March 2, 2011

Advocates clash with delegates over proposed reductions in state aid

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By Len Lazarick
Len@MarylandReporter.com

Advocates for increased school funding and a key legislator overseeing education spending clashed at a long hearing on the bill that will reduce many formulas for state aid.

The governor’s plan is “a sustained rollback” of education funding, said Robert Rankin, a lobbyist for the Maryland State Education Association.

“If this were to go in place, we would no longer call it Thornton,” the major increase in public school aid passed in 2002.

But Del. John Bohanan, chairman of the education appropriations subcommittee, told Rankin, “We think what the governor introduced is very responsible,” and “we’re funding 98% of what we did last year.”

Yet “the message we’re hearing is that ‘you’re shirking your responsibility on education,’” Bohanan said.

Bohanan said lawmakers were “being inundated” with phone calls and e-mails saying that they’ve “slashed money for education.” But he said they’ve “cut a lot of other programs” before even touching school aid, which has risen 96% in the last eight years.

“This is a time when we knew it would be a difficult year,” Bohanan said.

But Michele Douglas of the American Civil Liberties Union education project said, “This is the first time ever there has been a cut in that foundation” grant for school aid. “We’re chipping away at adequacy. It will take till 2014 to get back to where we were in 2008.”

The education advocates said they and the public were willing to pay higher taxes – actually to have others such as millionaires, corporations and drinkers pay higher taxes – to maintain school funding.

Don’t cut our budget

The supporters of school aid were just among scores of witnesses testifying to the House Appropriations Committee on the annual Budget Reconciliation and Financing Act – known as the BRFA in Annapolis-speak. The act is companion legislation to the budget, and adjusts the mandates and aid formulas to help balance it.

The consistent message from advocates for the Bay, the developmentally disabled, the arts, community health centers, and others was “Don’t cut funding for our programs or increase our expenses.”

Valerie Overton for the Maryland Hospital Association said the hospitals were concerned about the $330 million increase in the provider tax to fund Medicaid, meaning that hospitals will be returning a total $640 million to the state from patient charges to help fund health care.

Michael Sanderson, executive director of the Maryland Association of Counties, complained of “five years of flat funding” for local aid. “That is a massive policy change,” Sanderson said.

Pension changes criticized

This year’s BRFA also contains major adjustments to state employee pensions, increasing their contribution rates and lengthening the years they must work to receive pensions. The bill also raises the cost of retiree health benefits in order to reduce the $15 billion liability for future health care costs.

“The contributions are above average, and the benefits are below average,” said Sue Esty, legislative director for the state chapter of the American Federation of State, County and Municipal Employees (AFSCME). Furthermore, the increase in dollars that employees would pay — from 5% of salary to 7% — are “not even going into the pension fund, they’re going into the budget.”

Several panels of state workers and retired state employees decried the changes that Gov. Martin O’Malley is proposing.

Jeannette Taylor, a former property manager who became a parole and probation agent 3½ years ago, said, “I thought I had signed a contract.” She said she took a pay cut to $39,000 in exchange for better health and retirement benefits. But under the proposed changes, she would have to work till she’s 78 to get full benefits and pay more of her income to get them.

Deborah Cole, who works at the Holly Center for the developmentally disabled in Salisbury, said many of the workers there, who make about $30,000 per year, take second jobs to support themselves. She switched to the lower cost pension system in the 1980s to take home more pay, but now she will have to contribute more of her income just to maintain her current pension benefits.

The governor is also proposing that retired state employees join a Medicare prescription program and pay more of their drug costs.

Gerald Langbaum, a former assistant attorney general for the comptroller who worked for the state for 33 years, said his prescription drug costs would go up $3,000 a year, an increase he can handle. But “there are a lot of people who can’t afford it.”

William Kahn, another former assistant attorney general who headed the contract litigation unit, said he hired a lot of attorneys for the state and would always pitch the state benefits to people who would have to take a pay cut from the private sector.

“Should the state break the promise that was made?” Kahn asked. “It’s a retention issue.”

  • Abigail Adams

    While one can have compassion for those facing rising costs, join the private sector club! Our medical insurance costs went up $5K in one year due to a take over by a new out-of-state company owner without a raise in pay. What did those who voted for lame duck MOM and his Democratic crew expect?

    • John Q

      Abigail might recognize the need for individuals who enter into a contract with a bloated state government needing their individual rights protected. During the past decade, the super majority of middle class state workers, like teachers, police, and fire, have fully paid their agreed share of their hard earned income to help protect the future of our state’s retirement pension. The “corridor method” of pension funding – which does not require full funding by the legislators – and the Wall Street crash in 2008 contributed to the pension funding problem. State employees did not the cause of the problem and have stayed committed to their end of the bargain. Political news organization and political anarchist want to see a fight. Like you, my insurance, gas, banking fee and pretty much all other private sector fees have also gone in one direction. Democrat or Republican, we all agree we must protect a promise made to individuals by any large NAMELESS organizations.