At a time when unemployment is up, the stock market is down and local tax bills are expected to rise, several area governments are planning to give employees generous pay raises.
In Virginia, Fairfax County police and firefighters would see pay rise by more than 7 percent. Prince William would give out raises of 6.7 percent on average. The Montgomery County budget proposes pay boosts of 7 percent for most workers and more than 8 percent for firefighters.
Officials talk about a "salary arms race" in the region and say such raises -- in some cases much higher than the private-sector average of 2 percent to 3 percent -- are necessary to recruit and keep much needed police officers, firefighters and building inspectors.
"We have to make sure we're competitive," said Montgomery County Council Vice President Steven A. Silverman (D-At Large).
Montgomery needs the raises, he said, to compete with Fairfax and other places, not only for new teachers but for firefighters and police.
But in some places, including Fairfax, pay would rise substantially not just for public safety workers but for nearly all employees.
Such generosity is not a hit with taxpayers Clifton and Marybeth Brown of Vienna. He lost his insurance job in December. She has taken two pay cuts in the last two years. More bad news probably will come when they get their local real estate tax bill. Like many other homeowners, the Browns saw the assessment on their house rise by 20 percent in a year. The couple is budgeting an extra $713 this year to cover the tax bill.
"People are not getting raises now -- people are getting pay cuts," said Clifton Brown, 37. To get by, the family is eating out less and holding on to their Ford with 166,000 miles. "In my household, we've made some difficult decisions. Fairfax County politicians need to do the same thing."
This year, as homeowners are increasingly squeezed by rising tax bills, raises for government workers -- rarely popular at any time -- are receiving more scrutiny, especially in Virginia, where it's an election year.
In Fairfax, the county has proposed some cuts in services while preparing to continue its merit-pay system that is projected to give county employees an average 5.3 percent raise. Public safety workers could receive a boost of as much as 7.7 percent.
The raises recently have come under fire from some supervisors.
"I'll put any of our county staff against any other jurisdiction's," Supervisor T. Dana Kauffman (D-Lee) said. "But it's a question of whether we can pay [for these raises], and I don't think we can."
Kauffman and other supervisors have questioned why Fairfax is planning to be so generous when private-sector workers are receiving far less -- or nothing at all. His wife, a software developer for a private company, recently received a positive review.
"Her reward is that she still has a job," he said.
Other counties have limited choices. Montgomery County is locked into costly labor agreements negotiated during boom times. Now the county faces a $300 million-plus budget gap for the coming fiscal year. But Silverman said reneging on the raises is not on the table.
"These raises sound fairly large by themselves, but if you take into account that inflation is so extraordinarily low in the Washington-Baltimore corridor, these are even nicer pay raises," said Anirban Basu, a Baltimore economist who studies trends in the region. "Sometimes government can be easily divorced from underlying economic realities."
The number of payroll jobs in the nation plunged by 308,000 last month, the largest monthly decline since late 2001, while the nation's unemployment rate ticked up to 5.8 percent, the Labor Department reported last week.
The regional economy, reeling from job reductions in the technology and telecom sectors, has not fully rebounded.
"We're probably getting back to the point where the economy isn't losing jobs anymore," said William F. Mezger, the chief economist with the Virginia Employment Commission.
Private-sector raises are averaging below 3 percent, he said. Meanwhile 1,800 Virginia state workers have been laid off, and remaining workers have not had a raise since 2000. Last month, President Bush proposed a 2 percent pay raise for federal employees. In the District, Mayor Anthony A. Williams (D) is proposing to freeze salaries in the coming fiscal year.
In Maryland, many counties, including Prince George's, have not unveiled their proposed budgets. Local leaders are keeping an eye on the state budget, to see how much aid will flow to localities.
Stephen Fuller, a professor at George Mason University who studies the regional economy, said that despite the current slump, it is still a fairly competitive labor market.
"When you have a 2.6 percent unemployment rate in Fairfax and only 3.1 percent for the entire metro area, it's pretty tight to get the skills you want," he said.
Prince William County officials say their pay needs cannot be compared with the private sector. They are not trying to hire former dot-commers but are competing with each other.
In Prince William, the 6.7 percent pay boost is part of a plan to match the salaries of Fairfax, Alexandria and Arlington County, where pay would go up by an average of 5 percent.
"The market in which we compete is the Northern Virginia public-sector market," County Executive Craig S. Gerhart said. "You can talk about the private sector, but you have to look at places where they hire police and firefighters."
Still, Prince William County workers are scheduled to receive 6.7 percent raises on average. Gerhart and others said local governments are playing catch-up from the early to mid-1990s, when they were cash-strapped and skimped on raises, schools and infrastructure. And during the boom years, many governments had difficulty hiring technology and other workers.
Christi Murphy, 26, a new mother in Prince William, doesn't object much to the pay raises or the higher taxes to cover them, if it means better workers tackling the county's problems.
"If the money will pay for solutions, I'm all for the tax hike," Murphy said.
If Prince William supervisors approve the raises, 82 percent of salaries will match the starting salaries of its richer neighbors to the north.
"We set a policy that we want to be equal," Gerhart said in defense of the raises. "We have to stick with it in good times and bad times."
Staff writers Lisa Rein, Michael H. Cottman and Michael Amon contributed to this report.