By Adam Pagnucco.
Council President Natali Fani-González made major news last week when she proposed a plan to avoid County Executive Marc Elrich’s recommended property and income tax increases. One of the largest elements of her plan is a proposal to reduce, but not eliminate, collectively bargained compensation increases. The MCPS unions immediately blasted that idea and many union representatives gathered with Council Member Will Jawando, who is running for executive, to speak out against it.
Is this a good idea?
First, let’s understand labor’s point of view. I spent the early part of my career in the labor movement and I can tell you this: it is nearly impossible to find any union that favors abrogating its negotiated agreement. Obtaining favorable wages, benefits and working conditions is what American unions do. Furthermore, Maryland public employees are prohibited from striking by state law. If you can’t strike and your negotiated agreements are not respected, what good is bargaining? And what good are unions? This is an existential question for MoCo’s employee unions. Of course they will resist reducing any negotiated compensation increases in their bargaining agreements.
Now let’s get to process. The county council does not have unilateral authority to change all county agencies’ labor contracts. In Montgomery County Government (MCG), the county executive negotiates agreements with the three unions representing MCG employees (MCGEO, the fire fighters and the police). The council may approve or disapprove any items in those agreements creating costs for the county, including wages or benefits. The other agencies (like MCPS, Montgomery College and Park and Planning) negotiate their own agreements with their unions. While these agencies request funding from the council (which in some ways is constrained by state law), the council may not directly rewrite their labor contracts. The council could adjust their total funding to accommodate desired changes, but how the agencies react is up to them.
In practice, the council is usually reluctant to change any labor contracts. One exception was the Great Recession, in which the county did not fund any general wage adjustments or step increases for three straight years. Another exception was in 2016, when the council paired a property tax increase with a reduction in negotiated wage increases. The tax hike turned out to be a debacle as it helped lead to the passage of term limits. Apparently, voters forgot to thank the council for limiting county employee pay.
One more thing to keep in mind is that county collective bargaining agreements are complicated. The two largest cost elements in them are general wage adjustments, which are received by all bargaining unit members, and service increments, which are received by employees below their maximum base salaries. Service increments are usually 3.5% while general wage adjustments have varied in recent years from 1.0% to 7.0%. Another common increase is longevity steps, which are paid to employees who reach certain years of service.
As a demonstration of this complexity, check out the table below showing the distribution of negotiated increases in MCGEO’s collective bargaining agreement in FY27. As you can see, there are MANY elements, and most are received by some employees but not others. Roughly 80% of the contract cost is accounted for by general wage adjustments and service increments.
Fani-González’s idea is simple: keep the service increments, standardize the general wage adjustments at 2.0% and junk most of the smaller increases. That would have a differential impact by union and by agency. Consider the general wage adjustments negotiated by the following unions this year.
MCPS unions: 3.25%
Police (MCG): 3.0%
MCGEO (MCG): 2.85%
Fire fighters (MCG): 2.5%
At this writing, Montgomery College and Park and Planning have not finished their negotiations.
Another disparate impact is that junior employees below their salary maximums would keep their service increments but senior employees at their maximums would presumably not get their longevity steps.
That’s a big internal political problem for union leadership. It would be a huge headache to pit junior members against senior members. Of course they’re going to fight!
So why is Fani-González proposing this? We will explain why next.