As a cost-saving measure, and to “try to avoid layoffs” next year, county employees were notified Tuesday of a special retirement buyout offer, Harford County Executive David Craig said.
Positions left open by those who accept the buyout will be eliminated or consolidated for fiscal year 2011, which begins July 1.
But there’s a sweetener for those who take the deal by its March deadline: a one-time 100 percent return on the value of accumulated sick leave, compared to 50 percent currently. Craig said that the offer will apply to the 25 percent of the county workforce that is currently eligible for retirement.
Craig’s announcement came at a press conference held Tuesday in Bel Air to discuss and update local and state budget issues.
The plan could save the county an estimated $3 million to 5 million next year, Craig said during the press conference. However, Craig’s spokesman, Bob Thomas, later backed off of that estimate, saying budget officials are uncertain how much might actually be saved.
If other county agencies, including Harford County Public Schools, Harford Community College and the Harford County Public Library also decide to take similar measures, Craig said the savings could be higher.
Craig said he met with those county agency heads over the holidays and also asked them to “hold back”—or cut—five percent from their current fiscal year budget, in light of the ongoing tough economic conditions. He said he also ordered other county department heads to trim their budgets by the same amount.
According to a county press release, Craig has also ordered each agency and department to cut its budget by five percent for fiscal year 2011.
For the current budget year ending in June, Craig said that no more furlough days will be required for county employees beyond the five already built into the budget, three of which have already been taken. But he said that up to five furlough days may be built into next year’s budget, which Craig is expected to release in late March.
Craig said recent “volatility of revenues” has affected the county budget, including reduced highway user fees and lower income and property tax revenues but rejected what he called “doom and gloom” predictions, saying that with proper planning, “We will get through this.”
As the recently-elected president of the Maryland Association of Counties, Craig said that the organization is unified on two issues involving the state budget.
Craig said that the group will advocate in the Maryland General Assembly for modifications to the appeals process for Maintenance of Effort, or MOE. MOE is a state requirement which mandates that per pupil funding for public education remain level from year to year. However, counties can, and often do, fund public schools above the minimum MOE requirement. Craig said that when economic conditions affect counties’ ability to pay for MOE, “sometimes you have to back off.”
Craig said the costs of state teachers’ pensions won’t be shifted to local government this year, because the state has already planned to use federal stimulus money for fiscal year 2010 and fiscal year 2011.
But before the state considers pushing future teachers’ pension costs onto the counties, Craig said they should reconsider an increase to those pensions passed in 2006, a mandated $700 million cost they may not now be able to afford. Craig called it an “election year ploy” wherein the state government “put a mandate on themselves they now can’t afford.”
Here is the full county press release:
County Executive Craig Outlines FY 10 Budget Concerns
Cost saving measures implemented
(Bel Air, MD) – – Harford County Executive David R. Craig has announced some cost saving measures to help Harford County Government deal with lower revenue projections for FY 10. County Executive Craig addressed his cabinet and some local officials regarding the budget reductions during a news conference today.
“The past several months have seen a great deal of volatility in revenues and revenue projections,” remarked County Executive Craig. “The State of Maryland has eliminated 90% of our Highway User Revenue; income tax receipts from the state are down by as much as 13 ½%, which means a potential drop of nearly $8 million in revenue to Harford County. Additionally we have learned that property tax assessments for approximately one-third ofthe county will go down an average of 16%,” Craig stated.
“Some people would look at this as gloom and doom, for me however this is the fourth time I have been asked to lead government through a down turn in the economy – twice as Mayor of Havre de Grace and twice as County Executive,” the county executive remarked. “As long as we plan wisely and use balance in our approach, we will get through these difficult times successfully,” Craig stated.
In September of 2009 County Executive Craig began preparations of the FY 11 budget by meeting with his cabinet as well as various agency and department heads and suggested they submit a “flat” budget with no increase in expenditures for the next fiscal year. Since then, the county executive modified that request and directed that a 5% reduction be implemented in each agency and department’s budget for FY 11. Additionally, due to declining revenue projections from the Department of Treasury, County Executive Craig further ordered all departments of Harford County Government to hold back 5% of their budget expenditures for the current fiscal year.
Throughout the months of October and November 2009, County Executive Craig conducted a series of “Town Hall” meetings with county employees to gain input and recommendations to improve operations and efficiency in government. One recommendation which has been adopted is a “buy out” for those county employees who are currently eligibleto retire – an action which could affect as much as 25% of the county’s workforce.
Those personnel who are eligible to retire and who file by March 12 of this year, will receive a one-time 100% return on unused sick leave. Currently county employees are eligible for a 50% return on unused sick leave.
As employees take advantage of this offer, positions will be consolidated which could save the county millions of dollars in the long-term. Similar buy-outs from allied agencies could result in even larger savings. The retirement buy out is pending upon funding approval by the Harford County Council.
Additionally, Harford County Government employees have taken three of five furlough days previously scheduled for FY 10. At this time no additional furlough days are anticipated above the five days.
With respect to the 2010 Maryland General Assembly Session, County Executive Craig advised there are two major issues he will be monitoring. First, as president of the Maryland Association of County’s (MACO) he will be working to adjust the requirement and appeals process for county governments to meet “Maintenance of Effort” requirements for local Boards of Education.
Over the years many counties, including Harford have met or exceeded the requirement of Maintenance of Effort for local school systems. However, this past year three counties could not – Montgomery, Prince George’s and Wicomico. These three political subdivisions appealed the current requirement to meet Maintenance of Effort to the State Board of Education, but were denied.
Despite the fact that the county executive’s and administration of these jurisdictions were supported by their local boards of education in their request for a waiver to meet Maintenance of Effort, they were rejected in their request. Thus the appeals process failed.
“I strongly support correcting this process to allow counties more flexibility inmeeting the Maintenance of Effort during these challenging economic times,” stated County Executive Craig.
The second issue of interest to Harford County is the matter of teacher pensions. Although some suggest teachers pensions should be pushed down to county governments, County Executive Craig recommends the legislature carefully examine an action they took four years ago with passage of HB 1737, which enhanced the pension system and subsequently resulted in a $700 million hole in the state budget.
“The state must handle their budget deficit without balancing the budget on the back of local or county government,” Craig stated. “We are all in this together and passing on budget issues to local or county government does not solve the problem, it just redistributes the issue,” County Executive Craig remarked.