Gubernatorial Candidates Offer Few Details to Address Pension Unfunded Liability

Baltimore Sun editorial writer Jay Hancock, examines how each candidate would address the huge unfunded liabilities associated with state pensions and other post employment benefits. In a query sent to both gubernatorial candidates on September 16, 2010, Mr. Hancock asked Governor Martin O’Malley and former Governor Bob Ehrlich, to respond as specifically as possible, how they would address this issue. In an October 12  op-ed piece, Mr. Hancock claims both are vague on the details.

In Maryland, neither Gov. Martin O’Malley nor challenger and former Gov. Robert L. Ehrlich Jr. has said much of anything about pensions. Neither has a plan. And the subject — some $25 billion in unfunded pension and retiree health care benefits owed by Maryland taxpayers — didn’t come up in Monday’s debate between the two.

Maryland owes state employees and retirees pension benefits of something like $51 billion but as of 2008 had only $40 billion on hand to pay for it, leaving an $11 billion gap, according to a February report from the Pew Center on the States. And the 2008 measurement came before the stock market tanked.

And Maryland’s fiscal hole for retiree health care is even deeper than it is for pensions — $15 billion. That’s more than the state’s entire general fund budget this year.

So what would O’Malley and Ehrlich do to fix this huge problem — one they helped create?

We have little idea. Several weeks ago I asked both campaigns for pension-reform plans. I took O’Malley at his word when he talked about “fiscal responsibility during difficult times.” If Ehrlich were going to refer to “a mountain of debt” in campaign ads, I figured he would have something to say about fixing the biggest debts of all.

But both candidates responded by stating the obvious and making vague promises.

Fixing the problem “will be a top priority,” said O’Malley spokesman Rick Abbruzzese, who added that it must be done “through a process that involves all stakeholders.” (Translation: The process will include the public-employee unions whose support O’Malley needs.)

Ehrlich reaches out to government workers, too, saying, “We cannot break our obligations to the state employees who have worked in good faith and accrued benefits under the current system,” according to a statement the campaign sent in his name. He’ll engage in “serious discussions with the legislature” and believes that “all sides in this debate should be given equal consideration.”

Ehrlich will introduce bipartisan pension reform to the legislature, he said. For O’Malley’s part, he and legislative leaders just appointed people to the Public Employees and Retirees Benefit Sustainability Commission, Abbruzzese said.

The specific responses of each gubernatorial candidate can be found on Mr. Hancock’s blog.

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