Counties, state quarrel over teacher-pension costs

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ANNAPOLIS — County leaders and state lawmakers clashed Wednesday over Gov. Martin O'Malley’s proposal to push more than $200 million in teacher-pension costs onto counties, with both sides crying poor over their inability to foot the bill.

County officials told the Senate Budget and Taxation Committee that being forced to share the pension costs with the state will further hamstring local governments already struggling to balance their own budgets.

Maryland is one of three states that pays the entirety of teacher-pension benefits without help from counties.

Mr. O'Malley, a Democrat, proposed a budget last month that would establish an even split of pension and Social Security costs that would force Baltimore and the state’s 23 counties to collectively pay an extra $239 million this year.

Counties have widely panned the proposal, saying they have already made major cuts in recent years and that added costs will only make things worse.

“We’ve made major, major adjustments,” said Montgomery County Executive Isiah “Ike” Leggett, a Democrat. “This is simply something that is not workable. It is something that we cannot absorb.”

Legislators also complained that it reached too far into the state’s middle class.

Maryland teacher-pension costs have essentially tripled in the past decade as counties have improved retirement packages to attract and retain personnel. The state paid nearly $1 billion in pension costs last year.

A growing sentiment has emerged within the General Assembly that counties should begin sharing the costs. Mr. O'Malley had resisted such efforts since taking office in 2007 before proposing a split this year to help trim the state’s $1.1 billion structural deficit.

“At the current stage, the state can’t afford to carry the full freight,” said Sen. David R. Brinkley, Frederick Republican. “If there’s an alternative solution to shifting, I’m open to it. But no one has come forth with it.”

Mr. Brinkley and other Republicans have proposed deeper cuts in the state budget that could potentially free up enough money for the state to pay all or most of teacher-pension costs.

A state commission recommended last year that lawmakers phase in a shift over multiple years rather than jumping immediately to a 50-50 split.

County leaders argued Wednesday that an even split will hurt counties and that conditions will only get worse in coming years as pension costs are expected to increase.

They also expressed concerns about lawmakers’ proposed changes to the state’s maintenance-of-effort law, which requires counties each year to meet or exceed the previous year’s per-pupil funding for education.

The assembly is considering bills that could add teeth to the law, closing a loophole that allows counties to reduce funding and pay a one-time penalty, then use the reduced funding level as their acceptable minimum for future years.

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