Part Two: Is the Governor’s Plan Progressive or Regressive?
First, let’s finish looking at the remaining elements in the Governor’s proposal. Then we will be able to determine the plan’s relative reliance on progressive and regressive measures.
Corporate Income Tax
The Governor proposes to increase Maryland’s corporate income tax rate from 7% to 8%, raising $110 million in FY 2009. The new higher rate would still be lower than Pennsylvania (9.99%), the District (9.975%), New Jersey (9%), West Virginia (8.75%), and Delaware (8.7%), but higher than North Carolina (6.9%) and Virginia (6%). Given the facts that Maryland could easily raise its corporate income tax even more and still be close to most of its neighbors and that 66% of Post poll respondents approved of this hike, the state’s business community should be relieved that the increase is not larger.
Corporate Income Tax: Progressive, 7% of Package
Expansion of Sales Tax Base
Maryland’s sales tax does not apply to most services. According to the Federation of Tax Administrators, of 168 potential services to be taxed, Maryland taxes just 39. The District of Columbia taxes 70 and Virginia taxes 18. The Governor proposes to apply the sales tax to tanning salons, health club membership, massage services and real estate management, bringing in $74 million in FY 2009.
Because there are well over 100 types of services that would still be untaxed, there are vast opportunities for more revenue in this category. Jeffrey Birnbaum and Alan Murray’s brilliant book Showdown at Gucci Gulch (which should be required reading for all tax policy-makers) tells the story of how Congressman Dan Rostenkowski, Senator Bill Bradley and the Reagan Administration teamed up to lower marginal income tax rates by closing loopholes and exemptions in 1986. A similar approach to the sales tax might at least partially ameliorate a rate increase.
While real estate management might be passed on partly to renters, it is hard to say that the other services are used disproportionately by the poor. Overall, I assign this a neutral impact.
Expansion of Sales Tax: Neutral, 4% of Package
Property Tax and Sales Tax Relief
The Governor actually cuts two taxes in his proposal, losing revenues for the state. He proposes reducing the property tax rate by 3 cents per $100, costing $54 million in FY 2009 (and much more in later years). He also offers two sales tax-free weeks on clothes and two tax-free weekends on energy efficient appliances, costing $13 million per year.
The property tax decrease will disproportionately benefit people whose wealth is concentrated in their homes, many of whom are seniors or middle class. The tax-free periods will tend to benefit the poor and middle class. Since both measures cost the government money rather than raise it, I list them as offsets to the regressive features of the proposal.
Property Tax and Sales Tax Relief: Regressive Reduction of 4% of Package
Corporate Loopholes
The Governor would like to close two corporate loopholes. First, he would like to implement “combined reporting,” which would make it more difficult for corporations to reduce Maryland taxable income by assigning it to other states. Second, he would like to do away with commercial real estate owners’ use of shell companies to sell property without paying transfer taxes. Both measures are expected to raise a combined $36 million each year.
Corporate Loopholes: Progressive, 2% of Package
Slots
The Governor originally proposed a slots plan which he said would be loosely modeled on a bill passed by the House of Delegates in 2005, which would have authorized 9,500 machines. He estimated the plan would produce just $27 million of revenue in FY 2009 but would eventually bring in $550 million by FY 2012.
Opponents depict slots as regressive, alleging that poor people would gamble higher proportions of their income than the rich. Is it possible to have “progressive” gambling? Instead of relying on slots, the state could sell licenses for table games to luxury hotels requiring fifty dollar minimum bets. Wealthy gamblers could be seduced by endless champagne, sushi and Godiva chocolates. Some might even come in from Pennsylvania and Virginia which (so far) do not have table games. But such a proposal would fail because it would not generate as much revenue as the “one-armed bandits” and slots opponents tend to oppose all gambling, not just machines.
There is now a chance that the legislature will propose a slots referendum to be voted on next year rather than a slots bill. If that happens, there may be even more machines (perhaps 15,000) to compensate for the delay in the revenue stream. Sixty-eight percent of Post poll respondents supported slots, giving any referendum a fair chance of passage. If the referendum fails, state politicians may have to consider more taxes and/or cuts in 2009, something none of them wants to do so close to an election year. In any case, slots produce more money in out years than in the near term.
Slots: Regressive, 2% of Package (Rising to 24% of Package in FY 2012)
How Progressive is the Package?
Our calculations of the Governor’s deficit reduction proposal in FY 2009 are:
Amount in $ millions (Percentage)
Progressive Measures
Income Tax Restructuring: $162 (10%)
Corporate Income Tax Hike: 110 (7)
Closing Corporate Loopholes: 36 (2)
Total Progressive: $308 (18%)
Neutral Measures
Budget Cuts (non-education): $268 (16%)
Sales Tax Expansion: 74 (4)
Total Neutral: $342 (20%)
Regressive Measures
Sales Tax Hike: $730 (43%)
Tobacco Tax Hike: 170 (10)
Lower Education Spending Growth: 169 (10)
Slots: 27 (2)
Offsets for Property Tax,
Sales Tax Relief: -67 (-4)
Total Regressive: $1,029 (61%)
Total, All Measures: $1,679
The deficit reduction package is primarily regressive, principally because of its heavy reliance on the sales tax. The situation would be worse in FY 2012 as slots rise to 24% of the deficit reduction package, making it 70% regressive overall.
In Part Three, I propose an alternative revenue raiser that could be used to reduce the plan’s reliance on regressive solutions.
Adam Pagnucco is the Assistant to the General President of the United Brotherhood of Carpenters and has been employed in the labor movement since 1994. The views in this column are his alone and do not represent official statements from the union.
Wednesday, October 31, 2007
Tuesday, October 30, 2007
Adam Pagnucco on the Budget: Part I
Foreword
I produced this series in response to Senator Richard Madaleno’s budget briefing for a group of bloggers, including myself, on 10/29/07. While the mainstream media has churned out many articles on the drama of the state budget battle, speculating about Governor Martin O’Malley’s political fate and the relationship between the Senate President and the Speaker of the House, they have often overlooked more substantive issues. Senator Madaleno deserves high praise for his efforts to educate the blogosphere about the largest budget crisis to face the state in more than a decade.
Time now for a bit of disclosure. I have been a researcher in the labor movement for my entire adult career and write from that perspective. I am also a resident of Madaleno’s district and have contributed to his campaign fund in the past. That said, my conclusions are my own and do not reflect the views of Senator Madaleno, my union or the rest of the labor movement.
Part One of this series begins to outline the Governor’s proposal for eliminating the state’s budget deficit. Part Two finishes detailing the Governor’s proposal and examines its reliance on progressive and regressive measures. Part Three proposes an alternative for relieving some of the plan’s more regressive elements.
Part One: The Governor’s Plan to Eliminate Maryland’s Deficit
Upon taking office, Governor O’Malley inherited a structural state budget deficit. Simply put, the state was on track to spend $1.10 for every $1 in tax revenue for two principal reasons: a 10% income tax cut in 1997 and billions of additional spending on education (commonly called the Thornton Plan) started in 2002. The Governor balanced his fiscal year (FY) 2008 budget primarily by relying on reserves, but now faces a $1.7 billion general fund deficit in 2009. Unlike the free-spending federal government, the state is required to balance its budget.
Over the last couple months, the Governor proposed a budget reduction and revenue package totaling $1.679 billion to fix the deficit in FY 2009. He would also increase spending on education, transportation and health insurance by $328 million while drawing on left-over money from FY 2008 of $316 million. The Governor has now called a Special Session of the General Assembly to fix the deficit and his plan will be used as a starting point by the legislators.
Mainstream media coverage has reported on the items in the Governor’s proposal and the accompanying political tumult, but has largely omitted a very important question: is the proposal fair? For those of us on the left, fairness in tax policy is often defined in terms of whether taxes are “progressive” or “regressive.” Progressive taxes fall disproportionately on the wealthy. Examples include rising income tax rates at higher income brackets and taxes on capital gains, dividends and inheritances. Regressive taxes fall disproportionately on the poor. Examples include sales taxes and lotteries.
Progressivity is a paramount question for many people who voted for the Governor. Most left-wing activists worked very hard to elect him because they viewed him as caring much more about working-class economic interests than his predecessor. How does his deficit reduction package deliver for the Left’s priorities?
I investigate this question by examining each item in the Governor’s proposal and characterizing it as progressive, regressive or neutral. At the end, I add up the revenue in each of the three categories to determine their relative composition. Let’s look at what the Governor is proposing.
Sales Tax
The Governor proposes to raise Maryland’s sales tax from 5% to 6%. The new rate would equal that of Pennsylvania and West Virginia and exceed that of the District (5.75%) and Virginia (5%). The sales tax increase is by far the largest single element in the Governor’s plan, accounting for 43% of his package in FY 2009.
