Md. sacrifices road repair to pay teacher pensions

Monday, April 12, 2010

THE NEXT TIME your car jounces into a monster pothole in the Maryland suburbs, thank the union representing public schoolteachers. It's thanks to the union's overgrown clout in Annapolis, and to politicians too timid to challenge it in an election year, that some road repairs are unlikely anytime soon.

That was the trade-off that state legislators made when they hammered out a budget compromise last week. In return for safeguarding -- at least for a few years -- the budget-busting system by which teachers' pensions are paid exclusively by the state, lawmakers all but eliminated state funding for road repairs in counties such as Montgomery and Prince George's.

For the teachers union, this is very likely to be a Pyrrhic victory. Union lobbyists, with help from their friends in the House of Delegates, managed to rebuff a Senate bill that would have shifted to the counties a portion of Maryland's massive obligation to fund teachers' pensions. But the General Assembly is mindful that the state cannot afford to continue covering pensions on its own -- especially since they are determined largely based on salaries negotiated by local school systems. (And why should local school systems essentially write the bill but not have to pay some of the check?)

So rather than tackle the problem now and risk angering the union ahead of November's elections, lawmakers appointed a blue-ribbon commission. The commission, to be composed of non-lawmakers, will report back by the end of the year -- i.e. after the elections. And it's entirely possible -- we'd guess probable -- that its recommendations will mean bigger trouble for the counties and the teachers than if they'd taken the Senate's deal.

In the meantime, the state, and taxpayers, are likely to be the losers, and not just because of the damage that potholes inflict on cars. Annual deficits for the next several years are projected in the range of $2 billion, about 15 percent of the state's $13 billion general fund. In the compromise struck last week, lawmakers managed to shave that by about a third. But by postponing any change in how teachers' pensions are paid for the next few years -- and passing up a chance to trim the state's forecast annual deficit by an additional $300 million or so -- taxpayers are likely to be handed the bill starting next year.

So here's a word to the wise: Start saving now, both for the tax bills and the car repairs in your future.

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