The Budget Process
The Council is the final authority on spending by the departments of County Government as well as the independent County and bi-County agencies such as Montgomery County Public Schools, Montgomery College, the Washington Suburban Sanitary Commission, and the Montgomery County Planning Board. The County Executive has responsibilities for proposing a County Government budget to the Council and makes recommendations on the independent agency budgets.
It is the Council's task to review all of these spending proposals comprehensively and craft a budget that provides the services that the people of Montgomery County need and want at a cost that they can afford.
It is the Council's role to listen to the people of Montgomery County and understand the impact of spending and taxes on all of the residents of Montgomery County.
Spending Affordability
This is the process, required by the County Charter, by which the Council instructs the independent agencies and Executive departments how to plan their budgets for the coming fiscal year.
Each September, the Council begins with a study of the economic indicators that help predict the condition of the County economy. With the assistance of staff and fiscal experts, the Council estimates what the County's resources will be: revenue from property taxes, from the County income tax, transfer and recordation taxes, from State and Federal grants, and other sources.
Based on this information, the Council sets a limit on what the County can plan to spend. The "spending affordability" guidelines place a ceiling on property tax revenues, a ceiling on the total operating budget excluding certain grants and enterprise funds, and allocate the projected revenue among the agencies. Agencies are required to attach a prioritized list of reductions if they submit a budget that exceeds the spending affordability limit. There is some leeway for minor changes to the affordability limits, but the Charter specifies that any aggregate operating budget exceeding these guidelines requires the approval of eight rather than six Councilmembers on the eleven-member Council. A similar process is used for the capital budget and six-year Capital Improvements Program (CIP).
Budget Schedule
The County Executive submits proposed capital and operating budgets to the Council by January 15 and March 15, respectively. The Council then holds public hearings and deliberates on the spending and revenue proposals. By June 1, the Council must take final action on the budget for the fiscal year that begins July 1. The Executive has an item veto which the Council may override by seven votes. As a result of a 1996 Charter amendment, a six-year CIP is prepared every other year in the second and fourth year of an Executive/Council term.
The capital budget includes spending for construction projects such as schools and roads and is financed largely through bonds. The operating budget includes expenses for personnel, programs and capital budget debt service (principal and interest payments on the bonds).