For Immediate Release: Tuesday, May 7, 2024

Montgomery County Executive Marc Elrich delivered his fourth "State of the County" address at the Executive Office Building in Rockville on Thursday, May 2. In his address, County Executive Elrich said Montgomery County has emerged from the COVID-19 pandemic in a strong position, saying, "We're not just recovering from the pandemic; we're seizing this moment to drive forward a more responsive and resilient government."

The County Executive shared his administration's progress and success in supporting education, creating economic development opportunities and creating jobs; investing in technology, programs and staffing efforts to enhance public safety efforts; producing, preserving and protecting affordable housing; being a national leader in combatting climate change and the need to for comprehensive tax structure and tax reform to address growing infrastructure and service needs.

The video of the State of the County event can be viewed here.

This was the County Executive's first "State of the County" address since 2022.

"When I took office as your County Executive back in December 2018, I believed we needed to transform our government into a more inclusive and effective institution. Little did we know the challenges that were ahead, especially the global pandemic that turned everything upside down," said County Executive Elrich. "But you know what? Those difficulties only strengthened our resolve to innovate and adapt our services to meet the evolving needs of our community. Our initial struggles with COVID-19 pointed to the need to work more with our community partners who had a deeper reach in their communities than our government agencies did. We prioritized community engagement, enhancing our outreach through weekly media briefings. We expanded our budget forums and added multi-lingual sessions. Our approach has become more bottom-up, valuing the lived experiences of our residents and seeking more input from stakeholders to improve our services. As a result, we've cut through bureaucratic red tape, embraced technology, and most importantly, kept our focus on the human aspect of governance. We're not just recovering from the pandemic; we're seizing this moment to drive forward a more responsive and resilient government."

The County Executive discussed the need for tax reform. He said that Montgomery County has the lowest taxes on commercial property in the region.

"In Fairfax, commercial property tax rates are 20 percent higher. In one part of Fairfax-Tysons-they are about 50 percent higher than here. In Washington, D.C., the commercial property tax is even higher," said County Executive Elrich. "In Virginia, those special taxes are used only to fund transportation. Those additional revenues have allowed them to build transportation infrastructure, including the Silver Line. Commercial property owners supported the implementation of higher taxes there because they realized that those investments are good for business."

He also talked about a more progressive taxing system where a few might pay more, but the many would see reduced or no change in taxes, saying, "We can learn from our neighbors and better target our taxing structure in a way that makes economic and quality of life sense."

In his address, County Executive Elrich highlighted:

• Investing in Montgomery County Public Schools (MCPS) with the largest recommended budget increase in MCPS history without a tax increase.
• Expressing concerns about long-term bonding capacity for MCPS capital projects.
• The Montgomery County Police Department's "Drone as First Responder Program" in Silver Spring and Wheaton and the program's expansion to Germantown and Bethesda. Montgomery is the largest police department in the country using this program.
• Increasing the number of crisis response teams that can intervene in situations that do not require a police officer, freeing up officers to deal with more critical issues.
• $169.4 million in recommended Fiscal Year 2025 funding to expand housing preservation and production for the most economically burdened residents.
• Combating climate change initiatives like improving the energy performance of almost 2,000 buildings, transitioning the County bus fleet to solar-powered electric and green hydrogen, planting trees, supporting urban gardens, and protecting the nationally renowned Agricultural Reserve.
• Promoting equity by embarking on partnerships working on projects like the repair of the historic Black Church of Scotland, building a new community in Emory Grove to rebuild one that was displaced by Urban Renewal and restoring Lincoln High School, the oldest high school for Black residents of the County during the segregation period that lasted through the 1950s.
• The need to reform the County's tax structure, de-coupling commercial/residential taxes and advocating for a more progressive and equitable State income tax rate.

Below is the full transcript of the speech.

COUNTY EXECUTIVE MARC ELRICH'S 2024 STATE OF THE COUNTY ADDRESS

I want to start by first of all thanking my family who has endured my ridiculous schedule for a long time not just my executive years but my Council years and so it is nice when people can manage to be there even when you're not always there and it's been it's been definitely helpful to me. I want to thank everybody on our dedicated staff, the department directors, everybody who serves on a Board or Commission because you all work tirelessly behind the scenes and I appreciate each and every one of you and I want to thank every legislator, business leader nonprofit organization, government employee in this County. Thank you for your commitment to Montgomery County.

And I want to especially say something about my employees. We know we get credit when we do a program and people say this is a great program--you really do great things. I don't do any of that and neither does any Councilmember we either write a law or I implement a law, but the work is done by the people who work for this County and if they didn't do this work, it wouldn't be done and if they didn't do it well people wouldn't appreciate it. So, I want to especially thank our employees and we're all in this together and your partnership is invaluable.

