Montgomery county financial officials warned Tuesday of the affect of declining employment levels and home sales slumping to their lowest level in 10 years.
Montgomery’s chief administrative officer, Tim Firestine, told county council members to prepare for a grim budget process this year and perhaps even further into the future.
Firestine said county spending has grown far faster than inflation, population and school enrollment during the past 10 years. In recent years the county had been able to fund that spending through strong growth in income tax revenue.
Now, however, the county has seen a .3 percent decline in tax revenue between July and December 2007, compared to the same time period last year. County officials said the county is currently facing a budget deficit of about $300 million.
“The historic rate of expenditures is unsustainable,” Firestine said.
Montgomery, like many counties, spends about 80 percent of its budget on salary and benefit costs for employees.
Gino Renne, president of the union the represents more than half of county employees, said labor officials are bracing for discussions with county leaders. In 2003, Renne said county employees agreed to delay their cost of living adjustments for four-and-a-half months while the county dealt with financial difficulties.
Workers were later upset when county leaders found $4 million in funding for an arts center.
Renne, who recently told county leaders he was comfortable with a hiring freeze so long as the contracts of current county workers were not affected; said he might not be as amenable in negotiations now.
“If you don’t have money to honor contracts with your work force, how do you find four million [dollars] to bail out an art gallery?” Renne said. “That type of behavior raises skepticism with our membership—we have rising poverty in this county, an increase in gang activity, increase in trailers at schools and a lack of fire equipment but we can build a $95 million symphony hall that only the privileged use? I don’t get it.”
The cost of cost of living adjustments
It’s a lean budget time in Montgomery county, and cost of living raises for key labor groups on top of their usual salary bumps are still looming. Here’s what two major groups are expecting:
» 21,840 teachers and staffers: 5 percent
» 5,200 unionized county workers: 4.5 percent raise
