More News

While state and county officials grapple with plunging revenues, mounting costs and each other, educators are finding themselves in the crossfire once again.

Sen. David R. Brinkley (R-Dist. 4) of New Market is proposing a plan to split funding for teacher pensions with county governments, as opposed to the state alone bearing the responsibility, a move that will shift a considerable financial load onto counties even if phased in.

"If we continue the current pattern, the state's expense will double in five years," Brinkley said. The cost of funding teacher pensions statewide this year, he said, is $900 million, double what it was five years ago.

Brinkley and colleague Sen. E.J. Pipkin (R-Dist. 36) of Stevensville have recommended similar legislation for four or five years, but Brinkley said people have to listen this time.

"The funding stream is not sustainable," he said. "We're running out of time, we're running out of money, and we're running out of excuses."

Either major cuts are in store or a tax increase is in the wind, and there's little political will on either side for the latter, especially in an election year. "Nobody wants to raise taxes, but if they don't change underlying assumptions, they are going to have to do something," Brinkley said.

While the state may want to free itself from a costly long-term obligation, county governments are watching property and recordation tax income dwindle.

At Winchester Hall, Frederick County commissioners anticipate another grueling budget process as they try to reduce spending by $30 million and meet $24 million in state budget shifts and mandates. Brinkley's latest offering just makes it that much harder.

"Almost the entirety of the Republican solution to the state budget was to shift/mandate the cost of state services to county taxpayers," said Commissioners' President Jan H. Gardner (D). "Not only does this not save money, this scenario risks creating increased expenditures."

She said she sees Brinkley's proposal not as a cost-cutting measure, but as a way to send another unfunded mandate to counties.

Meanwhile, Commissioner John "Lennie" Thompson Jr. (R) is targeting Frederick County Public Schools' Other Post-Employment Benefits Trust Fund, which is in addition to the pension and is supposed to reflect calculations of post-retirement medical benefits to current and future retirees over the next 30 years.

Thompson said the trust is grossly underfunded, promising a payout of more than $400 million with assets of just $20 million.

The Board of County Commissioners paid $6 million into the fund in fiscal 2008, $7 million in fiscal 2009, and nothing in fiscal 2010. By the county eliminating its contribution to the fund, the Board of Education is faced with making draconian cuts in its budget, pushing for tax increases to fund it, or simply ignore it for now.

To fund the trust at the level Thompson is suggesting would mean drastic changes to the school system's budget priorities, a tradeoff that Gary Brennan, president of the Frederick County Teachers' Association, does not see as remotely viable.

"Instead of talking about cutting junior varsity basketball, we'd be talking about whether or not we can support an entire sports program," he said. "Instead of talking about adding 0.5 students to classrooms, we'd be talking about adding three or four students to current class size."

The most sensible course is to ignore it, according to Hal Keller, the school system's finance director.

Last year, the school board funded the trust with $2 million left over from the previous year's budget. Instead of scrounging for another one-time contribution, Keller is fine with letting it ride.

He finds support for his position in the latest study by consultant Bolton Partners Inc. for Frederick County Public Schools. The 2009 study found that the trust fund is sufficient for now and that potential distributions from the trust fund will not happen for 17 years.

However, "The Trillion Dollar Gap," a recently released report from the Pew Center for States finds that while paying more now may sound like an unattractive option, not funding retirement benefits on a regular basis will leave a legacy of "significantly unfunded liabilities, lower bond ratings, less money available for services, higher taxes and the specter of worsening problems in the future."

Mike Schaden, a member of the school board, agreed that delaying annual funding could result in shelling out more money later, but said that there are too many variables at play to worry about that now.

School retirees account for 1 percent of health care costs, but that number is projected to go much higher. And even with employees and retirees paying a share of the cost, Schaden said the cost will still be "astronomical."

"What gives me the most angst is trying to squeeze pennies to tie up money for something we might need in 17 years," Schaden said.

To do so, he added, would be crippling for a school system. So much can change in health care and Social Security benefits in the next decade, Schaden said he's not as worried about funding retirees as much as active employees.

"We're not putting our heads in the sand, but over the next 15 years we have to create a plan that can be adjusted as the government changes the rules," he said.

E-mail Katherine Heerbrandt at kheerbrandt@gazette.net.