by George Gay

Director of Human Resources

The cost of health care and pension benefits continue to put an unsustainable strain on government budgets across the nation. Baltimore County is no different.

What is different is that for nearly a decade, Baltimore County has been working with its employee groups to structure a benefit package that is fair for its workforce and sustainable to its taxpayers. With the new fiscal year only days away, the county is continuing that effort.

Here are the facts: Baltimore County is proud of the benefits it provides employees, but the cost of health care has escalated to the point where the current benefits far exceed those available to most people in the private sector and are simply not affordable over a period of time for taxpayers. For a county employee who selects the family plan in the Care First Triple Choice program, Baltimore County contributes $20,554 a year. For family coverage in the Cigna program, it contributes $18,311 a year, and even the least expensive HMO costs the county $15,950.

Baltimore County’s total budget for FY 13 is $2.69 billion. The cost of health care benefits for general government, library, community college, and school system employees alone is over $280 million a year, roughly ten percent of the County’s total budget. To put that number in perspective, Baltimore County’s total budget for the police and fire departments is $294 million.

Several years ago, the Government Accounting Standards Board (GASB) mandated that state and local governments fully fund the cost of retiree health care on an annual basis. This simply means that Baltimore County must pre-fund the cost of retiree health care as opposed to funding it on an as-needed basis.  Presently, the county’s unfunded health care liability is more than $3 billion. Employees and taxpayers know something has to give.

At the current time, the county has reached labor agreements with the firefighters, sheriffs and nurses. TABCO and other Board of Education labor groups also moved to modify the health-care-contribution rates for school system employees in their new contracts.

The county reached a preliminary agreement with the leaders of the Federation of Public Employees (FPE) before a federal mediator on April 17. That agreement would have delayed any increases in health care costs for employees until 2015, and at that point phased in a 5 percent increase in employee contributions over a three-year period. The agreement would have also guaranteed no layoffs or furloughs through June 30, 2015, while raising the pension contribution for correctional officers hired after July 1, 2011 to 10 percent, consistent with the agreements for the firefighters and sheriffs.

Preliminary Agreement with FPE, April 17, 2012

While the county was prepared to move forward with that agreement, FPE leadership decided not to honor the commitment made before the federal mediator and voted against the health care agreement, nullifying any potential contract agreement. It appears that the county will be unable to reach a contract agreement with FPE and AFSCME prior to June 30, and those unions will be without a contract on July 1. Even as that deadline approaches, the county is continuing to try and reach an agreement with AFSCME and FPE.

In the past month, county budget officials have reevaluated the economic climate, and the signs are not good. Job growth continues to be sluggish in Maryland, workers at Sparrows Point face great uncertainty, Europe is in crisis each day, and major financial institutions received credit downgrades.  As a result, Baltimore county needs to institute even greater employee contributions to health care. 

The county’s new health care proposal to the Health Care Review Committee phases in a decrease for preferred provider plans from 80 percent employer contribution to 75 percent, phased in at one percent per year from 2013 through 2017. For HMO plans, the county’s contribution would decrease from 90 percent employer contribution to 83 percent, phased in at one percent per year beginning in 2013.

Latest County Health Care Proposal, June 25, 2012

The county's goal remains the same: to create a benefit structure that protects employees and is affordable for taxpayers.