It appears that the 2010 Session will be a lost opportunity for long-term pension reform in Maryland.
That is unfortunate. Significant progress towards restoring stability in the state pension system could have been made under two proposals before the General Assembly: (1) the Senator Richard Colburn bill to create a "defined contribution" plan for new hires of state employees (see our prior post) and (2) the alternative plan to the Brinkley-Pipkin budget proposal to bring the counties in as partners with the state for future cost-sharing of teachers' pensions (see our prior post).
The blame for the lost opportunity falls directly on Governor Martin O'Malley and Speaker Michael Busch. That's the view of Gazette columnist Barry Rascovar who writes: "Who's afraid of an $8 billion deficit over the next four years? Not Gov. Martin O'Malley. Not House Speaker Mike Busch. Not the Maryland House of Delegates. For them, there's no need to worry today about what might happen tomorrow. That's the attitude that helped plunge Maryland into its current, woeful deficit, as governors and legislators over the last decade repeatedly supported huge spending commitments without bothering to find revenue to pay for them. Now, when faced with an opportunity to downsize that mind-boggling deficit by redistributing the obligations for paying teacher pensions, these politicians refused." To read the entire column, click here.
It's another example of where O'Malley and his policy advisors need to learn from lessons taught by their counterparts in Richmond. In commentary titled "What Washington Can Learn From Richmond," an editorial writer of the Richmond Times-Dispatch extols the budget balancing virtues of Republican Governor Bob McDonnell. Unlike O'Malley, who patched together a series of one-time fund swaps and federal stimulus funds as a temporary fix Maryland's budget trauma, McDonnell chose long-term solutions to Virginia's budget crisis.
On pension reform, McDonnell persuaded his State Senate (Democrat majority) and House of Delegates (Republican majority) to adopt a "defined contribution" plan for new hires - exactly what was proposed by Colburn in Maryland. While Maryland's Democrats cower before the public employee unions, the Times-Dispatch underscores the importance of rebuffing such union demands in order to secure the long-term budget security of the state:
"The most significant piece of McDonnell's budget -- though not widely noted -- was the decision to trim the pension costs of future state employees. By shifting the model for those hired after July 1 to one that more closely resembles private-sector retirement plans, McDonnell took an enormous step in ensuring the state's solvency -- which should soon emerge as a distinct competitive advantage for Virginia's economic development -- while keeping faith with past promises made to current state workers.This essential reform would have been impossible if Virginia politics were dominated by the public-sector unions that seem determined to drive California and New York, to name the most prominent examples, into bankruptcy, crippling tax increases -- or perhaps both. McDonnell has set an important precedent here." To read the full commentary, click here.
To see prior posts about the 2010 Legislative Session of the Maryland General Assembly, visit our website at www.mdsenategop.com
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