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Fiscal Policy Richard Falknor on 07 Oct 2012 05:41 pm

MPPI Reveals “Staggering” Maryland County Pension Burdens

(Scroll all the way to the bottom for additional perspectives and resources.)

The Maryland Public Policy Institute (MPPI) has just performed a vital service with its publication here of “ Maryland Pension Map Breaks Down Retirement System Debt by County: Interactive map reveals the staggering amounts counties spend on public employee retirement packages.”

The MPPI related last Monday —

“The picture painted by the map is not a particularly pretty one. Average unfunded liabilities for pensions and OPEB hover around 50 percent, and counties are spending hundreds of millions of dollars each and every year just to keep treading water. Downloading the spreadsheet containing the full data – much more than is displayed on the map – only darkens the image by revealing the exact percentages each county is contributing towards their obligations.

‘When you really drill down like this, you see that the real issue that faces Maryland counties is the rapidly increasing cost of benefits, specifically healthcare,” said Christopher B. Summers, president of the Maryland Public Policy Institute. ‘County pensions are funded, on average, to 76 percent. That’s not great, but it’s nowhere near as catastrophic as being 91 percent unfunded, which is where the average county finds its OPEB liabilities.’” (Highlighting Forum’s.)

Local property owners will (among others) be on the hook for recklessly undertaken county pension obligations.

Here is MPPI’s “Maryland Pension Map” which compares Maryland counties.

But we suggest you first click here to learn about the abbreviations on the map.”

Six County Illustrations

Here are the Actuarial Accrued Liabilities(AAL) –‘total predicted costs of these promises’– just for Other Post-Employment Benefits (OPEB) which are typically health care and life insurance for six Maryland counties:  Baltimore City, $2.498 billion; Baltimore County, $2.002 billion; Anne Arundel County, $1.159 billion; Montgomery County, $1.737 billion; Frederick County, $212 million; Carroll County, $133 million.

County By County

To find the public-employee retirement-related burdens for a specific county displayed in useful charts, click here. (Toggle tabs at bottom of spread sheet to see different charts.)

Local property owners will (among others) be on the hook for recklessly undertaken county pension promises.

Faithful readers will recall our post of nearly four months ago —Maryland & Virginia: GOP County Pols Going Wild With Taxpayer Money?

Perhaps conservatives can use the MPPI study to shame GOP county-level spenders to return to fiscal prudence, then prompt fiscal reform.

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Below are some of our earlier public-employee pension-reform posts —

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ANOTHER PERSPECTIVE! Josh Barro in “How Congress Can Help State Pension Reform” (National Affairs) writes “While conservatives tend to bristle at federal interference in state fiscal matters, the option to underfund pensions simply creates opportunities for irresponsibility at the state level. It is a way for politicians to take a ‘buy now, pay later’ approach to government spending. And the federal government does have an important interest in state-pension solvency: Allowing states to underfund creates the risk that a state will exhaust a major pension fund and look to federal taxpayers for a bailout. If state lawmakers knew that pension promises had to be honored and, more important, had to be funded, they would be less likely to make irresponsible promises. And one obvious way to convey such knowledge is through binding federal law. Conservatives should accordingly embrace an ERISA-style funding requirement for states, both to encourage fiscally responsible pension policy and to help build state-level political support for pension reform.” (Highlighting Forum’s.)
PENSION SUNAMI!  (Click on foregoing ‘hotlink’.) Readers may wish to get on the mailing list of this invaluable blog (and accompanying website) which, though focussing primarily on California, also covers significant developments in other statesOf special interest to our conservatives are this website’s searchable data bases of payments to highly-paid public retirees here, here, and here. These searchable data bases should be a model for pension-reformers in Maryland and Virginia.

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