Get more! Sign up for PLANSPONSOR newsletters.
Administration April 12, 2010
MD Teachers’ Pension Cost Shift Takes a Different Road
April 12, 2010 (PLANSPONSOR.com) – Maryland state lawmakers reached a budget compromise that would avoid shifting hundreds of millions of dollars in teacher pension payments to local governments.
Reported by Rebecca Moore
The Washington Post reports that House Democrats were unwilling to support a Senate proposal that would have required them to go against Maryland’s teachers unions, and House Republicans also rejected the plan, saying that pushing more costs on local governments could force cash-strapped counties to raise taxes.
As a compromise, House leaders accepted a Senate proposal to all but eliminate a major source of funding for local road construction and maintenance for as far into the future as the state estimates its budget, according to the Post.
Last month, the Maryland Senate gave preliminary approval to the proposal for balancing future state budgets by shifting teacher pension costs to local governments (see MD Lawmakers Approve Cost Shift of Teacher Pensions). Teachers feared that shifting pension costs to counties could limit future pay increases and complicate negotiations over health and retirement benefits, which the state now pays, the news report said.
The budget the House and Senate conference committee agreed to would cut the governor’s projected deficit in 2015 from $2.2 billion to $1.5 billion, and calls for setting up an independent commission to study the state’s rising public employee pension costs. The commission would be charged with drafting a comprehensive cost-sharing plan with local governments by the end of this year that state lawmakers would debate next year.