The Montgomery County Council rejected a proposed $100 million package of pay hikes averaging about 8 percent for teachers and other unionized employees Tuesday, telling County Executive Isiah Leggett and the Board of Education that the increases need to be pared back.The raises were negotiated by the county and school system as part of collective bargaining agreements. But council members, who are also considering a 6.4 percent property tax increase to fund the 2017 budget that goes into effect July 1, said the hikes are out of scale in an economy where inflation is low and Social Security beneficiaries won’t see an annual cost-of-living adjustment.“We’re working together to rebalance our spending in a way that’s responsible to all, including students, taxpayers and employees,” said Council President Nancy Floreen (D-At Large).Leggett and the Board of Education have until May 10 to renegotiate wage provisions with unions and send a revised package back to the council. Leggett and the board could also opt to leave the increases unchanged.
The council has the authority to set pay. It is scheduled to take final action on the budget May 26.
Leggett, who negotiated the contracts with police fire and non-uniform county employees, said the chances of shrinking the package were remote and amounted to “a kabuki dance” of pointless posturing.
“There’s no way I can envision that we can successfully negotiate what the council wants,” Leggett said.
He added that during the recession years, when the county was strapped for revenue, economic stability was achieved “on the backs of labor.” That came with a promise, he said, that workers would be made whole when times improved.
“We said that as we emerged from that we would try to make up for some of that,” Leggett said
About three-quarters of the $100 million is earmarked for the 156,000-student school system. In 2014, the county Board of Education signed an agreement with unionized teachers, principals and support staff that calls for a 2 percent general wage hike and a 3 percent “step” or longevity increase in September, followed by another step increase in March averaging an additional 3 percent for some school employees.
The council is considering a $2.4 billion schools appropriation for 2017, about $90 million above the state-mandated minimum spending requirements, or maintenance of effort. Members said they want to see less taxpayer money going to salaries and more channeled into initiatives that reduce class size and target the achievement gap.
School Board President Michael Durso and Chris Lloyd, president of the Montgomery County Education Association, said discussions were underway and expressed optimism.
“The council has made it very clear they are concerned about class size and the achievement gap, and so it’s incumbent on us to find a way where that can happen,” Durso said.
Lloyd, whose union presents about 12,000 classroom teachers and other educators and support staff, said both sides are “trying to find a path forward.”
“The challenge is to put together a package that makes sense to meet priorities and honor the people who are working to meet those priorities,” Lloyd said.
Under contracts negotiated by Leggett, police and non-uniform employees would receive 1 percent general wage increases and a pair of 3.5 percent step increases — one for this year and the other to make up for step increases deferred during the recession. Firefighters would get a 2 percent wage adjustment and a single 3.5 percent step increase.
The council said Tuesday that it wanted to eliminate the deferred step increase for police and nonuniform workers and reduce the firefighter wage increase to 1 percent, bringing all three unions to a 4.5 percent hike.
Gino Renne, president of the United Food and Commercial Workers Local 1994 MCGEO (Municipal and County Government Employees Organization) which represents about 8,000 non-uniform county workers, said the money at issue was “nickels and dimes” in the context of a $5.2 billion annual operating budget.
“This is really about money that was loaned to them by the workforce,” Renne said. “They want to renege on promises that were made.”
A County Council staff report recommends against funding full salary increases for teachers and school staff set to go into effect in September and next March, saying the council should push the school system to instead spend some of the money on reducing class sizes and solving the achievement gap.
Citing inflation numbers that remain low and the fact that Social Security beneficiaries won’t see a cost of living increase this year, the report also recommends against second-step increases already negotiated for county government employees and a decrease in the cost-of-living increase negotiated for county firefighters.
“The Council’s top priority is classroom initiatives that reduce class size and target the achievement gap,” read the report, which was prepared for a Thursday morning joint budget hearing before the council’s Government Operations and Education committees. “Channeling funds to these initiatives within the amount appropriated by the Council will require a reduction in proposed FY17 employee pay adjustments.”
Two years ago, the county’s Board of Education entered into the three-year agreement that calls for the 2 percent general wage increases in September with the three unions that represent more than 22,000 county school teachers, support staff, principals and administrators. The agreement also calls for a step increase in September that averages about 3 percent and another step increase next March averaging another 3 percent for some school system employees.
According to Stephen Farber, the council administrator who helped prepare the report, the county would have a nine-day period to renegotiate its agreements with county employee unions if council members support the recommendations at Thursday’s committee hearing and Tuesday’s full council session.
The Board of Education has authority over the school system’s contract agreements with teacher and staff unions. It would be up to the board to determine how to allocate the amount of funding approved by the council.
The council is set to approve the budget May 26 for the fiscal year that starts July 1.
The recommendations come as council members consider County Executive Ike Leggett’s recommendation for a 6.4 percent property tax increase to fund a proposed $5.27 billion budget for the fiscal year that starts in July.
Because the proposed increase would put the property tax rate above the county’s charter limit, it would likely require unanimous approval from the nine-member council. That has prompted a deep examination of the employee salaries and benefits included the budget.
A 6 percent increase in funding for Montgomery County Public Schools (MCPS) that’s $89.3 million more than the minimum spending required by state law was one of the driving factors behind Leggett’s property tax increase recommendation. MCPS funding would make up $2.45 billion of the county’s budget under Leggett’s proposal.
The council staff report points to the significant continued costs of salaries and benefits for county government employees, school system employees and employees of other county-funded agencies.
Salary and benefit costs for active and retired county government employees account for 80 percent of the $4.62 billion tax-supported portion of Leggett’s recommended budget. Salary and benefit costs for active and retired school system employees account for 90 percent of recommended school system funding, according to the report.
While saying MCPS employees have received similar pay increases as county government employees over the last six fiscal years, the report says “benefits for MCPS employees are especially attractive,” pointing to lower health care premium payments.
Leggett negotiated a 1 percent general wage increase for next fiscal year for most of the county’s more than 9,000 employees, a group that doesn’t include MCPS employees. The county employees would also get a step increase of 3.5 percent and there would be a second 3.5 percent increase for employees who had step increases postponed during the Great Recession-fueled economic downturn.
The county firefighters union negotiated a 2 percent general wage increase that the report recommends cutting to 1 percent.
The report says the general wage increases would cost the county $5.7 million for county employees, $31.5 million for MCPS employees, $4.2 million for Montgomery College employees and $1 million for Park and Planning employees—a total of about $42.5 million in additional costs for general wage increases.
Each of the agencies also include additional wage increase costs for step and longevity raises.