Sales taxes tend to be regressive since wealthier people generally devote less of their income to consumption than do poorer people. Maryland residents overwhelmingly disapprove of any increase – it drew only 29% support in a Washington Post poll released on 10/24/07. But the sales tax has three big virtues: it is simple to change, raises revenues immediately, and generates huge amounts of money. Those factors make the sales tax a budget component that may be impossible for legislators to resist.
Sales Tax: Regressive, 43% of Package
Budget Cuts
The Governor has proposed $437 million of budget reductions in FY 2009 but has supplied few details. The Washington Post reported on 9/28/07 that the Governor intended to realize $169 million in savings in FY 2009 by lowering increases in the state’s education spending formula. (He would still increase education spending by $119 million.) Because the education spending formula would provide for smaller increases, the state’s savings would grow larger each year. The remaining cuts, comprising $268 million, are unspecified.
Since poor people depend more heavily on public schools than the rich, reduced increases in education spending would be regressive. Without more detail, it is impossible to determine the impact of the remaining reductions. For now, I classify them as neutral.
Education: Regressive, 10% of Package
Remaining Cuts: Neutral, 16% of Package
Tobacco Taxes
The Governor would hike tobacco taxes by one dollar a pack, raising $170 million in FY 2009. At least part of the money would be dedicated to expanded health insurance. While there is ample justification for raising the tobacco tax – especially if the money is used for health care – it is a regressive tax. Interestingly, the additional revenues are projected to fall over time, leaving future revenue for health care an open question. Wide public approval (69% in the Post’s poll) guarantees passage.
Tobacco Tax: Regressive, 10% of Package
Income Tax
The Governor would add two higher-rate income brackets at $150,000 in income ($200,000 for couples) and $500,000 in income. At the same time, he would decrease the rates on the first $15,000 in income ($22,500 for couples), expand the earned income credit and increase the personal exemption for seniors. The net revenue increase would be $162 million in FY 2009.
A few Montgomery County politicians have questioned this restructuring, fearful that rich people would have an incentive to live in Virginia. But this measure is one of the most progressive features of the Governor’s plan and is favored by 62% of respondents to the Post’s poll.
Income Tax: Progressive, 10% of Package
In Part Two, I finish examining the Governor’s proposal and calculate its reliance on progressive and regressive measures.
Adam Pagnucco is the Assistant to the General President of the United Brotherhood of Carpenters and has been employed in the labor movement since 1994. The views in this column are his alone and do not represent official statements from the union.
I produced this series in response to Senator Richard Madaleno’s budget briefing for a group of bloggers, including myself, on 10/29/07. While the mainstream media has churned out many articles on the drama of the state budget battle, speculating about Governor Martin O’Malley’s political fate and the relationship between the Senate President and the Speaker of the House, they have often overlooked more substantive issues. Senator Madaleno deserves high praise for his efforts to educate the blogosphere about the largest budget crisis to face the state in more than a decade.
Time now for a bit of disclosure. I have been a researcher in the labor movement for my entire adult career and write from that perspective. I am also a resident of Madaleno’s district and have contributed to his campaign fund in the past. That said, my conclusions are my own and do not reflect the views of Senator Madaleno, my union or the rest of the labor movement.
Part One of this series begins to outline the Governor’s proposal for eliminating the state’s budget deficit. Part Two finishes detailing the Governor’s proposal and examines its reliance on progressive and regressive measures. Part Three proposes an alternative for relieving some of the plan’s more regressive elements.
Part One: The Governor’s Plan to Eliminate Maryland’s Deficit
Upon taking office, Governor O’Malley inherited a structural state budget deficit. Simply put, the state was on track to spend $1.10 for every $1 in tax revenue for two principal reasons: a 10% income tax cut in 1997 and billions of additional spending on education (commonly called the Thornton Plan) started in 2002. The Governor balanced his fiscal year (FY) 2008 budget primarily by relying on reserves, but now faces a $1.7 billion general fund deficit in 2009. Unlike the free-spending federal government, the state is required to balance its budget.
Over the last couple months, the Governor proposed a budget reduction and revenue package totaling $1.679 billion to fix the deficit in FY 2009. He would also increase spending on education, transportation and health insurance by $328 million while drawing on left-over money from FY 2008 of $316 million. The Governor has now called a Special Session of the General Assembly to fix the deficit and his plan will be used as a starting point by the legislators.
Mainstream media coverage has reported on the items in the Governor’s proposal and the accompanying political tumult, but has largely omitted a very important question: is the proposal fair? For those of us on the left, fairness in tax policy is often defined in terms of whether taxes are “progressive” or “regressive.” Progressive taxes fall disproportionately on the wealthy. Examples include rising income tax rates at higher income brackets and taxes on capital gains, dividends and inheritances. Regressive taxes fall disproportionately on the poor. Examples include sales taxes and lotteries.
Progressivity is a paramount question for many people who voted for the Governor. Most left-wing activists worked very hard to elect him because they viewed him as caring much more about working-class economic interests than his predecessor. How does his deficit reduction package deliver for the Left’s priorities?
I investigate this question by examining each item in the Governor’s proposal and characterizing it as progressive, regressive or neutral. At the end, I add up the revenue in each of the three categories to determine their relative composition. Let’s look at what the Governor is proposing.
Sales Tax
The Governor proposes to raise Maryland’s sales tax from 5% to 6%. The new rate would equal that of Pennsylvania and West Virginia and exceed that of the District (5.75%) and Virginia (5%). The sales tax increase is by far the largest single element in the Governor’s plan, accounting for 43% of his package in FY 2009.
Sales taxes tend to be regressive since wealthier people generally devote less of their income to consumption than do poorer people. Maryland residents overwhelmingly disapprove of any increase – it drew only 29% support in a Washington Post poll released on 10/24/07. But the sales tax has three big virtues: it is simple to change, raises revenues immediately, and generates huge amounts of money. Those factors make the sales tax a budget component that may be impossible for legislators to resist.
Sales Tax: Regressive, 43% of Package
Budget Cuts
The Governor has proposed $437 million of budget reductions in FY 2009 but has supplied few details. The Washington Post reported on 9/28/07 that the Governor intended to realize $169 million in savings in FY 2009 by lowering increases in the state’s education spending formula. (He would still increase education spending by $119 million.) Because the education spending formula would provide for smaller increases, the state’s savings would grow larger each year. The remaining cuts, comprising $268 million, are unspecified.
Since poor people depend more heavily on public schools than the rich, reduced increases in education spending would be regressive. Without more detail, it is impossible to determine the impact of the remaining reductions. For now, I classify them as neutral.
Education: Regressive, 10% of Package
Remaining Cuts: Neutral, 16% of Package
Tobacco Taxes
The Governor would hike tobacco taxes by one dollar a pack, raising $170 million in FY 2009. At least part of the money would be dedicated to expanded health insurance. While there is ample justification for raising the tobacco tax – especially if the money is used for health care – it is a regressive tax. Interestingly, the additional revenues are projected to fall over time, leaving future revenue for health care an open question. Wide public approval (69% in the Post’s poll) guarantees passage.
Tobacco Tax: Regressive, 10% of Package
Income Tax
The Governor would add two higher-rate income brackets at $150,000 in income ($200,000 for couples) and $500,000 in income. At the same time, he would decrease the rates on the first $15,000 in income ($22,500 for couples), expand the earned income credit and increase the personal exemption for seniors. The net revenue increase would be $162 million in FY 2009.
A few Montgomery County politicians have questioned this restructuring, fearful that rich people would have an incentive to live in Virginia. But this measure is one of the most progressive features of the Governor’s plan and is favored by 62% of respondents to the Post’s poll.
Income Tax: Progressive, 10% of Package
In Part Two, I finish examining the Governor’s proposal and calculate its reliance on progressive and regressive measures.
Adam Pagnucco is the Assistant to the General President of the United Brotherhood of Carpenters and has been employed in the labor movement since 1994. The views in this column are his alone and do not represent official statements from the union.
Friday, June 8, 2007
Annual Growth Policy Debate 2007, Part Two
Note: This post originally appeared on Just Up the Pike.
Impact Taxes
Impact taxes are charges paid by developers of new projects to the county. The purpose of impact taxes is to pay for new infrastructure capacity, such as schools and roads, that is necessary to service new projects. Montgomery County first used transportation impact taxes for projects in East County and Germantown in 1986, and expanded them to Clarksburg in the mid-1990’s. In 2003, the County Council passed a package of development policy changes that raised transportation impact taxes, created new school impact taxes, and applied them to the entire county. The new taxes were intended to allow development to pay part of its own costs rather than be subject to moratoriums, several of which were then in effect around the county.
