Montgomery County faces 5-year, $315 million teacher pension tab

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Local,Maryland,Rachel Baye

Montgomery County would be on the hook for $315 million over the next five years if Maryland lawmakers pass Gov. Martin O'Malley's proposal to shift half the cost of teacher pensions onto the counties, state data shows.

The first year's costs alone -- about $47.4 million -- are the equivalent of more than 500 county government jobs, the county estimates.

O'Malley has proposed shifting half of the state's $900 million pension costs to the local jurisdictions next fiscal year to help fill Maryland's $1.1 billion budget hole.

Teacher tab
The cost of teacher pensions under Maryland Gov. Martin O'Malley's plan:
Fiscal 2013$47.4 million
Fiscal 2014$61.1 million
Fiscal 2015$66.1 million 
Fiscal 2016$69.2 million
Fiscal 2017$71.0 million
Five-year total$314.8 million
What $10 million buys
$10 million could cover the following county personnel costs for one year:
89 public safety employees
114 Montgomery County Public School agency employees
109 non-public safety employees
153 "new hire" teachers
Source: Montgomery County Council

With a large public school system and higher teacher salaries than many other counties, Montgomery bears the largest share of the cost. Prince George's County, facing annual costs of over $100 million within the next decade, comes a close second. The neighboring jurisdictions together would face more than a half-billion-dollar tab over the next five years.

Montgomery County lawmakers geared up for a fight as they met Monday on the heels of County Council President Roger Berliner's latest round of meetings in Annapolis.

"They're going to bankrupt the counties, and they don't care," said County Councilman Hans Riemer, D-at large. "They want us to balance their budget for them."

Riemer urged the council to take up a statewide campaign, appealing to stakeholders county by county.

"I don't believe for a second that this is inevitable, or that we're going to lose," he said. "It's just a question of whether we fight hard enough."

The policy change is only fair, said O'Malley spokeswoman Raquel Guillory. Since the counties set teachers' salaries, it makes sense that they should have to share the burden of the pensions, which are calculated based on those salaries.

She pointed to a number of proposals O'Malley made to help offset the costs for the first three years, such as the elimination of some income tax deductions for residents earning more than $100,000 a year that amount to a tax increase at both local and state levels.

But it's possible that the pension shift proposal passes in the state legislature while some of the "carrots" waved in front of state lawmakers to convince them to vote for the proposal don't, leaving local jurisdictions with increased costs, said Councilman Craig Rice, D-Germantown and a former state delegate.

With or without the added incentives, the increased costs to taxpayers would make it more difficult for Montgomery County to compete for businesses and residents with comparable jurisdictions in Virginia, like Arlington and Fairfax counties, warned Berliner, D-Bethesda.

"Maryland is already losing higher-income earning people," said Dee Hodges, president of the Maryland Taxpayers Association. "They're losing more than they're gaining."

rbaye@washingtonexaminer.com

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Rachel Baye

Staff Writer - Education
The Washington Examiner