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SILVER SPRING – Montgomery County Executive Marc Elrich confirmed that he is interested in changing how Montgomery County focuses on its operating budget, shifting it to a two-year cycle.
Rich Madaleno, former state senator and now the county’s director of office management and budget, originally announced on Feb. 19 that the county may switch to a two-year budget cycle, an idea that that Elrich said was his. However, the Montgomery County Council would need to approve the idea before it could proceed to its early stages.
“I want to create a culture where you think about what you’re doing and thinking about whether what you’re doing is right before you decide to do it again,” Elrich said.
Madaleno said switching from a one-year cycle to a two-year cycle would help the council make sure that they have oversight of all things they spend money on and that they money is being spent properly. Under the two-year cycle, the county council would consider an operating budget and once it is approved, department heads and the county executive would have time to “take a breather” and evaluate the effectiveness of money spent before starting to prepare the next budget, Madaleno said. Elrich added that having an off-year would help staff and the council make sure that they are allocating the budget appropriately. The capital budget already follows a two-year cycle.
“I want to be able to take the year in between as a period of time where, you know, we made this decision: is it accomplishing what we want it to do? If it’s not, can I fix it? If it’s not, can I get rid of it? Is it worth expanding?” said Elrich.
In the case of nonprofit organizations receiving county grants, a two-year budget cycle would give organizations an opportunity to evaluate the success of a grant-funded program, Elrich said. It is difficult for organizations to pitch how successful their grant-funded programs are because they are writing proposals for the following year within months of receiving funding.
Madaleno said a potential challenge in a prospective, two-year budget cycle is predicting what money Montgomery County Public Schools (MCPS) will need two years in advance instead of just one year ahead. The council must give the same amount of money per student each year to MCPS, according to a state law called “maintenance of effort.” If the number of students enrolled increases, the amount of money MCPS receives also increases. MCPS enrollment increased yearly during the past 10 years.
In addition, the council would not be able to anticipate how much money the state would give the county in operating budget funds for MCPS expenses two years in advance because the state distributes money for school systems each year.
Councilmember Gabe Albornoz (D-At Large) said he supports the idea of a two-year budget cycle, as it is something he pitched during his campaign. However, Albornoz has some concerns about the MCPS operating budget because it coincides with the time frame of the current county budget cycle.
Madaleno said the office of management and budget staff are currently researching and studying jurisdictions, such as some in Virginia, which follow a two-year budget cycle. County staff would have to figure out the “right path” forward before deciding particulars, such as whether to hire anyone to help with the transition, if the council were to approve the idea. He said he estimates the county council might be able to discuss the possibility of a two-year budget cycle prior to the start of fiscal year 2021.
If the council were to approve a two-year operating budget cycle, Elirch, Madaleno and Albornoz said they believe the county would be able to proceed in the new cycle with existing budget staff. The people who write the budget every year would then help evaluate the success of the funded programs during the “off,” or non-budget, years.
Albornoz said that when he was director of the county recreation department, he spoke to other department heads, who said they supported the idea of a two-year cycle. He has not asked other county council members how they would feel about a two-year cycle, but he doesn’t want to “rush” things.
“I would hope that if we move in this direction (of the two-year cycle) that it (would) occur within these next three years, but I don’t want to rush into it,” Albornoz said. “I want to make sure that we look at it from every angle and don’t have any unintended consequences.”
Albornoz said he does not foresee a scheduling issue relating to working with unions of school staff and employees, if the council approves the switch to a two-year operating budget cycle.