Arguing that its hands were tied by the likely implementation of term limits, the Baltimore City Council advanced a bill Monday reducing the number of years required for elected officials to receive a pension.
The legislation, introduced by Council President Nick Mosby, calls for Baltimore to offer pensions to city officials after eight years of service. Currently, the requirement is 12.
The council voted, 9-2, in favor of the bill that city retirement and finance officials warned could be costly for the city in years to come. Three members, Councilmen Mark Conway and Eric Costello and Councilwoman Phylicia Porter, abstained. Councilmen Zeke Cohen and Ryan Dorsey voted against the measure.
The bill still faces one more vote from the council before it heads to the desk of Mayor Brandon Scott.
Mosby called the legislation a “companion bill” to Question K, a proposed charter amendment that appears on ballots this fall asking voters to establish term limits for the city’s mayor, comptroller and City Council. The amendment would limit officials to two four-year terms in each office, but would not begin until 2024. History suggests the amendment is likely to pass. Only one ballot question has failed in Baltimore in the past two decades.
The council president and some other members of the council were sharply critical of the ballot question, which they called “poorly written” and “politically motivated.” The movement to get the question on the ballot was funded almost entirely by a $525,000 investment from David Smith, chairman of Hunt Valley-based Sinclair Broadcast Group. The group owns local station Fox 45, a frequent critic of top officials inside City Hall.
“The council isn’t going from 12 to eight,” Mosby said. ”The council is saying if the citizens of Baltimore only want the elected officials to serve for eight years, then the benefit should be obviously tied to that for the pension.”
Some on the council and in the city’s finance office, however, have asked the council to pump the brakes. During a 30-minute committee hearing on the bill last week — its only public discussion so far — city retirement and finance officials urged the council to wait for a more thorough fiscal analysis and to consider alternatives before enacting the legislation.
If term limits are approved by voters Tuesday, they won’t be effective until the next wave of officials takes office in 2024. It will take those officials eight years to hit the term limit, finance officials argued.
“No one in this room will be affected until 2032,” said Dorsey, who cast one of the votes against the proposal. “I do believe it is premature to be jumping into making changes to the pension system at this time.”
As proposed, the eligibility change does, however, stand to boost the eligibility of sitting council members. As proposed, elected officials who have served since Dec. 1, 2022, would be pension-eligible after eight years. Costello, one of three abstaining members of the board, noted he had served eight years and 33 days on the council as of Monday and would become immediately vested.
“It’s inappropriate for me to vote for something that could directly benefit me,” he said.
In a letter to the council, David Randall, executive director of the Baltimore Employees’ and Elected Officials’ Retirement Systems, said the proposal before the group was unconventional.
“While it may not be unconstitutional, it is highly unusual for elected officials to enhance their benefits while in term,” he wrote.
Finance officials have argued the move could be costly down the road. The plan, which is currently fully funded, paid out about $1.5 million in fiscal year 2022 to 31 retired officials and beneficiaries.
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Mosby said the number of officials who would be added to the plan “would not negatively affect the fund in a way that we couldn’t sustain the way that it is today.”
Baltimore’s elected official retirement plan has two tiers of benefits: one for officials who were elected to office before December 2016 and one for those elected after. Officials elected before 2016 receive 2.5% multiplied by their years of service and their annual salary of their highest position held.
Officials elected after 2016 receive a pension based on the same formula, but it is capped at 60% of their compensation at the time of retirement.
Currently, the mayor is paid $189.044. Both the comptroller and City Council president make $131,798. Members of the Baltimore City Council are paid $73,966.
There are also built-in increases. After two years of receiving benefits, officials elected before 2016 receive an increase tied to the current compensation of the position held before they retired. An official who retired as the city’s mayor, for example, would receive an increase at the same rate as the current mayor.
Officials elected after 2016 are capped at a 1.5% increase until age 65 and 2% thereafter, but they have to wait only one year for the increases to begin.
The mayor has not yet weighed in publicly on the pension eligibility legislation, but 10 votes would be required from the City Council to override a mayoral veto.