Fani-González says no to Elrich’s special taxing district proposal — at least for now

Montgomery County Council President Natali Fani-González is sidestepping County Executive Marc Elrich’s proposal to create special taxing districts until after the fiscal 2027 budget is finalized in May.

She told reporters Monday that she wants to wait because a report scheduled for release in June could shed light on the issue. The council is considering tax hikes and funding cuts as the local job market and economy falter.

Elrich is seeking to introduce GROWTH districts — which stands for Growing Opportunity, Workforce, Transportation and Housing — as part of his proposed budget. These commercial districts would provide a dedicated funding source for future transit and infrastructure projects.

For years, Elrich has lauded Northern Virginia’s special taxing districts, calling them a boon for transit development.

But Fani-González said it’s not the right time for the council to introduce them.

“Creating special taxing districts requires an in-depth, time-intensive process — time that we do not have during the operating budget review,” she wrote in a March 19 memo to colleagues that was released to reporters on Monday.

She also wants to wait until the current budget process ends before deciding how to handle waste disposal. Elrich‘s budget calls for shutting down the county’s incinerator and increasing “long-haul” disposal — taking the county’s trash outside the community.

Elrich, now in the last year of his second four-year term as county executive, has long promised to close the county’s incinerator. He is term-limited, but is running for an at-large council seat in June’s primary.

In a statement, the county executive said he was disappointed that Fani-González would not introduce the bill for special tax districts at this time.

“Even if the Council delays consideration until after passage of the budget, introduction allows more public engagement,” Elrich wrote.

County Chief Administrative Officer Rich Madaleno told reporters during a March 12 budget briefing that the taxing districts would help attract grants for transit projects.

“We have to demonstrate more than just our good looks and winning smiles to try to get money for the federal government,” Madaleno said. “We have to show we have a mechanism to provide the money.”

More research on tax hike impacts

In addition to the special tax districts, Elrich wants to raise property tax rates by just under 6% to fully fund the school system’s budget request for the next fiscal year.

He has also proposed a 0.1% income tax hike, raising the rate to the state-allowed maximum of 3.3%.

Several council members have pushed back on these proposals, but Fani-González said she is waiting for an impact analysis on the taxes, which county staff will present to the council on April 7.

It takes a majority of the council’s 11 members to pass a tax increase.

“Numbers don’t lie,” Fani-González said. “We’re going to add things up and see what’s best.”

Fani-González said it’s possible that the council will compromise on a lower property tax increase or choose one of the two proposed hikes.

She asked council committees to create “reconciliation lists” of potential funding cuts in case the council prefers them to tax increases. The bar for raising taxes, she said, is “appropriately high.”

“We’re talking about families who are struggling to pay the rent, pay their mortgage, losing a job if they work for the federal government,” she said.