HHS Item 1
February 12,2015
Worksession
MEMORANDUM
February 10,2015
TO:
Health and Human Services Committee
FROM:
Josh Hamlin, Legislative
Attome~
SUBJECT:
Worksession:
Bill 59-14, Human Rights and Civil Liberties - County
Minimum Wage - Effective Dates
Bill 59-14, Human Rights and Civil Liberties - County Minimum Wage - Effective
Dates, sponsored by then Council President Rice, was introduced on November 25. A
public hearing was held on January 20.
Bill 59-14 would change the effective dates of future increases in the County
minimum wage from October 1 to July 1 of the years 2015,2016, and 2017. In November
2013, the County enacted Bill 27 -13, Human Rights and Civil Liberties - County Minimum
Wage Dollar Amount, establishing the County minimum wage with phased increases on
October 1 of each year through 2017. The October 1 date was chosen in anticipation of
an increase in the State minimum wage with the same effective/phase-in dates. In its 2014
session, the Maryland General Assembly enacted HB 295, increasing the State minimum
wage with phased increases on
July
1 of each year through 2018. Synchronizing the dates
would simplify the administration of the annual increases by employers.
January 20, 2015 Public Hearing and Correspondence
There were five speakers at the public hearing on the Bill held on January 20, 2015.
Four of the speakers were representing non-profit organizations serving people with autism
or developmental disabilities: Jane Salzano (©1O-12) and Ian Paregol (©13-15) from
Community Services for Autistic Adults and Children (CSAAC); Karen Lee from Seeking
Equality, Empowerment and Community for People with Developmental Disabilities
(SEEC) (©16-17); and Nancy Tolbert from CALMRA, Inc (©18). All three organizations
opposed the Bill, saying that they operate on very limited funding, and are already facing
budget challenges from the increase
in
the County minimum wage enacted by Bill 27-13.
Accelerating the impact would add to these challenges, and Ms. Lee and Ms. Tolbert each
pointed out that unlike many businesses, their organizations cannot pass on increased labor
costs to consumers, as their rates are set by the State. Michael Wilson from United Food
and Commercial Workers Local 400 (©19) spoke in support of the Bill, saying it would
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not only simplify implementation for employers but also for workers, who would have a
clear understanding of when the minimum wage increased, regardless of where they are in
the State. He also supported the Bill because it would get affected workers their raises
early.
The Council also received correspondence on the Bill from the Gaithersburg­
Germantown Chamber of Commerce (©20), the Greater Silver Spring Chamber of
Commerce (©21) and the Montgomery County Chamber of Commerce (©22).
In
the
correspondence, all three Chambers requested that the Bill be amended to synchronize the
County and State effective dates to July 1 beginning in 2016, rather than this year, as the
Bill is drafted. The Chambers pointed out that certainty and predictability are important in
business planning, and that many businesses have already planned their budgets and set
pricing structures for calendar year 2015. To change the wage requirements for 2015 at
this stage would be disruptive to these businesses.
The Council also received correspondence from Jim Sweet of Smokey Glen Farm.
Mr. Sweet described the impact of the already enacted minimum wage increases, and
expressed concern about a change in the effective date of the 2015 increase. Echoing the
concerns raised by the Chambers of Commerce,
Mr.
Sweet said that Smokey Glen Farm's
2015 pricing has already been established and published, and a change to the minimum
wage during that time would be a significant burden.
Issue for Committee Discussion
Should Bill
59-14
be amended to synchronize State and County increases beginning in
2016?
The Gaithersburg-Germantown, Greater Silver Spring, and Montgomery County
Chambers of Commerce all request that the Bill be amended to change the effective date
of County minimum wage increases to July 1 beginning in 2016. Mr. Sweet of Smokey
Glen Farm expressed general concern about the already enacted increases, and cited the
potential accelerated 2015 increase as particularly problematic. The positions of CSAAC,
SEEC
and
CALMRA
are based primarily on the effects of the already enacted increases
on their organizations, but presumably the acceleration of the 2015 increase is of the
greatest concern to them. While moving up the effective dates of any of the increases will
involve an additional expense
to
employers, moving the first change to 2016 will give any
affected entity adequate notice to plan their budgets for calendar year 2016 or fiscal year
2017.
As noted above, when it was enacted, Bill 27-13's effective dates were intended to
correspond to effective dates ofthe anticipated State increases. Synchronizing the effective
dates would provide a single date on which minimum wages throughout Maryland increase,
simplifying adjustments for County employers operating in other State jurisdictions.
Making the change effective in 2016 takes into account the fact that many of these
businesses have planned their 2016 budgets, and entered into obligations based on these
plans.
2
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Council
staff
recommendation:
amend line
8
ofthe
Bill,
so that lines
4
through
9
read as
follows:
Notwithstanding Section 27-68, as added in Section 1, the County minimum wage,
until [October] July 1,2017, must be the greater of the minimum wage required under the
Federal or State Act or:
(a)
effective October 1,2014, $8.40 per hour;
(b)
effective [October] [[July)) October 1,2015, $9.55 per hour; and
(c)
effective [October] July 1,2016, $10.75 per hour.
