About half of the budget — $2.6 billion — would go to Montgomery County Public Schools.
While the school district requested $15.6 million above the maintenance-of-effort level — a state mandate requiring that school systems be funded at least at the level they were in the previous year — Elrich proposed just $2.5 million above that mark.
Last year, Elrich’s predecessor, Isiah Leggett (D), had supported the school district’s full request of $19 million above maintenance of effort.
“It’s a tight budget,” said the council’s vice president, Sidney Katz (D-District 3), noting that “everyone’s concerned about the education part of the budget.”
School officials said they would work with the council, hoping to close the gap between what the school system requested and what Elrich proposed.
School leaders say they want the funds for priorities including mental health services and class-size reduction in elementary schools, said the school board’s vice president, Patricia O’Neill (District 3).
“Our efforts will be to persuade the County Council to fully fund it,” she said. “We believe every penny is needed and will be well spent.”
Elrich wrote in his transmittal letter that he was “hopeful that the General Assembly will increase state aid beyond current levels.”
“If current fiscal estimates hold true, this new, higher level of State Funding would provide MCPS resources beyond their requested FY20 budget,” he wrote.
Council member Craig Rice (D-District 2), who leads the council’s education and culture committee, called the proposal an “education-last budget” and said he hopes the council will fully fund the district’s request as well as that of Montgomery College.
Although the county executive proposes the budget, the nine-member, all-Democratic council has the authority to make changes and ultimately must approve the spending plan.
The first public hearings begin at 1:30 p.m. and 7 p.m. Monday at the council office building in Rockville, followed by three hearings on Tuesday and Wednesday. The council is scheduled to take a final vote on May 23.
To balance the budget, Elrich proposed directing the $90 million that would ordinarily go into the county’s retirement health care benefits trust fund to the county’s reserve fund, which would reach Montgomery County’s long-term goal of holding 10 percent of the county’s budget in reserves by 2020.
Last year, Leggett had reduced — but not eliminated — the amount going to the retirement funds as a “one-time diversion from our policy of pre-funding retiree health benefits.” The reduction was included in the approved budget.
Shortly after Elrich took office in December, his administration proposed a savings plan to make up a gap in the 2019 budget stemming from declining revenue. The $45.7 million savings plan was approved by the council in January.
In his transmittal memo to the council’s president, Nancy Navarro (D-District 4), Elrich said there was not enough revenue to contribute to the retirement fund without making “substantial reductions in current services.”
“I will not layoff or furlough current employees to pay for their future retirement health care benefits,” he wrote.
The move, Elrich wrote, also allows him to provide a “fair compensation increase” to county workers.
Many of those increases are contained in one-year union contracts with the United Food and Commercial Workers’ Local 1994, Municipal and County Government Employees Organization (MCGEO), which represents thousands of county workers, as well as contracts with the police and fire unions.
All three unions endorsed Elrich, a former council member, in his campaign for county executive last year, and spent money independently supporting him, but they did not contribute to his campaign. Elrich participated in the county’s public campaign financing program, under which candidates could not take donations from corporations or unions.
Under the negotiated contract with MCGEO, for example, union members would receive a 2.4 percent pay increase starting after November, a 3.5 percent step increase and, for eligible employees, an additional 3.5 percent step that the council didn’t fund in 2011.
Those who aren’t eligible for additional steps would get a $1,200 lump sum. Those provisions in the contract are expected to cost $14,484,264 in the first year and $21,367,717 annually beginning in 2021.
Nonunion county employees would receive a 2 percent increase. The contracts still must be approved by the council.
Council member Hans Riemer (D-At Large) questioned whether the contract increases are affordable, considering the amount of revenue the county expects.
“The fact that they had to take $90 million out of the retiree trust fund in order to balance the numbers would lead you to believe this is a fiscal crisis budget,” Riemer said. “But then the contracts they’ve proposed don’t really match that.”
“We’re going to look at all of that then hopefully continue a conversation with the executive and unions about this issue of sustainability,” he said.
The budget plan includes $7 million for an early-care and education program, aimed at helping some of the poorest children prepare for kindergarten; and more than $500,000 to increase housing inspections.
Navarro said that while overall the budget reflects the shared priorities of the council and the executive, the council must examine education funding, the union increases and other issues while also considering how the county will expand its tax base to pay for them in the future.
“Everyone is really eager and ready to work on this issue of economic development aggressively,” Navarro said.
Donna St. George contributed to this report.