County staff outline pay bill and warn of rising health‑insurance claims in FY27 budget

Steven from the Budget Office and Anne Badowski, the county’s personnel officer, told the Anne Arundel County Council on May 20 that personnel costs in the FY27 proposed budget rise mainly because of negotiated pay packages and higher health‑insurance claims.

At a presentation to the full council, Steven said the Office of Personnel’s general‑fund budget increases by roughly $950,000, largely for personnel services (about $632,000 for pay, benefits and turnover adjustments) and the addition of two contractual background investigators. Badowski said those operational moves also include shifting an existing background‑investigations software cost from the county’s IT budget to personnel, not an increase in software spending.

Badowski summarized the pay bill introduced earlier this week (referred to in the hearing as Bill 50‑26), saying it contains cost‑of‑living adjustments and scale changes for multiple bargaining units. Examples she listed: a 2.25% COLA and scale adjustment for the IFF group; a 2% COLA and step adjustments for deputy sheriffs; AFSCME units receiving increases to minimums and maximums (2.5% minimum and 3.5% maximum on one scale) and changes to longevity pay tiers. She also said the county won an arbitration that produced higher starting pay and added steps for detention officers and corporals.

On benefits, Steven and Badowski highlighted a projected $10.4 million increase in the health insurance fund driven by higher claims experience. “We’re seeing an uptick in actual claims — more high‑cost cases and new therapies,” Badowski said, adding that some individual claimants this year have exceeded $500,000 and one claimant exceeded $1,000,000. Steven quantified the projection as a 6.5% increase in claims for FY27 on top of about a 10% increase seen in the prior year.

Council members pressed staff on the drivers and durability of those increases. Councilwoman Fiedler and Councilwoman Ledbetter asked whether the jump reflected one‑time anomalies or a trend. Kelly Lovett, assistant personnel officer, pointed to medical‑innovation costs such as new immunotherapies and to several unusually large claimants as contributors. Steven said the double‑digit growth seen this year at the county mirrors trends reported by the Board of Education.

Badowski also described classification changes contained in the pay bill — for example, creating a deputy sheriff first‑class classification and adjusting several administrative and merit/exempt titles for consistency — and said some changes are administrative and do not change grade or pay.

What happens next: the pay bill remains a separate legislative item (introduced as Bill 50‑26 during the week) and will continue through the council’s committee and legislative process; the FY27 budget book shows the line‑item impacts described to the council. Staff advised the council that many health‑insurance cost drivers are difficult to predict and include some single‑claim outliers.