This packet contains:
Bill
59-14
Legislative Request Report
Table comparing minimum wage rates
Fiscal and Economic Impact statement
Public Hearing Testimony
Jane Salzano
Ian Paregol
Karen Lee
Nancy Tolbert
Michael Wilson
Gaithersburg-Germantown Chamber of Commerce letter
Greater Silver Spring Chamber of Commerce letter
Montgomery County Chamber of Commerce email
Jim Sweet, Smokey Glen Farm email
F:\LAW\BILLS\1459 Minimum Wage - Effective Dates\HHS Memo.DocK
Circle
#
1
3
4
5
10
13
16
18
19
20
21
22
23
3
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Bill No.
59-14
Concerning: Human Rights and Civil
Liberties - County Minimum Wage ­
Effective Dates
Revised:
11/05/2014
Draft No. 1
Introduced:
November 25.2014
Expires:
May 25,2016
Enacted: __________________
Executive: _______________
Effective: _______________
Sunset Date: ...:N..:..;:o"""n=e_ _ _ _ __
Ch. _ _, Laws of Mont. Co. ____
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President Rice
AN
ACT to:
(1)
(3)
change the effective dates of increases in the County minimum wage; and
generally amend the law governing the County minimum wage.
By amending
Chapter 34 of the Laws of Montgomery County 2013
Section 2, Transition
Boldface
Underlining
[Single boldface brackets]
Double undedining
[[Double boldface brackets))
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or
the
bill by amendment.
Existing law lDIqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL No. 59-14
1
2
3
4
5
Sec. 1. Section 2 of Chapter 34 of the Laws of Montgomery County
2013 is amended as follows:
Sec. 2.
Transition.
Notwithstanding Section 27-68, as added in Section 1, the County minimum
wage, until [October] July 1, 2017, must be the greater of the minimum wage
required under the Federal or State Act or:
(a)
(b)
(c)
Approved:
6
7
8
effective October 1,2014, $8.40 per hour;
effective [October] July 1,2015, $9.55 per hour; and
effective [October] July 1,2016, $10.75 per hour.
9
10
11
Craig
L.
Rice, President, County Council
Date
12
Approved:
13
Isiah Leggett, County Executive
Date
14
This is a correct copy ofCouncil action.
15
Linda M. Lauer, Clerk of the Council
Date
0-
F:\LAW\BILLS\l459 Minimum Wage - Effective Dates\BiII I.Doc
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LEGISLATIVE REQUEST REPORT
Bil159-14
Human Rights and Civil Liberties County Minimum Wage
-
Effective Dates
DESCRIPTION:
Bill 59-14 would change the effective dates of future increases in the
County minimum wage from October 1 to July 1 of the years 2015,
2016, and 2017.
After the County enacted Bill 27-13, establishing the County
minimum wage with phased increases through 2017, the Maryland
General Assembly passed HB 295, increasing the State minimum
wage. Both County and State minimum wages include annual
increases through 2017 and 2018 respectively, with the County's
minimum wage increasing on October 1 of each year, and the State
minimum wage increasing on July 1 of each year.
Synchronize the increases of the County and State minimum wages.
Office of Human Rights
I
Human Rights Commission
To
be
requested.
To be requested.
To be requested.
To
be
researched.
Josh Hamlin, Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIPALITIES:
PENALTIES:
NIA
J:\Iaw\bills\1459 minimum wage - effective dates\lrr.doc
(j)
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A
Comparison
of Bill 27-13
and HB 295 Minimum Wage Rates
L
I
Date
October 1,2014
January 1,2015
July 1,2015
October 1, 2015
July 1,2016
October 1,2016
July 1,2017
October 1,2017
July 1,2018
Federal
7.25
7.25
7.25
7.25
7.25
7.25
7.25
7.25
7.25
State
7.25
8.00
8.25
8.25
8.75
8.75
9.25
9.25
10.10
County
8.40
8.40
8.40
9.55
9.55
10.75
10.75
11.50
11.50
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ROC~LE: ~YlAND
MEMORANDUM
January
12,20tS
TO:
George Leventhal. President, County Council
Jennifer
A.
Hughes, D ' , O.ffice
ofManag~udget
Joseph F. Beach, Dir . r,DepartmentofFinan'1J
'v
FElS for Bill 59-14. Human Rights and Civil Liberties ­ County Minimum Wage
- Effective Dates
FROM:
SUBJECT:
Please find attached the fiscal and economic impact statements
tor
the above­
referenced legislation.
JAH:fL
cc:
Bonnie Kirkland. Assistant Chief Administrative
Officer
Lisa Austin. Offices ofthe County Executive
Joy
Nurmi,
Special Assistant
to
the County Executive
Patrick Lacefield, Director, Public Infonnation Office
Joseph F. Beach, Director, Department of Finance
James Stowe. Director. Office of Human
Right"
David Platt, Department of
Finance
PbH Weeda, Office of Management and
Budget
Helen
VaHone,
Office of Management and Budget
Alex Espinosa, Office of'Management and Budget
Naeem Mia, Office
of
Management and Budget
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Fiscal Impact Statement
Council
Bi1l59-14. Human
Rights
and Civil
Liberties-County Minimum
Wage-Effective Dates
1.
Legislative
Swnmary.
a
Change
the effective dates of future increases in
the
County
minimum
wage from
October
1
to
July
1
of years
2015,2016,
and
2017.
b. Amend the law governing the County minimum wage. (Chapter 27 illstead of
Chapter
34)
2.
