Budget talks back on track
Annapolis budget writers took the weekend off and came back to work Monday ready to make deals on the state's spending plan.
Progress was made on the thorny issue of pensions: State workers would see a hybrid plan that melds elements from the House and Senate passed versions of the reform package. Figures were not immediately available on how much will be saved by the latest version of the overhaul.
House Appropriation member John Bohanan called the result a "good compromise."
And Senate Budget and Taxation Committee Chairman Ed Kasemeyer said the state workers' pension plan is "fundamentally preserved."
The conference committee didn't vote on any changes to the budget that relate to the proposed sales tax on alcohol.
The Senate has passed a bill to elevate the sales tax on beer, wine and liquor by one percent a year for the next three years. The House hasn't yet voted on the proposal, but rumors are already flying that the full tax will be implemented in a single year.
The group also agreed to return $5 million to the Keeping Maryland Community Colleges Affordable Grant. The pool of money can be split among any group of community colleges that keep their tuition increases capped at three percent. Bohanan said there's a lot of interest in the grant this year. The Senate had removed money from this fund.
The group is going to reconvene at 4 p.m. Remaining issues include whether or not to direct the University System of Maryland to study creating a mega-university that would merge College Park and Baltimore campuses and how much the counties should pay for the costs of levying property taxes.
(Pension dorks: See the changes to the retirement system after the jump)
Progress was made on the thorny issue of pensions: State workers would see a hybrid plan that melds elements from the House and Senate passed versions of the reform package. Figures were not immediately available on how much will be saved by the latest version of the overhaul.
House Appropriation member John Bohanan called the result a "good compromise."
And Senate Budget and Taxation Committee Chairman Ed Kasemeyer said the state workers' pension plan is "fundamentally preserved."
The conference committee didn't vote on any changes to the budget that relate to the proposed sales tax on alcohol.
The Senate has passed a bill to elevate the sales tax on beer, wine and liquor by one percent a year for the next three years. The House hasn't yet voted on the proposal, but rumors are already flying that the full tax will be implemented in a single year.
The group also agreed to return $5 million to the Keeping Maryland Community Colleges Affordable Grant. The pool of money can be split among any group of community colleges that keep their tuition increases capped at three percent. Bohanan said there's a lot of interest in the grant this year. The Senate had removed money from this fund.
The group is going to reconvene at 4 p.m. Remaining issues include whether or not to direct the University System of Maryland to study creating a mega-university that would merge College Park and Baltimore campuses and how much the counties should pay for the costs of levying property taxes.
(Pension dorks: See the changes to the retirement system after the jump)
The new pension and health care plan looks like this:
* Prescription drug costs for retirees will be capped at $1,500 per year ($2,000 for a couple). The cap will *not* increase with inflation, as Senators had initially wanted.
* Cost of living increases are guaranteed at one percent a year as long as inflation rises by one percent. In years where the fund meets or exceeds the investment return target of 7.75 percent, employees would have a 2.5 percent COLA.
* The multiplier would dip to 1.5 for new employees. Current employees would keep their 1.8 multiplier. All would pay 7 percent of their pay into the system (up from 5 percent). A very similar plan was offered by Gov. Martin O'Malley and both chambers approved it. However, the state workers and teachers unions exerted pressure to allow new employees to have the 1.8 multiplier. Several have indicated that the issue will likely be revisited when the economy rebounds.
* Retirement age: The conferees adopted a "Rule of 90." It would apply to those who want to retire under the age of 65, and goes like this: Your years of service plus your age must add up to 90 in order to start getting a check. The Senate had favored a "Rule of 92."
* Prescription drug costs for retirees will be capped at $1,500 per year ($2,000 for a couple). The cap will *not* increase with inflation, as Senators had initially wanted.
* Cost of living increases are guaranteed at one percent a year as long as inflation rises by one percent. In years where the fund meets or exceeds the investment return target of 7.75 percent, employees would have a 2.5 percent COLA.
* The multiplier would dip to 1.5 for new employees. Current employees would keep their 1.8 multiplier. All would pay 7 percent of their pay into the system (up from 5 percent). A very similar plan was offered by Gov. Martin O'Malley and both chambers approved it. However, the state workers and teachers unions exerted pressure to allow new employees to have the 1.8 multiplier. Several have indicated that the issue will likely be revisited when the economy rebounds.
* Retirement age: The conferees adopted a "Rule of 90." It would apply to those who want to retire under the age of 65, and goes like this: Your years of service plus your age must add up to 90 in order to start getting a check. The Senate had favored a "Rule of 92."
Comments
Rule of 90 - I had heard that the Rule of 90 was calculated as follows:
up to 30 years of service = 30
for every year after 30, you get double credit, so that 33 years = 30 + (3x2) = 36
Then add your age at retirement.
So, for a teacher with 33 years and age 54, you could retire with full benefits
36+54=90
Has anyone else heard about the 30+ year multiplier?
Posted by: Woodie | April 4, 2011 2:39 PM
Even as a retire State employee I understand some changes must be made in the current pension structure. But here's one option that I haven't heard discussed. Let eliminate pension benfits for the State Senators and Delegates. What other business give a pension to an employee who works 90 days a year? Now I know many will argue that they put in a number of days beyond the 90 days session but perhaps we would benefit if they did not. For a 90 day session their pay isn't bad and in fact its very good compared to other State employees. They should invest some of this money into personal retirement accounts and their State pensions should be eliminated.
Posted by: Bill Miller | April 4, 2011 4:38 PM
I have not heard that, and frankly it would surprise me if they put that in. At this rate I will work longer, for an even less fabulous pension, and for less pay as a direct result of the increased pension payments I will now have to make. Not an impressive compromise -- just a continuation of the ongoing shafting.
Posted by: Anonymous | April 4, 2011 5:04 PM
Wow what a confusing mess...I just retired with 37 yrs of service to the State...I have since day one contributed 7% of my salary...and when you work for the state that is a big hit..I have had to work three jobs just to have a life that is affordable as the state allows you to subsisit and exist but never prosper...
I am 56 and glad I am done with all this tinkering and I feel sorry for those 55 and over employees whop are trapped , I know two specific men both in their mid 60s with over 40 years of service who cannot afford to retire yet..well how sad..but I am glad I escaped in time to have a life and get that check so now I win...
Posted by: fred nastri | April 4, 2011 9:51 PM
Legislators pensions will NOT change and, I also believe their medical and perscriptions will NOT change until at least 2014. Pensions for a Senator or Delegate is 3% times the number of years in the Legislature (needing a minimum of 8) so with 20 years of service they will receive 60% of a currant Delegate or Senators pay for the rest of their lives.....not bad for part time!!
Posted by: Postman | April 4, 2011 10:14 PM