Gov. Martin O’Malley cut local aid or shifted costs of $310 million to the counties in the budget he proposed Wednesday, including 10 percent cuts for libraries and local jails and making local government pick up $37 million in the cost of local property tax assessments. But one area he refused to touch was the $774 million contribution to teacher pensions.
But Republican Del. Steve Schuh of Anne Arundel County is planning to introduce legislation next week that would freeze the state contribution and make the counties pick up the $140 million O’Malley added this year and any future additions until they match the state share.
“It’s bad budget policy to have a complete disconnect between compensation decisions made at the county level and its consequences on pension costs,” Schuh told The Examiner. “It threatens the long-term fiscal health of the state” and it also “leads to irresponsible behavior from our counties.”
Teacher salaries are negotiated with teachers unions by local school boards, which have no taxing authority and depend on state, local and federal governments for funding.
Counties have fought any change on pensions. Michael Sanderson, executive director of the Maryland Association of Counties, told the House Appropriations Committee on Thursday: “There’s the misperception that the counties have control over significant components in school board budgets.”
“Our state is one of the few that covers 100 percent of our teacher pension costs,” O’Malley said Wednesday. “Working with MACO, we have been able to reduce the impact to local governments” of the state’s $1.9 billion deficit by also cutting planned increases in local aid for school funding and community colleges. He also tapped a $380 million fund for local income tax refunds but “those dollars will have to paid back over time by the counties,” O’Malley said.
Senate President Thomas V. Mike Miller told reporters Wednesday that he would like to sponsor a bill shifting some pension costs to the counties if House Speaker Michael Busch would go along. But Busch said the counties already had been asked to bear other cuts.
“[Busch said] that this is an issue that the General Assembly should discuss. He understands it’s a very controversial issue,” Schuh said.
In debate on the fiscal 2008 budget two years ago, Republican senators proposed a similar freeze on state contributions, but it was voted down by the Democratic majority.
