Howard County Executive Opposes Teacher Pension Shift
Moving teacher pensions from state to county budget is "not the right move," said County Executive Ken Ulman.
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By Mike Bock and Lizzy McLellan, CAPITAL NEWS SERVICE
Gov. Martin O'Malley's proposal to shift some teacher pension costs from the state to the county level would save Maryland about $240 million.
The proposed teacher pension shift, which has been discussed for years, comes as O'Malley tries to close a $1.1 billion hole in the state budget.
Howard County Executive Ken Ulman said Tuesday after a meeting in Annapolis between the governor and county leaders that he opposes the shift because counties are "not in any better position to afford it than the state is."
The county will lose a chunk of its revenue stream due to a 12 percent decline in property tax assessments, according to the Howard County Times.
"We're going to work hard to educate legislators on why we think the teacher pension shift is not the right move," Ulman told Capital News reporters.
Senate President Thomas V. Mike Miller Jr. said Tuesday morning that he supports the shift.
"It's a compromise," Miller said. "Not everyone can be happy in these very difficult times."
Potential changes to teacher pension funds were included in the final report of the Public Employees and Retirees' Benefit Sustainability Commission last July. The report recommended that "teacher retirement costs should be shared with local boards of education so that the State provides 50 percent of the combined cost of Social Security and pensions for teachers."
Michael Sanderson, executive director of the Maryland Association of Counties, said that while this proposal signals "a difficult year ahead" for the counties, the governor also discussed "elements of the plans designed to keep it from being as painful as it might have been."
The change would be phased in, according to the state's report, a point echoed by Howard County's Budget Administrator Ray Wacks.
"I don’t think anyone is saying it will happen all at once," said Wacks at January's monthly meeting of the County Council, responding to questions about the potential pension shift.
He said that he would be encouraging "status quo" and "hold-the-line budgets" in the meantime.
"We’re going to watch and see," Wacks said.
JB
7:59 am on Monday, January 23, 2012
How about we focus on the real issue here, which overly generous pension plans for PUBLIC employees are bankrupting the state and that they are ultimately unsustainable. Therefore the state is trying to push this off on the counties and the counties are in no position to fund it either. The only good this does is create the environment where these can ultimately be fought at a local level and therefore disbanded which has happened to in the private sector. What is unsustainable and can't be paid for, will not be paid for... Anyone believing that is not the case is living in a bubble.
Mr. Drew
8:22 am on Monday, January 23, 2012
Ken Ulman has a longstanding practice of handing out benefits that are paid for by others.
He gives out teacher pensions paid for by the state.
He gives CSX an intermodal terminal, which is "paid for" by nearby homeowners as their property values vanish.
He gives developers higher density zoning, which residents "pay for" in the form of overcrowded schools and heavy traffic.
Ohai
8:54 am on Monday, January 23, 2012
I agree with JB, these public pensions are way out of control. I have a question: when public sector unions negotiate these extremely generous benefits, who is negotiating on behalf of the taxpayers? Whoever that is should be paying for these benefits out of their budget.
Polly
11:45 am on Monday, January 23, 2012
I agree wholeheartedly with JB! It's obscene! And has gotten way out of hand. Even in years of surplus EVERYONE should contribute to their own pensions. Most people do. Taxpayers who are unemployed, underemployed, living on limited incomes etc., should NOT have to pick up the tab for these pensions. This is what happens when you have unions. So teachers either take a cut in your pensions or contribute.
CJ23
11:50 am on Monday, January 23, 2012
How about we honor our agreements with people who chose to teach our children and stayed in the career long enough to draw a pension? If there is a shortfall in pensions funds, perhaps the brilliant fund managers who gambled people's funds on mortgage-backed securities should pay for the loss instead of working Americans.
Ohai
12:41 pm on Monday, January 23, 2012
CJ23, I don't think the issue is that the pensions were initially funded but the reserves set aside to pay them were lost in the captial markets. I believe the issue is that promises to pay these penions were made, and no money at all was ever set aside to pay them. You can't blame fund managers for that.
JB
4:14 pm on Monday, January 23, 2012
Ohai,
Great argument where is the taxpayer in this process. They are nowhere, because the unions cans muster an incredible army of voters to vote in politicians that then continually increase their pensions and pay. Unfortunately, rats like Ken Ulman who caters to these groups actually has to pay for this he cries uncle. Ken can make promises that can't be kept, especially when it is not his dime. What until he becomes governor, he is going to be making the exact same argument O'Malley. The bottom line is the quid pro quo works until there is no money left and the overtaxed population has had enough...
CJ23,
While I have some compassion for this argument, you were lied to by politicians both on the right and the left. They promised something that can't be paid for and it is the same for what taxpayers have been promised like social security and medicare. There is no money for this, it is gone, having been spent to keep the sheeple in line.
Grab a helmet and good luck, its coming...
Anne
4:05 pm on Monday, January 23, 2012
Municipalities are going to have to move from defined benefit to defined contribution pension modalities, which during periods of economic downturn,will require the beneficiaries to contribute MORE to their own retirement plans. As it stands now few if any investments can pay the interest rates used as projections on assets, i.e., contributions, which would enable these plans to pay future benefits. Anyone remember "universal life insurance"? In order to pay an annuity @ 65 policy illustrations were @ 8% & 12% - for the life of the policy! If the insurer was only able to earn 4% per year on the internal cash value, the policy zeroed out TOTALLY long before retirement! The policy holder was put in the unenviable position of having to make vastly increased premium payments in order just to keep the death benefit!
JB
4:19 pm on Monday, January 23, 2012
Exactly Anne... Additionally, this ZIRP (zero interest rate policy) by the fed is killing our seniors and those on a fixed income... It used to be if you had a million dollars and could earn a risk free rate of 4% on your money, you could be comfortable in retirement with a social security supplement. Now, you have $1M, and you earn 1% and that means you get $10,000 a year in risk free returns.
Talk about a drop in standard of living! Thanks Ben Bernanke and the cronies in the government on both sides of the aisle who are letting this happen.
Robert R
7:03 am on Wednesday, January 25, 2012
Polly,
It is my understanding that Maryland's teacher DO pay into their own pension system. Are you saying that these teachers vested in this pension plan, many of whom were hired in the 70's when Columbia boomed and are now reaching retirement age, should NOT be given that pension? Let's not argue public vs. private because teachers are not private employees.
Ohai
8:26 am on Wednesday, January 25, 2012
If teachers do contribute, what's the problem? Their contributions should be there for them. Obviously, the issue is that they don't contribute or contribute far too little. And there is a difference between public and private employees. When private employee unions negotiate, management is negotiating on behalf of the stockholders. When public employee unions negotiate, no one at the table has their incentives fairly aligned with that of taxpayers.
Nicholas Aleshin
1:40 pm on Saturday, January 28, 2012
Ulman, O'Malley ... what's the difference?