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Lawmaker seeks to exempt Washington Co. from added teacher-pension cost

March 20, 2012|By ANDREW SCHOTZ | andrews@herald-mail.com

ANNAPOLIS — In newly amended versions of the proposed state budget, Washington County still faces millions of dollars in new costs for teacher pensions.

The county also suffered a setback recently when House and Senate budget committees declined to lift a cap on a wealth-based grant program. If allowed back in the program, Washington County would have been eligible for $6.7 million in grant money.

Del. John P. Donoghue, D-Washington, said Tuesday that he plans to offer a budget amendment to lighten the county’s potential financial burden. Since Washington County is excluded from grant money it would get without the cap, it should be exempt from the added teacher-pension cost, he said.

The amendment only would apply to Washington County.

The House is expected to start debating the budget this week.

Gov. Martin O’Malley’s proposed fiscal 2013 budget plan shifted some of the teacher-pension costs from the state to the counties, starting next year.

The plan added Social Security payments, which counties pay, and pension contributions, which the state pays, then split the total, with each paying half.

The budget proposal included other measures to offset those new costs, although the offsets helped some counties much more than others.

Under that plan, Washington County would have had a net loss of about $2.4 million, the second-worst outcome of any county, according to budget chart.

Recent actions by the Senate and a House committee have changed the numbers, but Washington County would face added costs under both plans.

The Senate has passed a budget phasing in the 50-percent pension shift over four years instead of one.

Because of offsets, Washington County would have a net gain of about $392,000 the first year, but net losses of about $440,000 the second year, $1.8 million the third year and $3.1 million the fourth year.

The House Appropriations Committee decided on a different structure on Monday, phasing in the pension split over three years.

Washington County would face a net loss of $1.8 million the first year under the House plan, according to Ardath Cade, a lobbyist for the Washington County Board of Education.

The teachers retirement supplemental grant, or disparity grant, is offered every year to counties with per-capita income-tax revenues less than 75 percent of the state’s average.

Washington County received the grant from 1998 to 2004, except for 2001, said David Juppe, a senior operating budget manager for the Department of Legislative Services.

The county received $1,987,118 in 2003, then $213,559 in 2004, he said.

In 2009, with revenues dropping during a recession, the legislature capped the disparity grant program, Juppe said. Counties not eligible in fiscal year 2010 — including Washington County — could not be considered in the future.

The Department of Legislative Services recommended this year that Washington, Cecil and Kent counties be added again to the program, since they qualify.

Although Washington County would be eligible for $6.7 million in fiscal 2013, legislative services recommended about $2.7 million, but budget committees rejected the idea.

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