Teacher Pension Shift

February 29, 2012

In a very unusual move, the Calvert BOCC called a press conference on Tuesday, Feb. 28 in the packed commissioners’ hearing room to let citizens know exactly what the State has in mind.

President of the Board Gerald Clark opened with remarks that Calvert funds the school system with almost half of the county budget. The State having made promises on teachers pensions, is now asking the counties to honor them. Calvert funds over the Maintenance of Effort per pupil required by the State Law. If the pensions are not sustainable at the state level, how could it be sustainable at the county level? Funding the teachers’ pensions at the local level would be a major hit.

Commissioner Shaw said that all counties are working together in MACo against the shift, regardless of party affiliation. The amount of the unfunded teachers’ pension is $20-$22 billion dollars. Half of that will be shifted to the counties and will affect the county’s bond rating, if Governor O’Malley has his way. Right now Calvert’s portion is $240 million and will be due in July. The State required teachers to contribute 2% but the money went into the general fund to help alleviate the deficit. Then the amount will rise to $7.3 million each year. To make the pension sustainable, it should be defined benefits from defined contributions.

Sheriff Mike Evans said crime doesn’t slow down when the economy is down. He doesn’t want to ask his personnel to do more with less. But should the pension shift come to the county, his office will take a big hit. Pat Hoffman, Director of Calvert Library also remarked that the library system receives a majority of it’s funding from the county and a small percentage from the State. If the pension shift were to occur, the libraries would not be able to operate.

Chris Zimmerman, Director of Financial Assistance College of Southern Maryland, said cuts to the college would mean some courses would have to be cut and students would have to pay more for less. Debbie Russ, Representative from Calvert Education Association, added that poor public policy was not good and will hurt quality of education.

Jonathan Riffe, Chief of the Huntingtown Volunteer Fire Department and Chairperson of the Calvert Volunteer Fire and Rescue Chiefs Council, spoke on behalf of all the Volunteer Fire and EMS and what it would mean if funding were cut to the departments. Allocations have been flat for the last few years and holding on to equipment past its service life has been a priority. The Capital Improvement Budget has $12.6 million in improvements through 2018, which is sorely needed, But should the teachers pensions be shifted to the county, that may go away.

Delegate Mark Fisher, when asked for his take on the shift, said “The folks who control Annapolis have mismanaged Maryland’s economy and the pension system. The attempt to transfer teachers’ pensions to the counties is proof of that mismanagement – and I do not support the transfer!”

Delegate Tony O’Donnell was also asked and replied. “I think it is a bad idea to shift teachers’ pensions back to local government at this time. If it happens, it will put pressure on local governments to raise taxes. Too many in Congress and too many in Annapolis are already planning to raise our taxes. Hopefully we won’t force local government to do the same.”

Margit Miller/Staff Writer/Editor

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4 Responses to Teacher Pension Shift

  1. JW Crockett on February 29, 2012 at 8:28 am

    Throw the no job growth Democrats out of the state house and bring some tax paying business to the state!

  2. Ltown Taxpayer on February 29, 2012 at 8:29 am

    Could we please NOT continue to portray this as Teacher Pensions? They are actually speaking about School Employee Pensions – this includes all school employees (building service worker, maintenance workers, bus drivers, administrators, etc.) and not just teachers. Teachers might be the largest group, but they are not the only group.

    The really sad thing about this proposal by the state is that they are NOT offering to reduce taxes that they collect. Don’t we all wish that we could just drop obligations and keep the revenue that was collected in the name of those obligations. This is the ultimate in bait and switch. Another point – the legislature has already pulled this crap. Back in the 90’s, the legislature voted to stop funding the social security contribution for state employees based in the counties. The counties had to pick up the cost WITH NO WARNING. And the bill was not something that the counties could push off. The legislature off-loaded a financial obligation and did NOT modify their behavior. So now, they are on the brink of doing it again. Maybe the members of the legislature need to find new employment.

    The state has been underfunding the pension fund for DECADES. Now they want someone else to fix it. Instead of funding the pension, they have been spending the money on other things. This would be like not paying your mortgage while buying luxuries and then asking someone else to contribute to paying your mortgage. :P

    It might interest taxpayers to know that Maryland legislators also get a pension. Yep, they “earn” a pension for their part-time job. And they are fully vested in a shorter period of time. And they do not contribute. And it has been recommended that they improve their pension. The governor is fully vested after two terms. He never contributes but is guaranteed the benefit. These pensions are also in the same pot of money as the teacher pensions. And the governor’s pension is indexed to inflation – meaning he could possibly earn more on his pension than he earned while serving as the governor. The legislative pension is heading in that same direction. School employees are not asking for indexed pensions, but they are asking the legislature to live up to their promises.

    • Ltown Taxpayer on February 29, 2012 at 8:34 am

      And one additional point. The article says that teachers were asked to contribute 2% to their pensions. Actually teachers already contribute to their pensions, it should have said that teachers were asked to contribute an ADDITIONAL 2% which went directly into the general fund. The legislators were buying an additional year of not dealing with the problem that they have created.

  3. jeannie green on February 29, 2012 at 9:47 am

    I sent this to the Governor and the President of the Senate last week:
    NO MAN’S LIFE, LIBERTY OR PROPERTY IS SAFE WHILE THE MARYLAND LEGISLATURE IS IN SESSION.
    They need to stop giving our tax dollars away to the illegal immigrants in this state and we will be able to take care of our teachers.The fact that they want to give illegals in state tuition when we can’t afford to take care our teachers speaks volumes. They are giving more to Maryland de Casa than it would take to pay our teachers pensions. They are aiding and abetting criminals and need to be dealt with before we throw them out of office.