Employee Benefits and Relations

Sen. Hershey Supports County “Right To Work” Option

Barbara Zektick County News, Economic Development, Labor

State Senator and MACo friend Stephen Hershey indicated plans to introduce legislation during the 2018 session to give counties the option to become “right to work” counties, enabling them to opt to prohibit employers and unions from compelling union membership.

Senator Hershey sees the legislation as an economic development initiative. He makes the case that employers are more likely to bring manufacturing jobs to right-to-work locations, since those manufacturing employees are less likely to unionize than workers in non right-to-work locations. 

From the Cecil Whig:

Essentially, by prohibiting unions from compelling membership, the law enables employees to choose not to join the union and pay union dues. Without the mandate that employees join their respective union — if one exists — the union loses funds and membership, therefore losing political weight during collective bargaining.

Maryland is not a right-to-work state, meaning that companies and unions can compel union membership. The idea behind compulsory membership is to eliminate “free riders” — those who benefit from the union without paying union dues.

This legislation, which is still being drafted, would give local jurisdictions the ability to say whether they are a right-to-work county or possibly even a right-to-work municipality.

Read the full article here.

BWI Leadership: Baltimore Workers Can’t Get Here 

Barbara Zektick Labor, Transportation and Public Works

Getting Baltimoreans to the BWI Airport to work has been “a major challenge,” Maryland Aviation Administrator Ricky Smith told The Baltimore Sun. Al Hutchinson, president and CEO of Visit Baltimore, weighed in on the issue. From The Sun’s coverage:

[He] called the airport a “gem and an economic engine” for the state that is a gateway through which many city visitors arrive.

“We want as many of our residents who are looking for work to be able to get to work,” he said. “I’m glad to hear there’s a conversation being had to close that gap.”

“If we can provide a transportation option, it’s definitely worth studying,” he said.

BWI is the 22nd busiest U.S. airport, with an average of 70,000 passengers per day and 90 domestic and international destinations, according to Smith. 

Harford County Receives $570K State Grant to Assist Families in Need

Kevin Kinnally County Budgets, County News, Finance and Procurement, Health and Human Services, Housing and Community Development, Intergovernmental Relations, Labor, News You Can Use

The state of Maryland has awarded a total of $570,994 to Harford County’s Local Management Board to fund child and family focused programs in fiscal year 2018.

According to a press release,

The Local Management Board (LMB) is a grant-funded organization within the county’s Office of Children, Youth and Families, under the administration of County Executive Barry Glassman. This year’s total includes a competitive grant award of $88,000, which the LMB will use for new programs to reduce childhood hunger, empower families to escape poverty and diminish the impact of parental incarceration on children in Harford County. The funding was announced on May 31, 2017 by the Maryland’s Children’s Cabinet, through the Governor’s Office for Children as part of $18 million in statewide grant awards to Maryland’s Local Management Boards.

Specifically, this year’s total grant funding will allow the LMB to offer the following new programs in Harford County:

“Getting Ahead in a Just Getting By World” is an educational program for low income families that addresses the causes of poverty.

“Parenting Inside Out (PIO)” is an evidence-based parenting skills training program for families affected by parental incarceration.

“Project S.E.E.K. (Services to Empower and Enable Kids)” is a program aimed at reducing intergenerational incarceration. The program addresses the risk and protective factors associated with delinquency and criminal behavior at both the individual and family levels.

“Reducing Childhood Hunger” helps families become more self-sufficient, food-secure, and economically stable. Rather than offering pre-packaged/pre-weighed food, the program creates a food pantry where clients can shop for their own groceries using a point system.

Formed in 1994, Harford County’s Local Management Board brings together local child-serving agencies; local child providers; clients of services; families, and other community representatives to address the critical needs of and recommends priorities for the County.

Read the full Harford County press release for more information.

Local Governments Spur Maryland Job Growth

Barbara Zektick Health and Human Services, Information Technology, Labor, Parks and Recreation, Summer Conference

In June 2017, Maryland’s local governments added 2,100 jobs – a big difference from the other states in the Mid-Atlantic region. Those states – Delaware, DC, Pennsylvania, and Virginia –  lost 6,200 local government jobs.

For the second straight month, Maryland’s unemployment fell by a tenth of a percent, reports Daraius Irani, Ph.D., Vice President, Division of Innovation and Applied Research and Chief Economist, Regional Economic Studies Institute (RESI), of Towson University. Maryland’s unemployment rate is 4.1 percent, while the rest of the Mid-Atlantic region maintains a constant rate of 4.6 percent.

According to Dr. Irani:

Maryland’s job growth was robust, with job losses only occurring in three industries:

  1. Manufacturing which lost 600 jobs,
  2. Trade, Transportation, and Utilities which lost 400 jobs, and
  3. Leisure and Hospitality which lost 100 jobs.

