Montgomery County Executive Isiah Leggett said Monday that he agreed to a two-year, 13.5 percent pay raise for many county employees to avoid binding arbitration that might have left taxpayers on the hook for an even more expensive labor contract.

His decision is the latest turn in a legal fight that began two years ago when Leggett decided not to follow Montgomery’s collective bargaining law. It places labor negotiations in the hands of an arbitrator if the county and its unions reach impasse.

Leggett (D) said that the county — which was facing huge budget deficits triggered by the recession — could not afford a new round of arbitrated salary increases. He also asserted that the law requiring arbitration did not apply to the county executive and was at odds with the county charter.

A Montgomery circuit court sided with Leggett, and unions representing police officers, firefighters and other employees have appealed the decision.

Two recent developments have led to concern by Leggett and his attorneys that they may not prevail in court.

In September, the Maryland Court of Appeals threw out an Anne Arundel County law that allowed the County Council to ignore arbitrators’ decisions. The measure weakened a county charter amendment approved by voters in 2002 that required binding arbitration.

In November, an arbitrator ruled that Prince George’s County must make up for four years in which police officers had their pay frozen because of budget issues. Officers received raises of as much as 12 percent, at a cost of about $8 million over the next year.

Leggett said he negotiated the two-year, 13.5 percent increase with the 5,000-member Montgomery County Government Employees Organization (MCGEO) — at an annual cost of about $11 million — to avoid potentially steeper increases in arbitration.

“At the end when I looked at the factors, I thought it was far better to come up with the compromise,” Leggett said. The entire package — the first pay raises for most county workers in four years — will be paid for without raising property taxes beyond the annual rate of inflation, he added.

Leggett is scheduled to submit his new proposed budget to the County Council on March 15.

Labor contracts must be approved by the County Council. Most members said they were surprised by the size of the raises but reserved judgment until they can review Leggett’s entire budget. At least a couple said that his concerns seem well-founded.

“It does appear that the Court of Appeals ruling in Anne Arundel is relevant,” council member George L. Leventhal (D-At Large) said.

“The court cases tell us we were going to be killed,” said council member Marc Elrich (D-At Large).

Council member Phil Andrews (D-Gaithersburg-Rockville) disagreed, saying says the raises are unsustainable and Leggett’s legal rationale unconvincing. “It’s a cop-out,” said Andrews, a candidate for county executive in 2014.

He said county employees unquestionably deserve a raise but that the proposal is similar to rich contracts awarded to politically influential employees unions in the past. “These are very large increases while the economy is still soft,” Andrews said. “They’re a repeat of what got the county into trouble prior to the recession.”

Leggett said he has never shied away from freezing workers’ pay when he thought it was necessary.

“Our history and record is fairly clear on that,” Leggett said. Andrews “wants to generate an argument and create a crisis when none exists to generate publicity.”

Leggett said arbitration is risky because under county rules, an arbitrator picks one side’s “last best offer” and does not try to find a middle ground. And if, as in Prince George’s, an arbitrator ordered that the increases apply retroactively to the lean years, “the amount would be devastating,” Leggett said.

He said he will push for changes in the arbitration law.

Leggett said that toward the conclusion of negotiations with MCGEO he offered 5.5 percent in annual cost-of-living and step increases, comparable to what state employees and Montgomery County teachers received in recent contracts.

He said the union’s final offer was 11 percent. Both sides agreed to 6.75 percent annually to avoid more arbitration and litigation.

County career firefighters will receive wage increases of 2.75 percent under a three-year agreement. The estimated annual cost is about $5 million. Terms of the police contract were not available because it has yet to be ratified by the union’s membership, Leggett’s spokesman, Patrick Lacefield, said.

None of the three county union leaders — MCGEO President Gino Renne, Fraternal Order of Police Lodge 35 President Torrie Cooke or International Association of Firefighters Local 1664 President John Sparks — returned phone messages.