Leaders of Maryland’s largest counties converged on Annapolis Wednesday to deliver a stinging rebuke of Gov. Martin O’Malley’s budget plan, saying his proposal to shift half of teacher pension costs to local governments could be “devastating.”
On a day that O’Malley stressed Democrats must remain focused on job creation, the county executives said his budget would do exactly the opposite, forcing layoffs, wage reductions and service cuts to local governments.
“It’s unacceptable, and it must be stopped,” said Ingrid M. Turner (D), a Prince George’s County councilwoman and president of the Maryland Association of Counties.
O’Malley’s budget proposal seeks to close a $1 billion shortfall in part by reversing an 85-year-old practice of using state tax dollars to pay the bulk of teacher pension costs.
In the first year, the shift would cost counties nearly $240 million, which O’Malley proposed to offset entirely with an increase in income taxes on six-figure earners and other budget maneuvers. In subsequent years, counties would be responsible for a growing amount of the costs.
The governor had long opposed such a shift, but said he had come around to the idea after deciding the state was too far removed from the contract negotiations with school boards that set teachers’ salaries, and therefore, determine their pensions.
Teacher pensions now cost the state nearly $1 billion annually, more than the budgets of most state agencies.
But county executives pushed back on Wednesday, saying the state is responsible for having under-funded pension obligations, and increasing school funding and teacher pay without anticipating that those actions would lead to higher pension costs.
“The state created this problem,” said Howard County Executive Ken Ulman, who has begun raising money for a 2014 gubernatorial bid.
Harford County Executive David Craig (R) urged state lawmakers to stop focusing on a compromise to facilitate the pension shift.
“We need to stop talking compromise,” he said. “It’s not going to work.”
The teacher pension shift is critical if O’Malley is to meet the legislature’s goal to halve the state’s ongoing spending imbalance in the budget year that begins in July.