A panel of MACo officials, President Ingrid Turner, Past President Ken Ulman, Queen Anne’s County Commission President Steve Arentz, and Legislative Director Andrea Mansfield, testified before the Senate Budget and Taxation Committee on January 24 to discuss MACo’s 2012 Session Priorities.  The panel discussed county finances, the teacher pension shift, school accountability and maintenance of effort, and highway user revenues.

Following is an excerpt from MACo’s testimony on the teacher pension shift.

Even the Administration’s own materials acknowledge that only “year one” is the offset target for the bill’s other fiscal components.  After FY 2013, contribution costs go up, the local offsets go down, and counties will take an even bigger hit, leaving many counties seeking local tax increases even in the most optimistic of scenarios.

Further, many components of this offset will take extensive discussion and compromise during the Session.  There has already been much discussion about the capping of income tax deductions and the phasing-out of exemptions for high income earners; and counties cannot build a budget on the closing of a transfer tax loophole when these types of transactions vary from one year to the next.  Further, some of the mitigation effort relieves burdens on school boards, rather than the counties who receive the new shifted pension burden.

Members of the panel also commented on the Administration’s claim that a “sharing of retirement costs will incentivize locals to consider the impact of salary decisions on retirement benefits.

County governments have no control over the setting of teacher salaries, and do not even have a seat at the table to negotiate benefits and terms. This responsibility lies solely with the boards of education.  Shifting retirement costs to the county does not provide an incentive for boards of education to hold the line on salaries, any more than current law requires school budget proposals to reflect any fiscal consideration or balance.  School boards are free to negotiate and propose any budget they deem suitable, and the county is to work within the narrow confines of the state’s funding requirements and its own other service needs to arrive at a balanced budget.