From the desk of MSEA's executive director, March 2011
MSEA Executive Director David Helfman
I was stunned when
Governor O’Malley unexpectedly took the stage at our Keep the Promise Rally.
After unsuccessful attempts to settle the restless crowd by celebrating the
contributions public employees make to Maryland, and announcing that things
aren’t as bad in Maryland as they are in Wisconsin or Ohio, he uttered the line
we needed to hear: “We are committed to staying at the table and to figuring
this out and to moving together as One Maryland.”
In response, I told a
reporter: “It’s clear that new ideas and real leadership are needed to move
Maryland forward. We are prepared to add the ideas and voices of Maryland’s
educators and are counting on the governor to demonstrate the leadership we
The following evening we
presented the governor with a comprehensive proposal, which would generate
similar savings and enhance the security of our retirement system without
violating the principles shaping our priorities.
High among our
- Protect the benefit formula…keep the 1.8 percent
- Don’t shift costs to counties…a shift would
inevitably cost jobs and harm children
- Treat all members equally…don’t create a
two-tier system with new hires paying more but receiving less
- Provide a secure, predictable retirement…don’t
link cost of living adjustments to pension investment returns
For years, schools
benefited from record increases in state support. We put those investments to
good use, and they’ve paid handsome dividends to Maryland’s students, parents,
taxpayers, and businesses.
Today, we understand the
harsh reality of our economy. Faced with an enormous structural deficit, we
decided it was in our interest to provide some relief to the state. So the
proposal we made does include both increases in our contributions and changes
in some benefits. Our proposal also contained numerous enhancements to the
system, providing members with a more stable and secure benefit over the long
Currently, the General Assembly is positioned to take the Governor's original proposal and strip benefits for new hires, make deeper reductions in the COLA, double the vesting period, and immediately raise the contribution rate to 7 percent. These moves are overreaching, anti-worker, and punitive.
Our proposal was a move to secure the fiscal stability of the fund, protect the 1.8 multiplier, and increase the reliability of the COLA by converting it to a guaranteed escalator, no longer tied to inflation. It also prevents a link to the fund's investment returns.
Finally, our proposal has a provision that would drop our contribution rate once the fiscal position of the fund improves and the state begins to reduce it rate. There is no floor, so it would be possible to drop it below the current 5 percent.
consequences. We elected Governor O’Malley, not a Governor Walker. We expect
him to take a restructured proposal—one that accomplishes the objective he
first articulated—and champion it through the General Assembly.
Will Governor O’Malley
be that champion? Will his actions in the waning days of the General Assembly
session match his words at the rally?
MSEA stayed at the
table, provided the vision and flexibility, and figured it out. It’s now time
to see if Governor O’Malley provides the leadership we need to move together as