Teacher pension cost shifts would cost Washington County $2.5 million

Gov. Martin O'Malley's plan to shift teacher pension costs to local jurisdictions is expected to cost Washington County about $2.5 million, according to budget figures released Wednesday.

O'Malley said the state is offering other "fiscal relief" measures that are projected, statewide, to offset the pension costs.

But some counties fare much better than others under the plan.

Washington County would take the second-largest hit in the shift, after Baltimore County, which would have a net loss of about $2.9 million, according to a budget worksheet.

At the other end of the spectrum, Montgomery County would come out about $18.1 million ahead, the worksheet shows.

Senate President Thomas V. Mike Miller, D-Calvert/Prince George's, has said in recent years that the state, which covers 100 percent of teacher pension costs, needs to start sharing that burden with local jurisdictions.

O'Malley has proposed having the counties and the state split the cost of Social Security payments, which counties make, and pension contributions, which the state pays.

The split would be 50-50, leaving the counties with an estimated new cost of $239 million.

However, the state has also proposed several moves that, combined, would give $244.5 million of "fiscal relief" to local governments, including capping income-tax deductions and reducing exemptions for the state's highest earners.

O'Malley said he has become convinced the counties need to pick up some of the pension burden because they, not the state, negotiate teacher salaries.

"First of all, we'll have to wait to see what's going to be approved," Washington County Commissioners President Terry Baker said in a telephone interview in which he learned of the proposed $2.5 million cost.

"If it's voted on and approved — I can only speak for myself — I'll have to hear from our budget and finance office the recommendations that they're going to make as to how we incorporate that into our education budget," Baker said.

At least an estimated 2,300 Washington County school  employees participate in the teachers pension plan, school system spokesman Richard Wright said.

In addition to school system employees, Washington County Free Library and Hagerstown Community College have employees in the pension program, officials with those organizations said.

About 200 HCC employees participate in the state teachers pension plan, spokeswoman Beth Stull said.

Most of the county library's employees are in that pension program, library spokeswoman Patricia Wishard said.

Before hearing the specifics of the plan, Washington County Commissioner Jeff Cline, who was in Annapolis on Wednesday morning for a Washington County delegation meeting, called the pension shift "troublesome."

"Washington County has been a good steward (with money)," he said. "It seems like we're being punished."

It will be one more demand on the county in a tough economic climate, Cline said.

Sen. George C. Edwards, R-Garrett/Allegany/Washington, said he doesn't oppose a pension shift to the counties, but it should be phased in, so they afford it.

Sen. Christopher B. Shank, R-Washington, agreed that there are merits to having the counties share the cost of pensions, but the question is how best to do it.

"It needs to be a collaborative process between these entities rather than only the state dictating," he said.

Raising taxes to help offset the pension shift is "a total nonstarter," Shank said.

Staff Writer Julie E. Greene contributed to this story

Washington County could get $46.4 million for projects

Washington County would get at least $46.4 million in fiscal 2013 under a proposed $3.6 billion state capital budget, including the following projects:

• $14.5 million for the Winebrenner Wastewater Treatment Plant
• $9.2 million for improvements to the R.C. Willson Water Plant
• $6.1 million for Smithsburg Wastewater Treatment Plant
• $6 million for Conococheague Wastewater Treatment Plant
• $3.6 million for construction of a new Bester Elementary School
• $2.8 million for Ruth Ann Monroe Primary School
• $1.2 million for Hagerstown sewer system improvements
• $800,000 to help pay for a new senior citizen center to be built at Hagerstown Community College.