In today’s Washington Post, a local editorial detailed the Maryland debate over employee benefits, and specifically commented on the recently proposed shift of teacher pension costs to local school boards. Disappointingly, the Post repeated an important error in discussing this issue. During the last session of the Maryland General Assembly, when such a funding shift was being heavily debated, the Post weighed in on this exact topic with a very strongly worded view of the underlying problem with pension funding:
More to the point, an arrangement whereby counties negotiate retirement benefits and then hand the bill to the state constitutes an incentive for irresponsibility. If the counties have no skin in the game, why should they be stingy with taxpayers’ money? Unsurprisingly, few states have a similar arrangement.
Strong words. They clearly help to underscore the Post‘s agenda. However, they dramatically misrepresent the facts. MACo contacted the Post following this item’s publication, and the Post agreed to rewrite that section of its article, with a note of correction. (Details of this exchange were posted on this blog site in April) The fact of the matter is that the “retirement benefits” — such as the multiplier used to calculate defined benefit levels for retirees — are established in state law by the General Assembly, not by any actor at the local level. The suggestion that local school boards (who do, unlike county governments, actually negotiate salaries with teacher unions) “have no skin the game” is an absurd conclusion when the school board budgets picks up the entire cost of salaries, social security payments, health insurance and all other benefits.
Today, the Post repeats its error. In a local editorial on “Pension Tension,” the Post essentially revisits this same factually incorrect assertion:
Most controversially, perhaps, the commission called for a major change to the state’s unusual system whereby counties set the level of teacher pensions but the state funds them, to the tune of more than $900 million per year and rising. This creates an obvious perverse incentive for local governments to promise more than they could deliver themselves.
Again, compelling. Again, strongly supporting the Post’s agenda. And again, simply incorrect. No county or school board decision maker has any input into the “level of teacher pensions” — the determination and calculation of these benefits is entirely a state function, as was the 2006 decision to enhance them. Once again, this so-called “perverse incentive” is anything but. Decisions to hire teachers or to increase their pay trigger far more cost consequences for the school budget than for the state’s pension system.
The State’s decision on this looming issue has massive and important consequences on its schools, local governments, and taxpayers. The State’s policymakers deserve to be guided by reasoned and informed debate on such an important subject. Today, even after admitting earlier mistakes, the Post has missed the mark once again in this important obligation.