Job losses in Manufacturing are not especially surprising. …. The increase in automation has been changing employment in the industry for some time, and it doesn’t seem like the job losses are quite finished. …

Other strong sectors of growth for Maryland include Health Care and Social Assistance, which added 5,600 jobs last month. This dwarfs the total increase in neighboring states, who combined to only add 1,000 jobs in the sector in June. The healthcare industry has been one of Maryland’s employment bedrocks, and this does not look likely to change in the short term. However, this does mean that changes in the sector as a result of the ongoing debate over the ACA and AHCA could have large ripple effects in Maryland’s economy.

With job growth in Maryland booming – particularly for local governments – it is no wonder that this year’s theme for the MACo summer conference next week in Ocean City is “You’re Hired!”

Learn about how automation is changing county employment at the MACo summer conference session, Will Your Next County Employee be…a Robot?

Listen to public health experts discuss potential impacts of ACA and AHCA on Maryland counties at the session, ABCs of the ACA, AHCA, BCRA, and Health Care in Maryland.

And, see Dr. Irani himself, on the panel, Parks & Recreation: A Healthy (and Wealthy) Investment.

Learn more about MACo’s Summer Conference:

CareFirst Settles Ongoing Reimbursement Dispute with Anne Arundel Medical Center

Kevin Kinnally County News, Employee Benefits and Relations, Health and Human Services, News You Can Use

CareFirst BlueCross BlueShield has resolved a dispute with Anne Arundel Medical Center (AAMC) after the Annapolis hospital threatened to terminate its contract with the medical insurance provider. In a joint statement released on Friday, officials from the hospital and the insurance provider said they have reached an agreement which will ensure no disruptions to care or coverage for CareFirst patients who receive treatment at AAMC.

According to The Baltimore Business Journal,

In a joint statement released Friday afternoon, AAMC and CareFirst said they signed a new three-year contract to be effective Sept. 1. They did not release details about the agreement but said there will be no disruption in care or coverage.

Without a contract in place, CareFirst members would not have received in-network discounts for certain medical services at AAMC. That means they would likely have had to pay higher prices for their care or find care elsewhere, with other in-network doctors. CareFirst has had contracts with AAMC for about 60 years. The health insurer is the largest in Maryland, with over 70 percent market share.

Read the full article for more information.

Big Returns for Pension Systems…Now What?

Michael Sanderson Employee Benefits and Relations

Governing magazine has reviewed the latest round of investment returns for public pension systems, and speculated on the next steps for jurisdictions offering these traditional defined benefit plans, that are dependent on long-term investments to pay for future benefit payments. The State of Maryland hosts such a plan for employees and public school teachers, and roughly half of the Maryland counties participate in that “pool.”

From Governing, citing analysis by Tom Aaron, vice president and senior analyst at Moody’s Investors Service:

Pension plans rely heavily on investment earnings because annual payments from current employees and governments aren’t enough to cover yearly payouts to retirees. As it stands, roughly 80 cents on every dollar paid out to retirees comes from investment income.

The average annual investment earnings target for pension plans is 7.4 percent. By Aaron’s calculations, pension plans would need investment returns of nearly 11 percent to prevent unfunded liabilities from growing.

Many plans are actually on track to beat that lofty figure this year, reporting returns between 10 and 14 percent, according to a Governing analysis. But it’s becoming much harder for pension plans to gain ground than to lose it.

The data collected by Governing (shown above) shows the Maryland plans’ consolidated returns at 10% for the year – well above the system’s assumed rate of return, but also incrementally below each of the other public systems reporting as part of the analysis. See previous Conduit Street coverage on the Maryland system returns.

Unpaid State Officials Sue Treasurer, State

Barbara Zektick Employee Benefits and Relations, General Assembly News, Government Liability and Courts, State Budget and Fiscal Issues

Dennis Schrader and Wendi Peters, Governor Larry Hogan’s secretaries for Health and Planning, respectively, have filed suit in Anne Arundel County Circuit Court against State Treasurer Nancy Kopp and the State of Maryland seeking a declaratory judgment on their right to receive their paychecks, reports Bryan Sears for the Daily Record.

Governor Larry Hogan withdrew his appointees’ nominations during the legislative session, preventing the State Senate from voting on their confirmations. The General Assembly passed budget language that prohibits the use of State budget funds to pay the salaries of certain secretaries and other high-ranking officials who did not receive Senate confirmation during the 2017 session. In response to the budget language, State Treasurer Nancy Kopp announced last month that should would not pay the secretaries at the start of fiscal 2018 year on July 1.

The Daily Record  quotes Governor Hogan:

The attorney general gave both the legislature and our office the opinion that they’re legally serving in their positions so it would be illegal for us not to pay them.

