March 19, 2010

Senate committee begins shifting teacher pension costs to counties

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By Andy Rosen
Andy@MarylandReporter.com

The Senate budget committee has taken the first step toward passing half of the state’s massive burden for teacher pensions onto local governments, as part of the budget it voted to send to the Senate floor on Monday.

The Budget and Taxation Committee approved language Friday that would begin moving the pension obligations to local governments next year. Nothing would change in the fiscal 2011 budget now being reviewed, but the move could shift nearly $338 million to counties within five years. The state now pays for all teacher pensions.

All told, the committee reduced nearly $120 million from Gov. Martin O’Malley’s proposed budget. Over the next five years, however, the changes are expected to cut about $1 billion in state spending obligations. That could likely cut in half long-term budget deficits of over $2 billion that the budget staff is projecting.

The panel also agreed to a proposal by Republican Sen. David Brinkley of Frederick County to eliminate 500 state jobs, saving the state around $11 million next year. The eliminated positions, which would be left up to O’Malley to identify, but may not result in any actual layoffs, Warren Descheneaux, the legislature’s chief fiscal analyst, said, since there are a “couple thousand” unfilled jobs that could be used to satisfy the cuts.

The panel also voted to hold onto more of the money it uses for road maintenance and local transportation aid, and put it in the state’s general coffers. That move could free up between $250 million and $300 million per year.

The measure already was in place through next year, but this move would continue the shift. The money would likely have gone to the Department of Transportation.

The full Senate will debate the budget next week, and then send it to the House of Delegates.