Letter to Editor: A Vision for Talbot County by David Montgomery

In the past few weeks there have been a number of community forums to which all ten Talbot County Council candidates were invited.  In those forums we had a minute or less to answer sometimes surprising or complicated questions.  That is nowhere enough time to address the complex issues facing Talbot County, and I am left with many pages of notes that went unused.  In this article I try to give a more complete account of what I think matters most now, and how I would approach these challenges  I will not give a pitch for myself, that is available at www.montgomeryfortalbot.com.  

These are the areas in which I see the greatest challenges, and opportunities, our future welfare:

1. Environment
2. Managing Growth
3. Comprehensive Plan
4. Public Safety
5. Budget
6. Schools
7. Health Care
8. Affordable Housing and Good Jobs

Environment

I have been an enthusiastic sailor, and I hunt in every local season.  I am committed to preserving our farmlands, open spaces and forests.  I want to see populations of oysters, crabs and fish increase in the Bay.  I want farmers and watermen to make adequate incomes so that they stay here and continue their harvests.  Preserving the rural land and maintaining healthy waters are my environmental priorities.

I have spent most of the last 40 years working on how to design policies and programs that achieve real results with a minimum economic burden.  To accomplish that for the Chesapeake Bay we must do three things:

1. Measure the problems of the Bay – its nitrogen levels for example
2. Determine the sources of those problems – such as wastewater treatment and agriculture, and 
3. Assess the ability of our jurisdiction to make a difference.  

Responsibility for reducing effluents – undesirable materials going into the Bay — has been divided by EPA among the jurisdictions located on the Bay. Virginia and Maryland have targets and programs that have a decent chance of meeting them. But that will not clean up the Bay.  Pennsylvania is not meeting its targets for reducing effluents – it is missing by a mile.  Thus realism says that we should judge proposals for particular environmental initiatives for their cost-effectiveness in achieving the performance this County is obligated to achieve.  We cannot shoulder responsibility for fixing the entire Bay – or the globe.  Given the relatively small contribution of some sources, we should not feel obligated to adopt every ordinance or fund every program that might make some small contribution.  We should do our part and not take on more.

Having said that, there is one large step we can take to protect the Bay and all the rest of our environment – that is to put sensible limits on growth.  Converting farmland to impervious surfaces, whether commercial and residential or infrastructure to serve them, will increase runoff into the Bay.   The wastewater treatment method planned at Lakeside and approved by MDE is more a loophole than a treatment.  Any nutrients that penetrate into ground water from spray irrigation – and our water table is high – could find their way into the Bay, as will nutrients from irrigation water that runs off instead of being taken up by plants. I was therefore very glad to see that the Maryland Agricultural Land Purchase Foundation has purchased a substantial amount of acreage in the Eastern Shore that will be permanently preserved for farming, and the Council should work hard to get more of these purchases in Talbot County.

Managing Growth

I am convinced by the evidence that the process of giving approval to the Lakeside development in Trappe was flawed, that its water and sewage plans are inadequate, and that further development at Lakeside risks additional harm to adjacent rivers and the Bay.  From that I conclude that MDE and the County Council should respect the ruling of the Planning Commission that Lakeside is not consistent with the Comprehensive Plan and withdraw its permits.  The new County Council should do a full de novo review of the Lakeside development, including its impacts on water quality and traffic congestion, adequacy of schools, availability of medical care, and requirements for public safety expenditures.

I would go further.  There are now plans and applications for new, large-scale residential construction in Easton that total almost as many units as Lakeside. With 2500 housing units at Lakeside and something like 1500 in Easton, that implies about 10,000 new dwellings.   

Easton is now developing a new water and sewer plan and a comprehensive plan.  I doubt that the numbers of new residents implied by all these proposed developments will be consistent with any reasonable plan.  It would be a shame if the location and type of new construction is determined by who is first to complete an application.  Much more worthy projects might be behind in the queue.  Therefore, I believe that there should be a moratorium on all new building permits for large scale developments, until the town and county planning processes can be concluded and all plans compared on their merits.

Comprehensive Plan

There are three effective tools for managing growth, and we should use all of them.  The first is the Comprehensive Plan. These are required by state law every ten years, making a new plan obligatory by 2026 – thus something the new Council must do.  The Plan is the basis for all future zoning and rulings about whether or not a particular development is consistent with the plan.  If it is not, the Planning Commission should disapprove it, and as mentioned earlier, the Planning Commission has the final say.

