County Employees Targeted to Cure Long-Term Budget Crisis

Long-term structural budget challenges dominated a County Council town hall meeting Wednesday night in Silver Spring. Over 100 county residents, including local union officials, gathered at Francis Scott Key Middle School and listened intently as county budget analysts projected a significant long-term imbalance between tax-supported revenue and government expenditures. 

“The County must consider reforms that either raise more revenue or lower the projected cost curves associated with ongoing government operations and future promises,” said Karen Orlansky, Director, Office of Legislative Oversight.

Analyst findings were based on a budget report prepared last fall by the Office of Legislative Oversight, at the request of the County Council. The report analyzed the county’s four tax-supported agencies:  Montgomery County Public Schools (MCPS), County Government, Montgomery College and Park and Planning from Fiscal Year 2002 through FY2016. Currently, 82 percent of all tax-supported spending goes to county government personnel costs. According to the report, “Theprimary driver behind higher personnel costs was not an increase in the size of the workforce but rather the increase in average costs per employee.”  

This year the county will pay 52 cents for benefits on top of every dollar it spends on salaries. Over the last ten years, county agency spending increased significantly - group employee insurance spending increased 134%, to $315 million; employee pension and retirement benefits increased 226%, to $193 million and county agency budgets collectively increased 59%, from $2.1 billion to $3.4 billion. Analysts presented eight options that could move the county to a healthier, long-term fiscal outlook - five of which targeted county employees.  

Cuts that could take place as soon as July 1, 2011 include: 1 to 5 percent salary rollbacks, decreases in county contributions to health benefits and restructuring retirement accounts for active and future retirees. Staff also recommended property and income tax increases, but were quick to point out that the bulk of tax-supported spending costs are associated with employee salaries and benefits, 57 percent of which are from the school system.  

“The OLO report seems to suggest that they are going to try and balance the entire budget on the backs of the employees of the county,” said Doug Prouty, executive director of the county school system’s employee union, Montgomery County Education Association. “We think a balanced approach to solving the budget problem with both revenues and budget cuts make sense. I don’t think we expect there won’t be any cuts at all. The question is whether they’re going to approach it in a balanced way or whether they’re going to ask employees to shoulder the entire burden.”

Council members took questions from the audience after the budget presentation. Several participants blamed budget shortfalls on an inefficient government bureaucracy. Others queried the Council on an alternative plan to the OLO’s recommendations, for which the Council had no response.

“I find it incredulous that the political structure would fall in line with an OLO report,” said Bob Stewart with the county employee’s union. Many questions were answered uniformly by the council, who urged parents and teachers to talk directly with their “elected” Board of Education officials who have sole authority on how to structure cuts. A potential $300 million deficit is projected for fiscal year 2012, according to Council President Valerie Ervin. The County Executive must present the Council with a proposed budget by March 15.  There are five more budget forums scheduled between now and February 28.