Faced with another budget shortfall for fiscal 2014 -- even after property taxes were raised 4.5 percent last year and a "temporary" energy tax failed to sunset as promised -- a responsible county executive facing a $134 million deficit would roll up his sleeves and start cutting nonessential spending. Not Montgomery County Executive Ike Leggett, who instead offered his already well-compensated unionized employees a 13.5 percent pay raise.
Montgomery's current budget gap is $63 million larger than had been forecast last June, and Leggett has already instructed the heads of all county departments to trim their budgets by at least 5 percent. That's before the pay raise.
Since 2009, library funding has been cut 30 percent, transportation 26 percent and recreation 23.5 percent. The school system is asking for a $50 million increase in its operating budget, and county employees' own pension system is dangerously underfunded.
According to the U.S. Bureau of Labor Statistics, the inflation rate was only 1.7 percent in December, so the proposed 13.5 percent pay hike over two years is well beyond any reasonable cost-of-living increase. County employees also got a $2,000 bonus last year.
Leggett had more than enough solid reasons to reject union demands. But he buckled in negotiations over a new two-year contract with the Municipal and County Government Employees Organization, which justified its demands by pointing to the equally unwarranted but far more modest 3.4 percent raise that school employees got last year.
Ironically, the $134 million budget shortfall is primarily due to steep increases in the amount Montgomery County must pay for teacher pensions and retiree health benefits, which are calculated using employees' base compensation. By raising their pay, Leggett will also be increasing the amount they are entitled to collect in future benefits. This creates an endless drain on county resources, to the detriment of other priorities that directly benefit taxpayers, such as libraries, roads and recreational facilities.
Raises in the private sector don't come every year, no matter what. They are based on increased productivity and a company's healthy bottom line. Were Leggett serious about balancing the interests of employees with those of the taxpayers who employ them (and him), he would have told the union that a double-digit pay raise under current circumstances was simply out of the question. Montgomery County will never get out of its current financial hole by digging more vigorously.