Smelser Bill On Teacher Retirement Outlay Is Criticized

Senator's Bill Draws Criticism

February 24, 1991|By Adam Sachs | Adam Sachs,Staff writer

ANNAPOLIS — A Carroll senator wants to ease state government's financial burdensas the economy falters, but two education leaders say his plan would harm teachers, public education and, ultimately, Maryland's economiccompetitiveness.

A bill sponsored by Sen. Charles H. Smelser, D-Carroll, Frederick, Howard, would curtail the state's contributions for teachers' retirement and Social Security. It would freeze, for calculation purposes, the teacher payrolls on which the payments are based at fiscal 1991 levels for Maryland's 24 subdivisions.

The contributions -- based on percentages of the annual payrolls in each jurisdiction for teachers eligible for retirement benefits --would not take into account post-1991 salary raises or payroll increases caused by staff expansion.

That means counties would pay the extra costs of benefits attached to increased payrolls. That would deter counties from providing raises to teachers, say Maryland State Teachers Association and Carroll County Education Association representatives.

CCEA President Maureen Dincher calls the proposal a "terrible idea" and "another example of an attempt by the state to find monies on the backs of teachers."

Smelser, a Budget and Taxation Committee member, says he is attempting to cut costs to alleviate a projected state budget shortfall of about $200 million next year, rather than imposing new taxes. He said the bill could save the state an estimated $13 million in fiscal 1992.

Federal law mandates that employers pay 7.65 percent of their employees' salaries toward Social Security. The state pays 6.13 percent of the contributions for teachers, with local jurisdictions picking up the difference. Thus, under the bill, the more teachers' salaries rise annually, the more local jurisdictions would have to spend to make up the difference.

For example, a county whose fiscal 1991 teacher payroll is $100 million would receive $6.13 million from the state for Social Security and would pay $1.52 million to meet the 7.65 percent mandate. If the payroll increased to $110 million in 1992, the state would still contribute $6.13 million, based on the 1991 payroll; the county would owe $2.28 million.

"It certainly will have an impact on what you can pay teachers,"said James W. Spencer, an MSTA researcher. "Education is a state responsibility. If you're going to have quality people in the classroom,you have to pay a quality wage. When you do something that's going to hurt giving teachers a competitive wage, it hurts education and makes the school system less competitive."

The bill also applies to certain library system and community college employees.

It also would require counties to contribute increasingly more toward retirementplans as teacher payrolls rise, beginning in fiscal 1993, said Smelser. The state now pays all retirement costs, based upon a fluctuatingpercentage of the total annual payrolls.

Smelser said the state should not increase contributions to counties resulting from teacher raises when state employees have been denied raises and had benefits cut for fiscal 1992 to compensate for the current $427 million deficit. He noted that out of $6.5 billion in appropriations, $2.7 billion is targeted to local subdivisions in the proposed state budget.

"Inview of the large amount of money going back, the locals should exercise the same restraint on salaries that the state does," he said. "We suggest they hold the line at 1991 salary levels."

The current deficit spurred the legislation, but it's not the sole basis, said Smelser.

"It's something that should have been done a long time ago,"he said. "There are so many different raises among the various subdivisions. It's not fair for the state to have to pay large Social Security payments in areas where we had no control over salaries."

Dincher said the bill would compound problems for local jurisdictions struggling to compensate for decreased federal and state aid for education. She said the bill reflects misguided concepts about education and teachers.

"It seems to be punitive toward teachers," she said. "He may not understand the importance of keeping teachers' salaries competitive. It may be born out of an outmoded idea of what teachers doand their level of professionalism."

Teachers' salaries in Carroll have climbed significantly, increasing by 5 percent this year and by 9 percent in each of the previous two years. CCEA is requesting 8 percent raises for the coming year, while the school board is offering 3 percent.

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