that that was me, but I understand the mentality. The purpose is to get attention. And if you acknowledge the foolishness, you’ll get more of it. (Just ask my wife.)

So a Germantown blogger, a constituent of Mr. Knapp’s, challenged the Council President about his blog. “Johno95” said:

Mike Knapp, county council member for District 2, has a blog now. (His district includes Germantown and surrounding areas.) But he likes Germantown best, I suppose.

You would think he’d be busy doing his 9-5 job, but instead he’s busy blogging. I am going to list him in my blogroll. But I am not above trying blackmail. Unless he mentions what he had to eat for breakfast (a typical David Burd question) in his next blog entry, I am removing this link. I want his blog to be casual. I want Mike to let his hair down. After all, he’s a Democrat.

Mike, go ahead and blog to this blog, if you want to answer my breakfast question.

So what does Mr. Knapp do? He tells him what he wants to know! The Council President begins his latest blog post by saying:

Well. I've been called out by some bloggers for not being informal enough. It would seem that some in the blogsphere want to really know what's really going on behind the scenes -- so far behind the scenes, in fact, that apparently my breakfast choices are of interest to some. So, here goes...

And then he tells us just about everything. Every detail of each day of the week, except for a few related to basic bodily functions. Now I know quite a few of our readers might want to be on the County Council someday. Well, read this poor guy’s schedule and then see if you really want to do it. When does he have time to swill beers with the guys? How about watching a Redskins game? Or chasing away transgender opponents from grocery stores? Nope, fuhgeddaboutit. Mr. Knapp doesn’t even have time to post; he averages one or two posts a month.

So remember the kid who shot a spitball at you from behind? If you turned around and gave him a look, you knew what you were going to get: another spitball. It won’t end here. Next they’ll want to know his waist size. Or his 40-yard-dash time. Or his vertical leap. I could throw in a few other things, but this is a family blog.

Mr. Knapp, we know you were trying to be a good guy. But take some advice from a former classroom troublemaker. Don’t respond to the bloggers. After all, it’s not like anyone reads these blogs, right?

General Assembly Announces Blogger Tax

Following is the exclusive transcript of the press conference called by Senate President Mike Miller.

Senate President Miller: Ladies and gentlemen of the press – the real press – I am announcing today a solution for the state’s financial crisis. Delegates Bill Frick and Kirill Reznik are introducing The Blogger Taxation Act of 2008. For too long, a growing group of rogue bloggers have been enriching themselves by impugning the integrity of your state’s noble public servants. It’s time that the people received a share of their ill-gotten gains!

Under the provisions of the bill, each blog post would be taxed $1,000. Any post mentioning a state legislator would be taxed $5,000. And any post that mentions me – well, don’t bother, because you don’t have the money!

Reporter: What about a companion bill in the Senate?

Senator Rich Madaleno: I will introduce the Senate version of the bill. It will of course be amended to exempt sitting office-holders.

Miller: I can’t stress enough what a high priority this is for the state. Your legislators work hard every day and these bloggers don’t understand that. Our folks get more emails than God, have to put up with crazy constituents at home and are forced to stay up until 2 in the morning listening to boring speeches by assembly leadership!

Reporter: But Mr. Miller, you are the Senate President.

Miller: Errr, well yes, strike that remark from the record. Anyway, support for the legislation is coming in faster than we can track it. Already, we have letters from the Montgomery County Democratic Central Committee, Montgomery County Executive Ike Leggett, Montgomery County Council Members Nancy Floreen, George Leventhal and Marc Elrich and famous television personalities Itchy & Scratchy complaining of defamation on these blogs. Even one of the bloggers themselves is calling for a halt to the nonsense! And poor Don Dwyer is still apologizing to his constituents after those bloggers caught him raising money for Dana Beyer!

[Unidentified delegate shouting from back]: Why are you blogging about the CARR bill? I’ve got five bills that are better. Where’s my blog coverage you little punks?!

Miller: Enough of that! These bloggers are getting rich – I mean, some of them live in Chevy Chase for heaven’s sake! It’s time for them to pay up!

[Just then, a stretch limo arrives with a license plate number of “CH CH 1.” Preceded by four tuxedo-wearing servants, world-famous blogger David Lublin steps out carrying his chihuahua, Muffitt.]

Lublin: This blogger tax is unfair, Mr. President! The Blogger.com fees are already killing me, my advertisers are asking for lower rates and now you want to tax me. I might have to move to Virginia! As it is, I can only afford to feed caviar to Muffitt three times a week. [Yap! Yap!] Look, you’re disturbing Muffitt! [Yap-yap! Yap!]

Miller: Now now, Muffitt, I meant no offense. [Kisses chihuahua on head] We certainly can’t have you rich people moving to Virginia. After all, we need the campaign contributions! So maybe we can work something out. But can you bloggers at least just tell the truth the way your public servants do?