So, when I took office as County Executive back in 2018, I believed we needed to transform our government into a more inclusive and effective institution little did we know that there were challenges ahead especially the global pandemic that kind of turned everything upside down but you know those difficulties only strengthened our resolve to innovate and adapt our services to meet the evolving needs of our community. In my mind, it's the only good thing that came out of the pandemic because it made us realize that in order to reach our community better, we had to change our approach and who we worked with within the community. Our initial struggles with COVID-19 pointed to the need to work more with our partners who had a deeper reach than we did. You know to a lot of immigrant communities in the country, when the government says I'm here to help, this does not come in words, and on the other hand people who have authentic relationships with the community could carry messages deeper and further than we could and they were more trusted so we managed to pivot how we did a lot of our work we prioritized community engagement, enhanced our outreach and we started these weekly media briefings.

I mean, the benefit was that people heard these briefings and because we talked about it people understood that we knew what we were dealing with we didn't have a solution until there were tests and vaccines but we at least could tell people what you needed to do to say stay safe and I will say and I'm damn proud of it.

We were the safest place pretty much east of California. I used to track the New York Times death rate and case rates. We consistently had the lowest rates in the country outside of a couple of places in California and, I think, one place in Arizona. Nothing east of the Mississippi could do or did do what we were doing, and I'm really proud of that.

I think it really did make a huge difference and I think our ability to talk to people every week gave them some level of comfort that they weren't going through this alone and that we were going to do everything we could do to manage this differently.

We expanded our budget forums. When I came into office, budget forums were done after the budget was done, so we solicited community input after departments had put together their budget. We flipped it and we did our budget forums before we developed the budget.

Our approach has become more bottom-up and valuing more the lived experiences of our residents and seeking more input from stakeholders to improve our services, as a result we've cut through bureaucratic red tape, embraced technology, and more importantly kept our focus on the human aspect of government. We're not just recovering from the pandemic we're seizing this moment to drive forward a more responsive government.

So, let's start by talking about numbers. I like numbers. Sometimes my staff criticizes me for numbers, but I like numbers. Our fiscal management has been rock solid in this County and it's paying off.

The County's target of 10 percent reserves had never, the operative word been achieved before my administration. But we hit 10 percent in our second year and have continued to stay above that requirement ever since. We're projecting $957 million in reserves, over 15 percent of our budget by the end of FY 24, and that's a testament to our prudent financial strategies.

Just because money comes in didn't mean we went out and spent it immediately and so we've been very careful with what we do with our resources. This achievement allows us to continue investing in critical education areas, public safety and affordable housing, without compromising our progressive values. I'm not afraid to use the word progressive. I am a progressive and being progressive is a good thing.

When it comes to education, we're promoting a significant increase in funding for Montgomery County Public Schools. Our kids and our educators need the resources to succeed and that's exactly what we're going to provide.

In public safety, we're taking a holistic approach focusing on prevention and support for mental health, as well as improving our enforcement abilities.

And on the affordable housing front, we're making historic investments and we recognize the essential role of affordable housing in the stability and well-being of our communities.

As a teacher, this really comes home because when you're low-income and you have to move every time the rent goes up, you're changing schools, you're changing teachers and you're changing your community. Maybe adults can manage that because their community is bigger than just the school, but for kids is a whole new set of students next to them. It is really challenging for people.

Our efforts include expanding partnerships with nonprofits to preserve existing affordable housing units, producing new affordable units, and initiating new programs and innovative programs to protect tenants from displacement.

Our libraries continue to provide a wide array of material resources in programming including the popular MoComCon, anybody know what that is like a comic book convention, Vinyl Day, which I went to, Contemporary Conversations and hundreds of programs for children and caregivers, and in this fiscal year residents have borrowed or accessed more than 10,300,000 items. That's a lot of access.

Our Recreation Department hosts out-of-school time programs and camps, swimming and sports classes, as well as serving our seniors and other residents with classes, music, and pickleball tournaments. Who hasn't tried it yet? You've all done it. And being the lead on Maryland Senior Olympics and more.

And we're responding to our public health challenges. We're tackling the increase in youth use of fentanyl with partners focusing on prevention, harm reduction and treatment. Early numbers from 2024 show decreases in youth overdoses compared to this time last year, but it's way too early to declare victory. There are new drugs out there and I think, are going to be in the thick of this for a while.

Our most recent point-in-time study for homelessness showed an increase in the number of homeless but a decrease in the number of unsheltered, meaning there were fewer people living on the street. We appreciate the work of our shelters and motel programs that temporarily house people. We've got to work to make homelessness rare, brief and one-time only.

And I'd like to thank you. I'd like to think that one reason there are more people in shelters than there were before is because of the shelter we actually built in the middle of the pandemic. A 200-bed shelter to help deal with getting people off the street and putting them in a place where they would be safe. We had no plan for it. It was not in the budget but we realized we had to do something.

