Adam Pagnucco at The Seventh State recently wrote about Montgomery County’s spending during the pandemic, arguing that the county needs to balance the budget. His alternative was to threaten a tax hike. It seems unlikely the federal government will send more funds to state and local governments under another stimulus program. The situation is a lot more nuanced than that, and direr if the county cuts or stops spending to help residents during a pandemic in which the federal government has been unable and unwilling to offer relief.
First, let’s get taxes out of the way. Montgomery County has one of the lowest real, personal, and utility tax rates in the entire state. Only a handful of counties have lower tax rates than Montgomery County. We happen to live in one of the wealthiest counties in the entire country, with five billionaires that made the Forbes’ 400 richest American’s list in 2019. Five. Billionaires. Let’s put billions into perspective though. It’s a hard number to grasp because it’s so much larger than anything most Americans will have access to. 10,000 seconds is about one-tenth of an entire day. 100,000 seconds is a little over one day. 1,000,000 is about 11 days. 1,000,000,000 seconds is…a little over 31 years.
Let’s also consider that Montgomery County has the most households in Maryland and the highest median household income per capita in Maryland, according to the 2010 U.S. Census and the 2010-2014 American Community Survey.
So Montgomery County has the most households and is one of the wealthiest counties in the entire country (and coincidentally also in Maryland) but also has one of the lowest tax rates in the state.
Residents in crisis
There are around 130,000 rental units in Montgomery County and 15% of them haven’t been able to pay full rent during the pandemic. The Department of Housing and Community Affairs estimates that landlords are losing around $35 million a month in rent. Now, I’m not a huge fan of landlords, but this sounds pretty bad. In fact, a looming eviction crisis would absolutely devastate the economy in Montgomery County. We would lose 22,000 residents and any taxes that they pay. The only good thing that would come of it would be lower rents for those that could afford to stay (maybe). We can also assume that if these folks can’t pay rent, they can’t pay utilities.
In addition to housing, many residents are struggling to buy necessities, including food. We’ve all seen pictures of endless lines of cars while they wait for grocery distribution at one of the distribution points in the county.
Students enrolled at MCPS and their families are having a hard time accessing school-provided lunches. Parents have to go back to work because no one can afford extended shutdowns when the federal government can’t function. Students have to spend time managing the household while their parents are working.
Taxes aren’t the bogeyman
Taxes pay for services that residents use daily. Utilities, roads, first responder services, police, traffic lights, public transportation, schools, libraries, etc. They also are used to pay for emergency services that residents have needed during the pandemic. Without these services, the county would ultimately be in a much worse situation. Imagine having one of the lowest tax rates in the state but not the tax base to maintain it. We are already in a precarious situation, banking on continual population growth to maintain the tax revenue needed to fund county services. What happens if mass evictions take place once the eviction moratorium ends? If residents can’t pay rent, they certainly won’t be able to pay any back rent once the pandemic ends. Where are they going to go? Montgomery County is one of the most expensive places to live in the entire DMV. They won’t stay here. Montgomery County doesn’t have enough housing, let alone affordable housing.
Fewer taxes means more potholes, fewer first responders, fewer new books at libraries, more classrooms being overcrowded, aging infrastructure that can’t be replaced, fewer health and mental health services, slower public transportation. When people talk about “balancing budgets” and threaten tax hikes, they never consider the impact it will have on everyday services for everyday people. During non-pandemic times, we never had enough money or will to fund services that middle and low-income residents needed to stay afloat. Now that we have a pandemic and a looming financial and housing crisis, we need more government spending, not less. This is precisely the time for a tax hike. Don’t be fooled by people who claim austerity is the way to go. We don’t need a balanced budget, we need to help our residents survive a pandemic.
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