Towns – Oxford, St Michaels, Easton and Trappe – also have their planning process underway. It will be very important for the next council to find a way to reconcile these separate plans.  The overall County plan must incorporate decisions about the rate of growth for the County as a whole, towns and unincorporated areas together.  Suppose that is 1% per year, or at most 400 new residents per year.  That might, sticking to round numbers, mean 150 new housing units per year.  Each town would also have a plan, and the number of units in each plan would add up to the total of 150 units per year for the County as a whole. 

From my experience in the Congressional Budget Office and with budgeting for other agencies, this process only works if the county-wide total is decided first.  Then the towns can work together with County planners to decide how to allocate that total.  Tradeoffs, of putting off construction in one location while another leapfrogs ahead, can be worked out.  But what cannot be tolerated is process in which the County simply takes and drops in whatever each town wants to do.  That leads to chaos and overbuilding.

Facilitating the complex process of negotiation among towns and county and providing technical expertise requires a qualified, independent consultant not now involved in any development projects or plans in the County.

The second tool is an Impact Fee that covers the gap between the additional expenditures to provide County services to new developments, and the additional tax revenue that development will contribute in the future.  The impact fee paid in advance by the developer should equal the present value of that gap, so that the County receives revenues from impact fees and taxes that cover all infrastructure costs.  This is the only way to make sure that existing taxpayers do not subsidize new development.  Estimating this fee is a job for a qualified consultant, and it is the kind of calculation I have done many times.

The final tool in an Adequate Public Facilities Ordinance, or APFO.  This ordinance states that if adequate infrastructure to serve the needs of the new development is not in existence or planned and funded, no building permit may be issued.  The developer may then pay to create the required infrastructure, and once that is planned and funded the development may proceed.

For example, suppose a 200-house development on Oxford Road were to degrade the intersection with Rt. 322 to an unacceptable level.  Then it would be the responsibility of the developer to find and fund a way to restore that intersection to acceptable performance.  Only then could a permit be issued.  If there were no way to restore traffic flow, then that development would not proceed – directing development to locations where impacts on infrastructure could be mitigated.  

Our current issues arise from this boom in residential development.  The Comprehensive Plan and zoning also need to keep commercial/industrial development and residential construction in balance with each other and limited to what the County can absorb while retaining its rural character.

Public Safety

I support all our investments in public safety.  A sword hanging over the heads of our police officers, and therefore all law-abiding citizens, is the Citizen Accountability Board.  As required by recent state law, that board will take over adjudication of all citizen complaints about officers.  A fair board has been appointed, but we cannot be complacent.  The terms of current board members will expire during the tenure of the next council, and it is critical that we elect a Council that will continue to appoint fair-minded citizens who understand the nature of police work and appreciate the conditions under which police officers must make decisions.   That is what I would do my best to make happen.  A second consideration is that with the kind of budget pressures we will face, we must not let necessary funding for public safety be crowded out by less important expenditures.

Budget

County government is not exempt from the disastrous state of the U.S. economy, rising prices and interest.We have a tax cap that does not increase with inflation, but county expenses are going up just like everything else.  When Joe Biden claimed that inflation had stopped, he was confused or misled by reports that it was not accelerating.  But even with the clarification, standard numbers understate the problem.  When we read that inflation is now 8.7% on an annual basis, that means that prices are now 8.7% higher than they were last September.  A more relevant number goes back to when inflation took off, which just happens to coincide with the election of Joe Biden.  Since November 2020, prices have increased by 14%.  

In addition, school construction and other infrastructure investment is financed by bond issues – by borrowing to be paid back in future budgets along with operating expenses.  Even the current rise in interest rates will probably double those debt service payments that must be provided for in every budget year.

That is what the County Council will have to contend with, before it even starts to consider proposals for new programs and spending.  None of the other candidates mention that we are required to have a balanced budget in the County.  Pity that is not true in Washington.  Anything we add on the spending side will come back to us as a need to raise taxes.  A share of stimulus funding and a reserve have tided us over with just a 2 cent increase in property taxes to fund better compensation for public safety.  That will not last. I am an economist and fiscal hawk.  I am good with numbers and have the experience inside and outside government to work the problem.

Schools

Which brings us to schools, the largest part of the budget.  Spending on schools has grown over the years because of the state law called “maintenance of effort,” which means that if and when a program gets an increase in funding, it can never be cut.  That has been replaced, at the recommendation of the Kirwan Commission, with minimum increases in spending.  I have searched diligently but cannot find a specific projection of what that will mean to the Talbot County budget for the next four years.  For the state as a whole, the plan is to double spending by 2030, with most of the state’s share coming from taxes we pay and going to Baltimore and more expensive programs that do little to improve real education.

