Montgomery County Taxpayers League

The Voice of Taxpayers of Montgomery County, Maryland
Montgomery County Taxpayers League

The Voice of Taxpayers of Montgomery County, Maryland

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Personnel-Disability Retirement- Eligibility: Testimony by President Joan Fidler

MCTL Presdient Joan Fidler provided testimony at a hearing September 28, 2010, before the Montgomery County  Council on Bill 45-10, Personnel-Disability Retirement- Eligibility-Total and Partial Incapacity:

Thank you for the opportunity to testify in support of Bill 45-10 related to disability retirement.   I am Joan Fidler, President of the Montgomery County Taxpayers League and I am here today to commend Council members Trachtenberg, Andrews and Berliner for sponsoring this bill.  You have shown considerable courage in devising this new two-tier system for disability retirements, one that I’m sure will not gain you many kudos from the unions.  As taxpayers we thank you for recognizing that the current system is fiscally  unsustainable and  a significant drain on the greatly diminished revenues of Montgomery County.

Let me state, at this juncture, that the problem lies not with County employees (though there have been several egregious examples of abuse by County public safety personnel); the problem lies with the current system that invites abuse.  Thus from 1985 – 2008, 40 percent of retiring police officers retired on disability pay.  The current system, not the people, needs strengthening.  This new, two-tiered system is a more fair approach to dealing with disabilities incurred by employees in the discharge of their duties and is an important step in the right direction.   It distinguishes between employees suffering total incapacity and thus unable to engage in gainful employment and those who suffer a temporary incapacity for 12 months.  A clearer definition of the two might be more useful in the implementation of the Bill.   The devil, in implementation, will lie, as usual, in the details.

Many, if not all, of the surrounding jurisdictions employ a two-tier system for disability retirements and none of them appear to have lost the ability to either recruit or retain highly qualified personnel.  Fairfax County—yes in a right-to-work state—has a handful of disability retirements.   Howard County has had no disability retirements of its public safety personnel in the last 12 months.   Both Fairfax and Howard counties exercise substantial follow through.

There are many positives in Bill 45-10.  To name two:   (1) retirees receiving disability-related pensions must, on an annual basis, send a copy of their federal tax return to the Chief Administrative Officer in the absence of which the pension payments are suspended;  (2) the Disability Review Panel must rely on the assessment of an independent vocational expert to base a determination regarding “substantial gainful activity”.

A few recommendations from the Taxpayers League:   (1) the definitions of total and partial incapacity should be more sharply delineated, and (2) annual reviews of the status of those receiving disability pensions should be conducted by medical personnel independent of both management and labor.

The Taxpayers League supports Bill 45-10.

Thank you.

Testimony given Sept. 15, 2010, by Yale Wiesberg, MCTL Treasurer, to the Organizational Reform Commission

Testimony given Sept. 15, 2010, by Yale Wiesberg, Treasurer of The Montgomery County Taxpayers League, to the Organizational Reform Commission:

“The Montgomery County Taxpayers League appreciates the Organizational Reform Commission allowing us to comment on our recommendations to save the County millions of dollars to address the structural deficit between $600 million – $1 billion.

The Taxpayers League fully supports the creation of this Commission and is impressed with the quality of its members.  There needs to be a recommendation to the Executive and Council that this Commission be called at least every ten years.

The League believes that the scope given to the Commission to consolidate functions performed by the County government and County-funded agencies is much too narrow in scope and will not address the larger structural deficits facing the County.  The League believes that the Commission should submit to the Executive and Council three tiers of recommendations with the first tier addressing the scope given to the Commission; the second tier addressing expenditures and revenues to reduce the structural deficit; and the third tier would include recommendations not related to the first two tiers.

Tier I – Some suggestions for Tier I recommendations might include:
·        Consolidation of all training (excluding public safety) to be performed at Montgomery College or a training facility to be constructed.  This facility could also include employees of the school system.
·        Transportation needs of both the county and school system could be consolidated.
·        Procurement of both the county and school system could be consolidated.
·        State legislature needs to enact legislation to allow the Inspector General more power to look into issues which affect the school system.
·        Process for negotiating contracts with the various unions needs to be changed.  Presently, there is a clear conflict of interest whereby the Human Resources Department fully participates in the negotiating process with the unions.  The results of the contracts directly affect their compensation and benefits.  The Executive needs to appoint a negotiator who represents the citizens of the county and has no vested interest in the contracts.
Tier II – Recommendations
The Commission is aware that the current County budget is approximately $4.2 billion (including the school system).  The school budget represents 58% of this amount.  Compensation and benefits represent 80% of the school budget and approximately 70% of the County budget.

