Montgomery County leaders fear that Maryland lawmakers, facing a gaping budget hole, once again will turn to the county’s wealthy residents to prop up the rest of the state with their tax dollars.
Suburban Washington residents on either side of the Potomac River have grown accustomed to subsidizing the rest of Maryland and Virginia.
But now, with both states facing potentially $1 billion budget shortfalls, Montgomery officials worry that the state will again raid their residents’ wallets only a year after the last tax increases targeted wealthy county residents.
Fairfax County officials, however, sound far less worried that the Virginia budget will be balanced on their backs. Some even see a “silver lining” to the state’s financial woes.
Montgomery residents get back a mere 18 cents of every tax dollar they pay into state coffers, according to the latest data available from fiscal 2005, with the rest going to poorer counties and to fund state operations. Baltimore City, by comparison, gets 95 cents back. The state average was 37 cents.
Montgomery County leaders and state legislators acknowledge the rate of return is likely even worse now, because last fall legislators increased income taxes for Marylanders who make more than $150,000, many of whom live in Montgomery County, to help solve a $1.7 billion budget deficit.
State budget officials recently said Maryland again may face as much as a $1 billion deficit for the coming fiscal year, and Montgomery leaders fear the cuts will hit their county hard.
“We’ll probably give more and we’ll probably get less,” said Montgomery County Council President Mike Knapp, who has said the state sees Montgomery as Maryland’s “piggy bank.”
Knapp and some state legislators have complained about the county being shortchanged on school construction funding at the same time it was bearing the burden of income tax increases.
Maryland Gov. Martin O’Malley told Montgomery County Executive Ike Leggett last year to expect $55 million to modernize and build schools. Although Montgomery received more than any other jurisdiction, the county ultimately received only $46 million.
“Montgomery County has done well under the circumstances and conditions,” Leggett said. “No community actually received what it should have received given the deficit last year.”
Fairfax, of comparable population and wealth as its Maryland counterpart, retrieves a scant 19 cents for every dollar its residents send to Richmond, according to the most recent data available from fiscal 2006.
But the Virginia legislature is far more averse to tax increases, and Gov. Tim Kaine has indicated the looming $1 billion shortfall, predominantly caused by slowing payroll and sales taxes, will be closed through more deep spending cuts.
Because Fairfax already receives so little from the state, those cuts will hit the county proportionally less than in poor counties that predominantly rely on state aid, officials hope.
Democratic Supervisor Sharon Bulova, the county’s budget chairwoman, calls this “the good news and the bad news.”
Pat Herrity, a Republican who represents the Springfield District, nevertheless worries that the legislature will attempt to transfer more fiscal burden onto Fairfax through unfunded mandates.
Local leaders in Montgomery County are especially worried that the state may stop contributing to teacher retirement funds, which could stick the county with an extra $217 million if Montgomery government has to foot the entire bill.
Montgomery County has the state’s largest delegation in the General Assembly, but few in the powerful positions necessary to influence Maryland’s purse strings. O’Malley is a former mayor of Baltimore City, Senate President Thomas V. Mike Miller represents Prince George’s and Calvert counties, and House Speaker Michael Busch hails from Anne Arundel County.
State Sen. Rona Kramer, a vocal opponent of O’Malley’s tax increases on the wealthy, says she thinks most Montgomery residents are in the dark about what happens in Annapolis.
“Until Montgomery County residents recognize what is happening, their legislators will not feel their feet are being held to the fire and they need to bring that money back home from Annapolis,” Kramer said.
O’Malley spokesman Shaun Adamec said, “It is an understandable frustration, but in the end taxes pay for schools, roads, police — services we all benefit from on the larger level.”
Knapp said he saw a “historical gap” — meaning Maryland leaders and residents are accustomed to Baltimore City being the epicenter of influence and population, but have yet to realize that Montgomery County has the largest population in the state.
“I think that is where the political test comes in,” Knapp said. “Are we willing to have that conversation: Prince George’s County has about 900,000 people, Montgomery has nearly a million, while Baltimore City is hovering around 600,000 — do we capitalize on that?”
