MACo Position on Pension Shift Proposal

Following the events of recent weeks, and some uncertainty regarding MACo’s position on potential shifting of pension costs onto local employers or county governments, the MACo Board of Directors has adopted a statement on the topic:

The Maryland Association of Counties, representing county elected officials throughout Maryland, has consistently opposed any proposal to shift the funding obligation for teacher pensions from the State to county governments. Public education is an essential function of the State, under the Maryland Constitution. Counties are already suffering from a weak economy and deep State cutbacks, and a shift in pension funding responsibilities could overwhelm the counties’ already desperate budget situations.

The 2010 Senate plan would shift the costs of these pensions until half the costs of their retirement were borne by the local employers – the Boards of Education, Community Colleges, and Libraries. The Senate plan, however, does not consider any change to the management or oversight of the State pension system, its benefits, its funding policies, or the contributions required of current or future employees.

MACo believes that if any shift in pension funding is to be considered, it should not be dealt with in isolation, but as part of a balanced and comprehensive study of the overall structure and sustainability of the system. This should incorporate county input into both the study and any ensuing policy proposals and debate. Simply shifting the pension costs without consideration of the full range of policy and budgetary implications could be disastrous for counties, and ignoring the long-term effects of the current overall system could be disastrous for the State. Hence, MACo agrees with public statements offered by those rejecting this Senate proposal and suggesting a more comprehensive approach.

Michael Sanderson

Executive Director Maryland Association of Counties

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