| Examiner Coverage |
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Debt in Montgomery County has grown so rapidly in the last decade that the county spends more tax dollars paying it off than it does on the county’s police department. “As the level of debt service grows, it has begun to crowd out spending in the operating budget for many critical services,” County Executive Ike Leggett said in a memo to the County Council on Tuesday. “If debt service were a department today, it would be the second-largest county department — behind only Montgomery County Public Schools.”
Debt service payments are costing the county $296.7 million this fiscal year, nearly 7 percent of the county’s $4.4 billion operating budget, according to data from the County Executive’s Office. The payments have increased more than 54 percent from $192.3 million 10 years ago. Just last year they increased by 11.7 percent.
| Maybe next year |
| The delayed renovations and construction projects include: |
| • Bethesda Metro station south entrance |
| • Montrose Parkway |
| • Montgomery County Public Schools bus depot |
| • Richard Montgomery Elementary School |
| • All high school modernizations |
| • Future middle school modernizations |
The Montgomery County Police Department cost the county about $240 million this fiscal year.
By comparison, Maryland’s debt service payments made up about 2.5 percent of the state’s $34.8 billion fiscal 2012 budget, according to a spokeswoman for Gov. Martin O’Malley.
Cutting the county’s debt obligations would protect Montgomery’s triple-A credit rating, but also mean delaying a number of construction projects and eliminating others altogether, Leggett said. If the county doesn’t want to cut projects, the county must raise more revenue or trim the operating budget.
Those delays were evident in the construction budget recommendations Leggett made Tuesday, with school modernizations and several road projects taking a hit. Improvements to the Bethesda Metro station’s south entrance also were delayed.
The County Council has until mid-February to change the county’s borrowing. Some council members say that now is the wrong time to cut spending and delay construction projects.
“I don’t know if there really is a question that over the long term the debt service is too high. It’s just a question of what is the right time to be cutting back,” said Councilman Hans Riemer, D-at large. “This is not a good time to be cutting back.”
Construction spending creates jobs and spurs the economy, he said, pointing to efforts at the state level to do the same by increasing capital spending.
Since the county already has a triple-A credit rating, reducing the county’s debt will not have a significant impact, according to Jennifer Diercksen, Moody’s lead analyst for the county. Other factors — the county’s tax base, finances and management — also would be considered.
“We did an extraordinary number of other things — quite frankly that the county executive hadn’t proposed — to put us on a fiscally conservative path,” said Council President Roger Berliner, D-Bethesda. “Whether or not this one measure is so vital that we can’t make any changes to it I think is something that we will be looking at.”
