Posts Tagged 'State Teachers Pension'



O’Malley’s proposed budget to include shift of teacher pension costs to counties

On Wednesday, January 18th, O’Malley will release his FY 2013 budget. It is believed that the proposal will include a $240 million shift of teacher pension costs, including that of public librarians, to the counties and Baltimore City. Currently the state pays $955 million per year in teacher pension costs.

For more information, please see the Baltimore Sun article.

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Public libraries exempted from Pension administrative fee

In late March, the Maryland House of Delegates voted within a matter of hours to charge local governments an annual administrative fee of $162.77 for each person enrolled in the State Teachers’ Pension.  This fee would have added an additional $2 million in expenses to public libraries statewide, and no funding was restored in order to offset the expense.

Public library administrators rallied to show the Senate how this significant financial burden would negatively impact public libraries.  Their efforts were successful and the Senate voted to exempt public libraries from this administrative fee.

Fortunately, in Conference Committee the Senate prevailed.  Public libraries will be exempt from this administrative fee.

Pension changes coming in FY 2012

The State Teachers Pension has been a topic of budget discussions throughout this session of the General Assembly.  In addition to O’Malley’s proposed changes, many bills were introduced to make additional changes to the pension plan.  However, none of the bills made any progress beyond public hearings.

The House and Senate have passed the Budget Reconciliation and Finance Act (BRFA), including an employee contribution increase to 7% while maintaining the 1.8% benefit multiplier at retirement.  New employees will automatically contribute 7% and have a 1.5% benefit multiplier.  These changes will go into effect on July 1st.

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

On Friday, January 21st, 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:

Benefit Sustainability Commission’s complete recommendations available

The complete recommendations of the Benefit Sustainability Commission have been posted on the General Assembly’s web site.  The recommendations are in the form of a letter to Governor O’Malley, Senate President Mike Miller and House Speaker Michael Busch.

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.)


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