MACo Encourages State Support for Teacher Pension Cost Overages

MACo Policy Associate, Kevin Kinnally, testified in support of legislation (HB 1109 and SB 1001)which addresses the shortfall in funding required to meet the portion of Maryland state teacher pension costs that exceed costs anticipated during the 2012 “pension shift”.

MACo’s testimony states,

The actual normal costs of teacher pensions in fiscal year 2017 are approximately $19.7 million more than the amount that local school boards were estimated to provide in legislation passed by the General Assembly in 2012.

The additional funding required in fiscal year 2017 is mainly attributable to changes outside of the control of local school boards. At the same time, absorbing this additional cost in fiscal year 2017 could put pressure on school board budgets, and county governments who provide much of their funding. The General Assembly’s effort to provide this funding during the 2016 Session did not resolve the shortfall, thus the need for HB 1109.

The BRFA of 2012 shifted the employer “normal costs” of teacher pensions from the State to county governments. Phased-in over four years, the total final amount that counties now pay toward teacher pensions is $216,530,425. Beginning in fiscal year 2017, this funding has been embedded into county education maintenance of effort appropriations, and as such may never be reduced.

HB 1109 was heard by the House Appropriations Committee on March 7, 2017. SB 1001 was heard by the Senate Budget and Taxation Committee on March 9, 2017.

Follow MACo’s advocacy efforts during the 2017 Legislative Session here.