Raiding Md.'s Pension Piggy Bank

In Case You Missed It: Raiding Md.'s Pension Piggy Bank From The Washington Post Editorial Board - "That boils down to a short-term payoff to core Democratic constituencies, especially teachers unions, that will burden taxpayers down the road." ____________________________________________________________________________________ Editorial Board The Washington Post March 14, 2015 "WHEN THE big bond-rating agencies took Maryland’s financial temperature last month, they found the state in robust health — with the notable exception of Maryland’s undernourished pension fund. The fund needs a sustained infusion of cash if the state is to meet its long-term promises to retired teachers, police, judges and other public employees — a $20 billion infusion, to be precise. "So how did Democrats, who control the state legislature, respond to this red flag? A week after it was raised, they advanced a plan to make the situation worse — to raid the fund in order to forestall cuts in next year’s budget proposed by Gov. Larry Hogan (R). By grabbing pension dollars to plug immediate budget holes, lawmakers would risk the state’s future knowing that most of them will no longer be in office when the bill comes due. ... "Nonetheless, bad old habits — raids on money earmarked for the fund — returned last year and now seem to be accelerating. In an effort to block relatively modest budget cuts proposed by Mr. Hogan, mainly to schools and public employees’ wages, Democratic lawmakers in Annapolis are pushing a plan to revamp the formula for scheduled contributions. According to Comptroller Peter Franchot, one of the few prominent Democrats who opposes the scheme, it would shift $2 billion into the general budget over the next decade, then cost the state $4.5 billion in the following dozen years — meaning Maryland would face a net $2.5 billion in additional costs over time in order to keep its pension promises. "That boils down to a short-term payoff to core Democratic constituencies, especially teachers unions, that will burden taxpayers down the road. And if the pension fund’s investments underperform officials’ rosy projections, the result will be fiscal calamity — and big trouble for the employees the legislature is purporting to help."