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Glendening signs pension bill

May 23, 1997

By GUY FLETCHER

Staff Writer

ANNAPOLIS - Gov. Parris N. Glendening approved legislation Thursday that will have the state reducing the city of Hagerstown's nearly $10 million pension debt by about $2.5 million.

The partial bailout is about half of what city officials and state legislators representing Washington County originally had hoped for, but they said they were pleased that they were able to get at least some help from the state.

"We'd always like more, but that's $2.5 million we didn't have before. You certainly can't complain," said Del. D. Bruce Poole, D-Washington, who attended the bill-signing ceremony.

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Hagerstown Mayor Steven T. Sager said the city could make installment payments on the remaining $7.4 million debt for at least a few years without significantly affecting the city's budget, services or taxes. But he added the city will likely need to come back and ask for more state aid next year to avoid steep payments in the future.

The city's pension debt resulted from the retirement agency under-billing the city for its contribution to the state pension plan over several years - a situation that was revealed after the passage of pension legislation last year.

State officials told Sager and the City Council in January that the $9.96 million the city owed could be paid off over 40 years in installments totaling $50 million.

"The city worked very hard to overcome this shock," Sager said.

City and state officials then quickly put together a plan that would have provided $7.7 million in aid to Hagerstown and six other governments in Maryland that were most affected by the pension debt. But that plan was amended by legislative leaders who said the state could only afford to pay about half that amount during the budget year that begins July 1.

"We'll come back next year and get the other piece. It should be no problem," said Del. John P. Donoghue, chairman of the county's legislative delegation.

Sager, who was defeated on Tuesday in his bid for a fourth mayoral term, said it will be up to the new City Hall administration to devise a plan for gaining approval of the additional state funds.

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