Christopher Anderson/The Gazette Gov. Martin O'Malley answers questions about his budget for fiscal year 2013 at a press conference at the State House in Annapolis Wednesday.

• 
• 

Christopher Anderson/The Gazette Gov. Martin O'Malley answers questions about his budget for fiscal year 2013 at a press conference at the State House in Annapolis Wednesday.

 

<< Prev

Next >>

More News

Thurmont to ask Congress to reimburse money spent during G-8

Takoma Park police aim to catch fleeing thieves

State chamber: Income tax hike will unfairly hurt Montgomery

Push for Shady Grove arena refueled

Montgomery County executive: Rapid Transit Vehicle system will be built

Gov. Martin O’Malley’s proposal to shift some of the nearly $1 billion annual cost of teacher pensions onto Maryland’s local governments could force school boards to lay off teachers or hire less-qualified ones, several public education officials say.

In addition, the move could force local governments to raise taxes — increases that taxpayers likely would blame on teachers and school boards, several officials said.

“I fear a train wreck,” said Cathy Allen, a member of the St. Mary’s County Board of Education and past president of the Maryland Association of Boards of Education. “We’ve been watching the train come down the track and we’ve been trying to alert the trainmaster. … But the crash seems to be imminent.”

As part of his proposed budget for the coming fiscal year, O’Malley is seeking an arrangement in which the state and local jurisdictions each would pay half the total cost of teachers’ pensions and Social Security, a move that would shift $239 million of the costs onto local governments in the coming year. The budget includes $244 million in revenue designed to soften that blow, said O’Malley, who is attempting to erase a roughly $1 billion structural budget deficit.

The state currently pays 100 percent of teacher pension costs — which have doubled in the past five years — while local jurisdictions shoulder the entire cost of teachers’ Social Security, which is lower.

Maryland's employee pension fund has a $19 billion unfunded liability, $11 billion of which is from teacher pensions. Last year, the General Assembly passed measures to make the system 100 percent funded by 2031. The system now is 64 percent funded.

The governor’s proposed budget also includes $5 billion in K-12 education funding, a $108.5 million increase from the current fiscal year, and $373 million for school construction.

Although in the past O’Malley has been reluctant to shift pension costs onto local governments, he said this week he considers the move fair given that local governments hire teachers and set their salaries.

Proposals have floated through the General Assembly in recent years to shift the costs onto the locals, though none has passed. In 2010, the legislature formed a commission to study the matter, which has recommended that the governor and state lawmakers phase in a shared system over at least three years.

O’Malley’s plan would not phase in the shift, but would kick in when the new fiscal year begins July 1. Some county leaders have said they will oppose implementation of the plan over the 90-day legislative session.

Howard County officials will seek to convince state lawmakers to phase in the switch, said County Council member Courtney Watson, who also served on the county school board.

The move should be “small and incremental so that we can have time to react to it and plan for it,” Watson said. Otherwise, the school board could be forced to cut jobs because a majority of its funding pays for personnel costs, she added.

If local governments raise taxes to cover the pension costs, it could lead to public resentment of teachers, said Wanda Twigg, the head of the St. Mary’s County teachers union.

She wondered if local boards would be able to offer high enough salaries to attract good teachers if the boards “feel trapped and in a box,” she said, adding that she believes the shift is unnecessary this year, given that the governor and lawmakers instituted pension reforms last year.

Allen said school boards are in a unique position in Maryland because although they hire teachers and write school system budgets, the money for the budgets comes from local and state governments rather than the boards themselves.

If the shift occurs, it must include a long-term mandated funding source to ensure that local governments aren’t left with gaping budget holes in coming years, she said.

Representatives of the state teachers union and the Maryland Association of Boards of Education both said their groups oppose the shift and that a resolution of the matter must be coupled with a strengthening of the state’s so-called “maintenance of effort” law, which requires counties to keep education funding levels consistent from year to year.

Too many counties are not keeping pace with maintenance of effort, said Sean Johnson, managing director of political and legislative affairs for the Maryland State Education Association, adding that the law should require that funding levels keep pace with need.

“It needs a complete overhaul,” Johnson said.

skelly@gazette.net