Montgomery County Learns to Tighten Its Belt

Thursday, April 9, 2009

FOR MOST counties, a 1.9 percent spending increase in this downturn would be cause to celebrate. For Montgomery County, known for its superlative services and sometimes spendthrift habits, the slender uptick is a lesson in austerity. The budget submitted by County Executive Isiah Leggett (D) slashes funding for almost everything but public safety and schools. The plan might seem generous compared with Prince George's County's 3.5 percent decline, but it offers the smallest year-to-year spending increase in Montgomery in 18 years. Yet, with news that the state could decrease aid to the county further, there's more work ahead.

Mr. Leggett has done much to slow the rate of spending. His $4.42 billion fiscal 2010 budget cuts hundreds of jobs and reduces services, including library hours and Ride-On bus routes. The average tax bill for an owner-occupied home, assessed only once every three years, would rise by about 8 percent; that may seem unfair to homeowners, but it's a by-product of measures intended to protect them from steep year-to-year property tax swings.

Some council members, including Michael Knapp (D-Upcounty), have accused Mr. Leggett of making assumptions that are too hopeful. Mr. Knapp points out that Mr. Leggett must still secure a waiver from the state to free $50 million from the school system to cover the shortfall. And, he notes, Mr. Leggett included $14 million in ambulance fee revenue in his budget, knowing that a majority of the council opposes the measure. But the fee is reasonable, and Mr. Leggett's other estimates aren't far-fetched; other counties are making similar assumptions.

Much of the drama in Mr. Leggett's budget has centered on his effort to limit pay increases for county employees. Only after wresting generous concessions from him did all the county's unions but the firefighters agree to forfeit their cost-of-living increases (COLAs). (To his credit, Mr. Leggett withheld the firefighters' COLA, a decision affirmed by an independent arbitrator.) Both the Municipal and County Government Employees Organization and the Fraternal Order of Police won "phantom COLAs," meaning their pension benefits will be tallied as if they were still being paid their cost-of-living increases. That puts undue stress on a pension system that's been hit hard by the downturn and is already struggling to fund its liabilities. Other goodies include bonus vacation days, a $40,000 buyout for employees within two years of retirement and a provision that allows police officers to take their patrol cars home if they live within 15 miles of the county line. The elimination of COLAs will save millions of dollars in fiscal 2010, but the concessions will cost the county for years to come.

The state is likely to reduce aid to the county by between $40 million and $56 million, and officials are scouring the budget for extra savings. Mr. Leggett may have to impose furlough days on county employees, or go after remaining pay increases. After closing a shortfall exceeding half a billion dollars, the easy choices are long gone.

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