HCPOA NEWS
Montgomery economic situation worsens
Sep 30, 2009 (09:09:56)
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Andy Stern hasn't been paid since May. The Montgomery County resident and small business owner was forced to forgo his own salary, implement furloughs for his workers and cut wages for his highest-paid employees to cope with the nation's economic recession.
Stern, who owns Andy Stern's Office Furniture Inc., was part of a panel of local business owners who told the Montgomery County Council that beyond their economic data "out here in the real world things are very bleak, indeed."
His revenue has declined by 40 percent in just one year, he said.
The business climate in Montgomery County, where Stern's family has owned a business for more than 60 years, is the worst it's ever been, Stern said.
The panel of business owners was gathered to respond to economic data the council received Tuesday.
Montgomery County's unemployment rate in July fell slightly to 5.5 percent from 5.7 percent in June, according to data. The unemployment rate in July 2008 was 3.5 percent.
While those numbers might appear relatively low, the actual business climate in Montgomery County is grim, Stern and other members of the panel said Tuesday.
Officials also heard a report about the county's projected budget shortfall in fiscal 2011, which stands at $285.4 million.
Among the possible ways to cut spending are to eliminate cost-of-living pay increases for county employees ($123.3 million), eliminate salary step increases for county employees ($27.6 million), reduce spending on retiree health insurance ($64.5 million), reduce the county's reserve fund ($40 million), along with other cuts, officials said.
Stephen Farber, the council staff director, said in his report that all of the cost-saving measures would be controversial, and some involve collective bargaining agreements already in place.
County Executive Isiah Legget (D) is expected to present a plan to the council by the end of October to reduce spending this fiscal year and next.
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