Maryland State Employee Retirement:
That’s right. Maryland Governor Martin O’Malley has submitted a budget that calls for reducing the state’s contribution to the pension plan by $100 million dollars a year.
Two years ago, that state required you to increase your contribution to the employee pension fund. In return, the legislature promised to contribute $300 million per year to that fund. Now, Governor O’Malley is breaking that promise. There are several problems with the governor’s proposal:
- The governor’s proposal could result in reduced payments to you when you retire.
- The reduction of state contributions to the pension fund could trigger a demand for even greater contributions to the pension plan by employees—perhaps as much as 9 percent.
- The reduction of the state’s contribution to the pension fund could result in reduced Cost of Living Adjustment (COLA) payments to retirees.
- The governor’s proposal threatens the state’s AAA bond rating and State Treasurer Nancy Kopp says that the decrease in pension funding could hurt the state’s financial standing in the coming years, further threatening your retirement security.
- The governor’s proposal will require a balloon payment to make the pension plan solvent by the year 2024 target date—a lump sum payment of millions that the state may not then be able to afford.
The governor argues that a reduction in state contributions is necessary to offset the state’s deficit, but there’s another way to address the state’s deficit problem: make corporations pay their fair share. For example, the state could:
Raise the state’s corporate tax rate—Maryland allows many of the state’s corporations to use loopholes that cost the state hundreds of millions in revenue. Many Maryland corporations pay no taxes at all!
Increase taxes on Casinos and Gambling Enterprises—Maryland allows a generous tax reduction for Casinos and the gambling industry. Last year Maryland cut casino taxes by 5-8%. We say “make casinos pay their share!”
Fair is Fair. If the governor and the legislature follow that simple principle, there will be no need to balance the budget and reduce the deficit on the backs of the state’s employees.
You Must Act Now! Click here to send a letter to your state delegates and senators. Tell them to VOTE NO on cutting the state’s contribution to the employees’ pension fund.