Inclusion | Opportunity | Innovation

Myth Buster: The State Determines Pension Benefits, Not Counties

One of the allegations I sometimes hear about the Governor’s plan to shift costs to the counties for teacher pensions is that the counties set the pensions or determine how big the benefits will be. This came up in a recent Gazette article, which stated:

“The argument of [Senate President Mike] Miller and others who have sought to shift the burden is two-pronged: Only three states currently foot the whole bill for teacher pensions, and local school boards set teacher salaries on which pensions get based. So why should the state, without a say in the matter, be stuck with the retirement tab?”

This is wrong! The state, and only the state, sets the pension benefits. And they can adjust those benefits up or down regardless of what any local agency does or wants.

Here is a good example.

In 2006, the General Assembly passed a significant hike in teacher pensions. The bill increased benefits almost 30% and made the increase retroactive for a worker’s salary to include years as far back as 1998.

The state passed this legislation. The counties are not Delegates or Senators. They do not have a vote in Annapolis.

I agree that the state’s teacher pensions were too low.

The problem is that the state passed the pension benefit increase without paying for it. This change alone cost the state over $120 million a year.

And now Annapolis leaders want to convince voters that they weren’t really even responsible for the cost increase in the first place.

Advocates for the cost shift should drop the myths. The counties did not cause the state’s pension problems. The truth is that the state wanted to increase the benefits to the level they are at now but failed to pay for them. Now the state wants county governments to step in to cover their responsibility.

The state caused its problems, and the state has a responsibility to fix them.

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