This story was updated at 2:35 p.m. Jan. 17, 2012.
ANNAPOLIS — A shift in teacher pension costs from the state to local governments will be a part of the governor’s fiscal 2013 budget plan, which is set to be released Wednesday, said legislative leaders.
Senate President Thomas V. Mike Miller Jr. said the governor plans to make a change to the pension system, which is based on salaries negotiated by county governments but paid for by the state.
While he would not indicate how much of the pension costs would be shifted to the counties, Miller (D-Dist. 27) of Chesapeake Beach did say he had hoped the governor would shift more of the cost to the counties.
“It’s not what I would like. It’s a compromise, and compromise is not a dirty word in politics,” Miller said. “The governor gives some to the counties, he takes some away. He makes the counties happy, he makes them sad. Not everybody can be happy in these very difficult times.”
Shifting the cost of teacher pensions to localities has been a point of contention for years in Annapolis, as lawmakers have attempted to eliminate recurring deficits. County officials argue that absorbing pension costs, in part or in total, would be an unfair financial burden that they cannot afford.
Following a meeting to review the governor’s budget proposal, House Speaker Michael E. Busch said O’Malley’s plan addresses ways “we can share responsibility and liability for the cost of education in the state” with the counties.
“There was a discussion of (teacher pensions) and how they’d go about doing it and how they’d give counties revenue opportunities,” Busch (D-Dist. 30) of Annapolis said.
He did not say how the budget would allow local governments to raise money for pension costs.
Miller also said Tuesday that he expects O’Malley to increase the state’s so-called flush tax, a fee assessed on water bills and used to upgrade sewage treatment plants. He did not specify how much the governor will attempt to raise the statewide tax.
Miller said he is happy with the governor’s plans for a gasoline tax increase, although Raquel Guillory, a spokeswoman for O’Malley said that while the governor and his aides are still discussing a gas tax proposal, any plans for hiking the rate won’t be part of his budget announcement Wednesday.
O’Malley and Miller were set to meet Tuesday to further discuss an increase in Maryland’s 23.5 cent-per-gallon gasoline tax. In the fall, a committee recommended the state boost the tax by 15 cents over three years, although some politicians and observers have questioned whether such an increase could generate enough support to pass the General Assembly.