O'Malley did a powerpoint presentation on his final budget submitted yesterday. The details are still sketchy, but from what we can tell, we should have a problem with the way some of the savings were achieved and revenues generated-- not by tax increases but by cuts to the funding system for pensions.
In previous budgets, the plan to get the state employee pension fully funded was to be achieved by 2024. In 2011, the state upped employee contributions to their pension from 7% to 9%. The state's savings from this increased employee contribution could go back into the pension fund, but only up to a $300 million cap. Any state savings generated by this new system above $300 million could be allocated somewhere else in the budget.
O'Malley's budget this year lowers that cap from $300 million to $200 million; the state will now be contributing less to the pension fund, meaning it will take another year to be fully funded (now 2025).
We will be following this subject closely.
Read more at the Maryland Reporter.
1/16/14 Todd Reynolds, Political Coordinator