Harford County Executive David Craig's plan to give bonuses to more than 5,400 county school employees was thrown into disarray after the teachers union failed to sign off on the agreement and Craig in turn vetoed the part of the legislation funding the school system's portion of the bonus funds.

By Tuesday, however, Craig and members of the Harford County Council were saying they would try to work out a solution to the situation which has thrown the county government into a battle with the leadership of the local teachers union over questions of how county funds should be spent and who has the right to determine it.

While Craig's veto means none of the $3.8 million slated for the school employees' bonuses can be transferred to the school system, some employees who aren't represented by the teachers union have already been paid the $625, the county administration said, because school officials believed the money coming from the county was a done deal.

Those employees who already received their bonuses will not be asked to pay it back, the school system's superintendent said at Monday night's Harford County Board of Education meeting. Craig likewise said Tuesday he would proffer legislation to reimburse the school system for those costs, estimated to be about $1.6 million.

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Friday's veto does not affect 1,939 county government, sheriff's office and library system employees who are due to receive the $625 bonus before the end of the year.

Accuses union of 'hijacking' money

In a statement Friday morning, Craig said he issued a line item veto on the bill passed just four days earlier by the Harford County Council, halting the funding for the $625 bonus distribution for the school system's 5,443 employees.

Craig, a 34-year educator and former member of the Harford County Education Association, or HCEA, which represents 3,200 teachers and counselors, wrote he was upset by the union's "attempt to hijack this fund appropriation to support its case before the Maryland Public School Labor Relations Board."

The council had passed the bonus funding bill with amendments that Craig said allowed HCEA to use the money from the one-time payment as a way to reopen salary negotiations with the Harford County Board of Education and to try to turn the one-time gifts into part of the base salaries of teachers, something Craig did not want because it would obligate the county for additional money in future budgets.

Council members had also passed amendments that approved funding for only half of the $1,250 bonus for which Craig originally planned to spend $11.3 million from a $32 million budget surplus, explaining they wanted to review the second half when next year's budget picture became clearer. Craig had planned to distribute the bonus in equal installments this month and the next one in June, just before the end of the fiscal year.

The county executive said he regretted that he tried to reach out to all unions, and "one of them was not collaborative and cooperative. Unfortunately that has pulled down four other unions."

Year-long salary dispute

The dispute with the teachers union has its roots in the 2011-12 budget process that began late last year.

Last winter, the teachers union and other school employee unions negotiated for a raise package in the 2011-12 budget that would have given the employees a 3 percent cost of living increase and, in the case of the teachers, other salary enhancements. Craig and the county council, however, refused to provide funding for the pay increases. The other unions later reached accords with the school system, but the HCEA pressed its case under the state's two-year-old school employee binding arbitration law. The dispute has gone before the state board created by that law, and that board held a hearing on the matter Friday.

When Craig realized what one of the council's amendments might do with the teachers pay issue, he vetoed it, which had the impact of canceling all the money for the bonus that might have gone to the school system.

In a further complication, the school system had already forward funded the bonuses to employees represented by the four unions other than HCEA that had previously agreed to accept the payment. Most had already received the money.

"This is why support staff, nurses, secretaries and other non-teaching employees will have received the funds," Craig's spokesperson Ben Lloyd wrote in an e-mail Monday, clarifying again that no money has been transferred from the county to the Harford County Board of Education.

"The County Executive regrets that the HCEA leadership has misled teachers throughout this process, and that the simple act of extending a holiday bonus to teachers was turned into a political issue by the union," Lloyd wrote. "Mr. Craig, however, still hopes that he will be able to fund the one-time bonus that teachers deserve."

During Monday night's school board meeting, Superintendent Robert Tomback read a statement saying that "payroll had already been processed" for those employees not represented by the Harford County Education Association, or HCEA, with the understanding that this was a "forward-funded payment" and would be paid back by the county government's one-time stipend before the end of the year.

Tomback said the school system "will not seek repayment" on this bonus and will notify employees "immediately" once more details are available.