February 15, 2010

Analysis: Lawmaker pensions become partisan issue

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By Len Lazarick
Len@MarylandReporter.com

“The politics of America is becoming more and more strident,” U.S. House Majority Leader Steny Hoyer, a former president of the Maryland Senate, told the House of Delegates Friday morning.

As if to prove his point, the delegates shortly after got into a partisan half-hour debate over a procedural motion about their own pensions. It went down to defeat in a straight party line vote, which outnumbered Republicans always lose. (UPDATE: Democratic Dels. Kevin Kelly, Allegany, and Jim Mathias, Lower Shore, voted with the GOP, according to roll calls not yet available online.)

A similar vote had taken place Wednesday morning on the same issue. Republican Del. Bill Frank got up to offer an amendment, but not before the opportunity to change the legislation had closed.

“I did get up a little bit late,” Frank admitted to the House on Friday.

Everybody, Democrats and Republicans alike, was actually in favor of the joint resolution Frank wanted to send back to committee. In it, lawmakers were rejecting a $2,000 pay raise in 2013.

Frank wanted to tack on an amendment to reduce legislative pensions, though he never got a chance to offer the changes or explain what they would do.

UPDATE: Andy Harris, another Baltimore County Republican, plans on offering Frank’s amendments to the Senate version of the compensation resolution, which came to the floor Friday. Harris quickly delayed discussion of the report, which is now scheduled for Wednesday.

“There’s been a lot of talk that Republicans don’t offer any ideas to resolve the long-term budget problems,” said Harris, who is running for Congress.

House Democrats may have dodged the bullet due to a GOP flub, but Senate Democrats may get an opportunity to vote down Frank’s proposals to cut their own pensions.

To Frank’s fellow Republicans, the debate on the motion was all about pensions much more generous than their constituents have.

To Democrats, the Republicans were trying to make an embarrassing election-year issue out of something they hadn’t bothered to bring up to the General Assembly Compensation Commission or to the House Appropriations Committee.

House Speaker Michael Busch calculated that GOP members had at least five opportunities to offer proposals for pension reductions – three commission meetings, a House hearing, and a floor vote. “Any member could have slowed it down,” Busch said. “It’s done all the time.”

Frank said he and other Republicans had been meeting for several weeks to come up with a way to deal with the pension issue.

The delegate said he had become concerned about the problem recently after phone calls from constituents complained about the pensions for members of the Baltimore County Council, who can retire after 20 years service at full salary, regardless of their age. Citizens also complained that Mayor Sheila Dixon was able to get her $83,000 yearly pension despite the conviction that removed her from office.

Pensions for legislators are not quite so plush – but much better than almost anything in the private sector. Lawmakers earn credits of 3 percent each year, and if they retire after surviving six elections, they can retire at age 60 and collect two-thirds of the salary of a current member.

Del. Addie Eckardt, a member of the Appropriations Committee, said Republicans were trying to figure out how to tackle the issue.

“There’s no clear guidelines on how to deal with the legislative compensation package,” Eckardt said.

The only time the legislature can deal with its own compensation is within the resolution from the commission set up under the constitution. When the Appropriations Committee voted on the resolution on the same day as they were briefed on it, “I was caught completely off guard,” Eckardt said. She and the other five Republicans joined the committee in unanimously voting to reject the pay, and didn’t even mention the pension issue. 

It fell to Frank to bring up the issue on the floor. His first amendment would have eliminated the current pensions, and given legislators something like a 401(k) plan, with the state chipping in 5 percent of their pay. If that amendment failed, Frank had a second amendment that would put the legislators into the state employee program – where recipients are credited only 1.8% of their salary each year, and final retirement pay is based on what a worker actually made, not current salaries.

The first amendment would save state taxpayers $750,000 a year, Frank said. The second would have saved $500,000. These savings are minimal when the future costs of the state’s pension promises amount to $17 billion, but he said it’s more about the principle.

“We’re trying to lead by example,” Frank said.

Del. Melony Griffith, D-Prince George’s, co-chair of the joint pension committee, said lawmakers are trying to stay on top of the issue.

“We well aware of the pension liabilities,” she said. “We’re taking a very deliberate review of our pension liabilities.”

Griffith also is co-chair of a commission reviewing the state’s obligations for retiree health insurance – an additional $15 billion that must be funded over the next 30 years.

The options for funding these promises are fairly simple – increase contributions by the state and its employees or reduce benefits. When these options for retiree health care were presented last year, state employee unions went ballistic.

The solution was to deliberate another year so that any proposals would come after the election.

Del. Murray Levy, D-Charles, who serves on Appropriations and the pension committee, said, “Over the long term, retirement is the most important [problem], but not at the moment,” given the state’s fiscal hole.

The legislative pension issue may be dead in the House, but Sen. Andy Harris, another Baltimore County Republican, plans on offering Frank’s amendments to the Senate version of the compensation resolution, which came to the floor Friday. Harris quickly delayed discussion of the report and his amendments until Monday night or Tuesday.

“There’s been a lot of talk that Republicans don’t offer any ideas to resolve the long-term budget problems,” said Harris, who is running for Congress.

House Democrats may have dodged the bullet due to a GOP flub, but Senate Democrats may get an opportunity to vote down Frank’s proposals to cut their own pensions.