ANNAPOLIS – Top Maryland Democrats are urging the state’s key budget committee to push some teacher pension costs onto counties, saying Gov. Martin O’Malley’s proposals to reform the state’s retirement system are “watered down” and fail to address Maryland’s $35 billion liability for public employee benefits. “I hope everyone on this committee recognizes a problem when it kicks you in the teeth,” Barbara Hoffman, vice chairwoman of the state-appointed pension commission, told members of the Senate Budget and Taxation Committee on Wednesday. “The commission acted quickly, but it was not hasty. … Kicking this can down the road will mean you won’t have the ability to offer benefits to the people you promised them to.”
Gov. Martin O’Malley included most of the pension commission’s recommendations in his fiscal 2012 budget, including measures that would raise the retirement age and force workers to pay more for the same level of benefits.
But he rejected a key recommendation that would shift 50 percent of teacher pension costs onto counties, which commission Chairman Casper Taylor Jr. said is critical to ensuring the sustainability of the state’s pension system.
Taylor called O’Malley’s fiscal 2012 budget a “watered-down version” of the commission’s recommendations.
He said the panel unanimously approved the cost-sharing proposal, which would save the state $62 million in fiscal 2012. Local boards of education currently set the salary and benefit levels for teachers, while the state picks up the tab.
Maryland is one of three states that fully pays teacher pension benefits, which cost the state roughly $1 billion in fiscal 2011. Over the next three years, pension costs for state employees and teachers combined are expected to grow 9.9 percent annually and health benefits expenses will grow 8 percent annually, according to the state’s legislative analysts. State revenues are expected to grow 4 percent annually.
“We have to cut classroom money so we can come up with a billion dollars [for teacher pensions],” Senate President Thomas V. Mike Miller Jr. said, turning around to face the gallery of union representatives attending the hearing. “We are taking a step backward this year because of these benefits.”
