Montgomery Employees Push Back on Proposal to Cut Raises

Hundreds of Montgomery County employees at a raucous public hearing yesterday implored County Council members not to unwind labor contracts as they move to close a $300 million shortfall.

Over a din of heckling and boos, council members Phil Andrews (D-Rockville-Gaithersburg) and Duchy Trachtenberg (D-At Large) voiced support for reducing salary increases for workers by two percentage points, a proposal that did not appear to gain traction with their colleagues.

"It was not a direction we chose lightly," said Trachtenberg, who was visibly pained to take a position unpopular with an audience waving signs that read: "Feed our families, Fund our contracts." "But I have a job to do, to balance the needs of everyone."

Andrews and Trachtenberg formally recommended shaving $40 million next week from employee salaries and benefits, but they left it to the full council to determine how to do it.

Council member Valerie Ervin (D-Silver Spring), the third member of the fiscal policy committee, shot down the idea "of balancing the budget on the backs of workers," and council President Michael Knapp (D-Upcounty) said he did not think there were any other votes on the eight-member council for a two percentage-point reduction in raises.

A consensus began to emerge, however, to lower the property tax rate, rather than increase it by 7.5 cents as County Executive Isiah Leggett (D) has proposed, and to raise the local energy tax.

To balance the books, Leggett has proposed the largest property tax rate increase since 1988 and the largest credit for homeowners' primary residences -- $1,014 -- to help offset the rate increase.

When the council takes preliminary votes next week on the more than $4 billion spending plan, Knapp said he is aiming to at least reduce Leggett's proposed rate increase and to provide a smaller tax credit, between $250 and $600.

Leggett's spokesman Patrick Lacefield said that lowering the credit by that amount would "hammer people on the middle and the lower end."

Outside the standing-room-only hearing, government employees who live in the county said they would be hit twice by proposed tax increases and salary reductions.

"They can't just write off our increases," said Renee Moss, a library technician of 30 years who lives in Germantown. "I'm an employee, but I'm also a taxpayer."

Salaries and benefits for the county's workforce account for about 80 percent of its spending in fiscal 2009. Most general government workers are slated to receive raises of 4.5 percent, in addition to step increases of 3.5 percent.

"We have zero tolerance for unilaterally breaking our agreements," said Gino Renne, president of the Municipal and County Government Employee Organization.

Even as Renne stood firm on raises, he and other union leaders have been meeting privately with Knapp this week to discuss other ways employees can help trim spending. Under discussion are unpaid days off during weeks including such holidays as Christmas or Thanksgiving; deferring raises for several months as the council did five years ago; or phasing in raises by providing 2.25 percent in the first half of the year, for instance, and another 2.25 percent in the second half.

In a separate hearing yesterday, six council members expressed support for increasing the local energy tax to raise $11 million and encourage residents to use environmentally friendly power sources. Rates for the average homeowner would rise as much as $10 a year, to $111.

The initiative by council member Nancy Floreen (D-At Large) would impose the highest rate increases on the "dirtiest" energy sources, raising rates 10 percent on electricity and 5 percent on natural and liquefied petroleum gas.

Leggett has opposed the increase, saying it disproportionately affects lower income residents and that "energy costs are already sky-high."

Energy taxes residents pay depend on consumption and the type of fuel used. Residents on average paid $88 a year in total energy taxes in fiscal 2007. Pepco's residential customers in Montgomery on average paid $66 in annual taxes on electricity alone, and large commercial customers paid $2,600.