Maryland Gov. Martin O’Malley is on the verge of asking lawmakers to reverse an 85-year-old practice of using state tax dollars to pay the bulk of teacher pension costs, a move that could open a bruising battle with local governments in a year crowded with showdowns over same-sex marriage and raising taxes.
O’Malley (D) on Friday inched closer to saying county governments must for the first time help cover the state’s rapidly expanding teacher retirement costs, telling The Washington Post that there has to be a “balance in the shared responsibility” of funding public education.
A shift, which aides confirmed O’Malley is likely to propose, could add tens of millions of dollars in new costs to counties’ beleaguered budgets in coming years and potentially lead the General Assembly to give counties a way to raise revenue to cover the bill. O’Malley said the pension issue would have to be settled in tandem with a growing dispute between Annapolis and counties over the minimum amounts they must contribute to classrooms. Both will “need to be addressed” during the 90-day legislative session, he said.
The coming pension debate in Maryland differs from recent high-profile battles in other states, such as Wisconsin, where Democrats have spearheaded an effort to recall the state’s Republican governor, whom critics say went too far in rolling back public employee benefits and bargaining rights. Maryland had a far quieter debate last year over more modest changes O’Malley pushed through to increase how much teachers and state employees contribute and to trim what benefits they receive. The nub of this year’s fight will be who pays the tab for retired teachers — the state or the counties.
O’Malley’s comments to The Post, combined with conversations he and top aides have had in recent weeks with lawmakers, staffers and lobbyists, have led a growing number to conclude that after years of standing in solidarity with local leaders opposed to a pension shift, the former Baltimore mayor is poised to change course.
They said they expect that the annual budget O’Malley is scheduled to release Wednesday will include a seismic shift in the way the state’s annual $900 million share of retirement and pension costs is paid for 105,000 Maryland educators.
The lawmakers, lobbyists and staffers spoke on the condition of anonymity to freely discuss private conversations with the governor and his staff. The governor’s top aides declined to comment publicly on O’Malley’s budget release. However, one suggested that any plan to require counties to share in the pension costs would be phased in and require some way for local governments to raise new revenue to cover the obligation.
Whether that would mean new local taxing authority or something else was not clear. An aide said steps are included in the governor’s budget to mitigate the impact in the first year.
But county executives and lobbyists for local governments and the state teachers’ union said they were skeptical that any plan O’Malley puts forward could please everyone.
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