Under O’Malley’s plan, the state will split teacher retirement costs with counties. Lawmakers said the first-year cost to the local governments would be less than $250 million.
Counties’ share of the extra income tax revenue would cover $111 million of that, and several other adjustments are possible to further lighten the load for counties, they said.
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The options include one-time adjustments to some of the numerous state aid programs to counties.
Montgomery County Executive Isiah Leggett (D), whose county faces a $135 million shortfall, said it would not be enough. “The shift is unacceptable, and the mechanisms to soften the blow are insufficient,” he said.
Leggett was among several county executives and other leaders from the Maryland Association of Counties who emerged with glum faces from a late-afternoon meeting with O’Malley, pledging to fight the proposal in the legislature.
“That’s what the 90 days are for,” said Howard County Executive Ken Ulman (D), a potential candidate for governor in 2014. “I’m disappointed. . . . We’re not in any better position to be able to afford it than the state.”
Prince George’s County Council member Ingrid Turner (D-Bowie), president of the counties organization, said she will “absolutely” urge lawmakers from her county to oppose O’Malley’s proposal and said “we’ll certainly continue the dialogue with the governor too.”
“This is going to be a difficult pill to swallow,” Turner said, noting that Prince George’s is already looking at a budget shortfall of more than $125 million next year.
The teacher pension shift won’t be the only battle.
Lawmakers said O’Malley’s budget also proposes forcing Internet companies to collect sales tax on purchases made online from Maryland businesses. Amazon.com has led opposition to such efforts in other states, and lobbyists said they were preparing for a fight on the measure if it is included in O’Malley’s budget. The governor’s budget expects to collect about $21 million in new tax revenue by instituting the measure.
The timing of the income tax changes for high earners may also be a point of contention. Under O’Malley’s plan, the changes would take effect in the budget year beginning in July, but be retroactive to Jan. 1.
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