Laurel-area elected officials last week denounced Gov.Martin O'Malley's proposal to shift more of the responsibility for teachers' retirement costs to local jurisdictions.
"I believe this shift will have a dramatic impact on our budget in 2013 and into the future, because our tax and revenue models do not factor in the County taking responsibility for teacher pensions," Prince George's CountyExecutive Rushern Baker said in a statement. "We are already looking at a $126 million dollar deficit and based on the Governor's plan,Prince George's County Government would be forced to make even tougher decisions that could significantly affect the programs and services provided to our citizens, businesses and visitors."
Howard County Executive Ken Ulman called O'Malley's proposal "the worst deal that could have been proposed," and said the $16 million it would cost Howard "is really a crippling blow to our local budget."
He added: "We're sending a message to the County Council and all our department heads that this throws all our budget planning up in the air."
O'Malley's fiscal year 2013 budget proposal, which must be approved by the General Assembly, aims to reduce the state's projected $1.1 billion deficit by $656 million. One of the largest and most controversial reductions O'Malley is proposing is shifting $239 million in teachers' retirement costs to the counties.
"Our proposal would require local jurisdictions to pay 50 percent of the combined cost of (teachers') social security, which the counties are already (fully) covering, and other teachers' retirement costs, which the state is currently paying," O'Malley said. Currently, counties pay one-third of the total retirement costs.
O'Malley explained the rationalization for shifting teachers' retirement costs at a budget presentation for members of the media Wednesday, Jan. 18.
"I have become convinced that some better sharing of that responsibility is in order, primarily because the counties are much more closer to the negotiation table than the state is," he said.
But Ulman rejected that argument.
"It's just not true; we're not at the negotiation table," he said. Ulman, former president of the Maryland Association of Counties, explained that the local Boards of Education negotiate contracts with the teachers' unions and then send county executives the bill.
Howard County Education Association President Paul Lemle said O'Malley's proposal, if approved, probably would result in teachers' contracts that do not include cost-of-living or salary adjustments, as well as other unintended consequences.
"You don't recruit and retain good educators by cutting their pay and benefits," he said.
State lawmakers weigh-in
So far, O'Malley's proposal is proving to be a tough pill to swallow for state lawmakers, too.
"I'm going to have to be really convinced," said District 13 Del. Guy Guzzone, a Democrat who sits on the House Appropriations Committee, which is responsible for vetting O'Malley's budget plan before sending it to the House floor.
Laurel's District 21 delegates said they are against any proposal to shift teacher pension costs to the counties.
"I have actually been opposed to it in the past and I am opposed to it now," Del. Joseline Peña-Melnyk, a Democrat, said. "I don't think (the counties) are able to handle it."
Democrat Del. Ben Barnes agreed.
"I've consistently supported maintaining the state obligation in teachers' pensions and not shifting our burden onto the counties," he said. "This is a state obligation that we've made to our teachers and I think we should fulfill it."
District 21 Sen. Jim Rosapepe said he has not supported teacher pension costs to the counties in the past, and hasn't seen the specifics of O'Malley's current proposal yet.
What will likely be one of the deciding factors for some legislators is whether the counties can count the pension costs toward "maintenance of effort," the state-mandated requirement that school systems must budget as much per-pupil funding as they did the previous year.
"The big picture is we need to invest more money in our schools, not less," Rosapepe said. He said if a pension shift were to occur, the state needs to make sure it will not impact investments in the classroom.
O'Malley said maintenance of effort is "one of the big variables that we still have to work out." He noted concerns about counties taking money out of the school system budgets because then "we're not protecting the priority of education."
Ulman, however, doesn't see it that way. More than half of the Howard County budget goes toward meeting the maintenance of effort requirement and if the teacher pension costs cannot be included in that, he said, "it gives me very little leeway."
One of the problems is education spending varies widely across the state. Some counties have not even provided enough education funding to meet maintenance of effort requirements.
"If we're going to kick (teacher retirement costs) back down to the counties, the counties are going to want us to ease off maintenance of effort," Barnes said.
Guzzone said the local jurisdictions provide different funding for various reasons, such as the counties' wealth base and willingness to tax, and those differences need to be taken into account in this debate.