Bill would penalize raises by county


ANNAPOLIS -- With state employees going without a pay raise next year because of budgetary woes, state legislators have found a way to discourage county governments from giving raises to their employees.

The House Appropriations Committee approved last night a measure that would penalize Maryland's 24 subdivisions a portion of their state aid if they used state funds to help finance employee salary increases after July 1.

The proposal, tagged onto a bill to balance the fiscal 1991 budget and help balance the fiscal 1992 budget, would cap the state contribution to Social Security payments for teachers, public librarians and community college employees.

Currently, the state pays 100 percent of their Social Security costs. The measure means that if a jurisdiction adopted a pay raise, it would also have to pay for the resulting increase in Social Security payments.

"It is minor," said Delegate Charles J. Ryan, D-Prince George's, the committee's chairman. "It's more an inducement than anything else."

Last week, Mr. Ryan and his counterpart in the Senate, Budget and Taxation Committee Chairman Laurence Levitan, D-Montgomery, mailed a letter to local jurisdictions asking them to refrain from pay raises next year. It would be "inequitable for local employees to receive salary increases utilizing the large amounts of state aid provided to local governments," the chairmen wrote.

The effect of the legislation wouldbe that if a county approved a 6 percent pay raise, they would actually have to pay about 6.36 percent to make up the Social Security increase, too, said William S. Ratchford II, director of the Department of Fiscal Services. He estimated the restriction could cost local jurisdictions as much as $10.5 million.

Earlier in the day, legislators discussed an even more stringent law, penalizing subdivisions one-quarter of their state aid.

But House leaders determined that might be too severe and likely would spark a series of lawsuits from jurisdictions that have negotiated raises for unions.

"Here we are cutting the budget to reduce moneys and hold the counties harmless, and our employees aren't getting pay increases. If ours aren't, why should theirs?" said House Speaker R. Clayton Mitchell Jr., D-Kent.

While most metropolitan counties and Baltimore City have already indicated they will not be handing out employee raises next year because of the recession and slumping tax revenues, some counties are still considering the issue.

At stake in the debate is not only a pay increase for local government employees but the principle of attaching conditions to general state aid.

A Feb. 27 letter signed by Robert A. Zarnoch and Richard E. Israel, two assistant state attorneys general, concluded that the state had the authority to impose such restrictions.

Mr. Zarnoch likened the authority to the federal government's highway funds, which have been linked to states' enforcement of laws on drunk driving and speed limits.

But officials also think that the restriction on state aid to local governments, if approved by the General Assembly, would be a first in Maryland.

"It would be a change, and we'd look long and hard at that," said Charles D. MacLeod, associate director of the Maryland Association of Counties.

"Traditionally, we've gotten that money with the intent of letting us choose how it is spent," he said.

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