The county is facing a surprising $120 million budget as reported by Bethesda Beat in a detailed article earlier this month. The situation is an almost entirely temporary bump in an otherwise healthy economy resulting from a shortfall in expected tax revenue; but, as we’ll see, therein lies an interesting example of an anti-democratic tendency within capitalism.
In order to remedy the budget gap, County Executive Ike Leggett is proposing 2% cuts across the board for executive branch departments. There’s a call by the county’s chief administrative officer, Tim Firestine for a further round 3% cuts. County budget director Jennifer Hughes says there will be 4.8% less available for county departments in the upcoming fiscal year. There is a freeze on hiring new county employees and even the threat of layoffs.
The fascinating reason politicians are willing to levy cuts to public services and public workers is that the fifty top taxpayers have held back on paying their taxes. This allows them to reap big rewards from the provisions in the recently passed federal GOP tax bill monstrosity.
County council legislative analyst Jacob Sesker reported to the council that those families reported half as much in capital gains as they did in previous years. To hold out for a tax cut, the rich are willing to let a county of over 1 million undergo austerity — cuts to social spending that impact our daily lives.
What Montgomery County now faces is a miniature crisis of capitalism. A community so sharply divided among rich and poor can’t be sustained democratically because not only do certain areas of the county hold a majority of the wealth, but they also command fringe benefits of holding wealth.
One such advantage of being wealthy is the ability to contract out daily management routines, such as money management. Most people don’t have access to the funds necessary to hire someone to assist them in taking advantage of the tax code. Another advantage includes having the time, and especially the money, to participate meaningfully in decision making for our community. In a word, the capitalist state better equips capitalists to engage in the government than it does for workers.
Campaign season makes the latter advantage explicitly visible. Take candidate for county executive and current Delegate Bill Frick, who took time off from planning his fundraiser with millionaire wine dealer David Trone to misplace blame for the $120 million budget shortfall:
“Despite an increase in the recordation tax, and a nearly 9 percent increase in property taxes, we find ourselves without sufficient revenues to pay for these councilmembers’ pet projects, and, as a result, public services are being cut.” -Frick, WaPo 12/4
Fricks’s claim is important to dissect. It points to an important feature about Montgomery County voters, about reforming capitalism generally, and his own incompetence.
It’s worth pointing out that Frick’s pet project is to privatize the county’s liquor monopoly. Even setting aside the fact that Frick does fundraising with a capitalist who benefits from an open liquor market, the economic merit of the county’s liquor control pertaining to the budget can’t be questioned — it brings in at least $30 million in revenue each year.
Upon closer examination Frick’s politically opportunist statement is self-defeating. If the county is facing a shortfall despite raising taxes, despite low unemployment and despite offering up hundreds of thousands of dollars to entice developers and hoteliers, where is the money going? If taxes are raised but the revenue never comes, what answer are we left with other than the money is still being hoarded by the wealthy to exact political revenge and personal enrichment? Frick’s own statement acknowledges that Potomac and Bethesda resemble offshore tax havens.
A bigger issue than Bill Frick’s inane comments is the pattern of reactionary responses by the local rich and the upper middle class of Montgomery County.
Frick is referencing property tax raises that occurred in 2015 (which arguably have little to do with the $120 million shortfall). Then, in a 2016 election where a majority of a liberal county pridefully voted for the liberal presidential candidate, voters also sprung for a ballot referendum to impose term limits on county councillors.The driving force behind the referendum was a longtime Republican candidate and operative pitting the anger of voters against politicians for raising property taxes.
The old political wisdom that voters cast their ballots with their wallets in mind proved true. Never mind that the benefit of taxing property owners, who are largely wealthier white communities, benefits the communities that predominantly rent, have little wealth, and come from diverse backgrounds. The success of the referendum (69% in favor) after failing twice previously tells us that, no matter the merit of term limits, Montgomery County voters are highly susceptible to reactionary thought and provocation.
The reactionary tendency of the wealthy, and those who erroneously believe they’ll eventually be wealthy, is one of the central features of capitalist society. The smallest move towards redistributive policies galvanized one portion of the population against another. The rich want more accumulation of wealth and more socialization of debts; the rest of us need the public spending made possible by taking from the wealthy what they acquire through exploitation. Of course, the wealthy are better at playing this game because they command all the resources necessary to win.
What actions are left to the people facing the brunt of the austerity cuts?
County Executive Ike Leggett holds annual forums on the budget for the upcoming fiscal year. It is worth planning to visit him with a few comrades and ask:
- Will he demand these fifty families pay their share in taxes this year, for the benefit of the county?
- Will he support Delegate David Moon’s (D – District 20) bill that would strip a tax loophole carved out for Montgomery County Country Clubs.
- Demand he change his previous opinion, and support Councilperson Tom Hucker’s initiative to found a County-run Student Loan Refinancing Center
Other measures, like the one just passed by the county council, to further benefit the rich and propertied class through tax scams must be disavowed and any vote in favor of the legislation ridiculed relentlessly.
Finally, when cuts do come, we as socialists have to be prepared to take matters into our own hands to ensure the safety of our comrades and community. Stepping into the vacuum the state once filled is one of many ways we show that the bourgeois state and capitalism fail the everyday person. It’s in times of financial crisis and confusion that we can enter the lives of people most affected by the inequalities capitalism produces. It’s a time for socialists and all people of goodwill to be ready to mobilize for a radical response to these routine crises.