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3/17/2010
County Administration proposed budget includes layoffs but no property tax - News Journal

3/17/10

County Administration proposed budget includes layoffs but no property tax - News Journal

Coons' budget includes layoffs
No property tax hike in NCCo executive's proposal
BY ADAM TAYLOR • THE NEWS JOURNAL • MARCH 17, 2010

HIGHLIGHTS

NCCo Executive Chris Coons proposed a budget including "dozens" of layoffs to address the county's "structural deficit."

Highlights of the budget proposal presented by New Castle County Executive Chris Coons (above) for the fiscal year that starts in July:

• Layoffs of dozens of employees who have refused to continue with a 5 percent salary rollback they agreed to for the current fiscal year.
• No property tax increase
• A 4 percent sewer fee increase that will add $10 to the average residential customer's yearly bill.

WILMINGTON -- Dozens of New Castle County employees would be laid off in July as part of County Executive Chris Coons' plan to limit the projected deficit for the next fiscal year  to $7 million.

Coons announced the proposed layoffs Tuesday night in his annual budget address to County Council. The $235 million operating budget he proposed for the fiscal year that begins July 1 is $6 million more than the county's current budget. The layoffs will save the county $2.2 million, Coons said.

Layoffs of this magnitude have not been proposed in at least 30 years, Coons said. He would not specify the number of layoffs other than to say "dozens, not hundreds."

The budget does not include a property tax increase, unlike last year when property owners were hit with a 25 percent tax hike. Sewer fees, however, would go up 4 percent, making the annual sewer bill for the average residential customer $279, a $10 increase from the current average bill.

Borrowing terms Wilmington Mayor James M. Baker has used in the past few years to describe the city's fiscal plight, Coons said the county suffers from a "structural deficit," meaning that it takes in less than it spends -- and said most of the expenses are uncontrollable, such as contractually mandated employee salaries and health care costs.

He also noted the need for "shared sacrifice," meaning taxpayers and government employees both must take hits to their wallets to help the government bring its financial problems under control.

"Like you, over the last 12 months, we have done more with less, to leverage every dollar and stretch it as far as it can go," Coons told nearly 100 people, mostly county employees, who attended his half-hour address at the Louis L. Redding City-County Building in downtown Wilmington. "Like you, we are being careful to live within our means. Like you, we are laying the foundation for better days."

Richard D. Krett, president of Local 3109, one of the unions whose employees would be subject to the layoffs, said Coons could easily have made enough cuts to not have to lay off crucial employees.

"This administration has chosen the easy way out," Krett said. "If I were the county executive I would not hire more executive assistants or buy gym equipment as he has, when he's instead going to lay off crucial people providing crucial services."

Budget problems during this recession have forced layoffs or pay cuts in the private and public sectors across the state. Earlier this month, AstraZeneca announced it would eliminate 550 research-and-development jobs at its U.S. headquarters in Fairfax.

On the state level, Gov. Jack Markell has proposed a budget that avoids layoffs but continues a 2.5 percent pay cut and forced days off implemented during last year's budget crisis. In Wilmington, Baker is expected to propose a budget Thursday that will include a combination of tax hikes, fee and fine increases, layoffs and cuts in services.

Delaware has seen the loss of a greater percentage of jobs than the nation as a whole in this recession, with 20,300 lost in 2009, according to the state Department of Labor . That is a 4.7 percent loss in total jobs, compared with a national rate of 4.3 percent.

The proposed New Castle County budget is $6 million more than the current budget mostly because of expenses such as health care costs for current and retired county workers, contractually guaranteed step and merit pay increases for employees, debt service payments, pension costs and new, higher payments to the city of Wilmington to treat sewage for customers in the county, county spokeswoman Angie Basiouny said.

County police, paramedics and 911 call-takers will not be subject to the layoffs, because before the current fiscal year began they negotiated a three-year deal with county leaders to help the government control spending. The non-union workers will continue to accept the 5 percent salary rollback they agreed to for the current year.

The layoffs will come from three unions: Local 459, which represents parks and maintenance workers; Local 1607, for clerical and technical workers; and Local 3109, the bargaining unit for supervisors and managers. Those three unions represent 725 workers, half of the county's work force.

Dan Tharby, president of Local 459, said he hopes further talks with Coons and his top aides will help avert the layoffs. Coons' proposed budget will be the subject of hearings between now and May, when County Council will vote on the final budget package.

Coons said the cuts won't be in police, parks and roads. "They will be internal, who cuts the grass, answers the phones, maintains the county vehicle fleet," he said.

The deficits for this year and next are mostly because of the virtual disappearance of real estate transactions.

The transfer tax the county gets for each sale is its second-largest source of income after the property tax, Basiouny said.

Coons said the current year was the taxpayers' turn to take the financial hit via the property tax increase. This year, he wanted employees to accept a second straight year of 5 percent salary rollbacks, but they declined. That rejection means layoffs for some union members, Coons said. "It is their choice," he said.

Bill Dunn, vice president of the Milltown-Limestone Civic Alliance, who mounted an unsuccessful bid for council president last year, said many of the cuts Coons and the council made to trim an estimated $40 million deficit for the current year hurt citizens.

"I would like to see some service cuts in the Land Use Department reinstated, and any further increases in the sewer fees would be disappointing to me," he said.

Contact Adam Taylor at 324-2787 or ataylor@delawareonline.com.

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