County officials testified today before the Senate Budget and Taxation Committee on the Budget Reconciliation and Financing Act in opposition to the teacher pension shift and raised concerns with the proposals to “mitigate” the effects on the counties. From MACo’s written testimony:
Counties disagree that shifting funding responsibility does anything to improve the sustainability of state pension funding, it simply relocates these cost burdens – away from the level of government that has complete control over benefit levels and investment decisions; and has deliberately guided policy toward wage increases, and toward the level of government that has played the far lesser role in these cost changes. Counties also differ with 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.
MACo made the following comments with respect to the pension offsets:
A series of actions have been proposed in the Governor’s budget to “mitigate” some portion of the pension costs newly shifted onto local governments. However, these are only for one year after which county costs will escalate by nearly $70 million immediately in FY 2014, and rise in each subsequent year thereafter, reaching over $358 million by the end of the projection, FY 2017.
MACo also questions whether the offsets will generate the estimated amount of revenue or whether it’s going to the counties at all.
MACo and county elected officials will also testify on the same issues tomorrow before the House Appropriations and Ways and Means Committees.