Health Benefits:
Last year the County Council appointed me to Chair the Compensation Committee for the elected officials.  The Committee also examined the fringe benefits given to the elected officials.  I scrutinized the health benefits of both school and county employees.  For county and school employees, their families, retirees and their families, the county’s budget consumes approximately 500 million dollars.  The health benefits given to county and school employees far and away exceed those given to federal employees and retirees.  County employees pay either 20% or 24% for their premiums while federal employees pay 28% and private employees pay 30% for their premiums.  School employees only pay 5% or 10% for their premiums.  The benefits of county and school employees far exceed those given to federal employees.  County and school employees have no deductibles, no hospital admission fee, 100% of tests and surgeries are covered and prescription drugs cost between $5-$10 for a name brand medicine for a 90-day supply (no incentive to get a generic brand).  Federal employees having the standard Blue Cross/Blue Shield plan pay a $200 hospital admission fee, pay 15% for tests and surgeries, a $300 deductible and pay $65 for a 90-day supply of a name brand medicine.  Federal employees pay a $20 copay for a doctor’s visit and $30 for a specialist.  County and school employees usually pay only a $10 copay for any doctor’s visit.

The Taxpayers League believes that major changes need to be changed for health benefits.  A savings can be made of at least $100 million a year and still allow county and school employees to have better health benefits than federal employees.

Another issue relating to health benefits is for school employees who pay 35% for their health benefits when they retire.  This is a disincentive for them to retire which means we cannot replace them with lower paid employees.  Finally, part-time school employees need to pay a higher percentage than full-time employees.

Overtime:
Tighter scrutiny needs to be given to the amount of overtime spent.  How much money is spent by all agencies for overtime?  When overtime for an employee reaches a certain amount, it needs to be approved by a higher level of management.  When an employee receives more than $20,000 a year in overtime, it needs to be approved directly by the County Executive or Chief Administrative Officer.

Gasoline:
Phil Andrews told me that the County spends at least $100 million a year for gasoline.  Gasoline (oil) is now around $70 a barrel.  The County should seriously consider entering into oil futures contracts to lock into a price per gallon.

Cost Overruns:
There are many contracts for construction projects which exceed the contract price.  We need to consider more fixed price contracts and since we are in a recession and companies are seeking work, we need to look into locking in prices for long-term contracts.

Speed Cameras:
The County has recently lost millions of dollars in revenues due to the enactment by the State relating to speed cameras.  Basically, fines can only be imposed by a jurisdiction when exceeding at least twelve miles per hour and can only be used in school and work zones.  Improvement in this law, requiring state approval, would be to have a two-tier system where speeding between 12-19 MPH would remain at $45 and speeding 20 mph or more would increase to $90.

Tier III – Recommendations
1.      Recommend to hire an outside consultant to perform management audits on some of the larger departments, i.e. Health and Human Services and public Works.  This consultant has the expertise to look at and reduce the expenses of the department and increase its efficiency.
2.      Election of a Council President by the voters.  The advantages would have consistency to the Council over the four years and would take the politics out of voting for a president each year.  The argument against this is it might dilute some of the power of the Executive.

Thank you.”

“Maryland firefighters funding Montgomery races to support union brothers”

From The Washington Post of September 8, 2010:

“Firefighters from Baltimore and Prince George’s County have been pouring money into Montgomery County council races, adding last-minute support to local union brothers who lost out on large raises this year because of Montgomery’s budget squeeze.

“Ross Goldstein, deputy administrator of the Maryland Board of Elections, said the contributions are permissible under state law.”

Read the full story at The Washington Post.

“In giving 117 years of comp time, Montgomery official hopes to heal budget wounds”

From the Washington Post of July 27, 2010:

“To salve the wounds left by an unusually tight budget, Montgomery County Executive Isiah Leggett has agreed to give county employees the equivalent of more than 100 years off.”

Read the full story at The Washington Post.

Our take:

Mr. Leggett’s gift of compensatory time to county workers is not a gift to the taxpayers of Montgomery County.  Our recent property tax bills are not a gift; neither are our increased cell phone taxes.  Compensatory leave, he claims, is not a cost to the taxpayer.  We taxpayers claim that it is.  Leave is a liability on the books of Montgomery County.  According to the Council, the gift of compensatory leave translates to $7 million.  These are not phantom dollars but translate to real money when employees choose to accrue and eventually cash out their leave.  The gift was supposedly given to raise the morale of county workers.  What will it take to raise the morale of county taxpayers?

“Who really controls the Montgomery schools”

From a letter of July 25 to the Washington Post by Laura V. Berthiaume,  Member, Montgomery County School Board:

“What the critics miss is who really controls the school system: the superintendent and the entrenched, unaccountable bureaucracy, who make almost all the real decisions.”

Read the full article in the Washington Post.

