MD Lawmakers Approve Cost Shift of Teacher Pensions

March 24, 2010 ( - The Maryland Senate has given preliminary approval to a proposal for balancing future state budgets by shifting hundreds of millions of dollars in teacher pension payments to local governments.

The Baltimore Sun reports that the new system would require local governments to contribute an added $63 million in the first year. Within two years, their payments would rise to $337 million.      

The shift would occur in the fiscal year that starts in July 2011.       

According to the Baltimore Sun, proponents say the move is fiscally responsible, but critics contend that it marks a disturbing new era in which state education funding is threatened.      

The news report said the state this year owes $900 million in teacher pension payments, and that is expected to grow to $1.2 billion in the coming years. About a quarter of the amount is now funded with federal stimulus money, which will not be available next year.

Although the Senate approved the shift, the entire budget is pending approval in the Senate and changes could still occur.

The proposal has been on the table for years (see MD Local Governments Fret over Possible Pension Cost Shift).