An
estimate of changes in County revenues
and
expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source ofinfonnation, assumptions, and methodologies used.
There would be no apparent change in county revenues or expenditures. Currently all
county full time employment positions pay above the minimum wage and our current
contracting policy requires the county
to
payaccordil1g to the County's Living Wage
Program.
The
current rate is S14.lSihour
for FY 15.
3.
Revenue and expenditure
estimates
covering at least the next
6 fiscal
years.
Expenditures over the next 6 fiscal years are estimated
to
be flat and consistent
\\-ith
CUITent
budget
projections.
4. An actuarial analysis through the entire amortization period for each bill that would affect
retiree pension or group insurance costs.
Not applicable
5.
An estimate ofexpenditures related
to
County's information technology
(IT)
systems"
including Enterprise
Resource
Planning
O~RP)
systems.
Not
applicable
6.
Later
actions Ulat
may affect future
revenue
and expenditures if
the
bill
authorizes
future
spending.
Not applicable.
7.
An
estimate of1he staff time needed
to
implemt-'nt the bill.
No additional staff required.
8.
An
explanation of11ow the addition of new
staff
responsibilities would affect
other
duties.
Not
applicable.
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9.
An estimate of costs
when
an additional appropriation is
needed.
Not applicable.
10. A description of any variable
that
could affect revenue and cost estimates.
Not applicable.
11. Ranges of revenue or expenditures that are uncertain or difficult
to
project.
Not applicable.
12. If a bill is likely
to
have no
fiscaJ impact,
why that is the
case.
The bill changes the implementation
date only.
13.
Other
fiscal impacts or comments.
Not applicable.
14. The
foUO\:vmg
contributed
to
and
concurred with
this analysis:
Jini Stowe, Director, Office
of Human
Rights
Joseph
Adler,
Director, Office or Human Recourses
Phil Weeda, Office ofManagement and Budget
Helen Vallone, Office of Management and Budget
Date
,.
,
(j)
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Economic Impact Statement
BiD 59-14, Human
Rights and
Civil Liberties ­
County Minimum Wage - Effective Dates
Background:
. Ibis legislation would change the effective dates offuture increases in the County
minimum wage from October
1
to July
1
of the years 2015,2016, and 2017. The changes
would increase the number of months covered under the minimum wage in FY2016 and
FY2017
by
three months. The rates
for
FY2016 and FY2017 are $9.55 per hour and
$10.75 per hour, respectively
1.
The sources of information, assumptions, and methodologies used.
Sources of information include:
• theBLS Reports,
"Characteristics of
Minimum
Wage
Workers,
2013", Report
1048,
U.S. Bureau
of Labor
Statistics
(BLS)~
March
2014,
and
• Montgomery County labor force statistics. Local Area Unemployment
Statistics (LAUS),
BLS.
The
Department
of
Financ.e
(Finance)
assumes, underBill
59-14 there
\V;U
be
an
increase of three months (from October to July) of coverage for rates that under
current
law
begins in October. Under current law,
the
minimum wage between
October 1,2014 and October 1, 2015 is $8.40. Under Bill 59-14, the
minimum
wage
of$9.55
would
begin
in
July 1, 2015 instead
of
October 1,2015. Therefore, there is
an increase in the
minimum
wage of
$
.1.15
per hour for
that
three-month period.
Under the
same
provision in Bill
59-14, the increase in the minimum vvage is $1.20
for the
period
July through September 2016 for FY201 7 effective from July 1, 2016.
The Department ofFinance
assumes
that 480 working hours are affected
by
the
increase
in
the effective
dates.
The
pumber is based
on
three months, fbur weeks per
month, and forty hours per week.
Based on da:ta in
HLS
Reports,
the number ofemployees in the state below the
minimum wage was 36,000 in CY2013. Using the data from that .report
and
data
from LAUS. Finance
e~1imates
the
number of employees
in
the County below the
minimum wage to
be
6,382 in FY2016 and 6,471 in FY2017.
2. A description of any variable that could affect tbe economic impact estimates.
The variables that could affect the economic impact estimates are the number of
working hours of 480 and the number of workers below the minimum wage
as
estimated
by
Finance.
Page 1 of3
CD
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Eeonomic Impad Statement
Bill59~14J
Human Rights and Civil Liberties­
County Minimum Wage - Effective
Dates
3. The Bill's positive or negative effect,
if
any on
employmen~
spending, saving.
investment,
incomes.,
and property values in the County.
Based on the assumptions discussed in paragraph # 1. Finance estimates the positive
effect
on
employee
incomes
is
over
$3.5
million in
FY2016and
over
$3,7
million in
FY2017. While the estimated number of employees below the minimum wage '\\'Ou1d
receive a positive economic benefit, employers would
experl~ce
additional labor
costs equal to the amount ofthe employee benefit. However,
if
the employer chooses
to
pass on those additional costs
through
higher prices, the
cOnsumer
would incur the
additional
costs. Therefore:
the additional income
to
the
employee "...ould
be
offset by
the additional costs
to
either the employer or consumer. As a result, the net efi'ectto
the COl.mty's
economy
from
Bi1l59-14 wouIdbe zero
and
the BiH
would
have no net
economic impact.
there is no consensus among economists on the
effects
of
the minimum
wage and employment. Based on the review ofthe research,
it
is not certain whether
an illcrease in
the
minimum wage would increase or decrease employment. This
uncertainty is based on the
following
factors:
• The
ability
of
the
employer
to
compensate
for the
increase
in
the minimum wage
by
passing such increase onto customers with higher prices
• The proportion
of the
\\'(lge costs among workers
earning
the
minimum
wage to
the total costs ofproduction
• The multiplier effect of increasing the minimum wage on the local economy
4.
