The Montgomery County Office of Legislative Oversight released a report Tuesday, indicating that County government employees may be subject to pay cuts and decreased employer contributions to health and retirement plans in an effort to alleviate budget constraints.   Compiled at the request of the County Council, the report highlights that employee salaries and benefits are the major cost driver- totaling $2.1 billion for fiscal year 2011.  With more than a $300 million budget deficit for the 2012 fiscal year, the County is now considering including employees of the County Public Schools system in future budget reductions.  The Gazette reports:

The report released Tuesday shows that the county could save $22.9 million in fiscal 2012 by imposing a 1 percent pay cut for all government employees. A 5 percent pay decrease would save the county $114.6 million — $73.4 million of which would come from Montgomery County Public Schools.

For an employee earning $70,000, a 1 percent decrease would reduce the employee’s salary by $700 a year. The same employee would lose $3,500 under a 5 percent reduction.

The report also shows how the county could save money by providing smaller cost-of-living increases or cost-of-living raises every other year.

Other possibilities include charging county government employees 30 percent of the premium for their medical and prescription drug coverage. School system employees pay 5 percent of the premium cost for medical coverage, while county government employees pay 20 percent of the premium. Montgomery College employees pay 25 percent.

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Council President Valerie Ervin (D-Dist. 5) of Silver Spring said she is unsure whether the council will work to enact the recommendations during deliberations over the fiscal 2012 budget.

She said she hopes to have options being considered by the council this month based on the report.

While the school system has resisted the council’s previous calls for it to reduce employee compensation, Ervin said her goal is to communicate with the school system about the urgency of the situation.