Despite an expected decline in revenue from a sagging real estate market, Baltimore County can afford pay increases for its workers, according to a fact-finder who recommended 3 percent pay raises for employees of two unions in negotiations with the county.
"The county's financial situation is not so dire as to require a wage freeze," the fact-finder, Robert T. Simmelkjaer, wrote in his decision, issued Thursday.
He wrote that the county's plan to freeze wages and the call by the Baltimore County Federation of Public Employees and the Baltimore County Federation of Public Health Nurses for 6 percent pay raises were both "inappropriate." But he concluded that the county's ability "to provide a reasonable wage increase" within spending affordability guidelines "remains feasible despite an anticipated slowdown in the county's revenue."
Simmelkjaer's decision could have wide-ranging implications for other county employees, including nearly 9,000 educators who belong to the Teachers Association of Baltimore County, who have been told not to expect across-the-board raises in the next fiscal year, which starts July 1.
Donald I. Mohler, spokesman for County Executive James T. Smith Jr., said complying with the fact-finder's recommendation would strain the county's budget because the county would be faced with giving a raise to all employees, including teachers, not just those in the two unions at the center of the fact-finder's decision.
"When a fact-finder makes a recommendation like that, it's pretty clear the fact-finder doesn't have to balance a budget," Mohler said last night.
He said giving raises to all county employees would add $42 million to the budget and force the county to exceed affordability limits - a shortfall that would require about a 7 percent property tax increase.
"We're just not going to do that," Mohler said. At a time when county residents are paying more for gasoline, food and utilities, "the county executive doesn't think this is the time to raise taxes on Baltimore County families."
A number of unions have planned a rally April 1 to protest the lack of pay raises. The teachers union has threatened job actions.
The county Federation of Public Employees and Federation of Public Health Nurses "have demonstrated that the county is in a much better fiscal position than the county is taking with its own unions," Keith Zimmerman, an attorney for the two unions, said yesterday.
Zimmerman said county officials have indicated they plan to notify the unions this morning whether they accept the fact-finder's decision. If the county refuses to agree to the decision, Zimmerman said the unions plan to seek arbitration to resolve the dispute.
He said the unions are dealing with a tight time frame; state law requires bargaining to be complete by April 5. The unions have one-year contracts, called memorandums of understanding, with the county, he said.
The Baltimore County Federation of Public Employees represents about 1,700 employees, including correctional officers, emergency communications technicians, highways crew chiefs and forensic services technicians. The Baltimore County Federation of Public Health Nurses represents nearly 90 full-time and part-time public health nurses and nurse practitioners. The unions are affiliated with the American Federation of Teachers.
"The fact-finder did a good job of understanding everything that was presented and apparently determined that they do have the funds to give county employees an across-the-board raise," said Jim Miller, president of the Baltimore County Federation of Public Employees.
In his report, Simmelkjaer's said the two unions "provided ample evidence" that the county has routinely overestimated expenses and underestimated revenues.
In hearings this month, in which county officials and union leaders presented their cases to Simmelkjaer, county officials maintained the surpluses have been targeted to one-time building projects to avoid layoffs and accruing debt. The county reported a surplus of $81.4 million for fiscal 2007, $106 million for fiscal 2006 and $101 million for fiscal 2005. An estimate for fiscal 2008 is a surplus of $184.9 million, according to evidence in the fact-finder's report.
In a letter to members of the teachers union this month, Smith wrote that "funding a 1% cost-of-living increase for teachers and other county employees would increase the budget by approximately $14 million, equivalent to a 2.3-cent increase in the county property tax rate."
In addition to the budget surpluses, Simmelkjaer's report indicates that the county can afford the raises because of savings from increased employee contributions to health care premiums, as well as the county's undesignated fund balance of nearly $134 million for fiscal year 2007 and an anticipated general fund surplus of $215.9 million for fiscal year 2008.
gina.davis@baltsun.com