In the summer, I asked them, what are you going to do when we put the homeless people back on the street? What are we going to do when we open up our recreation centers? That's where we were housing some homeless people. I was told, well back on the street and I said no. So I directed DGS to find a building, renovate the building, and create a shelter. And they did and I got to give David Dics a lot of credit. If not for WSSC and Washington Gas people would have been in there less than six months after they actually started work on that building.

So, I'm really proud of what they did and it made a big difference in our community. The COVID-19 deaths were virtually non-existent in the homeless population compared to other jurisdictions where they had no controls over it.

We continue to expand our dental and mobile health programs including outreach to rural areas like Poolesville. And for any of you who think Poolesville is this just luxurious rural community, it has one of the most alarming statistics on disparities and I know a lot of people did a double take when they saw those numbers when Poolesville shows up as a red zone for most people. It was like what? It's real and we're working on it.

As we tackle these issues, we remain dedicated to advancing racial equity and social justice and every policy, every policy decision that we make is evaluated through this lens, ensuring that we build a fair and more inclusive Montgomery County for all. Our budgets are analyzed for their equity impact. Departments are rated on how they explain their projects in terms of equity impact and it helps us make decisions.

We all know the global pandemic has laid bare the inequities within our society exposing harsh realities faced by far too many of our neighbors and we continue to navigate after this crisis.

We're committed to investing in the social safety net programs that provide a lifeline to those in need.

COVID-19 may be over, but the social problems did not end with COVID-19. It unveiled them, it did not create them and the problems that were there before are here now and we're going to continue to deal with them.

We're also committed to supporting local businesses which were central to the creation of a Business Center which provides services and outreach to our County's businesses. When I was on the County Council and they created The Economic Development Corporation, all of the local business stuff got dismantled. When I came into office, we started putting back the pieces and today we have a functioning Business Center that aids businesses all over the County and we're continuing to extend its reach.

Additionally, in our area of procurement we have a record 31 percent of County government procurement, over $350 million, is now going to local companies. We've increased transparency. You can see where contracts are and last year over 50 percent of our vendors were first time and that's the sign that one of my goals was to break up the old boy's network. Extra access to things.

When 50 percent of the vendors are new, you've made a dent in it and a pretty big dent. And I'm really proud of that. There is important work to do and I want to thank Ash, who's the head of our Procurement Department. You have driven this stuff with a passion and I really appreciate it.

And we're proud of many of the innovative companies across all sectors choosing to call Montgomery County home, including graduates from our County Innovation Centers like Arcellex and Deka Bio as well as other leaders in biotech like AstraZeneca, Qiagen, RegenXBio, and United Therapeutics to name just a few. And they're solidifying Montgomery County's reputation as a hub for innovation and growth. Montgomery County anchors the third largest biohub in the country.

I want to acknowledge Avi Halpert from United Therapeutics who is here with us tonight. Thank you for investing and staying in Silver Spring in Montgomery County and for doing the amazing work you do. The technologies that they have developed there are literally life-changing and life extending and it's amazing to see what they're doing.

Our collaboration with the University of Maryland on the Institute for Health Computing in North Bethesda aims to support the ecosystem of this work. The Institute will bring graduate-level research for the first time to Montgomery County to bolster our thriving life sciences industry, and it promises to facilitate groundbreaking research and collaboration with the private sector. They're already attracting partners who recognize the significance of the work they're doing, and it is pretty amazing.

INVESTING IN EDUCATION

The most important investment we can make is in our children and our students. As a former student of Montgomery County Schools, not always an angel, a former teacher in our schools, a former parent of former students in our schools, now a grandparent of children in our schools, as a community organizer who worked early on to keep schools open to keep the school system from shrinking the base of schools because apparently the population had decreased. They forgot that young people get older and reproduce and then if you get rid of the schools you got no place to put the kids. I worked on issues like that and I've been a lifelong advocate for investing in a robust public education system.

I'm proud that the recommended budget includes a substantial increase in funding Montgomery County Public Schools (MCPS). If approved, this budget will mark the third largest increase ever allocated to MCPS, totaling $107 million. This is the largest increase they ever had that didn't require a tax increase. there's no tax increase in this budget. Our recommended budget exceeds the state maintenance of effort requirement by $132 million.

We've proposed a way to fully fund the school budget and this is the discussion the Council's had but there's a way to fund this without the need to increase class sizes, without cutting programs, without raising taxes, and we can even avoid going into the reserves. I'm happy the education committee voted to make sure there was $49 million more for the schools. I hope they look at the resources we've identified.

We have a tough choice to make here but the cost of funding all of the existing programs would be a serious blow to many of the programs we have in the county. We've had many productive conversations with the Council over the last few weeks and I hope they see the flexibility that this program offers.

As happy as I am about what we could fund, the schools have a broader resource issue and then they're getting fewer dollars today than they got 12 years ago. When you adjust for inflation, rising costs and inflation have left us funding education almost 20 percent less than we did in 2012 and that's not a good thing, When people say schools aren't like they used to be, if you fund them at 20 percent less there's probably something you're not doing now that you were doing then.

