Montgomery’s Annapolis delegation and county elected officials are speaking in an united voice against Gov. Martin O’Malley’s proposal for Maryland’s counties to pick up half the tab for teacher pensions, a county responsibility of $41 million.
School officials, meanwhile, are concerned about the proposal’s longterm impact on education, as it could affect class size and teacher salaries.
County Council President Roger Berliner (D-Dist. 1) of Potomac, County Executive Isiah Leggett (D) and members of the delegation are meeting weekly to discuss how to argue against the proposal in Annapolis.
“We are prepared to fight this,” Leggett said. “This is a serious matter for the county, I’m not sure it gets more serious.”
Montgomery County has closed more than $2 billion in funding gaps during the past five years, Leggett said. Trimming more spending from areas already cut is nearly impossible.
Financially, the status quo is beneficial to Montgomery County, which has the largest school system in the state as well as the fastest growing, said Annapolis delegation chairman Del. Brian J. Feldman, (D-Dist. 15) of Potomac.
“We do not want a change to the current arrangement,” he said. “We will push back on any attempt to change that.”
Leggett and Feldman declined to discuss exactly how they and other officials would fight O’Malley’s proposal.
Berliner argued Monday that the county would be unfairly given 50 percent of the financial burden for teacher pensions, but no decision-making authority over them.
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 cost of teachers’ pensions and Social Security, a move that would shift a net $239 million onto local governments in the coming year.
In fiscal 2011, the State Retirement and Pension System reported about 128,300 teachers in the retirement and pension system.
The state currently pays 100 percent of teacher pension costs — which have doubled in the past five years to about $1 billion.
Proposals have floated through the General Assembly in recent years to shift the costs, though none have been successful.
Figures show that under O’Malley’s proposed arrangement, Montgomery would carry the largest pension burden of any in the state.
But other figures suggest the arrangement could result in Montgomery County gaining about $18 million in that same span rather than losing money, largely because of changes O’Malley has proposed in the tax structure to raise income tax rates for high earners.
Still, Leggett and county lobbyist Melanie L. Wenger believe the governor’s projections inflate the amount of money the county would gain from that change. Projections that show the county benefiting by the pension shift are “speculative at best,” he said.
In addition, the figures released by the state do not show increases in the county’s longterm obligations, Berliner said.
Years beyond 2013 worry school officials
Given that the council has promised not to cut per-pupil spending in fiscal 2013, Board of Education members say they are not worried about the new cost being passed on to the school system this year. Right now, that spending level from all revenue sources is $14,351 per student.
In terms of Montgomery County Public Schools’ fiscal 2012 budget, $41 million is approximately the same cost as all substitute and part-time teachers, as well as stipends paid to staff for being involved in extracurricular activities. It is 50 percent more than the $28 million saved in fiscal 2012 when school employees gave up step and longevity-based increases.
In the long term, it appears virtually impossible that the new pension cost won’t seriously affect salaries and compensation, said fellow board member Michael A. Durso, a member of the board’s Fiscal Management Committee.
“Maybe in fatter times this would be a more reasonable discussion,” said Durso (Dist. 5) of Silver Spring.
Last year, the county cut $45 million in education funding down to $1.37 billion. One consequence was that about 150 school positions were eliminated, although there were no employee layoffs.
If, on the other hand, counties are able to make pension costs part of their general operating budget appropriations to their schools, instead of a separate cost, it could crowd out other resources for classrooms and teachers.
This possibility was raised by Del. Theodore J. Sophocleus (D-Dist. 32) of Linthicum during a legislative meeting Friday in Annapolis.
When the General Assembly required school systems to assume teachers’ Social Security costs in Maryland in 1992, it led to increased class sizes and activity fees, recalled Durso’s colleague Patricia B. O’Neill.
“We’re trying to keep our powder dry. We’re trying not to be hysterical. But we’re worried,” said O’Neill (Dist. 3) of Bethesda.