State Senate approves teacher pension shift

Counties would be asked to pay more beginning in 2011

March 23, 2010|by Annie Linskey | Baltimore Sun reporter

The Maryland Senate gave preliminary approval Tuesday night to a plan that balances future state budgets by shifting hundreds of millions of dollars in teacher pension payments to local governments.

The shift won't begin until the fiscal year that begins July 2011. Proponents say the move is fiscally responsible, but critics said it marked a disturbing new era where state education funding is threatened.

"This is a sad day," said Sen. Paul G. Pinsky, a Prince George's County Democrat. He said the Senate vote marked the "erosion" of a landmark 2002 education funding formula that infused the state's public schools with hundreds of millions of dollars. "The counties are going to have additional pressure," he said.

The pension shift was one of a series of votes the Senate took on a package of $120 million worth of cuts made to Gov. Martin O'Malley's budget by a Senate spending panel. The cuts were adopted by a Senate committee last week, and the 47-member Senate was endorsing them Tuesday.

The new pension plan would require local governments to contribute an additional $63 million in the budget fiscal year 2012. Within two year they their payments would rise to $337 million.

Supporters said that the state's fiscal forecasts predict shortfalls between revenues and expenses for years in the future, a trend that Wall Street firms that play a role in setting the interest on Maryland's debt dislike.

"The state is under a lot of stress," said Sen. Richard S. Madaleno Jr., a Montgomery County Democrat who supported the pension shift in the budget committee.

The state this year owes $900 million in teach pension payments, and that is expected to grow to $1.2 billion in the coming years. About a quarter of the amount is now funded with federal stimulus money, which will not be available next year.

The Senate voted 28-19 to approve the cpension hange, but the entire budget is still pending approval in the Senate and changes could still occur. House of Delegates approval would come next.

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