The state is looking to gut pensions

December 01, 2010

Maryland's Public Employees' and Retirees' Benefit Sustainability Commission has been quietly painting a picture of deep the cuts coming for state employees. After sitting through all of the commission's public hearings I was wrongly lulled into the belief that they were established to find long-term solutions to the underfunding of Maryland's pension and heath care systems. However, it has become clear that the commission has been put in place to justify deep, quick cuts to balance the budget and to immediately protect Maryland's bond rating

Hours of testimony revealed that the pension and health care systems have rarely been funded in a prudent way. Creative financial tools were employed to hide the real extent of the gaping underfunded pension/ health care liability that grew over the years. And that, thanks to new, nationally, developed accounting, Maryland is now pushed to reform if it wants to maintain its AAA bond rating.

Unfortunately, the most important piece of information we learned is that Maryland faces a $1.6 billion to $1.8 billion deficit next year.

During the last commission meeting, the chairman laid all the cards on the table, saying that the governor and legislature are looking to the commission for $400 million to half a billion dollars in immediate cuts. I am left with the undeniable impression that the commission's work is actually to find short-term solutions —drastic and immediate cuts — and not to responsibly address the long-term, structural pension and health care funding problem.

The major cost cutting options available for the commission are boiling down to two separate choices: dramatically cutting benefits to the state employee workforce or substantially axing benefits that Maryland pays to the counties and Baltimore City for their teachers' pensions and retiree health benefits. No other state pays for those local benefits.

Instead of spreading out the pain across the table, the state will cruelly pit its state workers against its local teachers. One commissioner in particular, state Treasurer Nancy K. Kopp, summed up this upcoming infighting, saying that in her 40 years in the legislature, she has never seen lawmakers go up against the counties' wishes. Finally, she directed an admonishment to the state union representatives in the audience to sound the alarm to protect their interests.

In short, state workers need to wake up.

Jim Hagerty, Westminster

The writer is a retired state worker.

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