The current impact tax structure for schools and roads is:
SCHOOL IMPACT TAXES
Type of Unit Tax per Unit
Single-Family Detached $8,464
Single-Family Attached $6,348
Multi-Family Residential (except High-Rise) $4,232
High-Rise Residential $1,693
Multi-Family Senior Residential $0
TRANSPORTATION IMPACT TAXES (RESIDENTIAL)
Type of Unit Tax per Unit
Single-Family Detached $5,819
Single-Family Attached $4,761
Multi-Family Residential (except High-Rise) $3,703
High-Rise Residential $2,645
Multi-Family Senior Residential $1,058
TRANSPORTATION IMPACT TAXES (NON-RESIDENTIAL)
Commercial Use Tax per Square Foot
Office $5.30
Industrial $2.65
Bioscience Facility $0.00
Retail $4.75
Place of Worship $0.30
Private Elementary/Secondary Schools $0.40
Hospital $0.00
Other Non-Residential $2.65
Transportation impact tax rates are lower in Metro Station Policy Areas and higher in Clarksburg. All impact tax rates are adjusted for inflation every two years.
The new rates have been in effect for two fiscal years: 2005 and 2006. The total volume of tax collections has been lower than expected. For example, the new school impact tax was expected to collect $24 million in 2005 and $28 million each year thereafter. Instead, it collected less than $8 million in 2005 and less than $7 million in 2006. These amounts are small compared to the $271 million in school capacity expansion the county is planning over the next six years.
The county’s planning staff recommends substantial increases in the impact tax rates. The staff calculated the actual cost of projected school construction through 2012 and divided it by the projected number of new housing units to be constructed over the same period of time to determine the impact tax rate necessary to actually pay for new schools. The new school impact tax rates advocated by the planners proved to be more than double the current rates. The staff performed a similar exercise for transportation. It recommended that transportation impact taxes be 40-60% higher for residences and 80%-120% higher for most commercial buildings (with retail rates going up by four times).
Several statistics put Montgomery County’s impact tax rates in perspective. Sixteen counties in Maryland charge impact taxes on development. On a per-unit basis, Montgomery County currently charges more per single-family detached dwelling ($14,283) than any other county except Prince George’s ($19,361). Last year, Prince George’s collected a much greater total volume of impact taxes ($43 million) than did Montgomery ($13 million). Frederick ($15 million) and Howard ($14 million) collected more impact taxes than Montgomery despite having lower per-unit rates. When impact taxes as a percentage of median home value is calculated, Montgomery’s ratio (1.8%) is lower than Richmond (1.9%), Prince George’s (4.4%), Frederick (3.2%), Charles (3.5%) and Jefferson County, West Virginia (6.6%).
The planning staff argues that their recommended higher impact tax levels are necessary to actually pay for the full cost of added schools and roads required by new development. Unless impact taxes were raised, the county would have to find another way to pay for new infrastructure – most likely through alternate taxes on existing residents. Developers predict that the higher impact tax rates would deter growth in the county through pushing up home and commercial building prices. Others argue that the entire concept of impact taxes is flawed because the revenues collected are not well channeled to actual infrastructure projects needed by specific developments. These are the questions to be decided soon in Rockville.
Impact Taxes
Impact taxes are charges paid by developers of new projects to the county. The purpose of impact taxes is to pay for new infrastructure capacity, such as schools and roads, that is necessary to service new projects. Montgomery County first used transportation impact taxes for projects in East County and Germantown in 1986, and expanded them to Clarksburg in the mid-1990’s. In 2003, the County Council passed a package of development policy changes that raised transportation impact taxes, created new school impact taxes, and applied them to the entire county. The new taxes were intended to allow development to pay part of its own costs rather than be subject to moratoriums, several of which were then in effect around the county.
The current impact tax structure for schools and roads is:
SCHOOL IMPACT TAXES
Type of Unit Tax per Unit
Single-Family Detached $8,464
Single-Family Attached $6,348
Multi-Family Residential (except High-Rise) $4,232
High-Rise Residential $1,693
Multi-Family Senior Residential $0
TRANSPORTATION IMPACT TAXES (RESIDENTIAL)
Type of Unit Tax per Unit
Single-Family Detached $5,819
Single-Family Attached $4,761
Multi-Family Residential (except High-Rise) $3,703
High-Rise Residential $2,645
Multi-Family Senior Residential $1,058
TRANSPORTATION IMPACT TAXES (NON-RESIDENTIAL)
Commercial Use Tax per Square Foot
Office $5.30
Industrial $2.65
Bioscience Facility $0.00
Retail $4.75
Place of Worship $0.30
Private Elementary/Secondary Schools $0.40
Hospital $0.00
Other Non-Residential $2.65
Transportation impact tax rates are lower in Metro Station Policy Areas and higher in Clarksburg. All impact tax rates are adjusted for inflation every two years.
The new rates have been in effect for two fiscal years: 2005 and 2006. The total volume of tax collections has been lower than expected. For example, the new school impact tax was expected to collect $24 million in 2005 and $28 million each year thereafter. Instead, it collected less than $8 million in 2005 and less than $7 million in 2006. These amounts are small compared to the $271 million in school capacity expansion the county is planning over the next six years.
The county’s planning staff recommends substantial increases in the impact tax rates. The staff calculated the actual cost of projected school construction through 2012 and divided it by the projected number of new housing units to be constructed over the same period of time to determine the impact tax rate necessary to actually pay for new schools. The new school impact tax rates advocated by the planners proved to be more than double the current rates. The staff performed a similar exercise for transportation. It recommended that transportation impact taxes be 40-60% higher for residences and 80%-120% higher for most commercial buildings (with retail rates going up by four times).
Several statistics put Montgomery County’s impact tax rates in perspective. Sixteen counties in Maryland charge impact taxes on development. On a per-unit basis, Montgomery County currently charges more per single-family detached dwelling ($14,283) than any other county except Prince George’s ($19,361). Last year, Prince George’s collected a much greater total volume of impact taxes ($43 million) than did Montgomery ($13 million). Frederick ($15 million) and Howard ($14 million) collected more impact taxes than Montgomery despite having lower per-unit rates. When impact taxes as a percentage of median home value is calculated, Montgomery’s ratio (1.8%) is lower than Richmond (1.9%), Prince George’s (4.4%), Frederick (3.2%), Charles (3.5%) and Jefferson County, West Virginia (6.6%).
The planning staff argues that their recommended higher impact tax levels are necessary to actually pay for the full cost of added schools and roads required by new development. Unless impact taxes were raised, the county would have to find another way to pay for new infrastructure – most likely through alternate taxes on existing residents. Developers predict that the higher impact tax rates would deter growth in the county through pushing up home and commercial building prices. Others argue that the entire concept of impact taxes is flawed because the revenues collected are not well channeled to actual infrastructure projects needed by specific developments. These are the questions to be decided soon in Rockville.
Thursday, May 31, 2007
Annual Growth Policy Debate 2007, Part One
Note: This post originally appeared on Just Up the Pike.
Between the early 1980’s and 2004, new developments in Montgomery County were subject to two kinds of analysis for their impact on traffic: Policy Area Transportation Review (PATR) and Local Area Transportation Review (LATR). LATR examined the impact of development on traffic in a handful of intersections close to the project. PATR examined the impact of development on traffic in a large area surrounding the project called a “policy area.” The county had 21 of these policy areas in addition to 10 smaller “Metro Station Policy Areas” and “Town Center Policy Areas.”
The idea behind both LATR and PATR was that if the new development caused traffic congestion to rise above a certain threshold in either a small immediate area around the project (LATR) or a large area around the project (PATR), the developer would be required to provide certain mitigation measures, such as additional road or transit capacity. If traffic conditions were extremely congested in a policy area (as measured by an average congestion index), a moratorium could be declared. In 2004, the last year PATR was in effect, the county had eight policy areas in moratorium for housing construction and six policy areas in moratorium for commercial construction.
In 2003, the County Council voted to abolish PATR, keep LATR and institute a combination of increased and new development impact taxes. The council’s reasoning at that time was that new development should pay for added infrastructure capacity (like roads and schools) rather than be subject to a moratorium until the county could construct the added infrastructure.
New developments would now be analyzed only for their traffic impact on immediate surrounding areas. For example, under the old system, a new development at the corner of Georgia Avenue and Forest Glen Road would be analyzed not only for its impact on that intersection and a couple others nearby (LATR), but also for its impact on the average congestion level for the Kensington-Wheaton policy area (PATR). Under the new system, only the impact on a small number of nearby intersections would be considered.
Critics of PATR’s abolition contended that it was unrealistic to believe that traffic impact from a new development would only spread for a couple blocks away from the site. After the 2006 County Council elections, the council called for an analysis of the county’s growth policy from the Planning Board and specifically requested a recommendation on whether to bring back PATR. The board’s response was to suggest instituting a similar, but not identical process called Project Area Mobility Review (PAMR).