.If
a Bill
is
likely
to have no eronomic impact, why
is
that the case?
However~
Bill 59-14 would have positive economic impact on current employees currently
below the minimum wage but that positive
cco.nomic
impact is offset by additional
labor costs incurred
by
employers.· As stated
in
section #3, such a tradeoff would be a
net zero impact. However, it is uncertain whether increasing the minimum wage over
the three month
period
would have an effect on employment.
5. The fonowing contributed to or concurred with this analysis:
David Platt and Rob
Hagedoom, Finance; James Stowe, Director. Office of Human Rights.
Page
20f3
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Jane Ford Salzano
14319 Briarwood Ter
Rockville, M D 20853
January 20, 2015
TESTIMONY Bill 59-14
I am Jane Ford Salzano, a fifty year resident of Montgomery county,
Founder of CSAAC, Community Services for Autistic Adults and Children.
CSAAC was started thirty five years ago with the help of the
Montgomery County Councit whose members, like me, recognized that
institutionalization was an inadequate, inappropriate and cruel way to
contain human beings.
Starting in two apartments in Wheaton CSAAC has grown to be a
nationally recognized leader in the provision of services to those
disabled by autism. We have become the Statue of Liberty to families
with an autistic child, proving that there is hope, and the promise of a
real life in the community, for even the most severely disabled autistic
person.
Today CSAAC serves over three hundred children and adults. We have
fifty-one houses scatter site in Montgomery County. The Jane F. Salzano
Autism Center in Montgomery Village, which some of you have visited,
houses our model Vocational/Supported Employment Program for
adults. Our school, located on our Brookeville campus is a nonpublic
educational program approved by MSDE which educates students too
difficult to be served within MCPS. Our Intensive Early Intervention
Program, for children from eighteen months to six years, provides
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treatment through
one-to-one
positive
behavioral
intervention.
Instructional technicians work in the child's home, not only with the
youngsters but with their families.
. CSAAC
individuals
are working
and volunteering throughout
Montgomery County every day. The utensils and napkin at your
lunchtime restaurant may have been prepared by one. As you hurry to
catch a Metro train if you see an individual carefully stocking the Ride
On Bus schedule rack, that is one of our many individuals who are
proud to be contributing members of our community.
The individuals who started in those first apartments in Wheaton are
growing older. Our Board of directors is now developing specialized
services for an aging population. CSAAC provides services across the
lifespan of individuals with autism, from toddlers to adolescents, adults
to elders.
Always a leader, CSAAC is the sponsor of a new organization,
International Autism Initiative which is dedicated to initiating services
to those with autism throughout the world. Our first start up is in
Africa. After an intensive six month training at CSAAC a Nigerian
physician opened an Intensive Early Intervention Clinic in Abuja,
Nigeria. CSAAC provides ongoing support by Skype.
CSAAC is an important employer in Montgomery County. We have over
six hundred-thirty employees almost all of whom are Direct Care Staff.
And the majority of our staff live right here in Montgomery County.
They are well motivated, well trained, and must have a heart for their
job.
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CSAAC needs the continuing support of the Montgomery County
Council to ensure that CSAAC will continue to be a resource to our
citizens impacted by autism. Our Executive Director Ian Paregol will
discuss the impact of Bill 59-14 on CSAAC.
@
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Bill 59-14, Human Rights and Civil Liberties County Minimum Wage­
Effective Dates
Opposition
January
20, 2015
I
am
Ian
Paregol, Executive Director of the Montgomery County non-profit service provider Community
Services for Autistic Adults and Children (CSAAC). Consider that CSAAC maintains an office building
in Montgomery Village, a K through
12
school campus in Brookeville as well as
50
residential properties
throughout Montgomery County, an around-the-clock nursing staff and a
60
vehicle transportation
system. yet
61
%
of our entire budget is allocated
to
direct support wages and benefits. Direct support
expenses are the single largest element ofCSAAC's overall budget.
CSAAC opposes the acceleration of the implementation of the Montgomery County minimum wage as
proposed in
59-14
for a very simple reason: CSAAC and the service providers which provide supports to
Montgomery County's citizens impacted by developmental disabilities is not funded for the minimum
wage increase that will be required in Montgomery County and the acceleration of the implementation of
the Montgomery County minimum wage (if required by this bill) will only serve to hasten the adverse
financial impact on the provider community.
The state minimum wage increase carried with it an expectation that state funding for direct support staff
would remain just below the present level of 35% above the minimum wage. The entirety of the funding
for direct support wages comes from the Developmental Disabilities Administration budget which
presently funds all providers
$9.82
per hour no matter how long an employee
has
been in the field. I have
provided a chart (below) that outlines the state funding for direct support wages versus the state minimum
wage and the corresponding county minimum wage path.