Our take:

When a School Board member expresses frustration about the power of the School Superintendent and his senior bureaucracy, and the resulting inability of the School Board to take action on important matters, it is a bit jarring to taxpayers – and voters –  to discover that the elected members of the Board are unable to affect the actions of the appointed Superintendent – one appointed by them.  They can react but not propose? They have no input, can provide no guidance, in contract negotiations with the Unions? All power resides with the Superintendent?   Is something rotten in the state of Denmark when the School Board is powerless to control the Superintendent while complaining about his cozy relationship with the Teachers Union?  Thus while School Board Member Berthiaume would like to increase the co-pays for doctor visits of school employees from its current astonishing low of $5 and use the savings for direct services to school children, she claims that she is powerless to do so.  So in weighing the balance between benefits for school employees and increased services for the school children of Montgomery County, the School Board which is “responsible for the direction and operation of the public school system” claims that it is helpless!

“Fairfax schools undercut Montgomery on costs”

From the Washington Examiner of July 18, 2010:

“For the 2009-10 school year, the cost per pupil in Montgomery County was nearly $15,500, up from about $8,500 in 1999-2000.  In Fairfax County, the cost was about $12,900, up from $8,200 a decade earlier.”

Read the full story at the Washington Examiner.

Our take:

While comparisons are sometimes invidious, the glaring difference in per pupil costs between the public school systems of Montgomery County ($15,500)and Fairfax County ($12,900) raises some very logical questions.  Both counties have excellent school systems:  Nationally acknowledged to have high graduation rates, high SAT scores and high pass rates in advanced placement tests, to cite a few.  Both systems have dedicated teachers; however, the dedicated teachers of Montgomery County have an average salary exceeding that of their counterparts in Fairfax County by $10,000.  Does the generosity of the taxpayers of Montgomery County result in proportionately higher graduation rates, higher SAT scores, and higher pass rates in AP tests?  No.  Could we then infer that higher teacher salaries are not necessarily linked to better education results?

“Leggett approves more time off for county workers”

From the Washington Examiner of June 27, 2010:

“County Executive Ike Leggett has signed off on an arrangement granting municipal employees and police officers 26 hours more in paid leave next year. Firefighters would get an extra 48 hours….

However, some were flabbergasted with the agreement, saying it sends the wrong message to residents — who will pay roughly $250 in new taxes next fiscal year, go without toilets in public parks, and pay to park at certain libraries because of the county’s unprecedented $1 billion shortfall.”

Read the full story at the Washington Examiner.

“Consequences of the Budget”

Adam Pagnucco of MarylandPoliticalWatch.com wrote five very informative articles  (May 24-28, 2010) about the FY2011 county budget:

Part1:  “[B]ecause the county made a political decision to avoid the property tax, it instead chose to rely on a job-killing measure that targets employers to help close its budget gap.”

Part 2:  “The school system fared decently.  It did not suffer nearly as big a cut as most county agencies and its employees will not be subject to furloughs.   It now accounts for 57% of the county’s budget, its highest percentage in recent memory.”

Part 3:  “Most importantly, the six unions could not agree on a common approach to the budget. While the three school unions largely stuck together, the remaining three county government unions (MCGEO, the police and fire fighters) not only went against the schools, they also went against each other.”

Part 4:  “As bad as this budget year was, the county eliminated just 450 positions out of its nearly 30,000-person workforce and only 90 of those positions were occupied.  With labor costs accounting for roughly 80% of the budget, is this enough to achieve long-term balance?”

Part 5:  “Montgomery County has lagged behind Fairfax and much of the rest of the region in population, employment and real wage growth for decades. That hurts the business community by limiting profits. It hurts county employees by limiting the tax base. It hurts the non-profits, the poor and the immigrant community by limiting services. And it hurts the pursuit of smart growth by limiting revenues necessary to build transit projects.”

Did you know: Health Benefits

…. that if you are a federal employee and are a taxpayer in Montgomery County, you will likely be envious of the health benefits of your counterparts who work for the county and the school system. Here’s why:

Federal employees pay around 30% of their health care premiums; county employees pay from 20 – 24%, school employees pay from 5 – 10%

Federal employees pay a hospital admission fee, deductibles, a percentage of diagnostic tests costs and surgical fees; county and school employees pay no hospital admission fee, no deductibles, no diagnostic testing costs and no surgical fees.

Federal employees pay $65 for a 90-day supply of name brand medications; county and school employees pay from $5- $10 for name brand medications ordered through the mail

Federal employees have 2 classes of health care premiums (self and family); county and school employees have 3 classes of health care premiums (Self, self+1, and family)

Federal part-time employees and county part-time employees pay a higher percentage of their health care premiums than full-time employees, school part-time employees pay the same percentage as full-time employees

FINALLY, under the new health care bill federal health care plans will not qualify for the “Cadillac Tax” but health care plans for county and school employees will!