Like PATR, PAMR also assesses the traffic impact of a project on a broad policy area. However, its methodology differs. PATR relied on an average congestion index to determine whether a policy area’s transportation infrastructure was “adequate” to handle additional traffic. PAMR calculates a tradeoff between auto congestion (termed “relative arterial mobility”) and transit capacity (termed “relative transit mobility”). If a policy area had low relative arterial mobility (meaning it had lots of auto congestion), it could still be judged as “adequate” if residents could use transit to get to destinations almost as fast as through car travel. Conversely, if a policy area had transit use that took substantially more time than car use, it could still be judged as “adequate” if auto congestion was low. If a policy area had both high auto congestion and transit options that were much slower than car use, it would be judged as “inadequate.”
Developers in adequate policy areas would not be required to provide mitigation measures under PAMR, though they might face requirements if nearby local intersections were found to be excessively congested under LATR. The planners contended this new system fairly reflected the tradeoffs that residents could make between cars and transit – for example, by switching to transit if car travel was too slow.
The planning staff used their new PAMR standard to calculate adequacy levels for each of the county’s 21 policy areas. In 2005, the staff concluded that every one of the county’s policy areas had adequate transportation capacity. In 2013, the staff projected that only two policy areas – Gaithersburg and Germantown East – would be inadequate. In 2030, the staff projected that only two policy areas – Fairland/White Oak and Potomac – would be inadequate, but that projection assumed that the Purple Line, Corridor Cities Transitway, I-270 widening and Midcounty Highway would all be in place.
Now the debate will begin. Should a new development’s traffic impact be assessed in only a small surrounding area through LATR, or should its impact over a large area also be assessed through policy area review? Are the adequacy judgments of the new policy area review system recommended by the planning board – including its assessment that every policy area in the county had “adequate transportation capacity” in 2005 – realistic? And should the county return to instituting moratoriums in policy areas or merely insist on mitigation measures, such as new roads and/or transit and impact taxes, to be paid by developers? These are the questions now being argued in Rockville.
Between the early 1980’s and 2004, new developments in Montgomery County were subject to two kinds of analysis for their impact on traffic: Policy Area Transportation Review (PATR) and Local Area Transportation Review (LATR). LATR examined the impact of development on traffic in a handful of intersections close to the project. PATR examined the impact of development on traffic in a large area surrounding the project called a “policy area.” The county had 21 of these policy areas in addition to 10 smaller “Metro Station Policy Areas” and “Town Center Policy Areas.”
The idea behind both LATR and PATR was that if the new development caused traffic congestion to rise above a certain threshold in either a small immediate area around the project (LATR) or a large area around the project (PATR), the developer would be required to provide certain mitigation measures, such as additional road or transit capacity. If traffic conditions were extremely congested in a policy area (as measured by an average congestion index), a moratorium could be declared. In 2004, the last year PATR was in effect, the county had eight policy areas in moratorium for housing construction and six policy areas in moratorium for commercial construction.
In 2003, the County Council voted to abolish PATR, keep LATR and institute a combination of increased and new development impact taxes. The council’s reasoning at that time was that new development should pay for added infrastructure capacity (like roads and schools) rather than be subject to a moratorium until the county could construct the added infrastructure.
New developments would now be analyzed only for their traffic impact on immediate surrounding areas. For example, under the old system, a new development at the corner of Georgia Avenue and Forest Glen Road would be analyzed not only for its impact on that intersection and a couple others nearby (LATR), but also for its impact on the average congestion level for the Kensington-Wheaton policy area (PATR). Under the new system, only the impact on a small number of nearby intersections would be considered.
Critics of PATR’s abolition contended that it was unrealistic to believe that traffic impact from a new development would only spread for a couple blocks away from the site. After the 2006 County Council elections, the council called for an analysis of the county’s growth policy from the Planning Board and specifically requested a recommendation on whether to bring back PATR. The board’s response was to suggest instituting a similar, but not identical process called Project Area Mobility Review (PAMR).
Like PATR, PAMR also assesses the traffic impact of a project on a broad policy area. However, its methodology differs. PATR relied on an average congestion index to determine whether a policy area’s transportation infrastructure was “adequate” to handle additional traffic. PAMR calculates a tradeoff between auto congestion (termed “relative arterial mobility”) and transit capacity (termed “relative transit mobility”). If a policy area had low relative arterial mobility (meaning it had lots of auto congestion), it could still be judged as “adequate” if residents could use transit to get to destinations almost as fast as through car travel. Conversely, if a policy area had transit use that took substantially more time than car use, it could still be judged as “adequate” if auto congestion was low. If a policy area had both high auto congestion and transit options that were much slower than car use, it would be judged as “inadequate.”
Developers in adequate policy areas would not be required to provide mitigation measures under PAMR, though they might face requirements if nearby local intersections were found to be excessively congested under LATR. The planners contended this new system fairly reflected the tradeoffs that residents could make between cars and transit – for example, by switching to transit if car travel was too slow.
The planning staff used their new PAMR standard to calculate adequacy levels for each of the county’s 21 policy areas. In 2005, the staff concluded that every one of the county’s policy areas had adequate transportation capacity. In 2013, the staff projected that only two policy areas – Gaithersburg and Germantown East – would be inadequate. In 2030, the staff projected that only two policy areas – Fairland/White Oak and Potomac – would be inadequate, but that projection assumed that the Purple Line, Corridor Cities Transitway, I-270 widening and Midcounty Highway would all be in place.
Now the debate will begin. Should a new development’s traffic impact be assessed in only a small surrounding area through LATR, or should its impact over a large area also be assessed through policy area review? Are the adequacy judgments of the new policy area review system recommended by the planning board – including its assessment that every policy area in the county had “adequate transportation capacity” in 2005 – realistic? And should the county return to instituting moratoriums in policy areas or merely insist on mitigation measures, such as new roads and/or transit and impact taxes, to be paid by developers? These are the questions now being argued in Rockville.
Sunday, April 29, 2007
Adam Pagnucco on the Budget
In Montgomery County local races, four issues regularly rise to the top: education, development, traffic congestion and the environment, in no particular order. In last year’s elections, all four issues were discussed by the candidates – especially development. But this spring a fifth issue has risen to surpass all of them: the county’s difficult choices on the budget. The budget is not only an unavoidable issue because it is central to the functioning of the government – it also affects the ability of county leaders to deal with each of the above four issues that are important to voters.
The county has a short-term problem and a long-term problem with its budget.
The short-term problem appeared in the first budget submitted by our new County Executive. While Ike Leggett’s proposal for $4.1 billion in county spending was 6.3% higher than last year’s budget, the increase was below the prior year’s rate of 9%. Leggett pronounced recent budget growth “unsustainable” and declared that no county agency, including the schools, would get its entire budget request. Despite an aggressive lobbying campaign by public sector unions – especially the Montgomery County Education Association – the County Council seems likely to uphold the broad outlines of the County Executive’s proposal.
Furthermore, Council President Marilyn Praisner has identified a $269 million budget deficit for the fiscal year starting in July 2008. The deficit margin is about 7% - which is close to the increase recommended for this year. The council may very well combine a small tax increase with careful maintenance of core spending to deal with this deficit. This may be enough to avoid modifying the county’s labor contracts with its employees as the Council President has recently discussed.
As serious as the short-term problem is, it does not compare to the county’s budget issues of 1991-92 when it suffered from an economic recession. At that time, 7,000 county employees were furloughed for four days. Public employees occupied the council chambers, teachers engaged in a work slowdown and some public school students walked out of classes to protest potential cuts. No one is predicting similar upheaval this time.
However, the long-term budget problem represents a significant challenge. Since 1990, the county’s population growth has averaged 1.4% per year while its budget has generally grown 5-10% per year. In recent years, the county has managed this by depending on big increases in property tax receipts driven by its real estate boom. That real estate boom has ended and property tax receipts will soon reflect that. The county faces three choices in the long run:
1. Large tax hikes to fund budget increases. The danger here is that those tax hikes may slow the county’s economic growth rate even further, worsening its fiscal problems in the future.
2. Slowing the rate of county budget growth to equal the rate of economic growth. This would mean county budget growth of 1-2% per year. This would be insufficient to meet the standards of service to which residents have become accustomed. School, fire, police and health care costs are all increasing at faster rates even if the size of the relevant county departments remains unchanged. This budget growth rate would also be insufficient to adequately compensate county employees, and that would gradually damage one of the nation’s best-educated, least-turnover-prone local government workforces.
3. Systematically encouraging enough economic growth to fund the county’s budget.
The third option reveals a naked truth that was not commonly discussed during the last campaign: budget policy and development policy are inter-related. Over the long run, limiting economic growth will limit the ability of local government to serve its residents. But as any resident of Phoenix or Las Vegas would observe, economic growth has consequences for quality of life. The question of the last campaign was, “Should we have development or not?” But the real question is, “How can we have enough economic growth to pay for government services we need without driving existing residents crazy?”
Economic growth comes from two sources: population growth and job creation. If one of these occurs without the other, or if they occur in different geographic locations, the result is traffic congestion. The two should occur together, at similar rates, and in nearby locations. This has direct implications for county development policy.