In
Montgomery County, the minimum wage
requirements from last year's session not only raise the base rate on the minimum wage, it mandated a
faster rate of implementation. You can see from this chart and the graph on page 3 that the wages for our
highly-trained, dedicated direct support staff whom Jane Salzano described,
will
quickly dive below the
local Montgomery County minimum wage rate. Direct support is not a minimum wage job.
Chart 1: Impact of Montgomery County Minimum Wages Versus
Maryland State Funding for Direct Support Wages
Date
DDAfunding
(wi
2% in Jan
+
proposed 3.5%
increases)
9.82
9.82
State
Min
Wage
I
Mont Co
Min Wage
Proposed
Accelerated
Mont Co
Min Wage
7.25
I
9/1/14
10/1/14
I
7.25
:7.25
7.25
Difference
bit
state
funded rate and
accelerated Mont Co
min
wage (assuming
DDA increases)
2.57 above
min
wage
. 1.42 above
min
wage
1.62 above
min
wage
.82 above
min
wage
.82 above
min
wage
I
I
8.40
·8.40
8.40
18.40
18.40
I
I 111115
I
10.02 (2%)
10.37 (3.5%)
10.37
8.00
8.25
8.25
I
7/1/15
I
9.55
9.55
10/1115
7/1116
10/1/16
9.55
9.55
10.73 (3.5%)
10.73
8.75
8.75
10.75
10.75
-.02
10.75
10.75
1-.
02 .
1-.39
-.39
I
7/1117
10/1117
11.11 (3.5%)
11.11
l
9.25
,9.25
I
111 •50
11.50
11.50
1
@
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Even if we consider the partial match that Montgomery County has generously provided over the years
and assume that that match will
return
to the percentage that the County provided back in 2010, the direct
----~support-staff-barelj'-stay_ahove··-the-minimum-wage--in-Montg.omery..COunty..without~--­
funding. (See Chart 2 and Graph 1.) The margin above minimum wage for these workers quickly erodes
to less
than
a dollar in 17 months (July 2016) even with the present match.
Chart 2: Impact of Montgomery County Minimum Wages Versus Maryland State Funding
for Direct Support Wages including Adjustment to Montgomery County Match Rate to
Return to FYIO Levels
Date
DDA funding
(wi
2% in Jan
+
proposed
3.5%
increases)
State
Min
Wage
Mont Co
Min
Wage
Proposed
Accelerated
Mont Co
Min
Wage
i
9/1/14
9.82
9.82
10.02 (2
%)
10.37 (3.5%)
10.37
10.73 (3.5%)
10.73
11.11 (3.5%)
7.25
7.25
8.00
8.25
8.25
8.75
8.75
9.25
9.25
10.10
i
7.25
8.40
8.40
: 8.40
9.55
9.55
10.75
10.75
11.50
11.50
7.25
8.40
8.40
9.55
9.55
10.75
10.75
11.50
11.50
TBD
Mont Co
Match Rate
including slight
increases in
MCmatch
8.0%; 8.3%;
8.7%
I
.75
:.75
Difference
bit
state
funded rate and
accelemted Mont Co
min
wage (assuming
DDA increases)
3.32 above min wage
2.17
i
2.42
1.65
1.65
.87
.87
10/1114
111115
!
.80
.83
.83
.89
.89
.97
.97
7/1/15
10/1/15
7/1/16
10/1116
. 7/1117
i
.58
.58
10/1/17
7/1/18
11.11
11.49 (3.5%)
I
Without these workers, community-based support services to our most vulnerable citizens would fall
upon the County for the entirety of the service which
is
a much more expensive option especially in light
1
ofa unionized workforce.
In
order to maintain even a 30% differential between CSAAC direct support wages and the county
ininimum wage, CSAAC will need an additional $520K in FY 16. This bill seeks to accelerate that
implementation by an additional three months and this three month acceleration alone would cost
GSAAC an additional $130.000.00. We do not have
it.
There are lessons to
be
learned from the local minimum wage legislation that was enacted last year. We
are still scrambling for solutions so that critically-needed direct support workers do not become minimum
wage workers in Montgomery County. or worse yet, cause providers to discontinue services. There are
costs associated with well-intentioned actions, and accelemting the implementation of the county
minimum wage to "simplify the administration ofthe annual increases by employers" while hastening the
example ofthis impact
has
played out exactly in this manner. Montgomery County DHHS-based
resource coordination transitioned to private resource coordination last year.
In
response to a public request that
resource coordination revert back to DHHS, DHHS
has
sought significant county funding (in excess ofthe state
funding) to provide
less
resource coordination services
than
those that are now being provided privately because
MCDHHS cannot provide the service for the rate that the state reimburses.
1
A
revealing
2
{j)
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crisis for direct support services does not seem like a well-reasoned justification for the changes
associated with this bill.
Graph 1: State Funding of Direct Support Wages Against Montgomery County Minimum
Wage Rate (with and without Mont. Co. Match) Where $0 Equals Montgomery County
Minimum Wage Basis
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$10.50}
$(1.00)
.q
,,
~
Funded
VS.
MC Min
Wage
..
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- _
Funded
VS.
