State Budget Provides $100m Hedge Via Pension Funding

As reported in the Baltimore Post-Examiner, the $37 billion budget passed by the General Assembly this session included a provision to hold back $100 million from the pension fund.  The funds from additional salary contributions from state employees and teachers passed were intended to pay down the pension’s unfunded liabilities, but will now be held in case they are needed for revenue shortfalls due to sequestration.  As described by the Post-Examiner,

The cut reduced the use of additional salary contributions from state employees and teachers passed in 2011 [from$300 million] to $200 million, and the $100 million will be set aside in a “dedicated purpose account” to be used if revenues fall.

Some Delegates objected to the provision, which originated in an amendment from the Senate Budget and Tax Committee, and as reported previously on Conduit Street, was the main difference between the Senate and House versions.  As quoted by the Baltimore Post-Examiner, Delegate Susan Krebs of Carroll County stated,

“The pension underfunding is still a huge burden over our head.”

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