Maryland lawmakers are considering cutting the state’s payments into its pension system, citing strong investment performance.
The cuts would total $2 billion over the next 10 years, according to the Maryland Reporter.
But several key government officials are wary of the plan, including the state’s Budget Secretary and Comptroller.
From the Maryland Reporter:
Comptroller Peter Franchot and Gov. Larry Hogan’s budget secretary are both raising objections to a proposal reducing state pension payments, saving money that may be used to increase education aid and state employee salaries.
“It is a bait and switch on rank-and-file teachers and state employees,” said Franchot, as well as “bait-and-switch” on the state’s rating agencies and taxpayers.
“It is gaming the system to constantly switch from one system to another,” Franchot said, with the state constantly seeking ways to set aside less money for the retirement system.
“If we perform exceptionally well [on investments], this will be a good decision,” Budget Secretary David Brinkley told the House Appropriations Committee Friday. “If we don’t perform as we have been or hope to … it will be a disastrous decision.”
Both men sit on the Board of Trustees of the State Retirement and Pension System.
The system is currently 68 percent funded.
If the state doesn’t cut pension payments, the system is on track for 80 percent funding by 2021.
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