Sears further reports:

The attorney general, in two different advisories, said Hogan could legally reappoint secretaries whose names he withdrew before a vote. But in a separate advisory, the office said that the language in the budget barring the payment of Schrader and Peters was also legal under the Maryland Constitution.

From the Letter To Senator Ferguson from the Office of the Attorney General (June 27, 2017):

The reappointment of Ms. Peters and Mr. Shrader after the close of session raises significant constitutional concerns because the practice of making recess reappointments of withdrawn nominees tends to circumvent the Senate’s constitutional confirmation role. But in the absence of any constitutional provision addressing the practice, our Office’s position has been that a governor may reappoint a withdrawn nominee after session so long as the nominee was not rejected by the full Senate. As for the budgetary restriction, I believe it is a constitutionally permissible exercise of the Legislature’s power to impose conditions on the expenditure of appropriated money, particularly as applied to the positions of Secretary and Acting Secretary.

Although a reviewing court might disagree with one or both of these conclusions, it likely would not resolve the reappointment and budgetary issues in a way that would allow a governor to systematically circumvent the Senate’s confirmation role. Instead, it would either invalidate the reappointment of the withdrawn nominees, or, more likely, conclude that the budgetary restriction is a constitutionally valid means of ensuring the integrity of the Senate confirmation process. Thus, even if Ms. Peters and Mr. Shrader were valid recess appointments, they may not receive a salary as Secretary, Acting Secretary, Deputy Secretary, or Assistant Secretary as of the budgetary restriction’s July 1 effective date.

Useful Links

Frustrated U.S. Senators Press Feds On FBI Headquarters Plan

Kevin Kinnally Business Affairs, County News, Economic Development, Finance and Procurement, Intergovernmental Relations, Labor, News You Can Use, Planning and Zoning, State Budget and Fiscal Issues

A month after federal decision-makers scrapped the government’s decade-long plan to close the Federal Bureau of Investigation’s deteriorating headquarters in downtown Washington and replace it with a new building in the Maryland or Virginia suburbs, U.S. Senators from both parties yesterday expressed frustration at officials from the General Services Administration. Senators lamented that millions of dollars had been wasted on the failed effort, and complained that they were blindsided by the decision.

The General Services Administration, the government’s landlord, has been working with the FBI for more than a decade on a plan to trade away the J. Edgar Hoover building in Washington, D.C. to a developer. In return, the developer would be responsible for the majority of the costs to develop a new headquarters on a modern site.

After spending more than $20 million on its plan, which would have relocated the FBI to Landover, Md., Greenbelt, Md., or Springfield, Va., the General Services Administration said it was canceling the project because Congress had not appropriated enough funds.

According to The Washington Post,

No senator appeared more frustrated by the process than Democrat Benjamin L. Cardin of Maryland, the state that would be home to two of the proposed sites. Cardin said the GSA had received seven viable development plans from three developers and pointed out that Congress had granted the agency approval to pick a new headquarters location. Congress has already appropriated more than $800 million toward construction and approved the selling of the Hoover Building.

“We’ve got to figure out a way to move this quicker than saying it’s another four, five or six years to get this done,” Cardin said, “because the FBI can’t wait and the taxpayers demand that we be more efficient than this.”

Officials from Maryland and Virginia have competed for years to land the new headquarters. But the rest of Congress had repeatedly expressed concern with the huge price tag.

The project would have had a significant economic impact on Maryland and, more specifically, Prince George’s County, where two potential sites were being considered. The FBI has about 11,000 employees, which would have made it one of Maryland’s largest employers.

State and Prince George’s County officials had spent years trying to convince the FBI to relocate. The University of Maryland, College Park and the University of Maryland, Baltimore planned to launch a joint national security academy. Gov. Larry Hogan pledged $317 million in infrastructure and traffic improvements to accommodate a new headquarters in Greenbelt and $255 million for a Landover site.

Read the full article for more information.

Marylanders Educated, Prosperous, and Paying High Healthcare Premiums

Barbara Zektick County News, Education, Finance and Procurement, Health and Human Services, Housing and Community Development, Labor

dflurymw0aamnqrMaryland residents are very educated and fairly prosperous when compared to other states, according to a study by Washington-based national nonprofit Prosperity Now – but we have a ways to go in terms of business and employment equity, and are last on the list in terms of high employee shares for health insurance premiums.

Maryland ranked fourth in the nation for education, out of the 50 states and the District of Columbia. Almost 39 percent of adults aged 25 and older hold at least a four-year college degree, compared to 30.6 percent nationally. Nearly nine out of ten Maryland students entering high school in the 2011-12 school year graduated in four years – 87 percent. More than half of Maryland college students graduate with student loan debt, and 9.9 percent of Maryland borrowers entering repayment on their student loans in 2013 defaulted within three years.