I saw the impacts of this firsthand in an earlier round of cutting when I was a school teacher. When I started teaching, I had an aide. I was teaching in one of the most impacted schools in the County. I had an aide for almost my entire day. When I stopped teaching in 2006 they had reduced the aide time at our school, reduced the hours of their job and I had a choice of 45 minutes for English or for Math and the problem was my kids needed it for both. They didn't get it and it's not right.

On school construction, our bonds capacity limit is strangling us. We've been limiting our bonding capacity to $200 million a year for more than six years. I think you all know about inflation. It means that $280 million is buying less and less every year. In 2017, the amount we spent would require almost a 35 percent increase, and what you need to bond today in order to build the same things. Another way of saying this is for the same $280 million, you're buying a lot less than you could have gotten six and seven years ago.

We need to modernize our approach to bond funding, and I want to point out that Governor Moore led the effort in the state to raise the State's bond cap by 50 percent because you can't build the things you need to move forward. If you're not willing to fund them you don't get stuff without doing stuff.

Education is our greatest asset and we can't underinvest it. It's not going to turn out well. When I was on the Council we were spending $340 million a year on capital projects. That's $60 million more than we're spending today over six years, $360 million more dollars going into projects not just schools, going into roads and going into bridges and going into transit and it's having an effect on everything.

It's having an effect on developers whose projects aren't being built because the infrastructure they need is not being built. As I talked to one of them the other day there is no way we could have put the project in the budget that he wanted without taking other things out of the budget like schools and libraries. We simply can't do what we did before and I hope that's another thing that we can actually look at our declining resources are self-inflicted wound.

Nobody did this to us but ourselves. I remain ready to work with the Council to meet our construction needs and it's affecting, like I said, not only schools but other things. It's something we've got to come to terms with.

I share the concerns of many on the Council about transparency and the efficacy of the school budget. It's been lacking in accountability. I testified in Annapolis in favor of laws that would increase the accountability of the school board because we are in the dark about how money is spent and where money goes.

It is not good to operate that way. Their budgets are the most opaque that anybody produces and it's just not acceptable in this day and age. It's really a challenge. I'll just say that, you know, we've looked at areas where you can reduce spending.

I know enough about schools to have meaningful discussions about it. I've identified some places where you could save money but the truth is all the money we would save would not close the gap in spending that we're facing right now. It's just not enough of it there.

Most of the money in that budget, 90 percent of it or something, goes to pay teachers. You can't get rid of the teachers so everything else is, you know, administrators. You know, an unnecessary consultant here and there, but if you got rid of all the unnecessary consultants, you're not solving the budget problem either, so I think we need to face up to what we need to do.

I've never wavered in my belief that the thousands of incredibly dedicated professionals in our school system are consistently caring and attentive to the children, young adults and families they serve. I firmly believe that Montgomery County's success hinges on our school success.

We sell this all the time. People tell us they're coming here because of our schools. We even have advantages over Fairfax County in our schools, that's why we have to make sure we're providing your educational institutions with the resources they need to thrive and excel. You don't automatically stay on top.

Because you rise to the top once doesn't mean you stay there. If you rose because you made smart investments and understood what you're doing, you need to be willing to stay on that path otherwise people will catch you.

ENSURING PUBLIC SAFETY

I want to talk about Public Safety and reassure people that we're taking a comprehensive approach in Montgomery County. Like many other areas in the country, we've seen increased concerns about juvenile crime, drug overdoses and fatalities. We've also experienced the serious drop in the recruitment of police officers while retirements accelerate. Despite the challenges, we continue to focus on prevention and support for mental health.

I just want to diverge here for a second to say I'm really glad Governor Moore actually vetoed the bill in the house. It is not the time to figure out how to incarcerate children. Yes, we've got a problem with young people but if young people are failing to thrive it's because we have failed to nourish them.

I saw this as a teacher when a kid comes to school hungry in the morning they're not learning, they're sitting in the chair crying and they don't want anybody to see them crying because they don't want to tell anybody that they're hungry. That's a real thing that happens in Montgomery County when your parents are moving every year if they're moving more than every year because they can't pay the rent, their whole lives are unstable, and because we know that money is one of the largest issues that parents fight about in families kids are exposed to this kind of fighting over money that just further destabilizes their view of themselves in the world.

So, yes, we have to deal with youth crime, but we've got to help them. We've got to get them into facilities where they get help. We've got to be able to do that without giving them a criminal record to put them there.

I will say a criminal record is a life sentence. You get a criminal record; you're not getting the job, and you may not ever be able to rent an apartment. You are going to be locked out of any legitimate way to make a living and raise a family. I don't have to tell you what the alternative is.

