A current proposal before the Maryland General Assembly to shift teacher pension costs to counties has all of the makings of a classic Algebra problem, one that would be sure to end badly.
“If a train leaves Annapolis at high noon, going 50 mph, and another leaves the county seat of Hagerstown at 3 p.m., also going at 50 mph, how soon before they…?”
Hold that thought.Leaders of Maryland’s counties and the state’s teachers’ unions have each weighed in heavily on how devastating a budgetary hit it would be if the General Assembly were to enact Governor O’Malley’s proposal to shift a substantial portion of teacher pension costs from the state of Maryland to the counties.
Yet as devastating as this seismic cost shift would be to the counties that would have to pick up the bill, few people have even focused on the fact that Maryland’s community colleges, and the students we serve, will be harmed in two ways
First, the proposal to transfer a portion of the pension costs to local governments would represent a crushing blow to our annual operating budgets. As currently proposed, it would come with a $9.5 million sticker price in just the first year, and that figure would continue to increase in the years to come. Second, if the counties are forced to pay some $239 million in pension costs, they will be hard-pressed to maintain critical funding for their community colleges.
To help mitigate the impact of the $239 million cost shift, the governor has proposed revenue enhancements, including new taxes, but there is no guarantee that any of this additional revenue will benefit local community colleges. Many counties may opt to dedicate any additional revenue to other local priorities, while expecting the community colleges to make up the deficit by raising tuition.
Maryland’s community colleges are critical to its economic recovery and long-term future. Enrollments at community colleges have increased exponentially since the beginning of the recession. From 2008 to 2010, enrollments have increased statewide by approximately 20,000 students, an amount equivalent to the size of Towson University.
In recent years, the state’s traditional commitment to funding one-third of the cost of a community college education has fallen to below 20 percent, with student tuition picking up the shortfall. A pension cost shift will only further erode the state’s share of the commitment, and it will almost surely result in a tuition increase. Such an outcome would hurt the students who can least afford to pay more for their college education and would fly directly in the face of what has been the top priority for higher education for both the governor and for President Obama — holding college tuition in line, while ensuring that more students receive college degrees.
Ever since the first community colleges in the state were incorporated — dating back to the 1940s — the state has assumed the cost of the pension/retirement system. As is the case with the school systems, this funding has helped our colleges to balance the wealth differences among the various counties and has enabled the less-affluent communities to attract and maintain faculty and staff on par with the wealthier communities.
Passing these costs on to local governments would eliminate this factor and increase the cost of a community college education, without addressing the ultimate repercussions for Maryland residents.
Remember that equation we began with? We don’t think we need to fully solve it to see that the ultimate outcome here is a fiscal train wreck.
Dr. Guy Altieri, president of Hagerstown Community College, is chairman of the Maryland Association of Community College Presidents Council, which comprises the state’s 16 community colleges.