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Teacher pension issue in limbo as Md. House fails to take action

April 10, 2012|By ANDREW SCHOTZ | andrews@herald-mail.com

A breakdown in the legislative budget-approval process on Monday night has frozen — if only temporarily — plans to shift teacher-pension costs from the state to Maryland’s counties.

The shift was expected to be phased in starting in the coming fiscal year, over the objections of counties upset about the additional costs.

With time running out in this year’s Maryland General Assembly session, the House of Delegates and the Senate reached a compromise on a budget-related bill containing the pension shift. The Senate approved the bill on Monday, the final day, but time ran out before the House did, so the measure failed.

Under the compromise, the state would gradually shift pension costs to the counties for four years until there was a 50-50 split. The counties’ share would be 25 percent the first year; 32.5 percent in year two; 42.5 percent in year three; then 50 percent the fourth and subsequent years.

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Washington County’s share would be $3.1 million the first year. By the fourth year, the amount would rise to $4.8 million, according to a cost-projection chart.

However, the net impact almost certainly would be less because of other measures that would benefit the counties.

The House wanted to phase in the pension split over three years; the Senate wanted four years. For its initial fiscal impact, the House’s version was adopted.

The House and Senate planned to tie the pension shift into tax increases that would have helped offset the burden.

In fact, under an initial Senate proposal, Washington County could have come out nearly $400,000 ahead in the first year, when offsets were factored in.

But the House and the Senate also failed to pass the tax component of the budget package before the end of the session.

Instead, the working fiscal 2013 state budget shows cuts for Washington County.

But Del. Andrew A. Serafini, the chairman of the Washington County delegation, said the nickname Democratic leaders in Annapolis have given to the approved budget is a misnomer.

“I don’t think it’s this catastrophic ‘doomsday’ (budget) at all,” Serafini said, noting that spending still would go up next year. “Other states have real cuts year over year.”

County cuts
A chart shows $262 million in cuts that were made because the budget-related bill failed.
Washington County is shown losing $115,805 in library aid and $2,241,776  in education aid. But those are cuts from the state’s projected fiscal 2013 budget, not from the current, or fiscal 2012, levels.

According to the state Department of Legislative Services, Washington County’s per-pupil aid was projected to be $154.5 million in the fiscal 2013 budget.

The approved budget cut that amount to $152.2 million — which is about 1.3 percent more than the county’s fiscal 2012 amount of $150.3 million.

For library funding, Washington County would see an actual loss under the newly approved budget.

The county received $1.15 million this fiscal year. The amount was projected to rise to $1.16 million next year, but instead will drop to $1.04 million.

Ardath Cade, a lobbyist for the Washington County Board of Education, said Tuesday that she notified school district officials about the effects of the approved budget.

If there is a special session to address the budget cuts, as has been discussed, the counties and school board would like it to happen as soon as possible, she said.

“They’re all in the budget process now,” Cade said.

Although all bills that weren’t approved would have to go through the legislative process all over again during a special session, Serafini and Cade agreed that lawmakers likely would start with the compromise version of the budget bill related to the pension shift.

Late last month, Del.John P. Donoghue, D-Washington, tried to amend the state budget to protect Washington County from most or all of the added costs from the pension shift.

His amendment would have directed to the county $1,775,000 through a wealth-based grant program, roughly matching what the new pension-shift burden was projected at then.

The county would have been eligible for $6.7 million under that grant program in fiscal 2013, but a cap prevents any new counties from being added.

Donoghue’s amendment was rejected on the House floor.

He later said the money might be added when House and Senate representatives reach a budget compromise at the end of the session, but that didn’t happen.

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