Leggett, Montgomery County unions spar over pension costs
Montgomery County's pension and retiree health accounts are facing a long-term shortfall of more than $4.8 billion, and officials repeatedly have pulled back from difficult decisions needed to close the gap.
The pension programs for the county and the school system are underfunded by about $1.3 billion, and retiree health funds are short by $3.5 billion, county records show.
County agencies have set aside just 3 percent of what they will need to cover health care for retirees. The pension funds, which have been in place much longer, are significantly underfunded.
Faced with these burgeoning shortfalls, Montgomery County Executive Isiah Leggett (D) has taken the dramatic step of ignoring the collective-bargaining process with the public employee unions, rejecting the results of binding arbitration.
With a labor arbitrator recommending no change in the amount that county workers contribute to their pensions and health insurance, Leggett is proposing significant new pension contributions for workers and a sizable cut in county health-care contributions.
The move prompted tough rhetoric from union leaders in the wealthy, liberal county, which employs some of the Washington region's highest-paid, most generously benefited employees. County firefighters are planning to appeal Leggett's labor and budget decisions this week, formally accusing the county of engaging in an unfair labor practice.
In rejecting the arbitrated rulings, Leggett proposed that workers increase their pension contributions by 2 percent of their salaries and that the county cut its contribution to current health-care costs from 80 to 70 percent.
One union leader responded to Leggett by suggesting that the county executive might don a cheese head, a dismissive reference to Republican Gov. Scott Walker of Wisconsin, whose fight against collective bargaining rights has made him a union villain. Another called Leggett a lawbreaker for ignoring binding arbitration.
"Let my membership operate outside the law, and they'd be fired on the spot," said Gino Renne, head of the county's government employee union, who said Leggett's negotiators had been unyielding. "He drew a line in sand, pretty much like the radical Republicans in Wisconsin. Nothing good is going to come from that."
Leggett said he supports collective bargaining but must, under the county's charter, do what is fiscally responsible for taxpayers, binding arbitration or not. "It's not as if it has no meaning, no impact. It does," Leggett said of the arbitration process.
But, he said, the public interest and county's financial health take priority, and his proposals will produce "real, sustainable savings."
The County Council will most likely have the final say when it passes a budget in May. Leggett proposed a $4.35 billion budget.