Leggett Proposes Property Tax Increase In Bid to Increase Education Spending

Increase would mean $324 hike in property taxes next fiscal year for the average county homeowner; could require unanimous support of County Council


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County Executive Ike Leggett (file photo)

Aaron Kraut

Updated at 12:30 p.m. - County Executive Ike Leggett on Tuesday recommended the county’s largest property tax increase since 2009 in an effort to cut class sizes and the achievement gap in the county’s school system and to replace income tax revenue lost because of last year’s Supreme Court decision in the Wynne Case.

In his recommended $5.27 billion fiscal year 2017 operating budget released Tuesday, Leggett called for a property tax increase of 3.94 cents per $100 of assessed value, a new rate that would go into effect July 1 and that would cost the average county homeowner about $27 more per month. The average home value in Montgomery County is about $460,000.

The 8.6 percent tax increase surpasses the maximum rate allowed under the county’s charter, meaning it could require support from all nine members of the County Council for final approval.

Leggett said his requested property tax increase could be lower if the county’s delegation to Annapolis is successful in enacting a bill this legislative session to allow a longer repayment period for the county’s income tax obligations resulting from the decision in the Wynne Case, the Supreme Court case the state lost last May.

The court ruled Maryland must provide a credit on the county portion of state income tax for those who pay taxes on out-of-state earnings. Leggett estimated the county would be short $50 million in income tax revenue during fiscal year 2017 if the bill doesn’t succeed.

Leggett and council President Nancy Floreen said they met with members of the county’s delegation Friday about the bill.

“That $50 million, we may not have to pay it all this year. But if so, the tax I have suggested should cover that,” Leggett said Tuesday morning while presenting the budget to council members in Rockville. “The problem is I have to submit the budget to you today. We don’t know whether or not the General Assembly will act this year. They may or may not, but that’s still out there.”

While Leggett will push for unanimous council support for the property tax increase as his first option, county spokesperson Patrick Lacefield said the county also could use 2012 state legislation that provided for an exception to a county’s rules for “above-the-cap” tax increases if those tax revenues are dedicated to education.

Prince George’s County Executive Rushern Baker used the law in his unsuccessful bid last year for a tax increase. County attorneys have said Montgomery County could use the exception to try for approval of the property tax increase with a simple majority vote.

Leggett recommended spending $2.45 billion on the Montgomery County Public Schools (MCPS), a 6.2 percent increase from the current fiscal year. The amount is about $45 million short of the Board of Education’s full request, but $89.3 million over the minimum required under the state’s maintenance of effort law.

It would be the first time the county significantly increases education funding on a per-pupil basis since 2008, resulting in a funding commitment council Education Committee Chairman Craig Rice said “answers the call of what our community, and our teachers quite frankly, have been saying for quite a long time.”

"The county executive’s budget is a great start and a true recognition of the needs our students have," read a statement from Board of Education President Michael Durso and Interim Superintendent Larry Bowers. "We understand Mr. Leggett’s budget recommendation is based on an increase in the property tax rate and we urge all of the County Council members to support this recommendation. Investing in education is an investment in the future of this county. Without this investment, we will not be able to make the progress that Mr. Leggett has advocated for and our parents and staff have demanded. Our community has always placed a high priority on education and we believe they will support this new investment.”

Still, Leggett and some council members discussed whether the Board of Education would spend too much of that $2.45 billion on teacher and staff salaries, as opposed to adding teachers to reduce class sizes or programs targeting the longstanding achievement gap.

Almost $27 million of Interim Superintendent Larry Bowers’ requested budget would be devoted to an increase in health care and retirement costs for employees and $55.3 million would go toward teacher and staff salary increases negotiated with the county’s teachers unions.

“[Bowers’] budget really offered very little in terms of addressing class sizes and the achievement gap. It mostly goes toward negotiated obligations, contract negotiations,” Floreen said after Leggett’s presentation. “That’s the challenge we’ll be taking up and as I said, we have limited ability to address how the board allocates its money.”

During budget forums around the county in the last few months, many residents advocated for a significant increase in school funding to address class sizes, which rose by one student in some schools this school year because of staffing allocation cuts.

“Although teachers have suggested additional teachers and support, many of them have not given up on some portion of those raises,” Leggett responded. “They’re going to have to figure out how do they balance that within the allocation they have.”

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