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O'Malley's Pension Shift Scheme Places Unfair Burden On Local Taxpayers

The General Assembly is currently debating a proposal from Governor O’Malley to shift hundreds of millions of dollars in pension costs from the state to the county governments. 

Counties disagree that this shift will do anything to improve the sustainability of state pension funding. Years ago, Annapolis took the pension away from the counties; broke it by raising benefit levels; and now wants to give it back and force us to pay the bill for their financial frivolity.  County governments do not run the pension system; do not negotiate teacher salaries; and did not create these costs, but the Governor’s budget sends this ticking time bomb to county governments that would simply have to pay the freight without any say in the design of the system or its costs. 

The system assumed an aggressive annual asset growth rate of 7.5%.  This is difficult to sustain, and is one reason why the private sector abandoned defined-benefit plans decades ago, and replaced them with defined-contribution plans such as 401K’s.   

Rather than fix the pension, the governor elected to transfer the problem onto the backs of county citizens. It amounts to nothing less than another unfunded mandate that jeopardizes counties’ solvency throughout Maryland.

In Carroll County alone, the cost for the coming year exceeds $7 million.  The fiscal staff in Annapolis projects this will grow to over $10 Million within three years, or $160 a year per household.  This burden would put massive pressure onto the county’s taxpayers, and onto the public services our citizens depend upon. 

Annapolis should resist the temptation to balance its budget on the backs of our counties, and should demonstrate fiscal leadership by actually fixing the problem and cutting spending.  

The private sector cannot afford its own “defined-contribution plans,” and it certainly cannot afford to subsidize a bloated government retirement plan.

We urge our Senators and Delegates across the state to stand in opposition to these massive cost shifts. 


Richard Rothschild is Vice-President on the Board of Carroll County Commissioners. Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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