MC Min
Wage
wI
Adjustment
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The chart above graphically depicts the path of direct support wages moving forward in light of the
proposed acceleration. Further, this chart assumes that the current funding for DDA services will remain
intact with a 2% state increase in January 2015 and 3.5% increases to direct support staff wages through
state increases each July beginning in 2015. In the event there is a further cut by the Hogan
administration, the path toward minimum wage direct support staff will be steeper and services will be
compromised faster.
Consequently, CSAAC opposes the passage of59-14.
Respectfully submitted,
~4{.-ar
Ian Paregol, Executive Director
CSAAC
8615 East Village Ave.
Montgomery Village, MD 20886
3
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Bill 59-14
Karen Lee, Executive Director, SEEC
8905 Fairview Road, Silver Spring MD 20910
klee@seeconline.org
301.576.9006
I am here today not to oppose the minimum wage or the changing of the implementation date, but to
ensure that this committee understands the impact of these changes on local provider agencies that
support people with developmental and intellectual disabilities.
As
providers of services in a fee payment system, our reimbursement rates for our direct support
professionals (DSP's) are derived by a complicated formula driven by the state Medicaid office and
approved by the Center for Medicaid and Medicare Services. Those rates do not take into account any
one specific jurisdictions changing of personnel mandates or minimum wages. As'a state program,
Medicaid is only tied to actions by state legislators. When the minimum wage is gradually increased, it
allows our provider of services such as SEEC to work with state and local law makers to ensure there are
appropriate funds are allocated to support the minimum wage. If this council increases the minimum
wage on a track sooner than the previous legislation mandated, there will need to be a change in the
funds allocated to providers through the DD Supplement.
In the past this committee and the whole council has clear in their support regarding the commitment to
fully fund the impact of the unique Montgomery County Minimum wage.
As
the minimum wage
increase currently stands, there will be a 14% increase in 2015, 13% increase in 2016, and a 7% increase
in 2017. This is a total of 37% increase in a short period of time. The providers of services to people with
developmental disabilities known as InterAcc/DD are counting on the County Executive and the County
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Council to make us whole for any increases above the state minimum wage during these years. The
impact of the county increases without the parallel increases in our supplement would be catastrophic.
20 years ago, agencies had executive, administrative, managerial and direct support positions. Today
after years of eroding funding and cuts by both the county and the state, these agencies that bring in
over 140 million dollars of revenue into the county have whittled their staff down to executive, thin
managerial and direct support positions. We are not a retail organization like Target, we cannot simply
have a sale to raise more revenue, we are not like McCormick spices, we cannot create a new brand.
Our rates are set outside of our control.
We urge the council to take into consideration the impact of this and a II human resources bills that
impact state funded fee for service providers and ask that along with any changes you make to the
minimum wage bill, you consider what the fiscal impact on not only your constituents, but also what
obligation the county will have on supporting agencies that provide services to the counties most
vulnerable residents.
®
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CALMRA Inc.
STAND4Ita
t'OJt
Montgomery County Council
Testimony
1/20/15
II:XCELLENCI
Good Afternoon. My name is Nancy Tolbert and I am the Executive Director of CALMRA, Inc. I would
like to vehemently oppose the implementation of Bill
59~14.
Providers such as mine are still attempting to recover from the last minimum wage increase last October
1, 1014. We were hoping that the proposed 4% increase DDA was planning to give to agencies would
help us make up the large increase but were devastated to learn the Governor cut that increase to 2%.
We struggle to pay our wonderful direct care staff a meaningful, living wage while simultaneously
keeping our agency from major financial hardship. We are currently predicting a deficit at the end of
the fiscal year. This will be the first time in 22 years our agency will experience any type of deficit
situation. We certainly do not want to add to this deficit the first day of the new fiscal year, July 1,
2015.
Non-profit providers of services to people with developmental disabilities cannot make up wage
expenditures by raising our prices (they are set by the State) or cutting services (we have regulations
and mandates outlining the services we must provide). When the fast food chains increase minimum
wages, the costs are passed along to you and I in the price of our hamburgers or when the food banks'
donations are down, they give out less food. Providers such as ours have no real recourse other than to
cut needed employee benefits. The Affordable Health Care Act has also limited what we can reduce in
employee contributions to health care benefits.
We respectfully ask that you keep the proposed implementation date in October,
2015.
Our Finance
office reports no difficulties whatsoever implementing this in October. A July
1,2015
date does not
simplify the administration of these increases or ease its implementation of this process in any way.
RespectfuHy submitted,
1!~1~
Nancy Tolbert
Executive Director
5020 Sunnyside Avenue, Suite 206, Beltsville, MO 20705-2307
Phone (301) 982-7177 • Fax: (301) 982-7805 • TOO (301) 982-7804
@
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United Food
&
Commercial Workers Union
Mark
P.
Federici,
Chartered
by:
Lavoris "Mikki" Harris,
Secretary-Treasurer
Local 400
President
UFCW International Union
Serving Members in MD, VA, DC, WV, TN, NC,
KY,
OH
Montgomery County Minimum Wage Effective Date Testimony
Bill 59-14 Human Rights and Civil Liberties - County Minimum Wage - Effective Dates
Michael Wilson, on behalf of United Food and Commercial Workers Local 400
Thank you Mr. Chairman, and members ofthe committee for the opportunity to testify
today on this important issue. My name is Michael Wilson and I am testifying today on
behalf of the nearly 5,000 members of the United Food and Commercial Workers Local
400 who live and work in Montgomery County.