In general, the county has three kinds of developable areas: the agricultural reserve, the four downtowns (Bethesda, Rockville, Silver Spring and Wheaton), and the rest of the county. Most residents agree that the agricultural reserve should continue to be protected for cultural and environmental reasons. That leaves the other two areas for consideration.
The four downtowns are unique assets in the county because they each have residential density, concentrated office space and pedestrian-oriented retail space all within walking distance of each other. A resident of Bethesda’s central business district (CBD) who also works in the CBD does not have to use his or her car every day. That individual can walk to work and walk to the grocery store on the way home. The fact that all of the amenities of life are concentrated in a walkable radius cuts back on car use, which cuts down on energy usage, greenhouse gases and pollution. It also reduces the need for road maintenance.
But many residents may want to live in one CBD and work in another. This means that the CBDs should be connected, preferably through transit. Bethesda is connected to Rockville, and Silver Spring is connected to Wheaton through Metro’s Red Line. Bethesda could be connected to Silver Spring through the Purple Line. And a bus rapid transit route from Wheaton to Rockville is the county’s top transit study request of the state government. If both of those projects go through, the county will have four inter-connected downtowns.
How could the county encourage economic growth in downtowns rather than sprawl in non-transit-accessible suburbs? In the downtowns, the county could use zoning text amendments (or more ambitiously, coordinated and complementary updates to master plans) to encourage transit-oriented CBD growth. In non-CBD areas, project area transportation reviews and robust school capacity tests would limit development outside the downtowns. This combination of measures would channel economic growth to the CBDs while minimizing the consequences of traffic congestion and pollution. The side effect would be to encourage the creation of downtown entertainment districts, each customized to reflect the unique cultural identities of each CBD.
For those who are uneasy about growth in downtowns, keep in mind the other two budget options: large tax hikes or gradually deteriorating government services. No local area in this country – even Montgomery County – is immune to the negative long-run effects of either (or both).
The county has a short-term problem and a long-term problem with its budget.
The short-term problem appeared in the first budget submitted by our new County Executive. While Ike Leggett’s proposal for $4.1 billion in county spending was 6.3% higher than last year’s budget, the increase was below the prior year’s rate of 9%. Leggett pronounced recent budget growth “unsustainable” and declared that no county agency, including the schools, would get its entire budget request. Despite an aggressive lobbying campaign by public sector unions – especially the Montgomery County Education Association – the County Council seems likely to uphold the broad outlines of the County Executive’s proposal.
Furthermore, Council President Marilyn Praisner has identified a $269 million budget deficit for the fiscal year starting in July 2008. The deficit margin is about 7% - which is close to the increase recommended for this year. The council may very well combine a small tax increase with careful maintenance of core spending to deal with this deficit. This may be enough to avoid modifying the county’s labor contracts with its employees as the Council President has recently discussed.
As serious as the short-term problem is, it does not compare to the county’s budget issues of 1991-92 when it suffered from an economic recession. At that time, 7,000 county employees were furloughed for four days. Public employees occupied the council chambers, teachers engaged in a work slowdown and some public school students walked out of classes to protest potential cuts. No one is predicting similar upheaval this time.
However, the long-term budget problem represents a significant challenge. Since 1990, the county’s population growth has averaged 1.4% per year while its budget has generally grown 5-10% per year. In recent years, the county has managed this by depending on big increases in property tax receipts driven by its real estate boom. That real estate boom has ended and property tax receipts will soon reflect that. The county faces three choices in the long run:
1. Large tax hikes to fund budget increases. The danger here is that those tax hikes may slow the county’s economic growth rate even further, worsening its fiscal problems in the future.
2. Slowing the rate of county budget growth to equal the rate of economic growth. This would mean county budget growth of 1-2% per year. This would be insufficient to meet the standards of service to which residents have become accustomed. School, fire, police and health care costs are all increasing at faster rates even if the size of the relevant county departments remains unchanged. This budget growth rate would also be insufficient to adequately compensate county employees, and that would gradually damage one of the nation’s best-educated, least-turnover-prone local government workforces.
3. Systematically encouraging enough economic growth to fund the county’s budget.
The third option reveals a naked truth that was not commonly discussed during the last campaign: budget policy and development policy are inter-related. Over the long run, limiting economic growth will limit the ability of local government to serve its residents. But as any resident of Phoenix or Las Vegas would observe, economic growth has consequences for quality of life. The question of the last campaign was, “Should we have development or not?” But the real question is, “How can we have enough economic growth to pay for government services we need without driving existing residents crazy?”
Economic growth comes from two sources: population growth and job creation. If one of these occurs without the other, or if they occur in different geographic locations, the result is traffic congestion. The two should occur together, at similar rates, and in nearby locations. This has direct implications for county development policy.
In general, the county has three kinds of developable areas: the agricultural reserve, the four downtowns (Bethesda, Rockville, Silver Spring and Wheaton), and the rest of the county. Most residents agree that the agricultural reserve should continue to be protected for cultural and environmental reasons. That leaves the other two areas for consideration.
The four downtowns are unique assets in the county because they each have residential density, concentrated office space and pedestrian-oriented retail space all within walking distance of each other. A resident of Bethesda’s central business district (CBD) who also works in the CBD does not have to use his or her car every day. That individual can walk to work and walk to the grocery store on the way home. The fact that all of the amenities of life are concentrated in a walkable radius cuts back on car use, which cuts down on energy usage, greenhouse gases and pollution. It also reduces the need for road maintenance.
But many residents may want to live in one CBD and work in another. This means that the CBDs should be connected, preferably through transit. Bethesda is connected to Rockville, and Silver Spring is connected to Wheaton through Metro’s Red Line. Bethesda could be connected to Silver Spring through the Purple Line. And a bus rapid transit route from Wheaton to Rockville is the county’s top transit study request of the state government. If both of those projects go through, the county will have four inter-connected downtowns.
How could the county encourage economic growth in downtowns rather than sprawl in non-transit-accessible suburbs? In the downtowns, the county could use zoning text amendments (or more ambitiously, coordinated and complementary updates to master plans) to encourage transit-oriented CBD growth. In non-CBD areas, project area transportation reviews and robust school capacity tests would limit development outside the downtowns. This combination of measures would channel economic growth to the CBDs while minimizing the consequences of traffic congestion and pollution. The side effect would be to encourage the creation of downtown entertainment districts, each customized to reflect the unique cultural identities of each CBD.
For those who are uneasy about growth in downtowns, keep in mind the other two budget options: large tax hikes or gradually deteriorating government services. No local area in this country – even Montgomery County – is immune to the negative long-run effects of either (or both).
Friday, September 22, 2006
The Teachers vs. Neighborspac
Note: this post originally appeared on Just Up the Pike.
The reaction to my earlier guest blog (Teachers Union: the 800 lb. Gorilla of MoCo Politics) contained some agreement and some disagreement. Critics of my analysis question the relevance of the Apple Ballot, arguing that the county’s voters made their decisions on another basis, namely growth. I thought this comment was worthy of further examination.
Local politicians have two elementary tasks: A) develop and refine their message, and B) amplify it. Message content is the product of the politician’s beliefs and his or her opinion of the positions of the constituents. Message amplification is a logistical issue: the candidates need to spread their message to the greatest number of voters. In the 2006 primary election, amplification was a critical determinant of electoral success.
Message amplification is affected by the way in which voters obtain political information. “Passive consumption” involves television coverage, newspaper articles, campaign literature and advertisements. These sources are easily available, quickly consumed, and require no sacrifice or time adjustments by voters. “Active consumption” involves attendance at campaign events, writing letters and emails, and actual meetings with candidates and surrogates – sometimes at the voters’ initiative. These activities require considerably more time and effort for voters, and so they are far less frequently used than passive consumption.
In national races, passive consumption is often enough to allow voters to make relatively informed decisions. The current U.S. Senate race in Virginia is one example. Voters can read many newspaper articles and view frequent television coverage to form their opinions of George Allen and Jim Webb. They do not have to actually hear each candidate speak in person to learn their positions on, for example, the war in Iraq. Each candidate can additionally draw on a party apparatus and many surrogates to press his case for election.
In local races, passive consumption is less practical. Television coverage of the Montgomery County Executive race was scanty and perfunct. The print media was better, but Washington Post voters had to dig into the Metro section to read about the executive candidates. Television and print coverage of the county council and statehouse races was very sparse. The candidates’ literature and websites were hardly more informative. Every one of the Democratic candidates say that they support education, oppose traffic congestion, support diversity and will work on behalf of their constituents. No candidate proclaims their support for unfettered development. As a result, passive consumption – the preferred information receipt mechanism of most voters – is not sufficient to allow them to differentiate between local candidates. The sole useful source of passive consumption may be the Apple Ballot, which comes from a trusted source (the Teachers) and is delivered just outside the voting precinct.