All this tells me that the Council needs to be much more aggressive in questioning what is in the school budget.

I was appalled at a recent council meeting during which the current council, with the exception of Laura Price, accepted and rewarded a classic budgeting trick from the school finance officer.  She came to ask for permission to use about $350,000 of unexpended funds from last year’s budget to pay for newly discovered maintenance and an insurance bill that she “forgot” was due.  Having been involved in planning and budgeting during my government service, this was familiar territory and Laura Price jumped on it.  Every agency knows that it is bad to have money left over at the end of the year, for fear that next year’s budget will be reduced when budget analysts realize that the agency can get along with less.  But four members of the Council were unperturbed, and even commented that “we do this all the time.”  Not on my watch.

The primary responsibility for school budgets and curriculum lies with the School Board, but the County Council has both responsibility and authority.  It must approve the school budget before any money can be spent, and that gives ample opportunity to dig into where the money is going and demand transparency and accountability. The County Council has a responsibility to determine whether taxpayer funds are being spent effectively and wisely

Some useful facts do come out in these Forums.  I learned from the current Council president that our new, and very expensive, elementary school in Easton was redesigned in the middle of construction to use zero net energy.  We can see nationwide how the push from Washington for that Green agenda is increasing the cost of living.  Schools should be designed to provide the required services at minimum cost and with reasonable capacity for expansion, not used as showcases for Green or other agendas.  Saints Peter and Paul High School built a new building at the same time as the elementary school, and it cost less than half per pupil.  It is clearly the responsibility of the County Council to ensure that money is not wasted.

Nor should our schools become laboratories for application of woke agendas for anti-racism and sex education.  I would like to offer a few different thoughts on this subject.  Chris Rufo has done a public service with his exposure of this influence in schools, and his work is worth studying.  A different theme came up in the first of our candidate forums, in which the Democrat’s candidates all agreed that schools had the primary responsibility, greater than that of parents, to teach civility.  I do not agree: it is in the family that civility, morality and perseverance will be practiced or rejected.  A perceptive article stated this well: “The more important issue is whether monitoring, evaluating, and seeking to shape a child’s attitudes, values, and beliefs is the appropriate business of a school….at what point does a reasonable, healthy concern for a student’s emotional health become too personal, too intrusive, and too sensitive to be a legitimate function of public school and thus the state?” My answer is that current mandates and funding for “Social-Emotional Learning” go too far, and responsibility needs to be returned to parents.  That also means a different approach to discipline in schools, so that parents as well as their children will learn that unacceptable behavior has consequences.

Likewise, it is in the family that children should learn of sexual morality and the dangers of current fads about gender and sexual activity.  Thus I would like to see the County Council enact an ordinance based on Florida’s Parental Rights in Education Act and demand transparency on the kinds of books that students are required or encouraged to read and the curriculum they are taught.

Health Care

Health care delivery in Talbot County is failing to meet growing needs.  Our hospital is antiquated, to be generous.  Waiting times in the emergency room range from 5 – 7 hours for walk-in patients, even when the waiting room is empty.  The shortage of primary care doctors and other providers is getting worse.  New residents and long-time patients of retiring or relocating physicians cannot find openings with local doctors. 

I put responsibility for this problem squarely on the Shore Health System. It has moved at glacial speed to gain regulatory approval for a new hospital.  Doctors and other medical personnel are dissatisfied with the system and resigning, and it enforces its monopoly by granting hospital privileges only to practitioners within its system.  

There are two classic methods of dealing with a monopoly that fails to provide adequate service: regulation and competition.  The state regulates hospitals, and it is certainly the duty of the County Council to bring these failings to the attention of hospital regulators.  A more certain way to improve performance is competition.  The Luminis health system based in Annapolis has a foothold in Talbot County, and the County Council should work actively with its management to bring more services, or even a competing application to build a new hospital.  Johns Hopkins Community Physicians offer top-notch care, and a pathway into the entire Hopkins system of hospitals and specialists.  They withdrew from the Eastern Shore a few years ago, and the council should work to bring them back.

What the council should not do is use taxpayer funds for housing or grants to medical personnel to induce them to move or stay here.  That is the job of our monopoly medical system, and it needs to solve the problems of pay and working conditions that make it so unattractive to its own employees.

Affordable Housing and Good Jobs

The aspirations and promises of some candidates to “bring in good, new jobs” and create “housing our children can afford” run into the realities of markets and economics.  Addressing this topic requires a bit of a lecture on economics and how to anticipate unintended consequences.

