State budget officials threaten to pass teachers’ pension costs to Montgomery

Responding to the bleakest budget since the early 1990s, Maryland budget officials threatened on Tuesday to pass responsibility for pricey pensions on to cash-strapped Montgomery County.

The conversation between state number-crunchers and the Montgomery County Council came amid a crescendo of chatter surrounding slot machines. If Maryland voters say yes to slots on November’s ballots, proponents like Gov. Martin O’Malley say schools will see more money. But if they say no, counties have been warned they’ll need to come up with more money on their own.

Currently, a state board operates pensions for teachers, but a disproportionate amount of payments are doled out in Montgomery because of its generally higher salaries and costs of living.

In 2007, the county’s average $70,000 teacher salary was $10,000 above the state average. A 30-year teacher who retired earning $70,000 could earn a $38,000 annual pension.

Warren Descheneaux, a chief fiscal analyst for the state, told the Montgomery County Council that the state would pay nearly $800 million for pensions next year, up $88 million from the current year.

“From the state perspective, that aspect of the liability, which is the result of compensation decisions made locally is not subject to influence by the state,” Descheneaux said during a presentation before the County Council. “The folks making those commitments bear no responsibility for the costs,” he said, alluding to salary raises signed off on by the County Council during last year’s budget negotiations.

In 2007, Montgomery County teachers negotiated a 5 percent salary increase for the current school year, despite cuts made to school programming. This year’s starting teacher salary of $44,200 is the highest in the Washington region.

“There are two solutions,” Descheneaux said. “Share, in some measure, the contributions” to pension payments, or “adjust the benefits.”

O’Malley, responding to questions at an appearance in Prince George’s County, said he hopes to avoid shifting pension burdens to counties.

“They bring it up as a threat,” said Tom Israel, executive director of the Montgomery County teachers union.

Israel explained Montgomery County pays more than its share for services to the state because of its relative wealth. The pension funding is the one formula that actually favors the county, he said.

“We’re monitoring the possibility, we’re talking about it, but there would be incredible pushback” if it were proposed, Israel said.