Andrews’ Budget Comments

Councilmember Phil Andrews comments on May 16 after the Montgomery County Council reached unanimous tentative agreement on the Fiscal Year 2014 operating budget:

“I’m very pleased that the County Council has voted to reduce the County’s energy tax increase of 2010 by 10 percent as I proposed in March. It is important that the Council is keeping its word that the huge 2010 increase in the energy tax is a temporary not permanent increase. While I am voting for the overall aggregate County budget because of the decision of the Council on the energy tax, I will vote against the FY14 budget for County Government (which next week the Council will vote on separately from other agency budgets, and from the overall budget) because it includes excessive pay raises for most County employees of 6.75 percent to 9.75 percent. These excessive pay raises not only will cost $31 million directly in FY14 (and more in FY15 and beyond as they are annualized), they will also increase overtime and pension costs more than is defensible.

“The collective bargaining agreements with County unions agreed to by County Executive Leggett and approved by the County Council, which I voted against, include additional pay increases of 6.75 percent to 9.75 percent for most County employees in FY15 as well, resulting in pay increases over the next two years of 13.5 percent to 19.5 percent for most employees. Given the slow economic recovery and that Montgomery County Government has no difficulty attracting and retaining excellent employees, these pay raises are irresponsible.

County employees deserve a pay raise after several years without one, but one that is reasonable and sustainable. Reducing these raises by 35 percent as I proposed in March would have provided pay raises of 4 to 6 percent in FY14, and saved $11.4 million in FY14. Reducing the pay raises for FY15 as I proposed would save a cumulative total of $22.8 million that year and every year after. This would have enabled the County to reduce the 2010 energy tax increase by 10 percent in FY14 (as the Council did last year), and by an additional 10 percent in FY15, keeping the County on a path to eliminate that huge 2010 increase in the energy tax (a 155 percent increase for homeowners, and a nearly 60 percent increase for businesses) as both County Executive Leggett and the County Council promised in 2010.

“Regrettably, County Executive Leggett opposed reducing the energy tax in his proposed FY14 budget, and did not propose reducing it in his proposed FY13 budget either. Mr. Leggett is funding excessive pay increases by proposing that the County keep an excessive energy tax — by far the highest energy tax in the region – that undermines the County’s economic competitiveness. If the County has to keep an excessive tax to fund pay raises, it can’t afford the pay raises.

“I am also very disappointed that the County Council has voted to raise the property tax rate for a third consecutive year—a cumulative increase of nearly 12 percent from FY12-14. These increases more than wipe out the 10 percent reduction in the property tax rate that I fought for and that the Council approved between 2004-2006 (FY05-07). With property values now rising, the property tax rate increases of the past three years will burden many County homeowners, particularly those on fixed incomes. Landlords will pass the additional cost along to renters. The Council should have rejected Mr. Leggett’s proposal to raise the property tax rate for a third straight year, and reduced the FY14 income tax offset credit from $692 to $578 per household instead, as Councilmembers Berliner and Floreen joined me in supporting on May 15.”

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