First came the predictions of "dire fiscal straits" and "eventual bankruptcy." Then came the pamplets loaded with phrases like "front-end funding" and statistical tables covering every year through 2020. And finally there was a confession of sorts from a fiscal expert: "This is all very difficult to understand unless you are an actuary. It is like a foreign language."
With that introduction, the pension reform issue returned today to the Maryland General Assembly.
For three hours this afternoon, 40 legislators went through what one descrived as "a form of self-imposed torture" at a workshop on the pension issue, gathering information on a subject that promises to test their patience, their arithmetic ability and their campaign pledges.
The complexities of the proposed pension bill, which is designed to revamp the existing pension system for state employes and in the process save the state tens of millions of dollars, still elude many legislators. But the political ramifications elude no one.
Last year tow of the most powerful lobbying groups in Annapolis -- the state teachers' union and the state employes' unions -- made the defeat of a similar meansure their chief objective.
They succeeded. The House killed the measure after these groups put massive pressure on the legislators, threatening to work against their legislative opponents during the fall elections.
Now, however, with the next election four years away, there is general agreement here that the climate for changing the state's pension system is markedly different, and that the measure has a better chance of passing.
The new governor, Harry R. Hughes, has made it one of his few legislative goals for his first year. Hughes is reviewing last year's concept and plans to introduce a virtually identical measure this week. In addition, the legislative leadership has unanimously endorsed the measure -- in contrast to last year, when former Senate president Steny H. Hoyer, then running for governor, quietly worked against pension reform.
"The attitude is quite different this year, with the election pressure off," said House Speaker Benjamin L. Cardin. "What we're talking about is what kind of bill we'll have, not whether we'll have one at all."
Indeed, even some of last year's strongest opponents are embracing the pension reform movement now. Del. Gerard F. Devlin (D-Prince George's), who last year served as a spokesman for the lavor opponents, said last week that he had abandoned that role.
"I'm part of the leadership now," said Devlin, the new vice chairman of the House Ways and Means Committee. "My objective is to try to get a reasonable bill through, not to kill it."
The new bill would set up an entirely new companion pension system covering state employes hired after a specific date. This new system would differ from the existing system -- which covers 152,000 state employes and techers -- in three key respects:
It would reduce a new employe's annual retirement payments by at least 20 percent. For an employe whose highest annual salary was $15,000, yearly pension benefits would drop from 94 percent to 72 percent of this amount.
It would limit cost-of-living increases for pensioners to 3 percent annually. Under the present system, cost of living boosts must equal the annual increase in the consumer price index.
While reducing overall benefits, the state also would eliminate, for members of the new system, the existing requirement that emloyes contribute 5 percent of their salaries toward their pension.
These changes would apply only to state employes and teachers hired after the bill takes effect. Current members of the state pension systems would retain their present benefits, unless they chose to join the new system.
At the pension workshop today, Eugene Burner of the fiscal services department said that if the current funding formula is not changed the state's annual pension budget would jump from $229 million in u981 to nearly $6.5 billion by the year 2020.
By changing the funding formula and reducing the benefits, Burner said, the pension budget in 2020 would be only $3.2 billion.
Supporters of the pension reform measure say that the current system is too generous because it does not take into account the additional retirement pay state pensioners get through federal Social Security. They cite instances in which retired state workers -- receiving both state pensions and Social Security -- are taking in more than 100 percent of their highest annual salaries.
The reform bill would combine the state pension and the Social Security payments, thus reducing the total benefits for the pensioners.
The state employe and teacher unions, although aware of the legislature's changed climate this year, are preparing another lobbying effort against the new measure. During last year's election campaign, these unions received pledges from many legislators that they would oppose changes in the pension system. "We've got it down on paper -- who said what about it -- and we're going to remind them of their promises," said Toby Rich, president of the Prince George's Educators Association.