History of Teacher Pension Debate

With the anticipation of a teacher pension shift being included as part of the Governor’s FY 2013 budget plan, MACo has prepared a historical overview of this ongoing debate.

2009 Session

  • Senate President  Mike Miller introduces SB 710 which would freeze the State’s total employer contribution at the FY 2010 level with each local jurisdiction picking up the costs over that amount each year thereafter.
  • According to the fiscal note, county expenditures would have increased by $100 million in FY 2011, increasing to $452.7 million in FY 2014.

2010 Session

  • Senate President Mike Miller reintroduces his legislation, SB 959, however an alternate proposal makes its way into the Senate budget recommendations through SB 141 (third reading), Budget Reconciliation and Financing Act of 2010.
  • The Senate proposal for the “State and Local Sharing of Education Retirement Costs” would have required the State and local jurisdictions to share the retirement costs for local education employees on a 50/50 basis, including social security and pension contributions.  Overviewbelow:
    • In FY 2012 local boards of education would have increased their contribution for combined retirement costs by 1%, phasing up to 5% in FY 2014 and 2015
    • For years after FY 2015, the amount of funding responsibility borne by the counties would be that required to make the state-county split 50/50
    • County expenditures would have increased in FY 2012 by $63.4 million, increasing to $337.5 in FY 2015
    • During the phase-in period, if a county did not meet MOE and did not receive a waiver, the county would have been required to provide the amount by which it did not meet MOE to the school board or be billed by the Comptroller for payment
    • click here for the full senate vote on this proposal
  • The Senate proposal for a 50/50 shift of total teacher retirement costs met opposition in the House of Delegates and instead a compromise was reached, the appointment of the Public Employees’ and Retirees’ Benefit Sustainability Commission.
  • Senate Republicans also proposed a 50/50 split of local retirement contributions which would have started immediately.

Public Employees’ and Retirees’ Benefit Sustainability Commission

  • Commission began meeting in September 2010 to study and make recommendations with respect to all aspects of State funded benefits and pensions provided to State and public education employees and retirees in the State.
  • In both its 2010 Interim Report and its Final Report, the Commission recommended a 50/50 split of retirement  and social security costs between the State and local governments.
  • It was also recommended that this shift be wealth equalized, meaning that the wealthy jurisdictions would receive less State aid per pupil and the less wealthy jurisdictions would receive more.

2011 Session

  • Department of Legislative Services (DLS) included a pension shift recommendation as part of its Maryland State Department of Education Aid to Education budget analysis – House and Senate Budget Committees reject DLS recommendation.
  • Senate President Mike Miller introduces SB 628 which would have implemented the recommendations of the Public Employees’ and Retirees’ Benefit Sustainability Commission – bill is not voted on in Senate Budget and Taxation Committee.

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