Mayor insists pension shift must take wealth into account

January 27, 2012|By Michael Dresser, The Baltimore Sun

MayorStephanie Rawlings-Blaketold Baltimore lawmakers Friday morning that any shift of the state's teacher pension costs to local governments must take into account the relative wealth of the jurisdiction -- saying the failure to do so is her "biggest disappointment" with Gov.Martin O'Malley's plan for a 50-50 split.

The mayor said she would prefer not to see any shift of pension costs from the state, which now pays 100 percent of the tab, to the 23 counties and Baltimore. However, she said she understood that the state faces its own budget challenges and that the change has been coming a long time.

While the governor's proposal would help the city absorb the new costs by providing a so-called disparity grant next year, Rawlings-Blake insisted that over the long term the proposal needs to be "wealth-equalized" -- or adjusted to take into account which jurisdictions are relatively affluent and which are not.

The mayor said that would follow the pattern used in the Thornton Commission plan instituted for distributing state aid to K-12 education a decade ago.

"We're not giving up on this," she told the city's House delegation. "It would be fair and just if from the beginning it was wealth-equalized."

Bebe Verdery, director of the American Civil Liberties Union's education reform project, said the current plan could cost the city an extra $22 million a year. With wealth equalization, she said, the bill for the city would be closer to $5 million,

Verdery said such a change -- under which the city and other poorer jurisdictions would pay less than 50 percent -- would not necessarily mean shifting costs to wealthier jurisdictions. What it would likely mean, Verdery said, is that the governor would have to settle for a savings to the state of $200-$210 million a year  rather than the $239 million he is projecting from the pension shift.

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