Decade of extravagance
triggers budget crisis For the better part of this decade, Montgomery County let the good times roll.
Now, as the county faces a budget deficit of more than a half billion dollars for the second year in a row, it’s clear those good times have come to an end.
Much of the county’s misfortunes mirror what’s going on in the region’s other jurisdictions: The slowdown of the financial and housing markets that brought in so much wealth has laid bare financially unsustainable bureaucracies.
Instead of saving the extra money that poured into the county’s coffers from higher property taxes caused by skyrocketing home values during the housing boom, the county used the money to add employees and raise salaries, add social programs, and spend on education.
Bringing home the bacon
Cumulative pay raises of Montgomery County employees not at maximum salary compared with the private sector:
Fiscal years Montgomery Private sector
2006-2009 33% 22%
2002-2005 29% 16%
1998-2001 27% 18%
Cumulative base salary increases, fiscal 1999-2009
» Firefighters: 122 percent
» Police officers: 112 percent
» Other government employees: 96 percent
» Consumer Price Index: 37 percent
In 10 years, the county’s public schools added 5,000 positions, a 30 percent increase as enrollment nudged up 7 percent. Spending per pupil rose from $8,093 to $14,411. Much of the new spending was used to send more teachers and support staff to lower-income schools. As the number of immigrants rose, more money went to help students whose first language isn’t English. Between fiscal 1997 and 2007, the number of county government employees increased 28 percent while Montgomery’s population climbed 15 percent. Employee pay and benefits, about 80 percent of the county’s budget, rose too. Base salaries for firefighters, police officers and other county government employees doubled between fiscal 1999 to 2009. The Consumer Price Index rose 37 percent during that time.
A good part of the blame for that spending, Councilman Phil Andrews said, lies with former County Executive Doug Duncan, who was plotting a run for governor and was “very accommodating” to labor unions when negotiating contracts.
“The county got on a path … that just became the norm,” said Andrews, who voted against many pay increases and has called for freezing employee wages next year.
The county was also on a path of expanding services to a level it can no longer afford. The county’s archived news releases highlight the string of spending over the last decade, such as a $20 million expansion of county health care for the uninsured, $16 million to expand affordable housing programs, $1.5 million in energy assistance to low-income residents and an extra $700,000 to expand free summer school programs.
Adding to the county’s problems has been lax oversight of how it spends its money on more charitable programs.
The county’s inspector general has highlighted a lack of oversight in county spending on a nonprofit child care center. The county said the center overbilled it by $85,000 during the last fiscal year, and questions have been raised about whether other nonprofits misspent county money.
A tuition assistance program for county employees has been suspended over questions that hundreds of thousands of dollars of taxpayer money was misused. The county spent $260,000 a year on the program for fiscal 1998, 1999 and 2000. Since then, spending has climbed steadily, reaching nearly $800,000 last year.
Besides the spending, Montgomery hasn’t done itself any favors by having an “anti-business” attitude, business leaders said.
Adventist HealthCare Chief Executive Officer William Robertson, who sits on the board of the county Chamber of Commerce, said Montgomery has been complacent in attracting businesses.
He added that rival Fairfax County had added 43,000 new jobs compared with Montgomery’s 7,800 jobs between 2001 to 2008, according to the federal Bureau of Labor Statistics. Fairfax had a population of 1.02 million last year, while Montgomery’s population was 950,680, according to the Census Bureau.
“No wonder our roads are jammed with people — they are driving to Northern Virginia to work,” Robertson said.
Violeta Ikonomova contributed to this report.
