ANNAPOLIS – Gov. Martin O’Malley’s proposal to shift hundreds of millions of dollars in teacher pension costs from the state to the county level is “a non-starter,” Montgomery County Executive Ike Leggett said, after emerging from a Tuesday afternoon meeting with the governor and county leaders from around the state.
O’Malley’s proposed shift to the counties in teacher pension costs would save the state about $240 million, according to a person present at the meeting, who was not authorized to speak on the record.
“The bottom line is that it’s not an acceptable approach,” said Leggett. He added that the mechanisms to soften the blow are inefficient, and that the change would be immediate.
“It’s a difficult pill to swallow,” he said.
Complete details will be released with the governor’s budget on Wednesday. But according to the source at the meeting, O’Malley is proposing to share teacher retirement costs evenly between the state and the local governments.
That would include shifting some of the cost of teacher pensions, which the state has paid since the system was started, to the counties. Under the plan the state would absorb some of the Social Security costs that until now have been paid by the counties.
The proposed teacher pension shift, which has been discussed for years, comes as O’Malley tries to close a $1.1 billion hole in the state budget.
Howard County Executive Ken Ulman said after Tuesday’s meeting that he also opposes the shift because counties are “not in any better position to afford it than the state is.”
“We’re going to work hard to educate legislators on why we think the teacher pension shift is not the right move,” Ulman said.
Michael Sanderson, executive director of the Maryland Association of Counties, said that while this proposal signals “a difficult year ahead” for the counties, the governor also discussed “elements of the plans designed to keep it from being as painful as it might have been.”
In an interview earlier on Tuesday, Anne Arundel County Executive John R. Leopold said he will not support the pension shift, adding that it would entirely wipe out the $50 million in spending reductions he has made in his five-year tenure.
Senate President Thomas V. Mike Miller Jr. said Tuesday morning that he supports the shift, calling it “a fair and equitable way to assist the counties while balancing the budget.”
“It’s a compromise,” Miller said. “Not everyone can be happy in these very difficult times.”
Miller added that by allotting $370 million for school construction, O’Malley continues to show support for county schools.
Teacher unions, like the Maryland State Education Association, are not expected to be in favor of a pension shift.
Potential changes to teacher pension funds were included in the final report of the Public Employees and Retirees’ Benefit Sustainability Commission last July.
The report recommended that “teacher retirement costs should be shared with local boards of education so that the State provides 50 percent of the combined cost of Social Security and pensions for teachers.”