Arlington County, Va., and Montgomery County, Md., have a lot in common. Both are among the wealthiest counties in America. Both abut the District of Columbia and benefit from a tax base that consists largely of government and political spending. But in the current hard times, with both counties facing shortfalls, the two are taking very different approaches.
Arlington, facing a $50 million shortfall in its annual budget, is cutting 46 staff positions. In order to facilitate this in the least painful way possible, the county has given early retirement to 20 employees, the ARLnow blog first reported last week, and plans to reassign others, whose positions are eliminated, to slots that are currently empty.
In Montgomery, the story is very different. Facing a $134 million shortfall, County Executive Ike Leggett decided to strike a deal with public employees and their union that gives them a 13.5 percent pay hike over two years. The cost of this raise, estimated by Democratic Councilman Phil Andrews, will come to an additional $40 million over three years, and that comes on top of the shortfalls currently expected.
As The Washington Examiner's Kate Jacobson reported Tuesday, Leggett is keeping his cards close to his vest on the question of how he will pay for all this. He promises there won't be any further tax hikes. But on the spending side of the ledger, Leggett was already asking county agencies to reduce their budgets by 5 percent before giving away the store to the union. As we noted last week, the county has already slashed funding for transportation, libraries and parks in recent years.
Moreover, whatever the county promises its employees now, it is also promising them more later. A 13.5 percent pay hike, as Montgomery County Taxpayers League President Joan Fidler noted, "adds to the base of people's pensions." Montgomery County pensions are already $50 million underfunded.
Now consider one further and very much related development. In two weeks, the federal government's sequestration cuts will take effect. Montgomery County, which has lived off the fat of the capital land, will be among the jurisdictions hardest hit. Its top 10 employers include the Department of Health and Human Services (nearly 30,000 employees), the Defense Department (12,700) and Lockheed Martin (4,700).
Once contractor layoffs and government attrition begin taking their toll on the county's tax revenues, how will Leggett keep up with all the big promises he's made?