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Panel OKs debt relief for city

April 08, 1998|By GUY FLETCHER

ANNAPOLIS - A Maryland Senate panel on Wednesday approved legislation to reduce the city of Hagerstown's pension debt by nearly $2.9 million.

"The city ought to be ecstatic," said Sen. Donald F. Munson, R-Washington.

Munson and other members of the Senate Budget and Taxation Committee voted unanimously to approve the legislation.

Committee approval practically guarantees the legislation will be approved by the full Senate before the General Assembly's annual 90-day session adjourns on Monday. The bill already had been approved by the House of Delegates.

The city's pension debt stemmed from a 1996 law that changed the structure of municipal contributions to the state retirement system. Under that law, the city, despite having paid its pension bills to the state on time and in the amount requested, found it owed $9.96 million to the system.

Last year the legislature agreed to lower Hagerstown's debt by about $2.5 million. Six other local governments in the state affected by the 1996 law received lesser amounts.

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This year the city requested another $2.5 million as part of an overall $3.85 million payoff to the seven governments. The bill was amended in the House of Delegates to add $390,000 to the city's amount.

Munson, a member of Budget and Taxation's pension subcommittee, said he made the case to his colleagues that the assistance this year would be basically the second half of a two-year plan.

City officials have said the state assistance actually will save them about $10 million in savings from interest they would otherwise have to pay to finance the debt.

"I think the city can consider itself very fortunate, and the delegation did a good job," Munson said.

But he said there will be no further assistance on the pension debt.

"This is it. This is the end of the deal," Munson said.

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