As far as other public safety stuff goes, we've increased the use of our cameras--both stationary and on vehicles to more quickly identify stolen vehicles because we know stolen vehicles are often used to immediately commit a crime because it's not traceable back to the people doing the crime.

We've introduced the drone as first responder program in Silver Spring and Wheaton and we're expanding it to Germantown and Bethesda in this budget and if things go well in the fall we may try to expand it to a couple of other jurisdictions that need it in Montgomery County. We need more of this, it works, it is helping our police officers catch people and that's a good thing.

Our budget increases the number of crisis response teams. I know this is a priority of myself and the County Council. We're trying to get more people on the scene of crimes who aren't police and a lot of people, like homeless people, are having a bad day and don't need to see a police officer. They need to see somebody who can help them with mental health issues.

At the core of any improvements that we need to fill police vacancies, which keep us short-staffed and impair our ability to be proactive. Time and time again, people say can't we get more police down here? Why can't you get more police down here?

We are almost 170 officers short. People are going out with minimum staffing. I did a ride-along. Minimum staffing was 10, good staffing was 14. I went out with nine. We can't even fill the people we need to cover the County right now.

We have to and we are making an extreme effort to recruit more officers and bring them in. So some of the things we're doing to recruit, we are using a recruiting firm that we retained to increase the populations we are recruiting from. Fairfax County used it last year and was able to get more recruits, far more than we were able to get. We're hoping it can do the same for us.

We're changing the prohibition on marijuana use, which is a tad unrealistic right now because right now, past use would bar somebody from becoming a police officer. That's really tough on young people to have them barred from being a police officer over because of that.

We're also revising a County policy that keeps us from rehiring retired employees and who we believe can be recruited for Public Safety jobs that could free up our officers and put those healthy officers on the street. Our retired officers do these other jobs that sit behind the desk. It's another way for us to help fill the gap. I believe with all these efforts we're going to be back on track to staff this department. It's not going to happen in a year. I'm guessing two years at best, maybe three years, but we're going to get this done because we cannot operate with this few police officers.

I think the approach we've taken to paying benefits again, thanks to the council for supporting this, has helped us overcome some of the antipathy that we find in that department toward the County government, and hopefully, we can do more to make them feel that we're actually trusted partners. I want to acknowledge and appreciate the folks on our police force.

Recently, I was at a celebration of officers who had committed extraordinary acts of bravery or heroism, and I think there were about 30 people there, and it was really nice. But, I want to mention one particular case.

Last fall I got awakened to this terrible news that a police officer had actually been deliberately struck by a reckless speeder who was a serial speeder, known to the police department who they could never catch because we don't do high-speed chases because you lead to accidents. It was horrifying that someone would use a car as a weapon to try to murder a police officer.

Fortunately, injured officer Sergeant Pat Kepp survived the attack, and since then, while working on his physical recovery, he's also helped us in Annapolis to advocate for stricter penalties for serial reckless drivers.

You should not be able to drive like a lunatic at outrageous speeds and go free because we can't chase you. There's got to be a way. There's got to be a way to stop this. It's not fair to the innocent people who get killed when these lunatics create accidents and so hopefully next session we'll get everything we asked for. We didn't get quite everything this time.

Our fire department continues to excel in their duties as demonstrated by the recent deployment of our urban search and rescue team to Hawaii where they played a crucial role in the search for victims and we thank them for their tireless work. They are very highly regarded.

And we also restored the Department of Correction and Rehabilitation's baking program which I asked for years and years and years. I asked for it despite the fact that I can't eat carbs so I will have to teach them recipes that use almond flour instead of regular flour, but that said, I'm really excited to have this program back because the history before the program was dismantled was that these people could get jobs and they were getting real jobs as bakers and chefs in other places and it's in the outside world and what you need for people in jail is a path to re-entry.

If there is no entry, there is no recovery and this was one of those programs that provided re-entry. So, I was really, really proud of everything they did and we're giving them the tools they need to resist recidivism and to successfully integrate into this society. I want to thank our jail system.

You know, I'm, like I said, very progressive. I never thought I'd be talking about what a great jail we have. We have a great jail. We have a facility where the purpose is to return people to society better than when they came in and with more tools and able to be able to succeed. I have seen other jails in this state that don't do that we do and I'm proud of the work they do in our jail.

PRODUCING, PROTECTING & PRESERVING AFFORDABLE HOUSING

I want to switch now to talk about one of my favorite topics, affordable housing. We've doubled down on our efforts to produce and preserve affordable housing and the total public funds we allocated last year for both preservation and production; 70 percent of the units are dedicated to affordability. This is an extraordinarily high level that we were able to get because of the money that we put into the projects.

However, for production alone, the landscape presents challenges. Notably, the soaring costs associated with new housing construction resulting in only 33 percent of construction projects being affordable. Now, 33 percent is better than 15 percent but it's a far cry from where we need to be.

