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Sunday, January 9, 2011

Legislative Session; O'Malley says he won't shift pension costs to counties

This article from The Gazette describes several local bills, including MC 7-11, which would give the SMOB (almost) full voting rights. The next article, from The Washington Post, describes a proposal by the governor that says pension costs will not be shifted to the counties this year.

Montgomery takes modest priorities to General Assembly
By Alan Brody and Sarah Breitenbac

A new four-year term begins next week for state elected officials much the same way the last one ended: with a yawning, long-term budget gap now exacerbated by the end of federal stimulus money.

As a result, Montgomery County legislators are girding for a turbulent 90-day General Assembly session in Annapolis that will leave them shooting for modest but critically important goals, such as protecting funding priorities and staving off a potentially harmful shift in teacher pension costs.

"The last few years, everyone has said, 'This will be the worst year,' " said Sen. Richard S. Madaleno Jr. (D) of Kensington. "I definitely think this will be the worst year, because this is a year when we have to face our structural deficit without the backstop of federal funds."

For Madaleno, a member of the Senate Budget & Taxation Committee, which will wrestle with the state's toughest fiscal issues, that probably means considering cuts to previously untouchable programs, particularly education.

"The hole is huge, and we're really down to the very, very tough decisions, and they're going to hurt," said Sen.-elect Roger Manno (D) of Silver Spring, who moves over from the House after one term and also will serve on Budget & Taxation.

In addition to closing a projected $1.6 billion shortfall for fiscal 2012, Gov. Martin O'Malley (D) and legislators will begin to tackle an even more daunting structural deficit - the long-term imbalance between revenue and expenditures - of almost $2 billion. Unlike in the past three years when Maryland received about $4 billion in federal stimulus aid, state officials aren't expecting help from Washington this year.

They'll also examine options to get a handle on the state's unfunded pension and retiree health-care liabilities, which will total about $33 billion during the next 30 years.

"We just want to make sure that we don't break anything in the process of trying to fix what's [already] broken," said Manno, citing the difficulties caused by deregulating the electric industry in 1999 and the 2002 adoption of the Thornton education plan without a revenue source. "We want to make sure there's a solution that's sustainable."

Lawmakers will probably weigh proposals to increase the levy on alcoholic beverages as a way to fund health-care and developmental disabilities programs, which have sustained deep cuts in recent years. A bill to make permanent higher tax rates on incomes above $1 million, which was passed in 2008 to offset the repeal of the short-lived sales tax on computer services, also will be debated.

O'Malley has said the budget he will submit to lawmakers this month will rely completely on spending cuts and transfers, but he has not ruled out signing into law tax measures approved by the legislature.

Seven new lawmakers will join the 32-member Montgomery County delegation in 2011, and the county is gaining several leadership spots in the House with the elevation of Del. Kathleen M. Dumais (D) of Bethesda to vice chairman of the House Judiciary Committee and the naming of Del. Anne R. Kaiser (D) of Burtonsville as one of two chief deputy majority whips.

Across the hall, Sen. Robert J. Garagiola (D) of Germantown will be the chamber's majority leader, and the county will retain three spots on the influential Budget & Taxation panel.

Montgomery legislators, all of whom are Democrats, said they want to ensure the county is treated fairly when it comes to spending cuts and the allocation of school construction funding, as well as other pots of money. Several local and state officials repeated that theme at a recent legislative breakfast attended by O'Malley and business, civic and political leaders.

Specifically, county lawmakers want to shore up the state's depleted Transportation Trust Fund, which has been hit hard by falling tax revenue and the raiding of transportation funds to help balance the state budget, said Del. Brian J. Feldman (D) of Potomac.

Some legislators are advocating an increase in the gas tax to help pay for road improvements and the development of highway and transit projects.

Officially, the Montgomery school system wants $163 million in state aid for 84 school-construction projects. But county lawmakers will ask for a more realistic $40 million, or 16 percent of the expected $250 million that will be allocated statewide, to build and renovate public schools. About 16 percent of statewide student enrollment is in Montgomery.

Modernization of Carderock Springs Elementary School in Bethesda, an addition to Takoma Park Elementary School and an upgrade to Cabin John Middle School in Potomac are among the top funding priorities.

Budgetary issues aside, lawmakers still are preparing long wish lists for projects in their communities and for policy initiatives that have little or no fiscal impact.

This also could be the year that lawmakers lift the ban on direct wine shipments that the liquor industry has fought for years, primarily because of worries that it would hurt in-state alcohol sales.

