County Employees Face Big Cuts in Salaries, Benefits

Montgomery County employees could see salaries, retirement and health care benefits slashed as council members grapple with how to solve budget problems once and for all.

County council staff presented Tuesday a series of cost-savings options to close perennial budget shortfalls. The Office of Legislative Oversight said the council could roll back wages between 1 and 5 percent, or increase employees' shares of retirement costs and health insurance premiums.

The staffers behind the report said they were not endorsing any method.

For the past few years, the council has struggled every winter to close mid-year budget gaps totaling hundreds of millions of dollars. Last week County Executive Ike Leggett directed most county department leaders to find cuts equivalent to 15 percent of their budget to stem a projected shortfall of roughly $300 million.

Council members largely acknowledged the need to alter current salaries and benefits after reviewing the report's projections, including that by 2016, health benefit costs are expected to soar 55 percent.

"The study basically tells you that we're not going to get out of this by any uptick in the economy," Council Member Marc Elrich said. "The magnitude of this problem is going to require real thinking and planning in order for things to get better."

Staffers told the council that achieving substantial savings would require the county to reduce spending on personnel because roughly 80 percent of taxpayer money is spent on the county's work force. Several council members, however, noted that nearly two-thirds of payroll costs come from school employees and the council does not have the ability to alter the wages or benefit plans of school system workers.

"We don't have complete authority here to make decisions," Council Member George Leventhal said. "That is not an attempt to place blame but an effort to suggest the institutions of county government have got to find a way to work together. Acting alone we won't be successful."

Elected officials would also have to be willing to fight labor union leaders over any potential changes to employee salaries or benefits, something most council members have been reluctant to do in recent history. Shortly after the staff presentation ended, press releases from the county teachers union appeared throughout the council meeting room denouncing the options presented in the study.

"It is a mistake to blame the current budget crisis on public employees," the flier from the Montgomery County Education Association said, adding that the average benefit in the teacher pension system is just $17,484 a year—"hardly an extravagance after 30 years of service to our students."

The report also listed a series of options that would increase county revenue, such as increasing the property tax, which would require the backing of all nine council members.

"It has been clear for a number of years that the county is on an unsustainable spending path but it only recently became unaffordable in the current year," Council Member Phil Andrews said.