The cost of construction materials, and labor is higher than pre-COVID-19, but the cost of borrowing is still higher than it should be, caused by two things the strict Federal Reserve policy which seems determined to destroy the housing market and try to shrink the jobs which I do not understand - I never heard anybody talk about it shrinking jobs being a good thing.

And it's complicated by investors insisting on very high returns. I get solicitations from companies that do this and they're offering 20 percent or more to participate in investment deals. It's no wonder that people can't build affordable housing if capital costs them that much.

One of our primary focuses remains the protection of naturally occurring affordable housing. Since 2000, when we had 42,000 naturally occurring affordable housing units, we've lost 20,000 of those units. Before the rising rents caused by the last few years, the projections were that we'd lose another 10,000 more by 2030. That would leave us with about 12,000 units, maybe, out of the original 42,000 units.

Those are all people who had a place they could live, and it was affordable and it was naturally occurring. No government dollars went into it.

Those units are going that's why we're pursuing more partnerships with the nonprofits, why we put money into affordable housing funds and why we're taking advantage of recent changes to our Right of First Refusal law to protect more tenants from displacement again.

Thank you to the Council for supporting that, that's an important change. Our biggest deal last year was with the nonprofit Enterprise Community Partners. We preserved 345 units of existing affordable housing, and this morning, I was in a meeting with Enterprise at Jezrael Baptist Church in Silver Spring, and they're actually creating a cohort and a training program for churches to help put affordable housing on church property, and that's a big important thing.

I want to thank Enterprise for being a partner in this. Without our joint action, residents would either facing displacement or steep increases in rent before I should thank somebody else, Kate Chance, our liaison who works with the faith community. Almost from day one she's focused on partnering with churches and recruiting churches to look at housing opportunities on their property. She's done an amazing job she deserves an applause and Kate stand up so they know who you are. There she is, in the back, blue dress.

In my FY 25 recommended operating budget, we're prioritizing affordable housing and related services in the County. We're allocating over 169 million to expand housing, to expand housing preservation and production for our most economically burdened residents.

It includes $56 million in the Housing Initiative fund for operating and $113.2 million for three key Capital Improvement projects focusing on Affordable Housing Acquisition and Preservation, nonprofit preservation and revitalizing for troubled communities. This includes $78.5 million in new funds for affordable housing production and preservation and operating in capital budgets alongside, alongside $22.9 million for rental assistance.

That's a lot of money, but many people would not have housing if we weren't doing this. We've already lost the money from the federal government, so it's a challenge, but we're still trying to do everything we can to keep people housed.

We're making strides in housing stability with the implementation of the rent stabilization program. I thank the Council again for getting that done. It is going to help us protect against rent gouging and help with tenant stability, and while progress has been made, we have to do more because there's a serious mismatch between the cost of new units, which tends toward the luxury side versus the incomes of people who need the housing.

In fact, the study from Park and Planning - I always love using their numbers - showed that more housing isn't being built because developers can't get the rents they want, not because they don't have permits. We have over 30,000 units, and all the developer must do is walk into the Permitting Office and say I want to pull my permit.

So, for all the demand that people say there is, I keep saying you've got to ask yourself why they're not building because if there's demand and you've got potential for supply. It turns out the problem is basically they can't get the rents they want, and it's partly because you zone everything for high-rise, it's almost impossible to build things affordable. If you wanted to house young professionals, you'd be looking at townhouses, you'd be looking at low-rise buildings, you would not be doing high-rise.

We all know there's a need for more housing but it's affordable housing that is the most problematic in the County. We are pretty much on track to build the market rate housing that was projected for us. We are not on track and no jurisdiction in the DC area is close to being on track for building affordable housing so it's not just us, it is a regional, it is a national problem.

COMBATTING CLIMATE CHANGE

So, turning to another topic--climate change. For over half a century I've been an advocate for climate and sounding the alarm and urging action and local governments including ours stand at the forefront of the battle against the ravages of climate change and through investments and policies and most crucially action working to mitigate its impacts and secure a sustainable future for generations to come is the work we're trying to do here in Montgomery County.

We're taking bold steps to reduce the environmental footprint of our buildings and transportation systems. With initiatives like better energy performance for almost 2,000 buildings and transitioning our bus fleet to solar-powered electric and green hydrogen, we're paving the way toward a greener, more sustainable future.

We have loan programs, thanks again to money buttressed by the federal government, that can help homeowners and businesses green their buildings. So, there are opportunities and there is money out there. Please come get it.

We're also working to dramatically reduce our waste and modernize our recycling practices. Our goal is not only to minimize our waste stream but also to harness potential by recovering more of the waste stream and finding markets for these materials. There's a lot of stuff that we burn or throw away, my favorite example, is glass. If I break glass into chunks it can go into cement as a substitute for the aggregate. If you grind it into a powder, it is a substitute for cement. It is decarbonized cement, and it helps me get rid of my bottles.

