Economic storm clouds are gathering for the nation’s economy, and Montgomery County will not be immune to an economic recession. The combination of high debt burdens (consumer, corporate, and government), still too-high inflation, high energy costs and higher interest rates are slowing economic growth to a trickle, and potentially feeding a cycle of yet more (new) government debt needing to be issued, which politicians will claim is needed to “prop up” a stagnant economy.
Meanwhile the massive “public” (federal government) debt weighs on the nation’s future prospects, as interest costs are set to soar over the coming fiscal years. Hard money appears here to stay for a while, and the era of “free” or near-zero interest rate “money” or credit is gone. Servicing (paying interest and principal) all these new debt notes and T-Bills will ultimately mean less money in the federal budget for all the discretionary spending that states like Maryland rely on to prop-up local economies – or fund connected non-profit entities.
We’ve reported on the prior pork in so-called “Omnibus” spending bills in months past that came to Montgomery County. Such federal bacon is going to be harder to find in the near-future, and Maryland faces having a junior Senator in the upper chamber, not a seasoned veteran who knows how to “play the DC game”.
But here at home, in MoCo and the greater DC-MD-VA region, the economic / fiscal storm clouds are also approaching — and it sure seems like the local Montgomery County Council politicians are dithering and ignoring the coming financial problems. Can-kicking, as always. Tweeting about Supreme Court rulings or promoting multi-state marijuana corporate dispensary operators.
The Washington Metro Transit Authority (WMATA) is facing a massive budget gap between expected revenues and expenses. About $750 million, but it could end up being more. The transit agency claims if it receives no new (taxpayer) funding from Maryland, VA or DC or the federal government, it will have to cut service and raise fares dramatically – likely spelling an end to it as a viable transit option for the region. Council President Evan Glass, showing real “leadership”, immediately pointed to the Federal Government and claimed they’d have to “revisit the governing structure and funding allocations to meet the challenges and needs of today.”
What will MoCo government be on the hook to fork over to WMATA? Will everybody in the County be paying to prop up a transit agency that hundreds of thousands of us do not use? Will a new taxing district be instituted in and around metro stations to pay for WMATA’s follies? Or will a new “Independent Transit Authority” be created (with taxing authority), like Ike Leggett desired eight years ago?
The state of Maryland also finds itself with a “structural deficit” and revenue forecasted to be much less then what was anticipated in 2024. This in turn impacts education spending and what comes back from the state to the Maryland counties to patch budget holes related to all this education “blueprinting.”
Per Danielle E Gaines at MarylandMatters.org earlier this year:
The Blueprint for Maryland’s Future Fund, was projected to have a $2.2 billion surplus at the end of Moore’s fiscal year 2024 budget, but would have a near-zero balance in 2026 and run into deficit in 2027. Those gaps are expected to widen now.
Here is a quick translation for what is to come: the state of Maryland government doesn’t have as much money as anticipated by statehouse Democrats, and will expect individual counties to foot the bill – much more – for the ridiculous “Blueprint” mandates they put in place a few sessions back.
Counties like Prince George’s are already feeling that pinch and are having to crack into “rainy day reserves” just to make ends meet in the current fiscal year. This is all predictable and all a result of burdening Maryland counties and school boards with spending mandates and “maintenance of effort” laws from on high, in Annapolis. Instead of one-size fits all, what should be occurring is a true embracing of school choice and educational savings accounts for parents. Dollars following children not funding “more then the prior year” simply to claim a mantle of record “spending”.
So as we can see, these twin issues (transit / metro costs and education funding) are coming to a head for MoCo at a time of economic stagnation for the county – and running to uncle Annapolis or daddy fed government in Washington, DC for ever-more greenbacks isn’t going to work, at least not as much as prior can-kick sessions. Each of those government entities is deeply indebted and facing tough decisions themselves.
It is highly unlikely that the state of Maryland is going to assist Montgomery County government when the time comes, to patch a big budget hole in 2024-25 related to the “Blueprint” for education spending spree. The state will simply point to MoCo being “affluent” compared to other counties and command the MoCo House and Senate Delegation and County Council to come up with the cheddar to feed the bloated education sector.
What will their response be? Will MoCo Councilmembers like Evan Glass actually try and fight for a return of our tax dollars from Annapolis? MoCo currently sends far more to Annapolis then we get back in state spending. Will any of the current politicians really fight for appropriations equaling the size of our county’s contributions to Annapolis? Not likely.
The economic / fiscal storm clouds are gathering but again, the Council wants you distracted by other things.
It would be ideal to have some actual thought diversity on the Council, and some real storm chasers, not political wind chasers and folks who like to travel the globe for a fun time.
