The Montgomery County Council appears to be divided on whether to approve wage increases of up to 9.4% for some county employees.
During a Tuesday meeting where a straw vote was expected on raises proposed in County Executive Marc Elrich’s budget, several council members said they aren’t sure if the increases are sustainable.
Increases proposed by Elrich for members of the county’s main union, MCGEO, along with the county police and firefighters unions, are meant to make up for years following the 2008 recession when the council did not fully fund previous labor contracts.
County Budget Director Rich Madaleno said Elrich wants to cover the increases this year to prevent any future needed makeup steps.
Madaleno said the employees receiving the raises are deserving.
“I think he [Elrich] believes that starts from the ground up. Having strong, frontline employees who are rewarded for their dedication and skill is critical to making sure we have a county government that can perform,” said Madaleno, a former state senator.
“Our employees deserve a raise, there’s no question about that,” said Council member Hans Riemer. “The question is how much of a raise can we provide? And I think we’ve been put in a very difficult position quite frankly, to determine whether these raises are affordable.”
Riemer noted that Elrich has proposed adding additional jobs to operate the county’s new Flash bus rapid transit route, which is scheduled to open next year, and additional firefighter and police positions. Additional positions, he noted, goes against Elrich’s promise to cut the size of government.
“That was the basic discussion that the county executive put on the table, that we’re not going to have raises if we don’t grapple with the headcount,” he said.
Elrich’s proposed budget also includes a savings plan for the current fiscal year that diverts nearly $90 million from the county’s retiree health benefits trust fund, known as the Other Post-Employment Benefits (OPEB). Elrich has said that he cut from the retirement fund due to an $80 million tax revenue shortfall at the state level, and that not doing so would have required to cut other services in order to achieve a 10% reserve level by next year.
Elrich has received pushback from longtime County Council adviser Steve Farber due to the retirement fund cuts.
Farber, an adviser who oversaw the passage of county budgets for 26 years until his retirement in February 2018, wrote in an April 15 letter to the council dated that the county is at a “fiscal inflection point” due to the lingering possibility of a recession.
In the letter, Farber criticized Elrich’s decision to cut from the retirement fund, while simultaneously giving raises of as much as 9.4% to employees affiliated with county unions.
“Absent a fresh approach, there will be a reckoning, the more so if the economy weakens. The right decisions this year will enhance your ability to achieve your goals for this term in an orderly way. The wrong decisions could tie your hands and impair the County services you want to provide,” Farber wrote.
Riemer said that the risk of a recession would put the county in a difficult bind, and possibly require that the county raise taxes in order to support education and other services.
“This is not a recession. We should be able to benefit from growing revenues, but we’re not. I think we should all be very, very cautious about what could happen in this county over the next three or four years,” he said.
In addition to Riemer, council members Craig Rice and Andrew Friedson said they have doubts that the current budget is sustainable. Rice said he worries that with questions over the amount of school funding for Montgomery County from the state’s Commission on Innovation and Excellence in Education, also known as the Kirwan Commission, the county must continue to maintain steady funding for the school system.
“I know many who are here today who are concerned about their salaries are also worried about their friends and neighbors’ education… because it’s the same dollars,” he said.
Toward the end of the work session, Council President Nancy Navarro urged council members to not fixate on the wage increases this year, and focus on the long-term goal of ensuring future budgets are sustainable.
“This conversation is about choices. There isn’t a perfect, Pollyanna version of the budget,” she said. “We have been going on and on about this make up step. We need to close the chapter.”
Friedson countered by saying that addressing the issues in the current budget is relevant to future sustainability.
Council member Will Jawando noted that he formerly worked in the federal government, and make-up step increases were never questioned. But he also noted that the federal government, unlike Montgomery County, is not required to balance its budget.
Jawando said he objects to the “false dichotomy that workers are the reason we can’t have a sustainable budget.”
“Let’s get past this, let’s make up this step. Let’s get our savings up to 10% and let’s move ahead,” he said.
The council is expected to take a straw vote on the union contracts at its meeting next Tuesday, with a vote on the entire budget expected in late May. The council has the authority not to approve part, or all of the contracts.
Dan Schere can be reached at Daniel.schere@moco360.media