As for active consumption, I practiced it during this election cycle. I met eleven candidates running for county office and almost every statehouse candidate in my district. I attended one debate, three campaign coffees, and several community events where candidates appeared. By September 12th, I felt I had learned enough to cast an informed vote. But how many voters actually apply this much energy to determining their choice in local races? A few thousand in the entire county? If this is the case, then where did the tens of thousands of votes necessary to elect winning at-large council candidates come from?
Faced with the limited usefulness of passive consumption and the infrequent practice of active consumption, the candidates must work very hard to reach out to voters. One aspect of this is fund-raising; an often-detested job that most candidates regard as a necessary evil. Another aspect is endorsements – especially from organizations that can deploy volunteers. Many candidates regard election-day volunteers as a more valuable resource than dollars since enthusiastic bodies are much more scarce than money. I personally witnessed a half-dozen candidates show up at my precinct to lobby last-minute voters. Two sent their wives.
The critical advantage of the Teachers Union in the 2006 Democratic primary relates to its epic ability to mobilize large numbers of election-day volunteers. I saw at least four carriers of the Teachers’ “Apple Ballot” at my voting precinct. This projects to over 800 “Apple” volunteers across the county if the union’s efforts were evenly spread. I have not heard of either Neighbors for a Better Montgomery (a group favoring development restrictions) or the Washington Post endorsement staff fielding a similar number of volunteers across the county. And of course, the Teachers’ mobilization capacity was substantially aided by the closing of the public schools on primary day. Distribution of the Apple Ballot may have been the most effective information consumption technique of the entire campaign, passive or active, by any organization or candidate.
The Apple volunteers were able to sway the opinions of many of the last-minute voters in my precinct by appealing to them to consider the opinions of “teachers” – not the “Teachers Union.” In my thirteen hours outside my precinct, I saw over a hundred voters read the Apple, occasionally while sitting on a bench outside the door and away from the electioneers, before heading into the voting building. The fact that the union’s endorsees won 27 of 30 contested races at the state and county levels testifies to the success of its efforts.
Four years ago, two of the Teachers’ endorsees were losing at-large candidates Blair Ewing and Marc Elrich. So far this year, none of the Teachers’ county-level endorsees have lost, including the phoenix-like Elrich. In fact, the Teachers’ at-large county council candidates (George Leventhal, Elrich and Duchy Trachtenberg) finished first, second and third, while two incumbents the Teachers did not endorse, Nancy Floreen and Mike Subin, finished fourth and fifth. Not being foolish, the Teachers declined to endorse the opponents of council members Phil Andrews (District 3) and Marilyn Praisner (District 4), each of whom was sure to crush their opposition.
As my critics argue, growth was certainly a big issue in this race. It had a significant impact on the County Executive contest, in which MCEA made no endorsement. And it was also a factor in the county council races, as any observer of one of the candidate debates would conclude. But compare the electoral record of the Teachers with that of Neighbors for a Better Montgomery (aka Neighborspac), a citizens organization arguing for limits on development. MCEA endorsed five candidates in contested county council primaries: Mike Knapp (District 2), Valerie Ervin (District 5), and Leventhal, Trachtenberg and Elrich (at-large). All of those candidates won. (The fate of Republican Howard Denis, who represents District 1 and was endorsed by both the Teachers and Neighborspac, will be decided in the general election.)
Neighborspac endorsed nine candidates in contested county primaries: Of those, six won. The group’s at-large candidates finished second, third, seventh and eleventh, while MCEA’s picks finished first, second and third. Neighborspac took more risks than the Teachers, choosing to oppose four incumbents, three of whom won despite the group’s opposition. (Subin, a target of both the Teachers and Neighborspac, was the only defeated incumbent.) MCEA was more conservative, choosing to endorse three rather than four at-large council candidates, leaving room for one of its non-endorsed incumbents to win. And while the Teachers clearly disliked Andrews and Praisner (criticizing them as “fiscal conservatives”), they did not support their opponents.
Neighborspac and MCEA faced off against each other on incumbent at-large council member and 2006 council president George Leventhal. Neighborspac criticized Leventhal for accepting 43% of his campaign contributions from developers, a charge the council member disputed. The group even depicted Leventhal as a puppet dancing on developer-controlled strings in its infamous “County Council Can-Can” internet animation.
The Teachers rallied to Leventhal’s defense. In endorsing him, MCEA wrote, “He championed the ‘Montgomery Cares’ program, which makes health care accessible for poor, uninsured county residents. George is seen as one of the more reliable pro-labor members of the council, consistently supporting negotiated contracts and the revenue proposals necessary to fund them.”
MCEA won this clash as Leventhal finished first in the at-large race. Additionally, MCEA endorsee and incumbent Mike Knapp (District 2) defeated Neighborspac endorsee and challenger Sharon Dooley by nearly 30 points. If growth was the dominant issue in the election and Neighborspac the most influential group, how can the victories of Leventhal and Knapp be explained? Overall, MCEA’s 5-0 record compares favorably to Neighborspac’s 6-3 record.
Neighborspac has two of the three elements required for a successful citizens’ pressure group: a research-backed policy agenda and political allies. It lacks the third element: a large number of volunteers, particularly election-day volunteers. The group should consider developing an election-day “Neighbors Ballot,” assuming it can round up 800+ volunteers to distribute it. Until Neighborspac assembles this kind of volunteer network, it will not match the power of the Teachers Union. Still, with a council lineup including at least five endorsees in addition to new County Executive Ike Leggett, Neighborpac is poised for success in obtaining at least some of its goals.
The Teachers, with a so-far perfect electoral record in this year’s county council contests, a professional and experienced leadership, and an army of election-day volunteers, should score many of their legislative wins by heftier margins than a mere five votes. Their power will soon be put to the test as their current contract expires next summer.
The reaction to my earlier guest blog (Teachers Union: the 800 lb. Gorilla of MoCo Politics) contained some agreement and some disagreement. Critics of my analysis question the relevance of the Apple Ballot, arguing that the county’s voters made their decisions on another basis, namely growth. I thought this comment was worthy of further examination.
Local politicians have two elementary tasks: A) develop and refine their message, and B) amplify it. Message content is the product of the politician’s beliefs and his or her opinion of the positions of the constituents. Message amplification is a logistical issue: the candidates need to spread their message to the greatest number of voters. In the 2006 primary election, amplification was a critical determinant of electoral success.
Message amplification is affected by the way in which voters obtain political information. “Passive consumption” involves television coverage, newspaper articles, campaign literature and advertisements. These sources are easily available, quickly consumed, and require no sacrifice or time adjustments by voters. “Active consumption” involves attendance at campaign events, writing letters and emails, and actual meetings with candidates and surrogates – sometimes at the voters’ initiative. These activities require considerably more time and effort for voters, and so they are far less frequently used than passive consumption.
In national races, passive consumption is often enough to allow voters to make relatively informed decisions. The current U.S. Senate race in Virginia is one example. Voters can read many newspaper articles and view frequent television coverage to form their opinions of George Allen and Jim Webb. They do not have to actually hear each candidate speak in person to learn their positions on, for example, the war in Iraq. Each candidate can additionally draw on a party apparatus and many surrogates to press his case for election.
In local races, passive consumption is less practical. Television coverage of the Montgomery County Executive race was scanty and perfunct. The print media was better, but Washington Post voters had to dig into the Metro section to read about the executive candidates. Television and print coverage of the county council and statehouse races was very sparse. The candidates’ literature and websites were hardly more informative. Every one of the Democratic candidates say that they support education, oppose traffic congestion, support diversity and will work on behalf of their constituents. No candidate proclaims their support for unfettered development. As a result, passive consumption – the preferred information receipt mechanism of most voters – is not sufficient to allow them to differentiate between local candidates. The sole useful source of passive consumption may be the Apple Ballot, which comes from a trusted source (the Teachers) and is delivered just outside the voting precinct.
As for active consumption, I practiced it during this election cycle. I met eleven candidates running for county office and almost every statehouse candidate in my district. I attended one debate, three campaign coffees, and several community events where candidates appeared. By September 12th, I felt I had learned enough to cast an informed vote. But how many voters actually apply this much energy to determining their choice in local races? A few thousand in the entire county? If this is the case, then where did the tens of thousands of votes necessary to elect winning at-large council candidates come from?
Faced with the limited usefulness of passive consumption and the infrequent practice of active consumption, the candidates must work very hard to reach out to voters. One aspect of this is fund-raising; an often-detested job that most candidates regard as a necessary evil. Another aspect is endorsements – especially from organizations that can deploy volunteers. Many candidates regard election-day volunteers as a more valuable resource than dollars since enthusiastic bodies are much more scarce than money. I personally witnessed a half-dozen candidates show up at my precinct to lobby last-minute voters. Two sent their wives.
