Furloughs and Fiscal Reform
A first step to confront Montgomery County's budget shortfall

Sunday, September 7, 2008

MAYBE IT'S premature to clear space on Isiah Leggett's desk for a sign that reads, "The buck stops here." But Montgomery County's chief executive has taken a long-overdue shot across the bow at the county's muscular unions. Mr. Leggett announced that county employees would take a limited number of furlough days, or unpaid leaves of absence, to help balance the $4.3 billion county budget for the current fiscal year. Furloughs are a stopgap measure, not a long-term remedy. But by calling for furloughs and by indicating that more significant cuts to compensation are in the offing, Mr. Leggett rightly acknowledged that stagnant county tax revenue isn't going to rebound anytime soon. He also sent a powerful message to the unions: The county's purse strings are tightening, and the outsized pay increases unions have come to expect are on the way out.

Montgomery residents shouldn't forget why Mr. Leggett had to make such a bold move. When union leaders demanded huge pay increases be written into multiyear contracts, neither he nor the majority of the County Council pushed back. The sizes of the raises, which totaled 8 percent for many county employees, dwarfed inflation rates and drained the county budget. They also contributed to a 13.4 percent increase in property tax rates. The budget remained $16 million in the red despite the new tax revenue. The council dodged making difficult cuts by approving the budget with the unusual stipulation that Mr. Leggett find a way to make up half the shortfall.

The furloughs will generate $6 million; Mr. Leggett squeezed the remaining $2 million from existing programs. Workers will stay home a minimum of two days, though the timing and specifics haven't been decided. Libraries will probably close, but it's unlikely that residents will notice other cutbacks. The county will stagger furlough days for police and fire department employees so the impact on public safety is minimal. Furloughs won't affect public schools and the park system because they have separate operating budgets.

Montgomery County, which faces a shortfall of $250 million for fiscal 2010, isn't the only Washington area locality to confront financial challenges. Prince George's County faces a $48 million shortfall and is also considering furloughs; Fairfax County is bracing for higher taxes to make up a $430 million deficit. In Montgomery County, however, budget problems present a unique opportunity for change. The deficit has drawn public attention to the excessive pay increases demanded by the unions -- and many residents are outraged. Mr. Leggett and the council must capitalize on this opportunity by pushing for a reduction in cost-of-living increases for county employees in the spring. Furloughs are a good start, but they don't obviate the need for long-term fiscal reform.