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State Senate Panel Trims Pension Shift, but Still Hits Cecil County for $1.2 Million in 2013 Budget

March 12, 2012
By Nancy Schwerzler

ANALYSIS

The state Senate is expected to vote this week on a revised proposal, approved by a Senate committee late last week, that would ease the devastating blow to county budgets proposed by Gov. Martin O’Malley to shift half of teacher, community college and library staff pension costs to the counties. But the bill would still hit Cecil County’s budget—and taxpayers—hard.

Never underestimate the ability, and desire, of state lawmakers to make their own political decision-making process easier and dump the tough decisions onto someone else. But at least the latest proposal gives counties a bit of breathing room before slamming them big-time in subsequent budget years.

According to an analysis by the Maryland Association of Counties (MACO), the pending Senate legislation would shift $1,229,909 to Cecil County taxpayers in the Fiscal 2013 budget that Cecil County Commissioners have just begun to develop. The county budget must be adopted by late May and would go into effect on 7/1/12.

In contrast, the governor’s original proposal would have cost Cecil County $4.3 million in Fiscal 2013, according to MACO and their coalition, dubbed “Stop the Shift,” that includes many county governments, teachers’ groups and community organizations around the state. Those groups lobbied hard and long to kill the pension shift, but at least so far, the Senate bill that still dumps costs onto the counties is the best they have come up with.

The initial tab of the Senate bill would rise exponentially in subsequent years, according to the MACO analysis. For Cecil County, taxpayers would have to absorb new costs of nearly $2.4 million in Fiscal 2014; $3.5 million in Fiscal 2015; and nearly $4.6 million in Fiscal 2016—for a total of about $11.7 million over a four-year period. (However, the Senate proposal would exclude pension shifts for community college and county library staff, according to the committee working document on the bill.)

Statewide, the original O’Malley pension shift would have cost the counties a total of about $240 million in the upcoming Fiscal 2013 budget, but the Senate committee proposal would scale that back to $68.3 million, according to MACO’s analysis.

The governor and the legislative leadership in Annapolis were not into pension cost dumping before state Sen. E.J. Pipkin (R-36), of Elkton, and a Republican colleague developed a budget counter-proposal two years ago that featured dumping teacher and related pension costs onto the counties as its centerpiece.

Then, Pipkin and his local acolyte, Del. Michael Smigiel (R-36), last year sponsored legislation—that went nowhere—to dump some pension costs on the counties, including $14.1 million onto Cecil County over four years, according to state non-partisan legislative analysts. That pension cost dump would have been considerably higher than the $11.7 million cost shift to Cecil County proposed by the new state Senate bill this year.

When Pipkin/Smigiel were proposing dumping teacher pension costs onto the counties, it was touted as a ‘fiscal responsibility’ move. But now that O’Malley has embraced the idea, suddenly it is a “war on rural Maryland” move, according to the recent political campaign mantra of the Smipkins.

It will be interesting to see how the Cecil County delegation votes in the next few days on the more limited Senate bill that would still dump a significant burden on the county’s budget and taxpayers. If approved by the Senate, that bill will be the template for action in the House of Delegates in the next few weeks.

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One Response to State Senate Panel Trims Pension Shift, but Still Hits Cecil County for $1.2 Million in 2013 Budget

  1. Ronald Demmler on March 13, 2012 at 11:44 am

    All the state legislation is doing now is similar to bait and switch.
    When everybody gets used to the lower figure, the state will increase the amount, and when you’re used to that amount, will increase some more.
    Other states have used this tactic on sales tax increases. Instead of increasing the full amount of wanted tax at once, increased a penny at a time. That way it didn’t look like such a large increase. Don’t be fooled. We will be hit with the full amount in a few years.

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