Montgomery County Council considers ending 'phantom' pension contributions

The union representing government workers lead a rally on a parking-lot roof to protest budget cuts.
The union representing government workers lead a rally on a parking-lot roof to protest budget cuts. (Susan Biddle For The Washington Post)
By Michael Laris
Washington Post Staff Writer
Wednesday, April 7, 2010

With revenue taking a new hit and advocates from residents to large public employee unions ramping up lobbying for resources, members of the Montgomery County Council are catching a clearer glimpse of the unprecedented and uncomfortable budget squeeze they face.

On Tuesday, they found themselves surrounded.

Union leaders representing government workers led a rally on the roof of the parking lot behind the council's office building, while parent and teacher groups gathered on the council's front steps. More than 400 government employees clanging blue and yellow cowbells chanted, "We've had enough!" Later, a series of budget hearings -- which began Monday and will run through Thursday -- continued inside, as waves of speakers sat in panels facing elected leaders with the power to say yes or no to funds for libraries, classrooms and health programs.

Council members were at the hub of a day of bad fiscal news, impassioned appeals and a proposal that could save millions of dollars next year but initially garnered a lukewarm reception.

The approaches of council members differed sharply. Council member Phil Andrews (D-Gaithersburg-Rockville) proposed legislation that would end controversial retirement benefits known as "phantom" cost-of-living increases.

Under an agreement last year, the county makes contributions to the pensions of general government workers, firefighters and police based on raises they did not receive. Ending that unusual practice would save $7.2 million in the next fiscal year and more than $200 million over 40 years, Andrews said.

"It's bad practice to tie pensions to salaries that aren't provided, and this is the year to change it, before it gets established and when there's a very clear rationale because of the extremely difficult fiscal year," Andrews said. "The county needs the money."

Meanwhile, council member Valerie Ervin (D-Silver Spring), a former labor organizer, joined three council colleagues at the rooftop rally and led employees in chants of "No Justice, No Peace!"

"Look around you and see who's had your back," Ervin said.

County Executive Isiah Leggett (D) made the deal for the phantom retirement increases last year as a consolation for unions that agreed to give up part of their negotiated raises, and Andrews was the sole vote against it. Several council members said Tuesday that they would consider undoing the arrangement. But other members joined Leggett in voicing concern that the move could put too much of a burden on county employees who are facing deeper proposed cuts.

Leggett's $4.3 billion budget proposal includes 10 days of furloughs for many government workers, which amounts to a 3.8 percent reduction in pay. It also cuts more than 230 filled positions and eliminates raises and cost-of-living adjustments for police, firefighters and general government employees.

Several council members voiced support for those moves. "They know very well we don't have any options in this budget," said council President Nancy Floreen (D-At Large), though she voiced concern about the lowest-paid workers.

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