Montgomery County backs out of raises for public employees

By Michael Laris
Washington Post Staff Writer
Wednesday, May 5, 2010

The Montgomery County Council on Tuesday unanimously declared its intent to break the terms of contracts with public employee unions by freezing pay and ending controversial benefits arrangements known as "phantom" cost-of-living increases.

The collective bargaining agreement with the police union, backed by a recent arbitrator's decision, called for a 3.5 percent raise for members in the fiscal year starting July 1. The contract with the firefighters union called for a 10.5 percent raise for most members.

The council votes, which were required by law, are preliminary. Final decisions will come later this month. But they mark the beginning of a series of difficult decisions after weeks of pained rhetoric, and they signal the council's direction.

The council also indicated Tuesday that it would continue to push for across-the-board furloughs for all county employees, despite the threat of a lawsuit from Montgomery's powerful public school system, which has rejected the unpaid days off.

As they decide how many workers to lay off, how high to boost taxes, which union contract provision to back out of, and where to cut deepest, council members say they are trying to balance many compelling but competing needs.

"There are many moving parts that have yet to be put together," said council President Nancy Floreen (D-At Large). "It's a great jigsaw puzzle -- a Rubik's Cube. We're just starting."

Gino Renne, president of the general government employees union, said it is "premature" to reach any conclusions about final outcomes because county law requires another round of negotiations.

"All unions accept the fiscal challenge. That's clear to us," Renne said. What council members "need to do is let the process play itself out and then we'll see where we are," he said.

Just how do officials who became accustomed to growing government spending in good times now communicate the magnitude of a budget problem that has ballooned into the hundreds of millions of dollars? On Tuesday, some council members did so by talking about how distasteful their choices are.

Council member Marc Elrich (D-At Large) said he regretted having to vote to change the collective bargaining agreements.

"We need to basically own up to the fact that this is an incredibly difficult situation from which there is no other way out," Elrich said.

The labor agreements with the firefighters and police unions, as well as with the Municipal and County Government Employees Organization, which represents general government workers, include retirement contributions based on raises that were not given, which have been dubbed "phantom" cost-of-living adjustments or "ghost" wage adjustments.

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