Maryland ranks 17th on the “prosperity of its residents,” according to the nonprofit. Maryland ranked third for its low percentage of households with income below the federal poverty threshold (9.2 percent, compared to 13.8 percent nationwide). While 36.8 percent of households nationwide could not subsist at the poverty level for three months if they lost their major source of income (the “liquid asset poverty rate”), in Maryland, that number is less than 24 percent. One-fifth of Maryland jobs are in low-wage occupations. Maryland scored squarely in the middle for income volatility: 21.4 percent of Marylanders indicated that their incomes varied somewhat or a lot from month to month in the previous year, compared to 20.9 percent nationally.

Maryland ranked 23rd out of all states in the businesses and jobs category, but scored significantly poorly in business and employment equity categories. Our state ranked 43rd for its ratio of unemployment of its white, non-Hispanic labor force compared to its labor force of color. We ranked 43rd in small business ownership, 46th for business value by race, and 45th for business value by gender. (“Business value by race” is defined as “the ratio of the average business value, in terms of sales, receipts or revenue, of White, non-Hispanic-owned businesses to businesses owned by workers of color”; “business value by gender” is defined similarly as the “ratio of average business value, in terms of sales and receipts, of women-owned businesses to men-owned businesses.”)

Similar disparities exist in the healthcare category. Maryland ranked 17th for healthcare, with high rankings for percentage of non-elderly with health insurance, employer-provided insurance coverage, and few adults reporting poor or fair health status. However, Maryland actually ranked 51 out of 51 for high employee shares of premiums, or the “percentage of the average employee contribution to family premiums for employer-based health insurance.” The average employee contribution in Maryland is 35.4 percent, compared to 27.2 percent nationally. Maryland ranked 47th in the “uninsured by race” category: the uninsured rate is 3.2 times as high for people of color than the white, non-Hispanic population (compared to 2.1 times nationally).

Maryland ranked 37th out of all states for homeownership and housing. We ranked 25th for homeownership, but half of all renters are “cost burdened,” meaning they spend 30 percent or more of their income on rent and utilities – placing Maryland 39th in this category. Maryland ranked 43rd for delinquent mortgage loans, with 1.8 percent of loans with payments 90 or more days overdue.

Prosperity Now describes its scorecard:

The Prosperity Now Scorecard is a comprehensive resource featuring data on family financial health and policy recommendations to help put all U.S. households on a path to prosperity. The Scorecard equips advocates, policymakers and practitioners with national, state, county and city data to jump-start a conversation about solutions and policies that put households on stronger financial footing across five issue areas: Financial Assets & Income, Businesses & Jobs, Homeownership & Housing, Health Care and Education.

Useful Links

Prosperity Now’s Maryland data

Baltimore data (March 2016)

Herald-Mail Media coverage, with Washington County data

The Future of Work is Flexible

Kevin Kinnally County News, Employee Benefits and Relations, Human Resources, Labor, MACo Events, News You Can Use, Summer Conference

Baby boomers currently represent the largest share of active workers. Research has shown that boomers identify their strengths as organizational memory, optimism, and their willingness to work long hours. This generation grew up in organizations with large corporate hierarchies, rather than flat management structures and teamwork-based job roles.

Millennials have a very different point of view on what they expect from their employment experience. Millennials are knowledgeable, innovative, self-confident, have the ability to multi-task, and are very energetic. They have high expectations for themselves and their coworkers, and prefer to work in groups, rather than as individuals. Millennials seek challenges, yet work-life balance is of utmost importance to them. They do, however, realize that their desire for social interaction, immediate results in their work, and sense of entitlement may be seen as weaknesses by older colleagues.

So how do businesses keep this generation – the savviest, best-educated generation to date – involved, productive, and engaged?

According to HR Technologist,

Gone are the days when workers were exclusively full-time workers, glued to their desks and being supervised over their shoulders by strict supervisors and time-clocks. An increasing number of workers today want to work independently, branding themselves as independent consultants and freelancers.

…

Recruiters will need to reach out to new talent pools, by tapping online recruitment forums meant for the flexible workforce. Work infrastructure such as laptops, software subscriptions, security-ware, and place of work must be defined in new flexi-work policies.  The traditional performance management approach will need to be rethought, to factor in the flexible work hours/location and bringing together of virtual teams.

You can learn more about understanding, attracting, and recruiting your millennial workforce at the 2017 MACo Summer Conference session, “Dude, What’s My Job?”- Understanding, Attracting, and Retaining Your Millennial Workforce.

The MACo summer conference is August 16-19, 2017 at the Roland Powell Convention Center in Ocean City Maryland. This year’s theme is “You’re Hired!”

Learn more about MACo’s Summer Conference: