Jared Smith, the new CEO of the Montgomery County Economic Development Corp., faces a big turnaround challenge. Our local economy is stagnant and our growing poor and senior populations are burdened with inflated residential property tax assessments.
It will be interesting to see if he does anything with the last economic development plan approved in 2022, or whether he just starts over. The last plan did not include job performance targets, regional road transportation strategies, or a rigorous analysis of our competitive strengths and weaknesses in the region.
The plan also totally ignored two bedrock county service elements that corporations evaluate before relocating: schools and water and sewer service. Yes, a lot of work also needs to be done for timely permitting, and to reduce stifling regulations and high taxes. But in addition, both Montgomery County Public Schools (MCPS) and the Washington Suburban Sanitation Commission (WSSC) have been operating as poorly supervised state monopolies for years and it shows in their high costs and poor performance.
MCPS has a sky-high overhead rate of 45% vs. 37% for Fairfax County Public Schools for non-instruction spending, which drives high taxes. MCPS operates as a monopoly not adequately serving low-income students, and has blocked access to charter schools. The result is dismal academic proficiency levels for English at 35%, and math at 15%.
WSSC water rates are nearly double Fairfax’s for customer accounts serving more than three people, and this is critical for attracting light manufacturing. The Taxpayers League worked successfully with the WSSC Reform Group and state Del. Marc Korman (D-Dist. 16) to get a WSSC reform bill passed last spring. This will result in more state oversight to bring down costs, improve performance, and provide sustainability.
For the county to be economically competitive, MCPS needs similar reinvention. This should increase taxpayers’ return on investment, provide employers needed talent pools, and fix chronically failing schools. MCPS Superintendent Thomas Taylor’s latest push for a new regional program model while well-intended is not anchored in the strategic plan approved by the county school board in June. The plan emphasizes getting all students to be proficient in five years, and boosting college and career readiness objectives but requires undisclosed innovative strategies. The Montgomery County Education Association and Montgomery County Council of Parent-Teacher Associations object to elements of the regional model, and call for more analysis of program expansion plans. Fundamentally the problem is that Taylor has not presented a business case for how this spending will increase results for English and math proficiency and college and career readiness that would be better than more spending for interventions and tutoring in low-income schools.
Instead of increasing total spending, the Taxpayers League recommends shifting more resources from excessive overhead to academic strategies to improve performance. This will require new accountability at the school level, not watered-down shared central office accountability, and a cross-walk of the budget to the strategic plan. Our biggest structural difference with Fairfax public schools is we have 36% more middle and high school buildings, and our non-instruction costs for central office management, construction and IT staffing are greater. Strategies for consolidating school buildings, minimizing new capital spending and cutting non-instruction staffing are needed.
We can no longer rely on the state as a funding partner as it shifts MCPS pension costs to the county, considers unfunded mandates such as teacher collaboration time, requires Maryland Maintenance of Effort law spending regardless of academic results, and only performs audits of school districts every six years. The County Council annually points out it has little control over MCPS spending, but recently assigned the Office of the Inspector General to MCPS. It appears the inspector general’s audit coverage is more reactive, does little to prevent control failures, and doesn’t address academic strategy performance or the self-insured health plan, which required a $52 million diversion of actuarial reserves this fiscal year.
Lastly, MCPS needs a dedicated inspector general who will apply federal government auditing standards to annually certify that internal controls are effective, and who will report to our Board of Education to help members stay on top of academic, financial and compliance issues, as well as monitor management’s corrective action plans with public reports.
Improved MCPS performance will bolster economic development. A better MCPS strategic plan based on low-income school improvement plans will prepare our low-income kids to compete in the 21st century. The promise of new council and county executive economic development leadership, with more and better jobs, will lift more of our residents out of poverty, and increase tax revenues that can be used to expand MCPS services.
Gordie Brenne of Silver Spring is the treasurer of the Montgomery County Taxpayers League.