Reprinted below is the testimony presented by MCEA President Doug Prouty at the April 5th County Council Public Hearing on the FY12 Operating Budget; inlcuding a chart illustrating the potential impact on individual MCPS employees of a shift in health insurance premium cost-sharing to 30%.
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Good evening Council President Ervin, Vice-President Berliner, and members of the County Council. I am here tonight speaking on behalf of the approximately 12,000 professional educators whose hard work, dedication and skills have helped make the Montgomery County Public Schools one of the best school districts in America.
Let me start by asking that each of us endeavor to keep the discussions, public and private, focused on how we can best work together to seek a solution to the difficult budget decisions that need to be made. Keeping the rhetoric at this level and avoiding anger, resentment and finger pointing can only result in a more civil, productive, and healthy process and arrive at a budget solution that is fair, balanced and equitable.
I also hope that we can continue to preserve the quality of public services that our county residents and taxpayers have come to expect. Whether it be public schools, public safety, public libraries, public parks, or our community colleges – Montgomery County’s quality public services have been the linchpin of our county’s success. The quality of our local public services attracts jobs, investments, housing and economic growth.
I am not just concerned about our schools. Our communities will not thrive without adequate fire, paramedic and police protection. Public libraries, public parks and recreation programs, community colleges and mass transit all contribute to why people want to live in, or stay in, Montgomery County.
That is why I am fundamentally concerned by those who believe that the county government can solve its budget challenges by cuts alone. We are in the third year of an economic contraction that has forced large scale cuts in staffing and services across all county agencies and departments.
We have to look for long-term strategies, not one-time fixes. We need, taking that long term view, to be sure that our strategies do not have a disparate impact on those who have dedicated their lives to public service.
The Health Care Challenge
The proposed cost shift in county employee health insurance premium payments produces only one-time savings. It does nothing to slow the rate of increase in overall health care costs. MCEA strongly urges the Council to reject the County Executive’s proposal to increase the share of health insurance premiums paid by county employees. The proposal is wrong. The impact on individual county employees is too severe. We have modeled the impact of a potential shift in health care premiums for MCPS employees and attached it to this testimony. A shift to a 70/30 split would cost the average MCPS employee over $4,000 a year, on top of the 2% increased pension contribution and the restoration of the 2% federal FICA tax in January. The combination would result in a 10-15% pay cut for MCPS employees. The County Council has the ability to prevent it, and we urge you to do so.
There is a fundamental difference between cost-shifting and cost containment. In MCPS, the administration and the unions have worked together for many years to control the increasing cost of health care. We have prepared a detailed summary of many of the cost containment steps we have jointly developed and implemented. Our focus has been on providing incentives for plan participants to use health care services in the most cost effective ways. We encourage use of lower cost mail order maintenance drugs and generics. We discourage the use of expensive emergency rooms for non-emergency care. Over 63% of MCPS plan participants are enrolled in HMOs, compared to just 33% of county government employees.
But cost containment is not a checklist, it is an ongoing strategy. The pressures from rising health care costs are national phenomena. There is much work still to be done. Most recently, the MCPS cost containment collaboration has turned its efforts to employee wellness. We know from our data that 24% of our annual medical costs are caused by preventable and manageable health conditions: diabetes, asthma, high cholesterol, high blood pressure, obesity, and high-risk pregnancies. The best long term strategy for controlling health insurance costs is to improve the health of those segments of the workforce at highest risk of such preventable problems.
We expect there is much that all the agencies could learn from each other on cost containment strategies. As long as the purpose is honestly cost containment and not cost shifting, we would welcome the opportunity to participate in an ongoing, joint process involving the managers and employee representatives across all agencies, charged with seeking out additional options for meaningful cost containment.
We fundamentally believe that this is the appropriate way forward; in stark contrast to the County Executive’s proposal to simplistically shift more health care premium costs onto employees while doing nothing to address the overall, and ongoing, increase in the total cost of health care.
It is in the best interest of county tax-payers that we address the rate of growth in health care costs and not simply move to the next one-time savings trick – at the expense of county workers.
The MCPS Budget
The MCPS budget did not cause the county’s budget woes. We’ve heard the complaints that the MCPS budget consumes 57% of the overall county budget. But it’s been about 57% of the overall county budget for at least 20 years.
That figure does not present the whole picture, because it includes local, state and federal funding. Thankfully, our schools have benefited from a surge in state and federal funding over the past ten years. As a result, the Montgomery County Government has had to spend a smaller and smaller share of locally generated tax revenues on MCPS. That share of locally generated tax revenues going to MCPS has dropped from 52.5% in FY ’03 to 44.7% in the proposed budget. Were MCPS still getting the same percentage in local tax revenues as it did in FY ‘03, it would mean an additional $279 million a year going to our schools next year.
My point is simply that I ask you to reject the rhetoric that somehow our schools are causing cutbacks in other services. Spending of local tax revenues has been going up dramatically in some areas, but not in education. Those who want a boogie-man to blame for the cuts in county services need to look elsewhere.
The second myth I’d like to dispel is the belief held by some that MCPS has not “felt the pain” of budget cutbacks like other county departments.
Hundreds of positions have been cut over the past few years, more for next year. Hundreds of MCEA members are now on the involuntary transfer list due to the cuts that have had to be implemented as a part of the staffing process for next year. Teachers in the classroom will have even less support to teach more students. We can’t wait till the budget process plays out to plan for the 147,000 plus students who will walk through the doors of our school on August 29th. And this is happening in the context of a national dialogue in which public employees are being scapegoated as the cause of state budget woes and public school employees are being labeled the problem that needs to be fixed to help our kids.
The county executive proposes to spend $71.6 million more in FY12 in current revenue, PAYGO, and debt service than in FY ‘11. The budget is to be balanced by extracting tens of millions of dollars from the employees- $18 million from county workers through health insurance cost shifts, $12 million from county workers through pension cost shifts, and additional tens of millions in sought after school employee health insurance cost shifts.
The county executive is putting more new money into capital expenditures - and snow removal - than he is taking away from all employees. You can fix that or you can be a part of that. Those aren't the priorities any of you talked about when you ran for office. All of you talked about quality public services: good schools, safe streets. We believed you then, and we want to continue to believe those are your priorities. We don't live in Wisconsin. We can do better. I hope you will. Thank you for your time, your efforts, and your commitment to our students. We look forward to working with you in the coming weeks.
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