We will be looking for ways to get rid of the waste. We have a way that makes the County money and also benefits the environment.

You'll find us planting trees, doing urban gardens, doing tree plantings at schools, and protecting the nationally renowned Agricultural Reserve.

But despite all our local efforts, the specter of climate change looms more significant than ever. It doesn't, I don't think, a day goes by when the news isn't worse and that's alarming, it's a crisis. Though of our own making, a stark reminder of the consequences of decades of unsustainable behavior.

The fossil fuel industry and the utility companies, in particular, bear a really heavy burden of responsibility for this. For over four decades, their executives concealed the truth about climate change even when the research of their own scientists. Exxon was the first story that broke. They spent tens of millions of dollars, if not hundreds of millions of dollars, deceiving people worldwide using opinion leaders, scientists and complicit politicians to convince the public that climate change was either a hoax or greatly exaggerated.

I get why people are confused if you listened to 40 years of a story. If I marched out somebody in a doctor's suit and somebody wrapped like a scientist and an important person and they say this is a hoax, this isn't real. I get why people might have believed that story, but it was the wrong thing to do, and those folks who did that chose profits over health over our environment and over our children's future.

And now as the cost of the deception mounts. It's our communities that have to foot the bill while those companies remain

unaccountable, but the path ahead is pretty clear, we have to simultaneously reduce our greenhouse gas emissions and invest in mitigating the impacts of climate change.

The urgency of this dual challenge can't be overstated, it demands our collective commitment and unwavering resolve. Montgomery County has long been a leader in the fight against climate change but we can't do it alone. We need the support of our state and federal partners and the concerted efforts of people like you. And I urge our residents to help us, government cannot and will not fix this alone.

COMMITTED TO EQUITY

Turning to racial equity. This County continues to address racial equity issues which are a living legacy of slavery.

Hard to believe today, but 175 years ago most of the County was covered with plantations. We've done an amazingly good job of not talking about it. It's one of our great success stories right after the Civil War. Free black communities emerged, but 100 years after the war, they struggled to hold on to their land as developers had other ideas of what should happen to their property and had the means and tools to extract the property from the black community.

Communities were displaced. The land of black families owned was severely reduced. The historic black communities of Scotland and Emory Grove are examples of that. Today, we're embarking on incredible partnerships working on projects like the repair of the historic black church of Scotland and building a new community in Emory Grove to rebuild the one that was displaced by urban renewal. We're working on the restoration of Lincoln High School, the oldest high school for black residents of the County, during the segregation period, which lasted through the 1950s. And very shortly, that building will have a warm shell, and we're working with the community to put that back into use.

We're bringing economic development and education workforce training resources to underserved communities. I'm especially proud that I was able to get Montgomery College to begin creating an East County Campus. The campus started its first programs in the last couple of months, and the programs are fully subscribed. That part of the county has long been neglected. The college is an important thing that will help that community.

I want to point out there are four developments there that were stuck when I came into office. Every single one of them is moving now because I got involved in every single one to make sure they moved. I didn't want to hear from people that nothing's moving. That gets tedious after a while.

Our procurements have become more diverse and last year new contractors accounted for half the contracts awarded.

As we press on in our equity journey, we're committed to dismantling the systems and institutions that perpetuate injustice. Our goal is a County where every resident, regardless of race or ethnicity, has the opportunity to thrive and flourish.

URGENT NEED FOR TAX REFORMS

So, moving on to one of my other favorite topics, there's a lot this County's doing. We're investing a lot of money, but structural issues are preventing us from raising the revenues we need to make the necessary investments in our community-the investments that'll let us grow responsibly, the investments that'll attract the businesses that we need to come here in order to have the jobs we want.

For too long, our tax system has been disproportionately burning middle-class and working families and marginalized communities, stifling opportunity, perpetuating inequality, and preventing us from building the infrastructure needed to drive economic growth. It's time for a fundamental shift in our policy so we've been evaluating our tax structure. I want to close by talking about how we can continue to meet our needs and how changes could actually help reduce most people's tax burden.

I'm going to start by telling you something that probably many of you don't realize, Montgomery County has the lowest taxes on commercial property in the entire region. I mean the entire region including Northern Virginia. We're not even close to them.

Maryland has a law that requires a single rate of taxes for residential and commercial property which means anytime you need to raise money you have to tax residents as well as businesses and taxing residents becomes a red line and so we don't do anything and that's a real problem.

It's not true in Virginia and it's not true in DC and the following is the result. Commercial real estate taxes in Fairfax County are 20 percent higher than here at a minimum and in one part of Fairfax County, Tyson's Corner, they are 50 percent higher than here and these extra taxes are only used to fund transportation.

