The Pittman Payoff
During the 2018 election, Steuart Pittman made a few promises. One promise was “I believe that we can meet our needs with projected revenues.”
Anne Arundel County Executive Steuart Pittman’s first budget includes more police officers and firefighters, a new police helicopter, $46 million additional funding for education and increased income and property taxes that could cost average county taxpayers about $442 a year.
Pittman revealed the $1.7 billion fiscal year 2020 proposal Wednesday during his first budget address. The previous budget totaled about $1.6 billion.
Pittman pitched the budget as righting the ship, restoring funds lost to political decisions to bolster education and public safety funding.
Republican council members viewed the budget as a big tax increase foretelling continued government growth. Democratic council members were supportive but wanted to look at more budget details.
The Pittman budget is a 6% increase in spending in a county already looking for efficiencies.
The new proposed tax rates are 2.81% for the piggy-back income tax (from 2.5%), and 93.5 cents per $100 assessed value for the property tax up from 90.2 cents).
The proposed tax increases are historic. The piggy-back income tax rate has not exceeded 2.6% in recent memory; going to 2.81% puts the income tax rate higher than it has ever been before. There have been discussions about raising the tax for years to fund education, often proposed by unelected bureaucrats or union leaders, but nobody has ever proposed something this profane. The property tax rate increase isn’t much better.
So we’re keeping score, this is a 12.4% increase in the income tax rate and a nearly 4% increase in the property tax rate.
Now Anne Arundel County has a property tax cap. But Pittman and his cronies figured out a way to circumvent the tax cap by using the money for education spending, something that was allowed by a 2012 law. Pittman is going to dedicate a huge chunk of this tax increase to education spending so he can circumvent the voter-imposed tax cap and the will of the people of the county.
None of this should be a surprise to people; the Capital was writing about this back in February. But few people, if any, really expected Pittman to propose tax hikes so massive and so historic.
On top of all of this, Pittman is using a little known provision in the County Charter to spend more money outside of the Capital Budget process.
We have huge school construction needs without the capacity to pay for them, but we have a solution. The Reserve Fund for Permanent Public Improvements, a mechanism to fund large capital projects that would otherwise not fit into the Capital Improvement Plan.
— County Executive Steuart Pittman (@AACoExec) May 1, 2019
According to the Anne Arundel County Charter, the “Reserve Fund for Permanent Public Improvements” is:
Reserve Fund for Permanent Public Improvements. Notwithstanding the provisions of 718(c), above, the Council may establish a Reserve Fund for Permanent Public Improvements, into which there may be paid by the annual budget and appropriation ordinance unexpended fund balances not otherwise appropriated or toward the financing of which taxes or other sources of revenue may be dedicated.
This allows Pittman to issue $250 million in new bonds earmarked for education outside of the normal capital improvement process. Taxpayers, of course, will be on the hook for the interest for these bonds.
Education isn’t the only spending increase proposed by Pittman. He’s proposing hundreds of new firefighters and hundreds of new police officers. It hasn’t gone unnoticed by most that these spending increases match up with the priorities of the major unions that backed Pittman so loudly during the election.
Pittman understands the full nature of what he’s doing. At an event for The 100 Club of Anne Arundel County earlier this week, Pittman talked about how he knows that voters may not be on board with what he wants to do. He talked about how he can always “go back to the farm” if voters reject him in 2022. But he also talked, with the usual liberal pompousness and arrogance, about how county funding mechanisms are like when Anne Arundel was a rural county and as a “Big Five” county that the county needs to bring its tax structure in line with the other major counties.
Not coincidentally, Pittman is thus placing himself in league with Baltimore County Executive Johnny Olszewski and Howard County Executive Calvin Ball who have proposed massive and historic tax increases this year as well.
But let’s not forget the historic nature of the Pittman proposal. By proposing such massive increases in education, Pittman would be setting Anne Arundel County on a glide path for higher taxes in the future. Thanks to the increased spending on schools, Anne Arundel County would never go be able to go back and reduce this spending thanks to the maintenance of effort requirements that force the county to never be able to decrease school spending. That means that in the future when maintenance of effort requirements require additional school spending, county executives will propose a new tax increase that again circumvents the tax cap. Pittman is setting off a vicious cycle that will allow Democrats to circumvent the tax cap in perpetuity.
Pittman might as well just stand up on a stage and give the middle finger to voters.
It’s not hard to see what is happening here. Steuart Pittman, a novice who never expected to win and was swept into office during an anti-Trump temper tantrum, is falling on a political grenade to make sure that the unions that backed him in the election get paid off. You almost have to admire the brazen, self-serving nature of what Pittman is doing, laying bare the fact that elected Democrats are bought and paid for by union interests. But what Pittman is doing is creating an economic environment that will make Anne Arundel County less appealing for business, less appealing to residents, and will set the stage for economic calamity in the future.
What’s just as galling is the fact that Pittman never once considered cutting spending in other areas of the budget to fund his priorities. I find it hard to believe that Pittman could not find $100 million in efficiencies in the budget to do this, especially when you consider that 81% of the Anne Arundel County school budget is directed toward salary and benefits for employees, with only 19% dedicated to classroom instruction. But Pittman never seriously considered spending cuts and spending reallocations to cover these expenses. When Pittman launched his online budget tool in February, his tool only allowed users to increase spending. At no point were users of the tool allowed to propose spending reductions in any department. Pittman may say that he wanted user input into the budget process, but he baked the results in. Pittman didn’t want to hear from county residents who wanted to cut spending; they didn’t fit into his agenda of making sure that his political cronies get paid.
We’ve said in the past that elections have consequences. In this case, the tax-averse residents of Anne Arundel County elected an inexperienced, novice political animal as County Executive who does not respect the voter-imposed tax cap and does not respect the will of the people of this county. This is a vote that the residents of Anne Arundel County likely wish they had back.