March 3, 2010

County leaders: state should cut teacher pensions, not local aid

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By Len Lazarick
Len@MarylandReporter.com

Lawmakers should consider reducing teacher pensions rather than shifting costs to local governments, two county executives said Wednesday as local leaders sought to prevent more cuts to local aid.

“The thought that anybody out there would think of piling on is very distressing,” said Howard County Executive Ken Ulman. He noted that state aid for local roads, police and libraries would suffer $400 million in continuing cuts under the governor’s proposed budget, while education aid continues to flow uncut to local school systems.

County officials have little control over the schools that make up a big chunk of their budget costs, Ulman said.

But Sen. E.J. Pipkin, R-Upper Shore, one of two Republicans proposing that counties pay half the costs of teacher pensions, said, “The idea that they have no control over the process just isn’t true.”

“The counties have had a great run” with increases in local aid, Pipkin said. “They need to be part of the solution.”

In an interview after a legislative hearing on budget changes he and Sen. David Brinkley have proposed, Pipkin said the counties are largely responsible for teacher salaries.

The state currently pays the entire cost of teacher retirement — about $900 million next year. Pipkin and Sen. David Brinkley, the lead sponsor of the Republican budget-cutting plan, want the counties to pay half of that. Brinkley said the counties would be allowed to use state education aid to cover the pension costs.

This year, $137 million in federal stimulus money covered the increased costs of teacher pensions.

“Current pension funding is unsustainable,” Brinkley said.

But Baltimore County Executive Jim Smith and Harford County Executive David Craig noted that at the same time the state legislature was voting to increase pension benefits for teachers and state workers in 2006, they were reducing benefits for their own county workers.

“We were going in the opposite direction,” said Smith, a Democrat in his last year as executive. “One of the things they could do [to cut costs] is look at their pension plans.”

“Is it a reasonable pension plan looking at the future?” Smith asked. The same applies to health insurance benefits for retirees. State officials should “see if they’re appropriate for the times and if they can afford it.”

Craig, a Republican who is this year’s president of the Maryland Association of Counties, pointed out that the pension enhancements in 2006 were passed by unanimous votes in the House and Senate, including the GOP members.

The enhanced pensions were estimated to cost the state $1.9 billion over the next 15 years.

At the state level, “you sort of created your own problem,” Craig said. “You should have put the shovel down,” rather than digging the hole deeper.

“The people down here [in Annapolis] don’t have to provide the services” as the counties do, Craig said.