By Daniel Menefee
For Maryland Reporter
A bill to pre-fund future pension and health insurance liabilities for state workers passed overwhelmingly in the House of Delegates last week in a 130-5 vote — and now waits in the Senate Budget and Tax Committee for a hearing.
The bill, HB28, sponsored by Del. Carol Krimm, D-Frederick, would require 50% of the general fund balance in excess of $10 million be split equally between the pension system and the Postretirement Health Benefits Trust Fund, up to $25 million for each fund. (See earlier story.)
The mandated supplements would begin in fiscal 2021 and require review by the Department of Legislative Services when the pension fund is 85% funded, forecasted for 2026.
A provision in the 2015 Budget Reconciliation and Financing Act (BuRFA) required 50% of the annual fund balance, up to $50 million, go solely to the pensions system from 2017 to 2020. But Krimm’s bill would extend the so-called sweeper provision indefinitely starting in fiscal 2021 and split the surplus between the pension and retiree health insurance funds. The two funds face unfunded liabilities of $20 billion and $9 billion respectively.
Krimm’s bill moves to the Senate Budget and Tax Committee as Gov. Larry Hogan has withheld this year’s $50 million payment to the pension fund because of lower revenue estimates.
In a recent budget hearing Krimm asked Budget Secretary David Brinkley and Deputy Budget Secretary Marc Nicole if the administration was willing to double the payment next year to bring the supplemental current.
“That’s not currently in our plans,” Nicole said.