The critical advantage of the Teachers Union in the 2006 Democratic primary relates to its epic ability to mobilize large numbers of election-day volunteers. I saw at least four carriers of the Teachers’ “Apple Ballot” at my voting precinct. This projects to over 800 “Apple” volunteers across the county if the union’s efforts were evenly spread. I have not heard of either Neighbors for a Better Montgomery (a group favoring development restrictions) or the Washington Post endorsement staff fielding a similar number of volunteers across the county. And of course, the Teachers’ mobilization capacity was substantially aided by the closing of the public schools on primary day. Distribution of the Apple Ballot may have been the most effective information consumption technique of the entire campaign, passive or active, by any organization or candidate.
The Apple volunteers were able to sway the opinions of many of the last-minute voters in my precinct by appealing to them to consider the opinions of “teachers” – not the “Teachers Union.” In my thirteen hours outside my precinct, I saw over a hundred voters read the Apple, occasionally while sitting on a bench outside the door and away from the electioneers, before heading into the voting building. The fact that the union’s endorsees won 27 of 30 contested races at the state and county levels testifies to the success of its efforts.
Four years ago, two of the Teachers’ endorsees were losing at-large candidates Blair Ewing and Marc Elrich. So far this year, none of the Teachers’ county-level endorsees have lost, including the phoenix-like Elrich. In fact, the Teachers’ at-large county council candidates (George Leventhal, Elrich and Duchy Trachtenberg) finished first, second and third, while two incumbents the Teachers did not endorse, Nancy Floreen and Mike Subin, finished fourth and fifth. Not being foolish, the Teachers declined to endorse the opponents of council members Phil Andrews (District 3) and Marilyn Praisner (District 4), each of whom was sure to crush their opposition.
As my critics argue, growth was certainly a big issue in this race. It had a significant impact on the County Executive contest, in which MCEA made no endorsement. And it was also a factor in the county council races, as any observer of one of the candidate debates would conclude. But compare the electoral record of the Teachers with that of Neighbors for a Better Montgomery (aka Neighborspac), a citizens organization arguing for limits on development. MCEA endorsed five candidates in contested county council primaries: Mike Knapp (District 2), Valerie Ervin (District 5), and Leventhal, Trachtenberg and Elrich (at-large). All of those candidates won. (The fate of Republican Howard Denis, who represents District 1 and was endorsed by both the Teachers and Neighborspac, will be decided in the general election.)
Neighborspac endorsed nine candidates in contested county primaries: Of those, six won. The group’s at-large candidates finished second, third, seventh and eleventh, while MCEA’s picks finished first, second and third. Neighborspac took more risks than the Teachers, choosing to oppose four incumbents, three of whom won despite the group’s opposition. (Subin, a target of both the Teachers and Neighborspac, was the only defeated incumbent.) MCEA was more conservative, choosing to endorse three rather than four at-large council candidates, leaving room for one of its non-endorsed incumbents to win. And while the Teachers clearly disliked Andrews and Praisner (criticizing them as “fiscal conservatives”), they did not support their opponents.
Neighborspac and MCEA faced off against each other on incumbent at-large council member and 2006 council president George Leventhal. Neighborspac criticized Leventhal for accepting 43% of his campaign contributions from developers, a charge the council member disputed. The group even depicted Leventhal as a puppet dancing on developer-controlled strings in its infamous “County Council Can-Can” internet animation.
The Teachers rallied to Leventhal’s defense. In endorsing him, MCEA wrote, “He championed the ‘Montgomery Cares’ program, which makes health care accessible for poor, uninsured county residents. George is seen as one of the more reliable pro-labor members of the council, consistently supporting negotiated contracts and the revenue proposals necessary to fund them.”
MCEA won this clash as Leventhal finished first in the at-large race. Additionally, MCEA endorsee and incumbent Mike Knapp (District 2) defeated Neighborspac endorsee and challenger Sharon Dooley by nearly 30 points. If growth was the dominant issue in the election and Neighborspac the most influential group, how can the victories of Leventhal and Knapp be explained? Overall, MCEA’s 5-0 record compares favorably to Neighborspac’s 6-3 record.
Neighborspac has two of the three elements required for a successful citizens’ pressure group: a research-backed policy agenda and political allies. It lacks the third element: a large number of volunteers, particularly election-day volunteers. The group should consider developing an election-day “Neighbors Ballot,” assuming it can round up 800+ volunteers to distribute it. Until Neighborspac assembles this kind of volunteer network, it will not match the power of the Teachers Union. Still, with a council lineup including at least five endorsees in addition to new County Executive Ike Leggett, Neighborpac is poised for success in obtaining at least some of its goals.
The Teachers, with a so-far perfect electoral record in this year’s county council contests, a professional and experienced leadership, and an army of election-day volunteers, should score many of their legislative wins by heftier margins than a mere five votes. Their power will soon be put to the test as their current contract expires next summer.
Sunday, September 17, 2006
The 800 lb Gorilla of MoCo Politics
The mainstream media and the blogs are characterizing the 2006 Democratic primary in Maryland’s Montgomery County as the year that voters turned against growth. After all, many of the county-level winners – especially Ike Leggett, Marc Elrich, Duchy Trachtenberg and Valerie Ervin – ran on slow (or slower) growth platforms. So-called pro-growth candidates like Steve Silverman did not do as well. There is some truth to this story. However, to understand the results completely, we must realize that 2006 is the year the Teachers Union became the 800 pound gorilla of Montgomery County politics.
I first realized this while I was working at the polls on primary day. I spent all day at my precinct circulating a petition to build an east-side Metro entrance at Georgia and Forest Glen. I talked to all the political volunteers who showed up. Many candidates sent volunteers: county executive candidates Silverman and Leggett, county council candidates Ervin and Hans Riemer, and six of the eight District 18 state delegate candidates. Many candidates also showed up in person for parts of the day. The volunteers behaved pretty much the same way: chasing voters and giving them their candidates’ literature. Some voters took it while others didn’t. In many cases, the volunteers seemed to neutralize each other.
However, the candidates were not the only ones who sent volunteers. For almost the entire day, volunteers with the Montgomery County Education Association (MCEA) were present at the precinct. These volunteers distributed the MCEA's “Apple Ballot” – a district-customized endorsement list appearing on a red, apple-shaped handout. The MCEA volunteers did not tell voters that the Apple Ballot candidates were endorsed by the Teachers Union. Instead, they asked them, “Would you like to know who teachers are voting for?” The majority of the voters said yes, took the ballot, and read it before entering the booth. The fact that the public schools were closed on primary day no doubt helped the MCEA field an army of these volunteers across the county.
Many voters had pre-conceived opinions about some of the top-ticket races, especially Cardin-Mfume for U.S. Senate and Leggett-Silverman for County Executive (both races in which the Teachers made no endorsements). However, most had no opinion on the down-ticket races such as county council, state legislature and school board. That is where the Apple Ballot made the biggest difference. After all, who wants to vote against teachers?
The MCEA endorsed 41 county, statehouse and school board candidates. Of those candidates, 30 had contested races. Apple Ballot candidates won 27 races and lost 3. That’s an astounding 90% success rate. The Teachers had decisive impacts on the following races:
At-Large County Council
Montgomery County has four at-large county council seats, and all were up for election. Three incumbents were running: George Leventhal, Nancy Floreen and Mike Subin. Ten challengers were also running, of whom the strongest were Marc Elrich and Duchy Trachtenberg. Conventional wisdom would dictate that the three incumbents would cruise to victory as the ten challengers diluted each other’s votes. But the Teachers had other ideas.
MCEA was upset that Floreen and Subin had supported delaying a 2003 cost-of-living increase that was due to teachers under their contract because of budget problems. As a result, Leventhal and challengers Elrich and Trachtenberg made the Apple Ballot, while incumbents Floreen and Subin were excluded. The Apple candidates won the top three slots, while Floreen earned the fourth seat and Subin lost. Subin’s loss was particularly notable because he was a 20-year council veteran and the long-time head of the council’s education committee.
District 5 County Council
Two candidates were running for this Silver Spring-Takoma Park-Wheaton-Kensington seat: school board member and council staffer Valerie Ervin, and Rock the Vote political director Hans Riemer. Ervin had the endorsements of most Montgomery County organizations and the advantages of council connections and a long residency. Riemer outraised Ervin $118,000 to $57, 000 – far outpacing Ervin in individual contributions – and knocked on at least three times as many doors. Most bloggers were calling this a close race. But the Apple was telling voters to support Ervin.
At my precinct, Riemer’s volunteers were present all day while Ervin’s came and went. Riemer’s people thought they had the field to themselves, but I told them, “You’re not competing with the Ervin people. You’re competing with those ladies with the apples.” The power of the Apple prevailed and Ervin blew out Riemer 62%-38%.
