ROCKVILLE, MD— As the Maryland General Assembly begins its new session, the Maryland Public Policy Institute today released a new policy report examining proposals that would shift the cost of teacher pensions from the state to Maryland’s counties.

The report offers background information on Maryland’s current pension situation, and analyzes features of the various proposals, such as accounting for Social Security contributions, phasing-in, and wealth equalization. The report also addresses concerns about the effect of cost shifting on the teacher workforce, and suggests a way to link cost shifting to improved teacher quality.

In light of the rapidly increasing cost of state contributions for teacher pensions, the report contends that, properly implemented, a cost shift from the state to Maryland’s counties could ease pressure on the state’s finances, rational­ize the structure of teacher compensation, and avoid compromising the quality of Maryland’s educational system.

For several years, the state’s task force on pension issues has recognized the importance of cost shifting as part of a comprehensive pension reform plan. Last year, Governor O’Malley avoided the issue, preferring first to tackle general pension benefit and contribution changes. Given that those reforms were accomplished during last year’s session, the path for cost shifting proposals appears clear. Both the Governor and Senate President Mike Miller have expressed interest in reconsidering the cost shifting proposal, and the need to make up a $1 billion budget deficit (half of which must come from permanent budgetary changes) suggests that cost shifting will be one of the session’s most important topics.

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