On April 27, 2010, Joan Fidler, the MCTL President testified to the County Council to support the repeal of the phantom COLA (Expedited Bill 16-10, Personnel – Retirement – Imputed Compensation Limit)
Madam President and members of the Council, thank you for the opportunity to testify against the continuation of the phantom or “ghost” COLA that was passed by the Council last year.
I am Joan Fidler, President of the Montgomery County Taxpayers League and I am here today on behalf of the taxpayers of the County and in support of Expedited Bill 16-10. As a well-known author once wrote: “It was the best of times, it was the worst of times”. These are not the best of times for Montgomery County. We are facing a budget shortfall of close to $1 billion with painful decisions ahead of you that will have, in many cases, a devastating impact on the services offered to the residents of the County. You have no choice but to repeal the ghost COLA you so generously offered County employees last year. Though the COLA has been characterized as a phantom, in reality, it has already cost us taxpayers $7 million this year. If continued, this phantom will loom over us in the amount of $200 million over the next 2 decades. We cannot afford it.
Which brings us to the irony of the situation. The cost of living actually dropped last year, yet the Council voted for a ghost COLA. More ironic, you denied County employees a one-year COLA yet gave them a lifetime ghost COLA.
As I have testified before, the Taxpayers League recognizes the value of our County employees – they are dedicated and hard-working. We are proud of the services they provide us. And yes, I expect they will say a deal is a deal.
But the fact is that revenues continue to drop — and the predicted budget gap increases. In September 2009, the budget gap was $370 million. By December, it grew to $608 million. On March 15, it was $779 million. On April 22, the County Executive reported the gap had grown to nearly $1 billion, or more than 25% of the tax-supported budget. To add to the gloom and doom, Montgomery County now has 30,000 unemployed workers. The stimulus funds which have served as a band aid will soon end. Our draining of the Rainy Day Fund has not gone unnoticed by Moody’s. Need I say more?
Members of the County Council, the journey of eliminating a deficit of $1 billion begins with $7 million? Won’t you take the first obvious step and vote for Bill 16-10?
The Council passed the bill to repeal the phantom COLA.