When Montgomery County took the lead by passing its minimum wage increase tat the
end of 2013 the county council had no way of knowing that the state would set
different effective dates when they raised the state minimum wage in early 2014.
Montgomery County paved the way for that state minimum wage increase through the
actions of this council, passing a significant increase in conjunction with Prince
George's County and the District of Columbia that helped show the state that it was
time to act.
Synching the date with the state will make things easier not just for employers, who
will not have to worry about wage increases in some parts of the state in July and
others in October, but also employees. When workers know clearly the minimum wage
they are owed, they can more affectively assert their right to that wage.
Moving the effective date forward from October to July will also help by workers by
getting them their raises earlier, putting more money in their pockets that they will
likely spend in the county, helping the county's economy.
Changing the effective dates to align with the state law is the right thing to do for
employers and workers and will make things less confusing for everyone. We thank
Council Member Rice for introducing this common sense bill, and urge the committee
and the full council to pass it quickly to erase any confusion as the minimum wage
continues to rise over the next several years. Thank you.
Main
Office: 8400 Corporate Drive, Suite 200, Landover, MD 20785-2238 • 301-459-3400 • fax 301-459-2780
West
Virginia
Office: 405 Capitol Street, Suite 808, Charleston, WV 25301 • 304-346-9679 • fax 304-346-9670
400
@
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!!jg
Gaithersburg-Germantown
c1c
Anticipate Me,..
Chamber of Commerce, Inc.
December 8, 2014
The Honorable George Leventhal
Council President
Montgomery County Council
100 Maryland Avenue
Rockville. MD 20850
Re: Bill 59-14 - Human Rights and Civil liberties - County Minimum Wage ­
Effective Dates
Dear Council President Leventhal.
Thank you for the opportunity to comment on proposed Bill 59-14 - Human
Rights and Civil Liberties - County Minimum Wage - Effective Dates. While we
understand the motivation to have the same effective date schedule as the
State for the County's minimum wage, the Gaithersburg-Germantown
Chamber recommends that the coordination of schedules not happen until July
1,2016.
910 Clopper Road, Suite 205N, Gaithersburg, Maryland 20878 (301) 840-1400, Fax (301) 963-3918
Corporate Sponsors
Methodist Village
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you know from your own experience with the County, budgeting typically
MONTGOMERY COVN'fY
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what's
happens well in advance of the fiscal year in question. In the case of the
County's increase in minimum wage, businesses have already prepared their
2015 budgets based on the originally legislated effective dates. This also means
they have set their prices, let contracts, hired staff and incurred expenses
based on those budgets. As we have mentioned in the past, one of the
overwhelming comments we hear from businesses is that they need a level of
certainty in responding to government regulations. By changing the effective
dates you are unfairly changing the rules without allowing businesses the time
to adjust to the increased costs.
The Montgomery County Minimum Wage law was landmark legislation that
impacted business in the County. The fair thing to do is to keep the existing
schedule and have the next increase slated for October I, 2015. Then
coordinate the County and State effective dates in 2016 to July I. 2016.
Thank you for your consideration.
important'"
~Momgomery
Colleg&
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President and CEO
THERRIEN \:V,'.I,DDELL
www.ggchamber.org
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January 16, 2015
The Honorable George Leventhal
President, Montgomery County Council
Stella B. Wemer Council Office Building
100 Maryland Avenue, 6th Floor
Rockville, MD 20850
RE:
Bi1l59-14 - Human Rights and Civil Liberties - County Minimum Wage - Effective Dates
Dear Council President Leventhal and Members of Council:
On behalf of the Greater Silver Spring Chamber of Commerce, I am writing to urge consideration of an
amendment to Bill 59-14, which would move forward the effective dates offuture increases in the County
minimum wage from October I to July 1 of the years 2015, 2016, and 2017.
While we fully understand the motivation to align the effective date schedule for the County's minimum wage
with that adopted later last year by the State of Maryland, we respectfully ask you to delay that coordination of
schedules until July 1, 2016.
Like County government, businesses typically develop and finalize their budgets well in advance of the upcoming
fiscal year.
As
such, businesses have already prepared their budgets for 2015, based on the wage levels and
effective dates specified in the enacted legislation. Likewise, based on these calculations, they have already set
their prices, let contracts, hired staff, and incurred expenses based on those budgets. And, while a three-month
change might seem inconsequential,
it
could be devastating for many businesses, especially those that employ
large numbers of seasonal workers, and some of our County's youth, during the summer months.
As our Chamber has often brought to your attention, in order to be successful, businesses need a level of certainty
and predictability, especially when it comes to responding to changing government regulations. By accelerating
the effective dates for the County minimum wage increase, Council would be unfairly changing the rules without
allowing businesses the necessary time to adjust for the increased costs.
The Montgomery County Minimum Wage law was landmark legislation that impacted every business in the
County. Once it was enacted, employers accepted the new law, with its legislated effective dates, and
incorporated it into their planning for 2015. A more equitable approach to aligning the County and State
minimum wage effective dates would keep the existing schedule for the next increase on October 1,2015, and
wait until July 1,2016 to coordinate the effective dates.
