This story was updated on Feb. 28, 2012.
A proposed shift of Maryland teacher pension costs would require Montgomery County to fund $47 million during the first year, an expense that equates to cutting hundreds of county and teacher jobs, increasing class sizes the school system, a tuition hike at Montgomery College, or cuts to county services.
Representatives of Montgomery College, the Montgomery County Board of Education, United Food and Commercial Workers Local 1994/Municipal and County Government Employee Organization, the Montgomery County Education Association, Friends of the Library and others discussed Tuesday with the County Council the effects of Gov. Martin O’Malley’s proposed shift.
“The bottom line is this: we have before us yet another deficit,” said Gino Renne, president of MCGEO. “If we are burdened with this pension liability, it will exacerbate our already eroding menu of public services. Our members can’t handle it, the public can’t handle it and Montgomery County as a community cannot handle it.”
Montgomery County faces a shortfall for its fiscal 2013 operating budget of $135 million — the latest in a string of gaps the county has closed totaling more than $2 billion — and forecasts show the pension shift costing Montgomery $315 million over the first five years.
“If we now have to absorb another large burden from the state, there will be real damage to all our vital services — our schools, college, police, fire and rescue, safety net, libraries, parks, housing, transportation, recreation, and many others,” the council said in a statement last week.
As part of his proposed budget for the coming fiscal year, O’Malley (D) 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 of $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 pays 100 percent of teacher pension costs, which have doubled in the past five years to about $1 billion.
Should the shift reach the Montgomery County Public Schools budget, it could mean cutting as many as 600 teacher positions or classroom services, said Board of Education President Shirley Brandman.
It could also force the school district to increase class sizes, which have already jumped in the last three years, by about three students per classroom, said Tom Israel, executive director of the teachers’ union.
While frequently referred to as teacher pensions, Stephen B. Farber, council staff director, noted that Montgomery College staff and county library employees are also part of the proposal.
Of the shift’s estimated first-year impact, Montgomery College would take a $2.3 million hit, said college President DeRionne Pollard.
Should pension costs shift, it would also cost the college about $1 million in state aid, for a net loss of more than $3 million, she said. To account for that, Montgomery College would have to raise its tuition rate by $4 per credit hour, she said.
No longer funded by the state at 100 percent, the pension program has raised eyebrows recently for underperformance, Israel said.
“I think the message is: fix it, don’t shift it,” he said.
Jargon words like “shift, share and split” reminded Arva Jackson, a health and children’s services advocate, of dancing. Over time the state has looked to Montgomery to fill the gaps of its budgetary incompetence.
“I call that the ‘Renegging reggae,’” she said, adding she’d like the county to declare: “We will not dance.”