Governor releases FY 12 state budget – Public libraries flat funded; Some changes to pension

On Friday, January 21^st, Governor O’Malley released the Maryland state budget proposal.  Two areas are of most interest to libraries:

Library Funding

It appears that public libraries, the State Library Resource Center (SLRC) and the Regional libraries have all been flat funded, with only the formula causing a small change.

Pensions

The Governor is proposing retaining the existing defined benefits system.  However, the proposal includes a one-time choice for current employees to a) continue to contribute 5% with a 1.5% benefit multiplier (reduced from 1.8%) or b) increase their contribution to 7% and continue to earn benefits with a 1.8% multiplier.  New employees will automatically contribute 7% and receive a 1.5% benefit multiplier.  More information about the pension system and other benefits is available on the Governor’s web site. 

Budget Announcement

To view the proposed budget, Powerpoint presentations, budget highlights, video of the announcement and more, visit the budget announcement on the Governor’s web site.  The budget proposal has now been turned over to the General Assembly.

Elected officials forecast budget challenges and possible solutions

At the Maryland Association of Counties (MACO) Conference, Governor O’Malley, Senate President Mike Miller and House Speaker Michael Busch are talking with local elected officials about the challenges facing them as they wrestle with the state budget and a projected $1.6 billion shortfall.

O’Malley has promised not to pass along any teacher pension costs this year, adding that the pension system must be changed first.  However, the General Assembly could still decide to shift some of the costs.  Miller and Busch also warned that the budget will very likely include a reduction in local aid.  Local officials are concerned with the impact and that tax payers will suffer.  For more information, check out the following articles:

• Baltimore Sun blog posting – O’Malley promises not to shift teacher pensions
• Baltimore Sun article – Local officials to make their case to the state
• Gazette article – Assembly faces puzzling predicament

Pension Costs by County

The Department of Legislative Services developed a presentation on costs for the Benefit Sustainability Commission.  On page 51, the presentation indicates the different pension shifts proposed and the breakdown by county for libraries, community colleges and schools.

The Washington Post recently ran an article discussing the difficult budget decisions that Governor O’Malley would be facing, including the possibility of shifting the pension costs to the counties.  (You may need to set up a free login to access the article.)