State Budgets and County Sleight of Hands
We are approaching the budget season for county government and as usual, I’ll point out some items of interest as well as things I feel we could do differently.
It’s interesting to see how the state budget cycle works because, as a county, we rely on a lot of state dollars for our local government. The state budget cycle is as follows:
· Budget instructions are sent to state agencies in June of the year preceding the start of the new fiscal year.
· State agencies submit their budget requests to the governor in late August.
· Agency hearings are held from October through November.
· The governor submits his or her proposed budget to the state legislature on the third Wednesday in January.
· Public hearings are held from January through March.
· The legislature typically adopts a budget in April. A simple majority is required to pass a budget. The fiscal year begins July 1.
The county’s fiscal year coincides with that of the state, so as of July 1, we are into our new fiscal year. The interesting point Councilman Billy Shreve and I have brought up repeatedly is that as a council that represents Frederick County, we are losing out on millions of state tax dollars due to the fact we are not represented in Annapolis.
We have requested – for the second year in a row – that the council hire a lobbying firm to represent us in Annapolis.
Now, you may say, hey Delauter, why would you send my tax dollars to a lobbyist in Annapolis, I thought you were a fiscal conservative?
You would be correct in asking that question.
Here’s my answer. If you don’t know the inner workings of Annapolis, you are getting passed by for (your own) tax dollars. The lobbyist we requested to hire would charge $25,000 annually. When I spoke to his firm last year, after we missed the boat, he stated that there was $70,000,000 (yes, seventy-million) in untapped funds that went unappropriated.
I wonder how much funding Frederick County could have tapped into for that $25,000 fee. Everybody who knows me knows I like to gamble, I gamble every day in the construction business, I love to gamble on the craps table, and I will bet anyone, that if we should hire a lobbyist, we would not only recover the $25,000 fee, we would bring back multi millions for Frederick County that is simply our money to begin with. Instead, we are “no shows” in Annapolis. We pay no attention to the timeline as shown above, and when the money is doled out, they pass by Frederick County simply because we have no one representing our interests, and we show up late to the party year after year.
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On to the reactionary issue of the week, impact fees. The county executive is requesting that the council propose a bill on her behalf to raise impact fees. (Just a short note, the council is the branch of this government that proposes legislation, but what is happening with this is that Executive Jan Gardner has written the legislation and is using the council and an extension of her office to propose legislation from the back door. The council is supposed to be a check and balance to the executive, in our case, we are simply an extension of the county executive.)
These impact fees are not going to solve the issue of school funding. We are needing two elementary schools at a proposed cost of $45 million each.
Here’s some information as to why this won’t work, and why it’s "déjà vu all over again." If you go to the Frederick News-Post archives and look up September 2000, you’ll find an article that is very interesting. It’s about what else but, school impact fees and funding.
Then Board of County Commissioners member Jan Gardner (yes, 17 years ago she was in charge then, too) and her board proposed and passed a 300% increase in school impact fees on builders and developers. Guess who was the county manager at the time? None other than Doug Browning. He is quoted in this article saying that the plan calls for 1200 homes per year and with these new fee increases, this will solve all of our school funding problems.
Now I don’t know about you, but I have never seen a 300% increase in any of my annual income, yet the county back in 2000 passed this “solution” that would cure our school funding needs.
It’s funny how we had the same players 17 years ago, proposing the same tired ideas of blaming builders and developers, yet today we have the same problem we had back then; and, to make things worse, these same people are proposing the same solution today as they proposed 17 years ago. Somehow they seem to think they’re going to get a different result?
Wouldn’t a sane person ask this question, if we raised fees 17 years ago by 300%, (and they’ve been raised since) and we still have school funding issues. Isn’t raising fees a solution that doesn’t work?
Back to Doug Browning’s comment in that article about 1200 homes per year to maintain this funding source. The fact is, from 2000–2008 we exceeded the 1200 homes per year and to boot, when the Gardner Board of County Commissioners of 2006 updated the Comprehensive Plan, there synopsis stated that their debt affordability models needed 1500 homes annually on average to maintain the bond-to-revenue ratios for debt affordability.
So, from 2008–2015 we have only averaged 800 homes annually, so we are 50% of what her models predicted and this is evidenced by the fact we have in 2015, 57 fewer Frederick County Public Schools student enrolled than predicted.
Now I’m not a mathematics major, but the numbers would tell me that fees are not the issue, along with the fact that builders and developers are not the issue. Heck, we should be relaxing standards on builders or having a blue light special on building permits so we increase revenue for impact fees. If we use the county executive’s model and increase impact fees themselves, this will not increase revenues. It will actually decrease revenues and stifle an already fragile construction market.
Some other interesting facts are that in the last 10 years over $80 million in fees have been paid by developers for an added student population of 1000, or $80,000 per student. The current Tischer/Bise study for impact fees requested by Executive Gardner, and paid for by the taxpayer, clearly states that a new student costs the county taxpayer $35,000 each.
So, if we’ve taken in $80,000 per student in fees, and a student costs $35,000 each (in today’s dollars) where the hell is all the money? Why are we proposing to raise fees?
I have a theory that explains this gap in revenue. I have proposed to issue RFP’s (request for proposals) to do design/build contracts for the two new elementary schools. I also propose to include a private lease agreement for the school and the maintenance and custodial contracts as well.
My bet (remember I like to gamble) is that the schools can be built for far less than $45 million per, and by including all maintenance and custodial services, we could systematically eliminate FCPS maintenance and custodial employees through attrition thus reducing these costs by making them fixed costs within the long term contract.
My theory is this, and this is where we lose the $50 million gap between fees collected and student costs. We lose it in all of the miscellaneous employees and benefits.
My theory also includes the reason this will never come to fruition until we’re flat broke, is because all of these miscellaneous employees are a huge voting bloc. Who will they vote for, a businessman like me who wants to control costs, or a FCPS employee who was elected to the county council like Jessica Fitzwater or Jerry Donald who will provide them with higher pay and benefits……..with your money.
None of this is rocket science. Just follow the money and you’ll find the answers.
Hopefully I can continue to help expose this while still finding ways to educate our children without breaking the banks of ordinary citizens who call Frederick County home.