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December 22, 2005

Necessary But Costly

John W. Ashbury

There have been outrageous attacks on your pocketbooks and wallets by the legislatures through the years. All too frequently our elected officials fall prey to the demands of special interest groups whose sole objective is to rob Peter to pay Paul.

That isn’t really the case in the situation which will confront the General Assembly regarding pension benefits for school system employees across the state – mostly educators. But it’s close.

The Maryland State Teachers Association (MSTA), and its member unions (including our own Frederick County Teacher’s Association (FCTA), is proposing dramatic and expensive changes in the state operated pension system that would increase the retirement benefits educators receive more than 18 percent.

The unfortunate part is that MSTA representatives and FCTA minions are misrepresenting the facts and the true situation before our delegates and senators.

In an email to Frederick County’s delegation, Gary Brennan, FCTA president, says that “Maryland’s teacher pension system is the worst in the nation with benefits for 30-year teachers equaling about 38% of their final pay.”

What he doesn’t say is that Maryland’s ranking with other states is due in great measure to decision made by the MSTA and its member unions – and lobbied for before the General Assembly – in years past.

In addition, Mr. Brennan falsely says the benefits are at 38% of final pay. It actual fact it averages 42 percent of the average of the pensioners’ salary for their last three years on the job.

While Mr. Brennan is correct in stating that the pension benefits are a “deterrent for the state to attract and retain highly qualified teachers,” he once again fails to mention the duplicity of the educators’ unions in this situation.

Mr. Brennan also skewers the benefits of Pennsylvania educators in attempting to make his argument. He says that a retired educator in our neighboring state might earn as much as 75 percent of pay for 30 years of service. That’s true enough!

But he fails to point out that Pennsylvania educators have been contributing 7.5 percent of their salary toward their retirement for most of their years of service, while Maryland educators have only been contributing to their retirement for the past six years – and only at 2 percent of salary.

What this means is that Pennsylvania educators are contributing 275 percent more to their pension plans than Maryland educators. This certainly would explain why teachers in our neighboring state to the north have a much better pension system.

While it is apparent that improvements need to be made, what the MSTA and FCTA are proposing would put a major dent in the state’s budget for the next decade.

They are seeking a “benefits multiplier of 2 percent so that an educator retiring after 30 years would receive a pension equal to 60 percent” of their average salary for their last three years on the job.

They also are seeking “full retroactivity so that all teachers currently in the system as well as new enrollees will benefit from the changes.” And they want the “cost of the improvements” shared “fairly between the state government and increases to the employees’ contributions.”

The retroactivity feature is the real bug-a-boo. That would mean that a teacher who currently has 28 years service and who has contributed only 2 percent of his or her salary to their pension program for six years could retire in 2 years at 60 percent of their salary.

Analysis of the MSTA proposal by state agencies and interested parties outside the government estimate this would cost taxpayers at minimum $500 million a year.

Remember the Thornton education funding plan that was adopted by the legislature in 2002 with only partial funding through an increase in the cigarette tax. Well, that’s how the Democrat-controlled legislature and State House got Maryland into this mess in the first place.

Even the current Republican governor has made a valiant effort to fund the Thornton plan, but he, too, has run into obstructionism from the leadership of the General Assembly, who thwart him at every turn, afraid that a legislative victory would benefit him at the polls next November.

Baltimore’s Sun editorialized last week that the Democrats in the General Assembly “can’t afford to pander” to the MSTA. “They should not, for instance, increase retirement benefits retroactively. And teachers should have to pay half of any benefit increase.”

The Sun also suggested that our legislators “should consider the option of putting money into a 403(b) retirement savings account in lieu of a bigger pension,” suggesting that younger teachers might prefer that.

Once again, the unions and their leadership will not accept compromise. And you’ll hear that overused term of “What we do is for the children.”

Well, if that’s who you are doing it for, then produce a better product. Our children are not adequately prepared to enter the world of self-support when they graduate. Many can’t read or write above an elementary level – and that’s disgraceful.

The MSTA, the FCTA, and all the other union members across the state must accept the fact that, if this plan is accepted, it will reduce funds for all other areas of education – which is certainly below what is needed in today’s era of testing for accomplishment.

Pension benefits for educators in our public schools need vast improvement; however, doing it the way that is being suggested would be foolhardy – and far too expensive when compared to any benefit in the classroom.

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