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Statement oUhe Issue Montgomery County Organizational Reform Commission Collective Bargaining The Council's Office of Legislative Oversight (OLO) recently released a comprehensive report on the County's tax-supported revenue and expenditure trends over the past 10 years, as well as those projected for the next six years.4 OLO concluded that the County has a "structural budget gap," indicating that as currently projected, future spending would exceed expected revenue generation on a "persistent and recurring basis." The historical increase in personnel cost is described in detail in OLO Report 2011-2. According to the report, a 10-year comparison of personnel cost versus the number of workyears indicates that the primary driver behind the increased cost is a higher average cost per employee, rather than a larger workforce. Employee compensation and benefits currently account for 82% of the County's total tax-supported spending. According to the OLO report, from FY02 to FYll, the County's tax-supported spending - excluding debt service 5 was 29%, the County's population grew 12%, and median household income increased 21 %. Personnel costs for the County government, MCPS, Montgomery College, M-NCPPC and HOC are largely determined by collective bargaining with employee unions. With unions representing the large majority of employees from these County tax-supported agencies, collective bargaining is one of the most important government processes. For this reason, we explored the possibility ofmaking changes to the collective bargaining system. The ORC was faced with a limited duration and limited resources to evaluate all processes thatmightmeritanalysis. Weareawarethatmanyoftheseshouldbeaddressedinthefuture. However, we chose collective bargaining because of the enormous impact collective bargaining agreements have on the County's fiscal situation. The ORC encourages the Council to continue to seek savings and efficiencies by reviewing these other processes. Please see Appendix II at the end ofthis report, indicating some issues that we would suggest be considered for future review. Discussion oUhe Issue and Recommendations The ORC's review of the collective bargaining system was governed by a desire to create a more equitable balance between the needs of County tax-supported employees and the needs of County residents. Over the past two years, due to the severity of the budget crisis, the Council has rejected some of the economic provisions in negotiated collective bargaining agreements with each County employee union. In F Y l l , the Council modified the furlough proposed by the Executive and adopted a budget that included a progressive furlough for all County Government employees. These "take-backs" inevitably lower employee morale over 4 OLO Report 2011-2, Achieving a Structurally Balanced Budget in Montgomery County (Parts I and Il), is available on the Internet at: http://www.montgornerycountymd.gov/content/council!olo/reports!pdf!20 11-2.pdf. 5 OLO, Part I, pg 2 increased 59%, from $2.1 billion to $3.4 billion. During this same lO-year period, inflation - 33PDF Image | Montgomery County Organizational Reform
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