Opponents of Gov. Martin O’Malley’s proposal to shift half the cost of state teacher pensions to local governments went on a counterattack this week, arguing a change would have a devastating effect on services.
Worse, they fear the proposal, even if defeated this year, will frame the debate of the state budget for years to come.
More than two dozen local lawmakers gathered Wednesday in Annapolis to argue that because their governments have had little input into pension reform or how the pension fund is managed, they should not have to bear the burden of the shift.
“I want to also make clear one thing: The state caused this challenge,” said Howard County Executive Ken Ulman (D). “We weren’t the key drivers. We don’t negotiate those salaries, we don’t affect the pension benefit, and we don’t manage the investments. To send us the bill?”
The Montgomery County board of education echoed Ulman’s argument.
Actions that led to underfunding of the pension — including the 2006 enhancement of benefits and “corridor funding,” which allows underfunding by as much as 10 percent — were the result of state-level decisions, the board said in a statement.
The Maryland Association of Counties, which is spearheading the opposition and telling lawmakers they simply must vote against the proposal, also is working with state education organizations and public employee unions to create a coalition against the plan.
State payments toward public school teacher pensions have more than doubled in the past five years — to more than $900 million annually. The state currently pays 100 percent of the costs, while local jurisdictions shoulder the entire cost of teachers’ Social Security, which is lower.
Under O’Malley’s plan, the state and jurisdictions each would pay half of the total cost of pensions and Social Security, a move that would shift $239 million of the burden onto local governments.
The plan also includes $244 million in increased local revenue, aid to less-wealthy jurisdictions and other budget relief to soften the blow in the first year.
That’s not enough, said Montgomery County Executive Isiah Leggett (D).
“There are some offers of sweeteners or things that could be done to soften the blow,” Leggett said. “The problem with that is that we don’t have those.
“Those are somewhat speculative and many of them may not come year after year, it may be simply for the first year. You really need to have something that is permanent, something we can accept.”
Eloise Foster, O’Malley’s secretary of the Department of Budget and Management, argued the governor is not shifting a broken system to the counties, rather that he ushered in pension reform last year.
Baltimore County Executive Kevin Kamenetz (D) did not attend the news conference and supports the governor’s plan.
“County Executive Kamenetz has great respect for his colleagues in MACo. More often than not, they agree. On this issue, they do not,” said Donald Mohler, his chief of staff.
Other supporters of the proposal, such as Senate President Thomas V. Mike Miller Jr., who has championed the shift for years, argue the pension costs should be transferred to the counties because the state doesn’t have a say in teacher salaries.
When pressed by reporters to offer an alternative to the governor’s proposal, officials at the meeting said only that they would not support a shift.
Harford County Executive David R. Craig (R) said he anticipated a long fight.
“My fear is that even if we get this resolved this year, we’ll still be looking at this next year and the year after that,” he said.