- The Washington Times - Thursday, August 11, 2011

Maryland’s teachers union is resisting state lawmakers’ efforts to trim an anticipated $1.1 billion budget gap by sharing teacher pension costs with counties.

A state-appointed commission has recommended Maryland begin splitting the cost of nearly $1 billion in annual teacher pension benefits with its 23 counties and Baltimore, to help close the state’s structural deficit during next year’s legislative session.

Yearly pension payouts to Maryland teachers have essentially tripled in the past 10 years as salaries have increased and more teachers have retired, and represent nearly two-thirds of the state’s annual $1.5 billion in total pension costs.

Maryland is one of just three states that pay teacher benefits without help from counties, though hiring and salaries are determined on the county level.

While the commission and many legislators say a 50-50 sharing of costs is long overdue, unions and local governments argue it could yield disastrous results for many already cash-strapped school systems.

“Shifting costs to local boards of education is really tantamount to a huge cut in education funding,” said Adam Mendelson, spokesman for the Maryland State Education Association, which represents more than 71,000 school employees and is the state’s largest union. “There would be a tremendous impact on the quality of education.”

Cost sharing has become a hot topic in Annapolis in recent years, as legislators look to fix an underfunded state pension system that has been wracked by underperforming investments and salary and benefits increases.

Legislators during this year’s General Assembly considered shifting as much as half the costs of teacher pensions to counties, but met stiff opposition from state and local teachers unions that staged several protest rallies and predicted the plan would force jurisdictions to increase class sizes, cut programs and lay off as many as 2,800 employees, Mr. Mendelson said.

Counties currently pay retired teachers’ Social Security benefits, which Mr. Mendelson said makes up about one-third of their total benefits.

The unions eventually won out, with the Assembly taking the less drastic steps of shifting $17 million in administrative costs to counties, raising the early-retirement age from 55 to 60 and requiring many employees to pay higher contribution rates.

Cost sharing is sure to come up again in next year’s session, and could even be considered as early this fall, in a special redistricting session, some legislators say.

The state-appointed Public Employees’ and Retirees’ Benefit Sustainability Commission recommended in a July report that legislators work as soon as possible toward evenly splitting costs with counties — a move that committee Chairman Casper R. Taylor Jr. characterized as necessary and inevitable.

“Before the budget deficits became a huge, major issue, it was still always a concern simply because the body that sets the salary level hasn’t been required to pay the bill,” said Mr. Taylor, who was House speaker from 1994 to 2003 and served in the chamber as an Allegany Democrat from 1975 to 2003.

“That, on itself, is a mistake,” he said, adding that he’d like to see legislators phase in an even split over two or three years.

The MSEA criticized several of the commission’s recommendations, including that the state look into a hybrid pension plan in which employees would be partially on the hook if investments underperform.

Senate Majority Leader Thomas V. Mike Miller, a Prince George’s Democrat and vocal cost-sharing supporter, has said he believes cost sharing has majority support in the Senate but could be in for a tough battle in the House.

He said during last session that less-tenured legislators could be reluctant to go against the will of education proponents and a union, ardently supporters of Democrats in a majority Democratic state.

Delegate Melony G. Griffith, a Prince George’s Democrat who serves on the House Appropriations Committee, downplayed any potential loss of union support in the next election cycle, saying this year’s changes to the pension system have helped cut costs in the short term and that discussions about cost sharing are “a little premature.”

“What the educators want to ensure is that the commitments that are made to teachers are lived up to,” said Miss Griffith, House chairman of the Assembly’s Special Joint Committee on Pensions. “Clearly, the conversation will continue, but it is a different conversation than it was a year ago.”


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