By Adam Pagnucco.
County Executive Marc Elrich has proposed a 10 percent property tax hike which would raise $223 million for the FY24 budget. He is using a loophole in state law that would allow the county to evade its charter limit on property taxes so long as the tax hike is dedicated to MCPS. But since money is fungible, the tax hike allows the county to finance large increases in most of its departments, increases that become especially huge when considered over two years. Is there any way the council can eliminate or reduce the tax hike?
The two biggest places to go for $223 million are MCPS’s appropriation and compensation. The former agency has been accumulating gargantuan fund balances totaling $94 million in FY21 and $88 million in FY22, the largest in its history. Elrich’s collective bargaining agreements with MCGEO, the fire fighters and the police will collectively add $100 million a year to the budget after FY24. There doesn’t seem to be much appetite at the council for going into either of these items as they fear the unions more than the taxpayers… for the moment.
But there is another place in which millions of dollars may potentially be found: vacancies. In its budget kickoff memo, the council staff noted that the executive was proposing to add 725 positions across all county agencies in FY24, which would amount to an addition of 1,394 over two years. At the same time, in the county government alone, “there were approximately 1,500 vacant positions in County Government – representing 13.7% of the 10,921 approved positions in FY23.” That count excludes MCPS, Park and Planning and Montgomery College, so if they were included, the number of vacancies would be MUCH higher.
Why does this matter? The question is how much funding accompanies those vacant positions. Let’s be conservative and assume, for the sake of discussion, that each of those positions account for an average of $75,000 in wages and benefits. If that’s the case, then $112.5 million is built into the budget for them when they may not be filled. County government accounts for 29% of the positions of all county agencies, so if the other agencies have similar vacancy rates, there are hundreds of millions of dollars at stake. That’s comparable to the size of Elrich’s $223 million tax hike.
There have been mentions of vacancies in certain departments in council committee packets, sometimes with funding estimates. Among them are:
Community Engagement Cluster. “As of March 3, 2023, CEC had 23 vacancies representing $1.95M in compensation and 51% of FTEs budgeted.”
Corrections. “DOCR currently has 78 vacant positions, for a total FY24 budgeted amount of $8.3 million. Of the 78 vacancies (attached at ©11), 19 have been vacant over a year, representing about $2 million in budgeted expenditures.”
Fire and Rescue. “For FY24, the Department has 1,363 FTEs, 11 of which are proposed in this year’s recommended budget. As of March, the Department had 43 total vacancies, which represent about $5 million in personnel costs. Fourteen of these positions have been vacant longer than a year.”
Health and Human Services. “As of March 2023, DHHS is the second highest County department in terms of number of vacancies, totaling $20.9 million and 246 positions… Of the $20 million in vacancies, $3.9 million (56 positions) have been vacant over one year, $840k (13 positions) have been vacant over 2 years.”
MCPS. “MCPS reports 161 current vacancies that are not school based.”
Public Libraries. “As of March 3, 2023, MCPL had 71 vacancies representing $4.77M in compensation and 18% of FTEs budgeted. As of March 29, 2023, 65 vacant positions represent 17% of FY24 FTEs recommended.”
Transportation (General Fund). “As of March 3, the DOT General Fund has 80 budgeted vacant positions with an FY24 cost of about $5.6 million. The table below shows that the General Fund has 20 positions vacant for over one year and 11 positions vacant for over two years.”
Transportation (Mass Transit Fund). “As of March 3, the Mass Transit Fund has 76 budgeted vacant positions with an FY24 cost of about $7.1 million. The table below shows that the Mass Transit Fund has 45 positions vacant for over one year and 4 positions vacant for over two years.”
It is probably unwise to phase out money for all vacancies. To take just two examples, MCPS and the police department have demonstrated shortages of teachers, substitutes and sworn police officers that are impacting their operations. But what about concentrating on positions that have not been filled for more than a year, or more than two years? How much money can be found there? Maybe not hundreds of millions, but could tens of millions be found?
Here is a crazy fact: the exact numbers on potential savings across all agencies and departments are not yet known. So Council President Evan Glass has asked the county executive to quantify them. His memo to the executive appears below.
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MEMORANDUM
DATE: April 18, 2023
TO: County Executive Marc Elrich
Richard Madaleno, Chief Administrative Officer
Jennifer Bryant, Director, Office of Management and Budget (OMB)
FROM: Evan Glass, Council President
SUBJECT: Reductions associated with position vacancies
Recently we received from OMB a list of all vacant positions in County Government as of March 3, 2023, some of which have recommended funding in the Recommended FY24 Budget. Many of these positions have been vacant for more than one year.
To ensure that the budget uses taxpayer resources efficiently, we request that the Executive provide the Council with a list of vacancies in each department that could be unfunded with the least amount of impact. We understand that these would be non-recommended reductions. The list should include the FY24 budget cost associated with each position and should focus on budgeted positions—both full- and part-time—that have been vacant for more than one year.
We request receipt of these lists no later than Friday, April 28 so that we can review them as part of our development of the Approved FY24 Operating Budget in May. Thank you in advance for your cooperation.
cc: Councilmembers
Heads of County departments and offices
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Finally, I will note a salient fact. It was not that long ago that the county faced the Great Recession, which was fiscally much more devastating than the recent COVID pandemic. County Executive Ike Leggett and the county council of that time cut the number of county government work years from 10,033 in FY09 to 8,961 in FY11. That’s a cut of 1,072 work years done by attrition and not through layoffs. That proves it’s possible to save significant amounts of money by carefully evaluating workforce needs while preserving key services.
Will today’s council equal the work of its predecessors? We shall find out as the budget proceeds to its momentous conclusion.