Maryland Senate Passes Teacher Pension Shift Plan

March 16, 2012 ( – Maryland’s Senate passed legislation shifting teacher pension costs from the state to local government. 

According to The Baltimore Sun, the Maryland Senate recommended a gradual four-year pension plan shift. Gov. Martin O’Malley originally proposed for an immediate shift of the $239 million teacher pensions from the state to counties.

The state currently pays all the pension funds for Maryland public school teachers. Gov. O’Malley proposed a 50/50 cost split between the state and local governments for teacher pensions, which would start in 2012 (see “Maryland Considering Shift in Teacher Pension Costs to Counties”).

The Senate plan phases the pension shift over a four-year period, and also provides ways for counties to alleviate the impacts, reports The Baltimore Sun.

The plan would allow counties to pay for the pension shift by using a combination of new taxes, reallocated funds and an elimination of certain payments owed by counties to the state. Additionally, the state will also eliminate the payment plan for the Local Income Tax Reserve, a loan that counties received to help pay for various unexpected tax refunds two years ago.

The article states that some local jurisdictions, such as Baltimore, Prince George’s County and Wicomico County, will also be able to offset pension costs with state funding from the Maryland Disparity Grant, which is determined by the amount of money a county can generate through income tax revenue.