"The difficulty keeps going and I don't know where we go from there unless we get someone that's more creative," he said.

'I don't know how to fix it'

Councilwoman Mary Ann Lisanti also said she does not know what to do.

"I look at all of you, I hear you. I really do," she said, explaining she has met with the board of education.

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"The bottom line is, I don't know how to fix it," she said. "If we write a check, there's no guarantee it will go to your salaries."

Lisanti emphasized that the school system's budget negotiations need to be congruent with the budget process.

"I think we still have a long way to go so we don't find ourselves in the same situation every year: a war on public employees," she said. "I really am frustrated, like all of you, that this year it's the teachers, last year it was the deputies.

"At the end of the day we're all public employees," Lisanti said. "Somehow and some way, we're going to have to put all these swords down and work together."

County executive responds

In his statement, Craig said he has no choice but to fund the pensions.

"Money that could have been earmarked down the road by the school system for permanent raises or step increases must now go to paying for the portion of teacher pensions that used to be funded by the State of Maryland," he wrote. "Nonetheless, this mandate cannot be ignored and must be paid for by the taxpayers of Harford County. The annual impact to Harford County will rise to approximately $10.3 million by FY 2016."

Craig rejected the possibility of the county using so-called "offsets" attached with the pension shift, calling them "merely estimates" that are mostly "optimistic, dubious and unreliable."

"To balance a budget based on these at this late date would be fiscally irresponsible, and would potentially undo years of prudent financial management, which have resulted in Harford County achieving the AAA bond rating that saves taxpayers millions of dollars annually," he continued.

He also rejected the possibility of paying the second half of the bonuses with county surplus money.

"Once funds that have been reserved or are restricted, or that have been allocated for necessary capital improvements are accounted for, however, there would not be sufficient funds left in reserve to meet the teacher pension obligation after granting the bonus," he said.

"Local governments did not create the fiscal problems for this state; however, in addition to balancing our own budgets, it's now become common practice in Maryland that counties have the responsibility of balancing the state budget as well," he wrote. "The state has failed to lead, so it is now my responsibility to do so on this issue."