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For discussion only or a new mandate?

HB 50:

November 16, 2007|By BOB MAGINNIS

Halloween is over, but that didn't stop Washington County officials from getting a major scare this month, in the form of a Maryland bill that could add a multi-million dollar state mandate to the county's budget.

Here's the background:

In a June 30 column, state Sen. E.J. Pipkin, R-Queen Anne's, said that one part of the solution to the state's $1.5 billion budget shortfall could be "..sharing fairly with the counties the employer share of funding the teachers' pensions.."

But it wasn't Pipkin who introduced the bill, but Del. John Donoghue, D-Washington.

After filing HB 50, Donoghue told WBAL-TV that "We have this $1.7 billion deficit, and in all fairness, we have to bring everybody to the table, including the counties.

"Right now, the counties negotiate the teacher salaries. The state pays 100 percent of the freight. What we are asking the counties to do is come to the table and help us figure out a way to fund this proposal. The poorer counties would pay less, the wealthier counties would pay more," Donoghue said.

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In a letter printed elsewhere on this page, Donoghue said that he introduced the bill at the request of House Speaker Michael Busch.

Donoghue said, "..the purpose of the bill was to get the wealthy counties with huge surpluses to come to the table and explore ways to address the budget and protect less wealthy counties."

But according to the Washington County Commissioners and Greg Murray, the county administrator, Donoghue didn't communicate with them prior to filing the bill.

What they knew, as of Tuesday, was that, based on a fiscal analysis of HB 50 done by the state's Department of Legislative Services, the county would owe an additional $6.5 million a year.

Debra Murray, the county's Budget and Finance Director, said that if the lawmakers believed that the counties could afford to take on more of the pension costs because of their fund balances, they were wrong.

"The state needs to realize that these fund balances are also used for other purposes," she said.

For example, Murray said, on school construction costs, the county government must front millions of the cost, then wait three to six years for state reimbursement.

State Sen. Don Munson, who sits on a number of pension-related committees and subcommittees in the General Assembly, said Wednesday he had had read Donoghue's bill.

Emphasizing that he did not want to provoke a disagreement with Donoghue, Munson nevertheless said that he opposed the bill.

"I am in disagreement with the bill, for a couple of reasons. First, it's a state mandate, but more importantly. I'm really concerned about the tax implications for Washington County," Munson said.

If the bill passed as written, Munson said, "the only way the county commissioners are going to make this up is to raise taxes. Ultimately the cost will fall on the property taxpayers of Washington County."

The other reason Munson said he opposes the bill is that while it would save the state $330 million, he's not confident that any savings would be spent on reducing taxes.

Munson said there has been no discussion of the issue on any of the committees on which he sits, but he said that there is a lot of talk among members of the legislature about some counties' financial practices.

Some counties, Munson said, have cut property taxes even while they gave employees raises. Other, richer counties have raised teacher salaries to the point where some other, less-wealthy counties can't compete.

They've been able to do that, in part, Munson said, because the state has paid all of the employer's share of the pensions based on those higher salaries.

If someone were proposing a new pension system, it's unlikely that it would be enacted with the state paying 100 percent of the employer share, Munson said.

But the present system has been in place for a long time, Munson said, and the counties, particularly Washington County, don't have the tax bases that would allow them to cover that.

The formula in Donoghue's bill would place a greater burden on the wealthier counties. While Washington County's bill for the employer's share would be 44 percent, Montgomery County's would be 63 percent and Anne Arundel's would be 67 percent.

Are the wealthier counties likely to go along with a measure that would add millions to their budget?

Not easily, I would wager. But as with many bills, the sponsor asks for the moon, secretly hoping to get a slice of green cheese. I predict this bill won't pass during the current special session, but the topic will be revisited in January, when the 2008 General Assembly opens for business.

As for Donoghue, if the bill was only being introduced for discussion purposes, why not let local officials know that? I understand that when Busch asks for a favor, wise delegates don't automatically say "no."

But for the sake of good communication and cooperation betwqeen governments, a phone call or an e-mail would have been nice. Hopefully, it's a lesson learned.

Bob Maginnis is
editorial page editor of
The Herald-Mail newspapers.

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