Montgomery County faces a $41 million burden in the coming fiscal year and even more the following year as a result of Maryland Gov. Martin O'Malley's plan to shift half the skyrocketing cost of teacher pensions onto local jurisdictions.
Montgomery would be on the hook for more than any other county because of the large size of its school system and the high salaries it pays to teachers. Neighboring Prince George's County would come in second, paying $27.4 million for teacher pensions in fiscal 2013.
| How the teacher pensions would be divvied up | ||
| Region | Extra tax revenue* | Extra cost for pensions |
| Anne Arundel | $10,287,321 | $17,695,439 |
| Baltimore City | $4,013,327 | $15,883,936 |
| Baltimore County | $12,933,534 | $23,786,566 |
| Frederick County | $4,641,068 | $9,185,601 |
| Howard County | $10,694,124 | $16,229,349 |
| Montgomery County | $37,233,303 | $41,189,859 |
| Prince George's County | $11,669,340 | $27,438,652 |
| Total for Maryland counties | $110,742,603 | $202,217,194 |
| *This includes the last two quarters of fiscal 2012 and all of fiscal 2013. | ||
| Source: MARYLAND GOVERNORS OFFICE | ||
To make the plan -- which must be approved by the General Assembly -- more palatable to Montgomery and other counties, O'Malley proposes some sweeteners, such as the state picking up half the tab of teachers' Social Security, which counties currently fund, and some revenue-generating techniques to help the counties pay their share.
But the revenue that would be raised is less than O'Malley's office claims, Montgomery County officials said Monday.
The largest amount of revenue -- $110.7 million statewide -- would come from changes to the state income tax that would reduce the amount of tax deductions and exemptions residents earning more than $100,000 can receive.
Montgomery County's share would total about $37.2 million in fiscal 2013, according to state data.
However, O'Malley's office has calculated that $110.7 million based on 18 months worth of revenue by retroactively incorporating revenues from the last six months of fiscal 2012, according to Melanie Wenger, director of the Montgomery County Office of Intergovernmental Relations.
The result is that in fiscal 2014, which starts July 1, 2013, the $110.7 million would shrink to about $73.8 million, and Montgomery County's portion of the revenue would plunge to $24.8 million under current estimates.
A spokesman for O'Malley did not return calls for comment.
Pension costs are expected to rise at a much faster rate than Social Security, which has some local officials dreading the years to come. The tab for Social Security is expected to be about $100 million in fiscal 2013, while teacher pensions are estimated to run about $180 million.
"We know it's going to be a cost that in the next five, six years probably is going to double," said Thomas Himler, Prince George's County deputy chief administrative officer for Budget, Finance and Administration. "We have our own problems even without the retirement shift."
The shortfall results from years of putting money into the state's general fund rather than teacher pensions, said Montgomery County Council President Roger Berliner, D-Bethesda.
Although the state would foot half the bill for teacher pensions, only 26 percent of the state's contribution in fiscal 2013 would go toward current pension costs, according to the Montgomery County Office of Legislative Oversight. The other 74 percent would help fill the $11.4 billion shortfall in the state's unfunded pension obligation.
