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Montgomery County tries to spend big during lean years

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Local,Maryland,Kate Jacobson,Montgomery County

Montgomery County Executive Ike Leggett's deal to give 5,000 government employees pay raises of 13.5 percent is raising questions about the cash-strapped county's pattern of big-ticket proposals without money to fund them.

The raises would cost the county $11 million in the first year.

"What has happened to being prudent and being cautious?" asked Joan Fidler, president of the Montgomery County Taxpayers League. "This is going to mortgage our future. I'm not sure where he's coming from. What services is he going to cut?"

The county is facing a $134 million budget gap without the raise, the latest in a series of shortfalls since the recession started in 2007 -- the worst being a gap of almost $1 billion in fiscal 2011.

Leggett has laid off more than 1,000 employees, furloughed workers, and slashed funding for libraries, transportation and recreation.

He has raised property, energy and phone taxes, while the equally cash-strapped Maryland raised income, sales, alcohol and smoking taxes. The county increased parking fees, Ride On fares and parking tickets, as well.

But during these lean years, the county has surged ahead with grand plans for the $2.1 billion Purple Line, pushing the state in 2008 to build a 16-mile light rail system between New Carrollton and Bethesda instead of a cheaper rapid bus line. Last year, a task force appointed by Leggett proposed a 160-mile bus rapid transit that could cost as much as $10 billion, suggesting a 15 percent property tax increase to pay for it.

Antony Davies, an associate professor of economics at Duquesne University, said Montgomery County's approach isn't working: Raising taxes and creating new revenue streams is not the answer to closing deficits -- reducing spending is.

"County governments have to look most to cutting spending," he said. "If you keep increasing taxes, you're going to get people moving out of the area. If you get a gas tax, people will just cross the county line. Raising revenue is rarely an option."

Leggett has scaled back the BRT plans, admitting they are too costly. And county officials chose rapid bus for the Corridor Cities Transitway along Interstate 270 instead of a more expensive light rail line.

But Leggett defended his large-scale plans, saying planning projects represent a sliver of the $4 billion fiscal 2014 budget he will present next month. They're not pie-in-the-sky ideas, and without planning, the county wouldn't know if such projects are feasible.

He pointed out that he has been austere compared to predecessor Doug Duncan, who plans to run for county executive and who increased government spending 42 percent during his tenure in the economically robust early 2000s.

Leggett said he promises not to raise taxes in the budget, although he would not say how he plans to fund the pay raises. The contract is 1 percent more than what he had estimated for wages, he said, and employees deserve a raise after four years without any -- though they received $2,000 bonuses last year.

"I don't see that there will be much objection to this," he said.

But the teachers union, which got a 3.4 percent raise last year, is looking to use the contract as leverage for more money. And schools Superintendent Joshua Starr wants $10 million more than required under Maryland law.

County Council members, who say they were surprised by the contract agreement, are questioning such big raises.

Councilman Phil Andrews, D-Gaithersburg/Rockville, called the deal "excessive, unsustainable and irresponsible," adding it could cost $40 million in the next three years.

"If [Leggett's] earlier indications about the budget are true, the money to pay for these pay increases will directly compete with funding for important services," said Andrews, who plans to run for county executive, possibly against Leggett if he decides to seek a third term.

kjacobson@washingtonexaminer.com

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