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ANNAPOLIS — Local government and education advocates expressed surprise that the Senate Budget and Taxation Committee approved a gradual shift of half the cost of pensions for teachers and some other employees to the local governments and then delayed it by a year.

The shift has been long discussed, but budget pressures in recent years have increased calls among legislators to act.

Even so, Maryland Association of Counties Executive Director Michael Sanderson said it appeared until recently that lawmakers would hold off on any major teacher pension reforms this year.

"It moved very rapidly from a totally dead issue, to ‘Wow, this is going to move,' " he said of the committee action, which took place Friday.

The recommendation, Sanderson said, is less painful than other, Republican-backed ideas that proposed a more immediate shift to counties, but it would still leave counties with a huge new burden to pay for.

Under the cost-shifting plan, which must be approved by the full General Assembly as part of the fiscal 2011 budget, counties would assume 1 percent of the wage-based pension costs for teachers, librarians and community college faculty in fiscal 2012, which begins July 1, 2011.

The state, which currently pays the entire cost of teacher pensions, would continue to foot the bill for the fiscal 2011 budget year that lawmakers are currently reviewing.

Counties would up their contribution to 3 percent of the salary wage base in fiscal 2013 and 5 percent in fiscal 2014 and fiscal 2015, which, when coupled with counties' current responsibility to fund Social Security payments, is approximately 50 percent of the total combined retirement costs. The cost to the counties is projected to be $337.5 million in fiscal 2015.

"In the end, it makes both the state and the counties financially responsible for the cost of those benefits," said Warren G. Deschenaux, the chief fiscal analyst for the nonpartisan Department of Legislative Services.

The 15-member committee, also approved cutting 500 state employee positions for the coming fiscal year and reducing by $60 million state aid to K-12 schools under the Thornton funding formula.

The state would save about $12 million in fiscal 2011 by cutting the 500 jobs, which Gov. Martin O'Malley (D) would have to identify within the executive branch. The governor could avoid layoffs by eliminating vacant positions, Deschenaux said.

Altogether, the panel slashed about $120 million from O'Malley's proposed $13.2 billion operating budget for fiscal 2011. Some lawmakers in both chambers have expressed a desire to reduce O'Malley's spending plan by up to $600 million to caution against a future downturn in revenues and to offset the loss of federal stimulus funds next year.

The full Senate will debate the budget this week, before sending it to the House of Delegates. Lawmakers are constitutionally mandated to pass a balanced budget before they adjourn.

The Senate committee also voted to continue cuts to highway user revenues, which funds local road maintenance projects, through fiscal 2012. The Board of Public Works last summer voted to take $159.5 million in highway user money from local governments to help close a midyear deficit.

The teacher pension shift alone will reduce state spending obligations by hundreds of millions of dollars in the coming years and minimize the state's projected long-term budget deficits.

School funding previously had been considered off limits because it was tied to federal stimulus money that was contingent on maintaining education spending.

"We've appropriated more than necessary to retain all the federal funds under the stimulus legislation," Deschenaux said.

Stimulus funding is still an issue, said John Woolums, a lobbyist for the Maryland Association of Boards of Education.

"Boards of education would hope that there would be a more comprehensive discussion of implications for the funding cliff beginning in 2012, when the federal funding through stimulus goes away," he said.

And without increases in state aid for schools, school systems will be forced to make cuts, Woolums said, noting that every $100,000 in pension costs translates to 1-1/2 to two teacher positions.

"For us, the implications are huge," he said.