Montgomery council cuts health, retirement benefits for employees

The Montgomery County Council unanimously passed a budget Thursday that rolls back health and retirement benefits and raises the prospect of a prolonged period of labor discord.

The $4.37 billion budget cuts benefits for government and school employees by $33 million, a fraction of what the county spends each year on health care and retirement. But the impact on individual workers could be significant. County salaries vary widely, from $38,000 a year for a bus driver to $172,000 for a child psychiatrist, and the health component alone could reduce take-home pay for many employees by more than $1,000.

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Employee compensation in Montgomery
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Employee compensation in Montgomery

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Given the county’s history, the survival of the cuts is significant. But the way they were passed shows what happens when a wealthy, liberal county is forced to confront years of political accommodation and generous spending.

In the lead-up to Thursday’s vote, County Executive Isiah Leggett (D) had insisted that he was not bound by the county’s collective bargaining process in proposing a budget and won a resulting court fight. Union leaders say they plan to appeal, and some have raised the specter of possible strikes.

Republicans on Capitol Hill and in statehouses in Wisconsin, Ohio and elsewhere have targeted public employee unions and government-guaranteed pensions, moves that partisans hope will fuel frustration over spending on the right or energize labor supporters on the left. But in Montgomery, where Democrats hold every seat on the County Council and in the General Assembly, it has been an internecine fight, pitting public employees against historic allies.

During a rushed round of bargaining in recent days, union leaders said they were confused about who was in charge. Gino Renne, head of the Municipal and County Government Employees Organization, said the council told union leaders to bargain with Leggett’s staff, only to have Leggett’s staff say its hands were tied by the council.

“Right now, things are chaotic. . . . The whole point of arbitration is it’s final and binding,” said Dale Belman, a labor relations professor at Michigan State University who remembers a teachers strike from his years growing up in Bethesda. “The council and county executive are both trying to pass the ball back and forth.”

The consequences could be far-reaching. Union officials said that police are worried about losing take-home pay and paying their residential electric bills. Without a reliable line of communication to management, worker morale will fall, and services will deteriorate, union officials said.

But county officials said there was no way to ignore the ballooning costs of benefits, which have more than doubled in a decade.

“It’s time for all of us to live within our means,” said Council President Valerie Ervin (D-Silver Spring). “Today is a watershed moment for the County Council, because we are not just passing next year’s budget; we are creating a blueprint for addressing our long-term structural deficit.”

With the new spending plan, the county closes a $300 million shortfall. Prince George’s County had to close a $77 million budget gap. And the District is wrestling with a $322 million deficit.

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