Education and employee pensions could be in the budget-cutting cross-hairs next year, as government revenues continue to shrink and officials find it increasingly tough to avoid the twin fiscal elephants in the room.
That was the message last week when Maryland Association of Counties president Wilson H. Parran, who is also president of the Calvert County commissioners, and MACO executive director Mike Sanderson visited the Howard County Council for an informal talk over dinner Monday night at Lee Lynn's restaurant in Dorsey Search.
"You can't draw a circle around a piece of the budget and cut around it," said Parran, speaking about school system budgets that comprise from 50 percent to 60 percent of most local government spending. Local governments managed to avoid permanent state cuts to local aid or state grabs of local revenues last year, he said, but if things stay as grim as they appear to be, something's got to give.
One big fear is the state shoving the cost of teacher pensions onto local governments.
"Most counties don't have anywhere to go but the property tax," Parran said, and no elected official wants to raise taxes in an election year. Major spending cuts, big hikes in employee pension contributions, or a move away from defined benefit pensions to defined contribution systems are alternatives. Howard also owes nearly $500 million for future retiree health benefits.
Parran suggested government may have to start 401(k)-style retirement savings funds for employees instead of guaranteeing a specific benefit at retirement, especially since pension funds lost money in the stock market like everything else.
In addition, the state's maintenance-of-effort standard on schools is at issue, since the state school board refused to waive that requirement for any counties for fiscal 2010, which began July 1. The rule means any local government that cuts school spending below the previous year would lose state aid. Howard did not request the waiver for this fiscal year, though eight other counties did.
"The whole maintenance of effort is a major concern for counties. If you can't get a waiver when you need it, there's no incentive to increase education spending," Parran said.
"The 2010 budget is already out of balance," Sanderson said, noting a $700 million projected shortfall, and the same budget-cutting issues from the last General Assembly will be circulating in January for the fiscal 2011 budget.
In addition, although federal stimulus money is helping close some gaps, it also means those areas can't be cut because that would negate the federal intent - to help the economy recover, he said.
Local governments are worried about potential state moves either to take away revenues or to cut programs like health and community colleges.
"You can continue to cut us, but we have to start thinking about education," Parran said.
Kelly S. Derthick of Edgewater is the latest addition to County Executive Ken Ulman's staff. The 42-year-old deputy chief of staff is an old colleague of Ulman's from his days in the late 1990s working for then-Gov. Parris N. Glendening. Derthick started in June, filling a vacancy created when Jessica Feldmark moved up to chief of staff for Ulman, filling the vacancy created when Aaron Greenfield resigned.
Derthick was a special assistant and protocol chief for Glendening for five years while Ulman worked in several administration posts.
"Ken asked me to come on board," Derthick said. "There was a need here with the county executive, to run the day-to-day operations" she said, including his scheduling, which is similar to her job for Glendening. She'll be earning $89,600, she said.
The Buffalo, N.Y., native spent the past eight years working at several posts at BWI-Thurgood Marshall Airport, most recently as director of customer service.
Dario J. Broccolino, Howard County's state's attorney, was elected first vice president of the Maryland State's Attorneys' Association and is legislative chairman for the group, which represents all 24 of the state's chief prosecutors. That will give Broccolino a more prominent role in the January General Assembly session, raising his profile before next year's election.
Broccolino is planning to run for election in 2010 for a full term in office. He was appointed to the job to replace Timothy McCrone, who became a judge.
On the education front, and despite the recession's pressure on Howard Community College's budget, the school is the only one in Maryland chosen for the Chronicle of Higher Education's Honor Roll as a great place to work out of 247 colleges surveyed earlier this year. The evaluation process measures pay and benefits, but also staff relations with administration and confidence in leadership among 15 categories.