“Affordable housing” is in some ways the more straightforward of the two promises, once we establish what kind of housing is included in this ambiguous phrase.  It is helpful to distinguish low-income housing, limited to those who qualify under means and other tests, from the “workforce housing” that most candidates are proposing.

After walking and knocking on doors on South Street and Talbot Street, I see the need for fixing up or replacing existing, dilapidated houses with structures that the current residents can afford.  I hope this kind of low-income housing appears in the new Easton comprehensive plan. 

The problem with such improvements is making sure they benefit those who were displaced for renovation or new construction.  That rarely happens.  Unless the current residents come back and resale is also strictly limited to qualifying buyers, “low-income” housing will rapidly become unaffordable to those it is intended to benefit. 

The problem is far greater for “workforce housing.”  The phrase brings back pictures of company towns in coal country and farm worker housing, which were only means of extracting more surplus value from workers.  That is not what those who have adopted the slogan have in mind.  They seem to believe that the County Council can wave a magic wand and make housing cheap somewhere in the county.   But the market is hard to beat.  As one commentator put it, developers are monetizing the value of our quality of life in Talbot County into housing prices.  And landowners are taking the largest share as they turn farmland into tracts of houses.

One possibility is to require builders to produce, say, one cheaply built or smaller house or apartment for every 10 they build for market prices.  The question about affordable housing is, who gets to buy them?  There are many houses going on the market here that might be suitable as starter homes for a capable family, but those who complain about the lack of affordable housing appear to believe that prices of these houses are being bid up by “come heres” or investors who intend to upgrade them for living or investment.  Unless they are built on purpose to be undesirable to anyone who can afford more, any “workforce” housing required of builders will also be bid up to market. 

Another thought experiment is informative.  Suppose that somehow it were possible to allocate new “workforce housing” only to the plumbers, carpenters, electricians, office and retail workers who now commute from Caroline or Dorchester counties.  That is one candidate’s vision. The demand for housing from those willing to pay market prices will not disappear.  These fortunate individuals who win the lottery, so to speak, for workforce housing will be offered a windfall to sell their Talbot County house and move back to a place where the market is lower.  These homeowners will be able to ask themselves, is a profit of $50,000 on this house worth adding a half hour to my commute?  My experience and training says that yes, many will eventually return to commuting.  That takes us right to where we started, except for the beneficial outcome that some local workers actually did win the lottery and pocketed some of the elevated market value in Talbot County that would otherwise go to the developer.  I do not object to this in principle, but it practice it would just be an expenditure of effort that might better go elsewhere.

This can all be summed up simply.  The only way to create workforce housing that some candidates are promising is to allow so much development that a glut appears, and the housing market crashes.  That would mean that collectively developers had so overbuilt that the current amenities and value of life here was destroyed, because that is what drives up housing prices.  

The alternative is to recognize that in every urban area, however small, housing prices rise with proximity to jobs and other attractions.  Each family makes a choice of whether to spend more for a house or more time and expense commuting.  The market settles out with workers choosing varying amounts of commuting over proximity, depending on their incomes and preferences.

There is a choice: to get lower housing prices that are permanent, we must embrace a level of development and sprawl inconsistent with the qualities we want in the county.  Or we limit development to a rate that will not overtax infrastructure and change the county irreparably, accepting that many who work here will choose to commute a longer distance to obtain more affordable housing.

That finishes my economic critique of promises of “affordable housing.”  Promises of “good, new jobs” are even more unrealistic.  Every community has an economic base.  In Talbot County that base has been agriculture and seafood — farmers and watermen.  Those two industries not only provide jobs and income, which is spent here, they define a character for the County as a whole.  Tourism is also a major source of jobs and opportunities for businesses, derivative from the land and water that is our base.  With the increasing age of the population, health care is another natural growth area and is already by some metrics the largest employer.  These industries and jobs locate here naturally, attracted by the existing base and the amenities of living here — for example, Mr. Prager’s reported plans to locate a large part of his Beowulf enterprises here once the town is up to his standards. 

Efforts to attract businesses not related to the current economic base of the area are futile; expenditures on junkets to visit them or tax breaks to compete with other potential locations generally, in my experience, end up with the County in a hole, spending more to subsidize new jobs than it gets in tax revenue.  Thus I believe that the County should project and plan for organic growth in the established economic base of the county, and let the wisdom of entrepreneurs and the attractiveness of the county decide who comes here.  Remembering always that safety, good schools and medical care, fiscal restraint and low taxes are an effective lure.  If we solve our other problems, business will grow.

David Montgomery
Candidate for Talbot County Council