"It's not a life-or-death issue, but it's a pretty basic consumer issue," said Del. Tom Hucker (D) of Silver Spring, who was a lead sponsor of the direct wine shipping bill last year. "People don't understand why their choices are limited by special interests, and it's a basic step we can take."

Maryland is one of 13 states that bans residents from purchasing wine directly from out-of-state vineyards and retailers. Comptroller Peter Franchot recently released a report that recommends allowing direct wine shipments for in-state and out-of-state wineries but not for out-of-state retailers. The report recommends limiting people from purchasing more than 12 cases of wine a year.

In lieu of big-ticket items, Sen. Jamie Raskin (D) of Silver Spring plans to focus on extending civil liberties and public safety proposals, such as mandating installation of ignition interlock devices in the vehicles of convicted drunk drivers. That proposal passed the Senate each of the past two years, but it died in the House both times.

"It's a common-sense measure that will save dozens of people's lives every year," he said. "It costs us nothing, and it will save incredible pain and hardship for Maryland families."

House Majority Leader Kumar P. Barve said he expects Montgomery lawmakers will probably press for stricter regulation of energy companies.

Legislation that would apply to all utilities, but that specifically targets Pepco, the electricity provider that left tens of thousands of Montgomery customers without power during storms in 2010, is still in the works, he said.

"Since Pepco is the one that's falling down on the job, it would probably have the (most) effect on them more than anyone else," said Barve (D) of Gaithersburg.

Local bills that will probably receive consideration during the session include a proposal to extend additional voting rights to the student member of the county school board and several alcoholic beverage proposals, including one that would allow diners to bring their own bottles into eateries and let restaurateurs establish a corking fee.

Gazette staff writer Andrew Ujifusa contributed to this report.


O'Malley says he won't propose shifting teacher pension costs to counties
By John Wagner

CAMBRIDGE, MD. - Maryland Gov. Martin O'Malley (D) assured a gathering of county leaders here Thursday that he will not propose making local jurisdictions shoulder a portion of teacher pension costs in the coming year.

The issue of which level of government picks up educator retirement expenses is certain to be among the most thorny when the General Assembly reconvenes in Annapolis next week for its annual 90-day session.
With the state facing a budget shortfall of about $1.3 billion next year, many lawmakers are pushing to change the long-standing arrangement in Maryland under which the state covers the entire cost of local educators' pensions.

"While other elected leaders may well offer other approaches, the balanced budget proposal I submit to the General Assembly later this month will not propose pension costs this year onto the counties," O'Malley said, drawing a standing ovation at a dinner that was part of the winter conference of the Maryland Association of Counties.

In his remarks, O'Malley cautioned that his budget proposal will contain many painful cuts and that other reforms to the pension systems for state workers and teachers will be needed to make them sustainable for the long term.

"The only thing I can guarantee you about this budget is that no one will be happy," O'Malley said.
The governor's budget advisers had recommended he consider shifting 40 percent of teacher pension costs to the counties - a move with the potential to save the state more than $340 million a year. But such a move would also exacerbate budget problems on the local level.

Under options presented by O'Malley's advisers, such a shift would cost Montgomery County as much as $96 million a year and Prince George's County $50 million a year.

The state Senate advanced a similar proposal last year, but leaders of the House of Delegates balked at the idea. A state commission has since endorsed a move in that direction, increasing momentum for a shift in costs heading into the legislative session.

Leaders of both the House and Senate are scheduled to address the gathering of county officials Friday morning.

County leaders expressed relief upon hearing O'Malley's pledge not to shift teacher pension costs.

"He appreciates the tough times we've been under," said Howard County Executive Ken Ulman (D), the new president of the county organization. "Having a governor who comes out of local government is very important."

Ulman acknowledged that O'Malley's support was only part of the battle ahead in the legislative session.

"There's going to have to continue to be some education and dialogue with the General Assembly," Ulman said. "Shifting is not solving the challenge."

O'Malley mentioned several "principles" he would advance in reforming the pension system.

Those, he said, include maintaining a public system, asking for greater contributions from state workers and teachers, and establishing certain "milestones" to determine the need for additional changes.

"If is my belief that we cannot have an honest conversation about sharing costs, or even the need to share costs, until we reach agreement on how we can fix the pension system," O'Malley said.

The issue of shifting pension costs is one that does not break cleanly among partisan lines. The leading advocate in the legislature has been Senate President Thomas V. Mike Miller Jr. (D-Calvert).

On Thursday night, House Minority Leader Anthony J. O'Donnell (R-Calvert) praised O'Malley's position.

"It's a rare occasion when I happen to be in agreement with the governor," O'Donnell said, suggesting a shift in the coming year would force local governments to raise taxes.

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