District 18 State Legislature
One of the three state delegate seats opened up when the incumbent state senator retired and one of the three incumbent delegates moved up to run for senate. The resulting open delegate seat attracted six challengers in addition to the two incumbents who were running for re-election. The field was deep: all six were solid candidates and had pockets of support in the district.
The two incumbents were Jane Lawton and Ana Gutierrez, who ran on a slate with the uncontested state senate candidate. Lawton worked hard, visited the neighborhoods, appeared at dozens of events and finished first with 20% of the vote. Gutierrez’s efforts focused almost solely on Spanish-language media, but that plus her slate support and incumbency earned her second place with 16% of the vote. And of course, both were apple-approved.
That left the third and final slot, and the two strongest contenders were young, aggressive lawyers Dan Farrington and Jeff Waldstreicher. At first glance, Farrington appeared to hold most of the advantages. Sometimes compared to Bill Clinton, Farrington surpassed Waldstreicher in public speaking and one-on-one contact and earned the Washington Post and Gazette endorsements (neither of which backed Waldstreicher). And while both candidates raised slightly more than $100,000, about 90% of Waldstreicher’s money came from himself and his family while Farrington had more than 450 contributors. One advantage Farrington did not possess was work ethic; both candidates worked extremely hard. Waldstreicher’s pesky, hustling style matched Farrington’s omnipresence and the two blanketed the district.
But Waldstreicher was the Apple candidate and let everyone know it. Every one of his literature pieces showed the apple, and he usually started off his voter contacts saying he was “teacher-endorsed.” Visitors to his website even found a giant red apple flying across the screen before seeing the candidate’s picture! Waldstreicher’s apple-carriers earned him a 392-vote victory for the final delegate seat (pending provisional ballot counting).
As for the school board, apple-endorsed Shirley Brandman won 59% of the vote in a 5-way contest for the at-large seat. And apple-endorsed Nancy Navarro won 57% of the vote in a 3-way race for the District 5 seat. If those winning percentages resemble each other, it’s probably not a coincidence.
Of course, each of these races involved other factors besides the Teachers. Voters were clearly tired of development, and that favored Elrich and Trachtenberg. Ervin’s supporters consistently criticized Riemer for his two-year county residency even as they were privately surprised by his fund-raising and hyperactive door-knocking. And the county’s widespread voting machine meltdown may have affected the District 18 statehouse race. But the MCEA’s ballot was the common thread in all these contests. I personally witnessed over a hundred voters reading the Apple while turning away candidate-specific literature from the other volunteers.
So what does the Teachers’ emergence as Montgomery County’s dominant political force mean for the future? With property tax growth slowing down, the next county council will face tough budgetary decisions. Public schools account for half of the county’s budget and would be an obvious location for cuts. But don’t expect any action there: the county’s politicians have learned that those who cross the Teachers Union once are unlikely to be given a second opportunity.
I first realized this while I was working at the polls on primary day. I spent all day at my precinct circulating a petition to build an east-side Metro entrance at Georgia and Forest Glen. I talked to all the political volunteers who showed up. Many candidates sent volunteers: county executive candidates Silverman and Leggett, county council candidates Ervin and Hans Riemer, and six of the eight District 18 state delegate candidates. Many candidates also showed up in person for parts of the day. The volunteers behaved pretty much the same way: chasing voters and giving them their candidates’ literature. Some voters took it while others didn’t. In many cases, the volunteers seemed to neutralize each other.
However, the candidates were not the only ones who sent volunteers. For almost the entire day, volunteers with the Montgomery County Education Association (MCEA) were present at the precinct. These volunteers distributed the MCEA's “Apple Ballot” – a district-customized endorsement list appearing on a red, apple-shaped handout. The MCEA volunteers did not tell voters that the Apple Ballot candidates were endorsed by the Teachers Union. Instead, they asked them, “Would you like to know who teachers are voting for?” The majority of the voters said yes, took the ballot, and read it before entering the booth. The fact that the public schools were closed on primary day no doubt helped the MCEA field an army of these volunteers across the county.
Many voters had pre-conceived opinions about some of the top-ticket races, especially Cardin-Mfume for U.S. Senate and Leggett-Silverman for County Executive (both races in which the Teachers made no endorsements). However, most had no opinion on the down-ticket races such as county council, state legislature and school board. That is where the Apple Ballot made the biggest difference. After all, who wants to vote against teachers?
The MCEA endorsed 41 county, statehouse and school board candidates. Of those candidates, 30 had contested races. Apple Ballot candidates won 27 races and lost 3. That’s an astounding 90% success rate. The Teachers had decisive impacts on the following races:
At-Large County Council
Montgomery County has four at-large county council seats, and all were up for election. Three incumbents were running: George Leventhal, Nancy Floreen and Mike Subin. Ten challengers were also running, of whom the strongest were Marc Elrich and Duchy Trachtenberg. Conventional wisdom would dictate that the three incumbents would cruise to victory as the ten challengers diluted each other’s votes. But the Teachers had other ideas.
MCEA was upset that Floreen and Subin had supported delaying a 2003 cost-of-living increase that was due to teachers under their contract because of budget problems. As a result, Leventhal and challengers Elrich and Trachtenberg made the Apple Ballot, while incumbents Floreen and Subin were excluded. The Apple candidates won the top three slots, while Floreen earned the fourth seat and Subin lost. Subin’s loss was particularly notable because he was a 20-year council veteran and the long-time head of the council’s education committee.
District 5 County Council
Two candidates were running for this Silver Spring-Takoma Park-Wheaton-Kensington seat: school board member and council staffer Valerie Ervin, and Rock the Vote political director Hans Riemer. Ervin had the endorsements of most Montgomery County organizations and the advantages of council connections and a long residency. Riemer outraised Ervin $118,000 to $57, 000 – far outpacing Ervin in individual contributions – and knocked on at least three times as many doors. Most bloggers were calling this a close race. But the Apple was telling voters to support Ervin.
At my precinct, Riemer’s volunteers were present all day while Ervin’s came and went. Riemer’s people thought they had the field to themselves, but I told them, “You’re not competing with the Ervin people. You’re competing with those ladies with the apples.” The power of the Apple prevailed and Ervin blew out Riemer 62%-38%.
District 18 State Legislature
One of the three state delegate seats opened up when the incumbent state senator retired and one of the three incumbent delegates moved up to run for senate. The resulting open delegate seat attracted six challengers in addition to the two incumbents who were running for re-election. The field was deep: all six were solid candidates and had pockets of support in the district.
The two incumbents were Jane Lawton and Ana Gutierrez, who ran on a slate with the uncontested state senate candidate. Lawton worked hard, visited the neighborhoods, appeared at dozens of events and finished first with 20% of the vote. Gutierrez’s efforts focused almost solely on Spanish-language media, but that plus her slate support and incumbency earned her second place with 16% of the vote. And of course, both were apple-approved.
That left the third and final slot, and the two strongest contenders were young, aggressive lawyers Dan Farrington and Jeff Waldstreicher. At first glance, Farrington appeared to hold most of the advantages. Sometimes compared to Bill Clinton, Farrington surpassed Waldstreicher in public speaking and one-on-one contact and earned the Washington Post and Gazette endorsements (neither of which backed Waldstreicher). And while both candidates raised slightly more than $100,000, about 90% of Waldstreicher’s money came from himself and his family while Farrington had more than 450 contributors. One advantage Farrington did not possess was work ethic; both candidates worked extremely hard. Waldstreicher’s pesky, hustling style matched Farrington’s omnipresence and the two blanketed the district.
But Waldstreicher was the Apple candidate and let everyone know it. Every one of his literature pieces showed the apple, and he usually started off his voter contacts saying he was “teacher-endorsed.” Visitors to his website even found a giant red apple flying across the screen before seeing the candidate’s picture! Waldstreicher’s apple-carriers earned him a 392-vote victory for the final delegate seat (pending provisional ballot counting).
As for the school board, apple-endorsed Shirley Brandman won 59% of the vote in a 5-way contest for the at-large seat. And apple-endorsed Nancy Navarro won 57% of the vote in a 3-way race for the District 5 seat. If those winning percentages resemble each other, it’s probably not a coincidence.
Of course, each of these races involved other factors besides the Teachers. Voters were clearly tired of development, and that favored Elrich and Trachtenberg. Ervin’s supporters consistently criticized Riemer for his two-year county residency even as they were privately surprised by his fund-raising and hyperactive door-knocking. And the county’s widespread voting machine meltdown may have affected the District 18 statehouse race. But the MCEA’s ballot was the common thread in all these contests. I personally witnessed over a hundred voters reading the Apple while turning away candidate-specific literature from the other volunteers.
So what does the Teachers’ emergence as Montgomery County’s dominant political force mean for the future? With property tax growth slowing down, the next county council will face tough budgetary decisions. Public schools account for half of the county’s budget and would be an obvious location for cuts. But don’t expect any action there: the county’s politicians have learned that those who cross the Teachers Union once are unlikely to be given a second opportunity.
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