In Fairfax, while residential rates are going up to $1.12, when they pass their budget, commercial taxes in Tyson will be over $1.50. In DC residential property taxes are 85 cents, commercial property taxes are a $1.89. Imagine what these jurisdictions were able to do with tax rates like that in commercial property, imagine the resources that are at their disposal and compare that to our rate which is at $1.04, so for everything and everyone it's $1.04, so our lower taxes don't make us more competitive and we can't, what we can't do because we lack the revenue actually makes us less competitive.

Given the observable growth in Fairfax, the higher taxes may seem counterintuitive given their success, but it's not. Since 2012 they vastly increased revenues which are plowed into transportation infrastructure. This has been a huge benefit to commercial property owners and because those owners realized those investments are good for business, they actually supported the changes.

They saw that these taxes were basically investments. Together with the Fairfax Council they went down to a republican legislature with a republican governor and asked for the authority to tax themselves. Ponder that. A Republican governor, Republican legislature, the Governor does a press thing about what a great thing it was to have these taxes-Republicans.

We're Democrats. Maryland law puts our counties in a position where they can't raise revenues from major projects and the state doesn't have the revenues either. We just saw that unlike Virginia, we can't tell a developer or community when projects in and the master plans will get built because we have no idea when or where the money will come from.

The short of it is that businesses will go to a higher tax state that can provide infrastructure they need, something that we're not able to do.

This year most Maryland counties lobbied for changes to state law that would give us the same authority that Virginia has. We got close but we didn't succeed.

The impact on our County would allow us to accelerate transportation infrastructure and would let us fund some of the projects in the capital budget with these dollars rather than general fund dollars or general obligation bonds. And shifting taxes would free up space in the capital project for other community projects like schools. Meaning we could build more schools with the money we already have without having to go after taxes to do it.

As a trade-off the County, and I've offered this repeatedly, would get rid of the impact tax regime which is flat out bad for builders and it's bad for the County. I agree it needs to be replaced. I will lead the charge to get it replaced but it's a deal that we should make.

There was also a bill in Annapolis that would allow us to create a graduated income tax at the County level. Right now, you all pay the same tax. The bill only allows increases on higher incomes and requires the County to reduce taxes for other people and I think in the bill, higher incomes were defined as $500,000.

So everybody else, nobody else would get an increase. Everybody else the same, say, or get a reduction.

A progressive tax system would make it possible for more of us to benefit from lower taxes or no change in taxes while the County, in general, will be able to gain some additional revenues. It's another way to build up more revenues and at the same time provide benefits to the majority of our population.

We could generate a net increase and we'll be putting out a proposal to the residents because we're going to share it with them. We're going to show them what a progressive tax would look like and see what they think about the idea.

The reason I'm bringing this up is that these changes are things we need to do. Our tax structure holds us back from making investments while it unfairly burdens our residents.

It's no wonder Virginia can build more. They can focus on commercial taxes without hitting residents but it makes sense because the investments that they make in Virginia bring huge benefits to the commercial sector and they see it as an investment and they benefit from it. So, let's learn from our neighbors, for they've identified a better target for taxing than we have.

They have a better tax structure than we have and I think it's worth evaluating. We simply are not going to be able to do the things we want to do with the handcuffs that we put on ourselves.

CONCLUSION

These are undoubtedly challenging times. I don't have to tell you that. This has been very hard year and if you read, I assume you may not read a newspaper because they basically don't exist much anymore, but if you hear the news or see the news, what's happening in the world is pretty discomforting.

Our times are marked by uncertainty and division at a level I haven't seen and I grew up with Nixon and the Vietnam War. This is more deeply divisive than anything I experienced growing up.

We've continued amidst the turmoil to be steadfast in our commitment to stand against hate and bigotry in all of its forms. You don't get a pass, it's great that you can point out a particular person or group, you don't like is doing terrible things but a lot of us have people we like who are doing terrible things and everybody's got to be willing to acknowledge that them is not us and we should stand for what's right and we should be free to speak for what's right and you know we put a lot of work into building an inclusive community.

I credit Ike all the time for taking the first steps toward doing that. It's a community that has a tapestry that's woven with threads of all our different cultures, religions and backgrounds, and that diversity is our greatest strength.

When we went abroad searching for businesses, one of our biggest advantages was all the people who came from India and Vietnam and were about to go to China and Korea, people who live here who came from those countries and told people what Montgomery County was and told them that this is the place that you should bring your businesses, not Texas. We don't often get to see close up what diversity can do for you, but our trips brought it to front and center and I just you know we've got to be committed to protecting what we've built here.

We've got to resist the worst and not go to dark places because we're angry, frustrated or bitter. We may be all those things, but that's not an excuse to become bad ourselves. We have to hold ourselves to a standard that's the kind you'd want to have in good times.

So, just to conclude, let's keep moving forward together; let's continue to innovate, adapt and put people first in everything we do because when we work as a united front, there is nothing that we can't accomplish.

Thank you.

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Release ID: 24-219
Media Contact: Barry Hudson 240-300-7348
Categories: Executive Office

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