We thank you for the opportunity to offer this proposed amendment to the bill.
Sincerely,
~~
Jane Redicker
President & CEO
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Hamlin, Joseph
From:
Sent:
To:
Cc:
Subject:
lIaya Hopkins <ihopkins@montgomerycountychamber.com>
Monday, February 09, 201511:02 AM
Leventhal's Office, Councilmember
Berliner's Office, Councilmember; Navarro's Office, Councilmember; Riemer's Office,
Councilmember; Rice's Office, Councilmember; Floreen's Office, Councilmember; Hucker's
Office, Councilmember, Eirich's Office, Councilmember; Katz's Office, Councilmember;
Hamlin, Joseph; Georgette Godwin; Michelle Guzman
BILL 59-14, HUMAN RIGHTS AND CIVIL LIBERTIES - COUNTY MINIMUM WAGE­
Effective Dates
Dear Councilmember Leventhal,
We respectfully request that the following PQsition be included in the public record for discussion on Bill
59-14.
The Montgomery County Chamber of Commerce respectfully requests that Bill
59-14
be amended so that the effective
dates of the County and State minimum wage requirements are increased on the same date beginning in July,
2016.
As we have mentioned in previous testimony, certainty and predictability are important prerequisites to promote
business success. Many businesses have already planned budgets and pricing structures for the
2015
calendar year. Any
change to proposed effective dates should allow ample time to plan and prepare for those changes.
For this reason, we request that the implementation date of the new effective dates schedule begin no earlier than July,
2016.
Thank you for your consideration.
llaya Hopkins
Vice PreSident, Public Affairs, Montgomery County Chamber of Commerce
(MCCC)
51 Monroe Street, Suite 1800, Rockville, MD 20850
Ph: 301.738.0015
ext
205, Fax: 301.738.8792
Email: ihopkins@mcccmd.com
See MCCC's Advocacvinformation on efforts at the local, state and federal level.
Missed a Member Meeting? Catch up on the MCCC BlDg and follow MCCC in the News.
rI!J
Please consider the environment hefore printing this e-mail.
1
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Page 1 of2
From: Rice's Office, Councilmember
Sent: Tuesday, December 02,20148:57:18 AM
To: Montgomery County Council
Subject: FW: Smokey Glen Farm - Minimum Wage Legislation - Acceleration of Tiered Increases
From: Jim Sweet [mailto:jsweet@smokeyglenfarm.com]
Sent:
Monday, December 01, 2014 3:49 PM
To: Rice's Office, Councilmember; Eirich's Office, Councilmember; Floreen's Office, Councilmember; Katz's Office,
Councilmember; Navarro's Office, Councilmember; Hucker's Office, Councilmember; Berliner's
Office,
Councilmember; Riemer's Office, Councilmember; Leventhal's Office, Councilmember
Cc: Dawn Free; Sherry Wilcox; msweet@smokeyglenfarm.com; richard.calvin.baker@gmail.com
Subject: Smokey Glen Farm - Minimum Wage Legislation - Acceleration of TIered Increases
Dear Montgomery County Councilmembers,
Congratulations on the election. I hope that you and yours had a wonderful Thanksgiving Holiday.
I just read the article in the Gazette about the initiative to begin the second tier of the minimum wage
increase in July rather than October of 2015. Ifthe initiative passes, it will have serious consequences to my
family's business for next year. Our 2015 pricing has already been established, published and sent out to all of
our clients. The current minimum wage legislation is built in to the pricing. A mid-season July increase is not.
As it stands, the current minimum wage legislation adds a significant increase to our pricing for next
year. It works out to $.55 per year for the next 3 years to the cost for each and every guest attending events at
the Farm. Food and supply cost increases have been unprecedented over this past year. This alone has pushed
our price increases far higher than normal - then add in $.55 for the minimum wage increase. All told, we have
had to increase our 2015 pricing 6.5% - 8.7% depending on the event package. That's a huge year over year price
increase. Typical price increases for us range from 2% to 4%.
With all due respect, please reconsider this initiative. As the County's largest single-unit youth
employer, we have worked our way through the burdens of this minimum wage legislation as it now stands.
Please do not change the rules mid-stream.
As always, thank you for your consideration.
Jim Sweet
Maryland State Minimum Wage:
$8.00 on January 1,2015
$8.25 on July 1,2015
$8.75 on July 1,2016
$9.25 on July 1,2017
$10.10 on July 1,2018
Montgomery County Minimum Wage:
$8.40 on October 1,2014
$9.55 on October 1, 2015
h
s:llmccouncilmd.lmhostedi .com/coun
council/sta
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Page 2 of2
$10.75 on October 1,2016
$11.50 on October 1,2017
http:Uwww.gazette.net!article!20141124!NEWS!141129553!1257!rice-proposes-to-move-minimum-wage­
increases-to-july&template=gazette
Jim Sweet
President
Smokey Glen Farm
Barbequers, Inc.
16407 Riffleford Road
Gaithersburg, MD 20878
Phone(301)948~518
Fax (301) 948-3188
E-Mail -jsweet@smokeyglenfarm.com
Website - www.smokeyglenfarm.com
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