Andy Harris On Pension Reform

State Senator Andy Harris Introduces Legislation to End Special Pensions for Elected Officials, Deny Pensions to Convicted Legislators

Legislation would aid state's long-term fiscal health by moving to a defined benefit system

ANNAPOLIS—State Senator Andy Harris today introduced legislation that would overhaul the public pension plans for elected officials in the General Assembly, which is separate and more generous than the state public employees' plan, by moving from a "defined benefit" to a "defined contribution" plan. The legislation is projected to save the state taxpayers approximately $750,000 a year. It would bring legislators' pensions in line with what the majority of Marylanders receive from private employers. Maryland's current public pension system is actuarially unsound to the tune of $32 billion, with a current deficit of $2 billion.

Elected officials' pensions have received significant attention in recent months with public outcries on the pension benefits (which are defined benefit plans) that Baltimore County Councilman Vincent Gardina will receive after five terms as a part-time county councilmember and the $83,000 a year pension that disgraced former Baltimore City Mayor Sheila Dixon will receive following her guilty judgment in court by a city jury on embezzlement charges.

The legislation would set up a pension plan for legislators similar to what most private employers offer through 401k plans. It will be offered as an amendment to the Compensation Commission legislation for pay raises for public officials. A second amendment would deny pension benefits to any legislator convicted of a crime of misconduct in office committed during their term in office.

"Marylanders have been disgusted lately with what they rightfully see as golden parachutes for elected officials, even when they've been convicted of a crime," Harris said. "This legislation would begin to treat elected officials just like the constituents they serve and provide significant cost-savings for taxpayers in the process. One need only look to our own underfunded state employee pension system, or to the American auto industry to see that 'defined benefit' plans have a disastrous effect on long-term viability and fiscal health. Changing to a defined contribution plan is the right thing to do and will provide pensions for elected officials that are no more generous than what most hard-working Marylander taxpayers receive when they retire. I urge my colleagues to get behind this legislation that will help the Maryland General Assembly start getting Maryland's fiscal house in order by getting its own pension plan in order. As elected officials, we need to provide good leadership in a time when the public's trust in their public officials is at an all time low."

February 16, 2010
The Baltimore Sun
Andy Harris is right about something

It’s early yet, but 2010 is shaping up to be one for the record books. Baltimore gets four feet of snow. The New Orleans Saints win the Super Bowl. And perhaps the biggest surprise of all -- Sen. Andy Harris is offering a floor amendment that we might just support.

The stick-it-to-the-Democrats amendment the state senator is expected to offer Wednesday would reduce legislative pensions and prohibit state lawmakers who commit a felony while in office from collecting pension benefits. It’s patterned after a proposal that went down in flames last week in the House on a party-line procedural vote.

That Maryland Republicans would like to rub Democratic noses in pensions right now is no surprise. The Baltimore County Council brought the issue to the forefront with recent revelations over pensions so generous that members could retire at full salary after a mere 20 years on the job. Former Baltimore Mayor Sheila Dixon’s $83,000 pension, a sweet benefit she gets to keep despite her legal woes, was the icing on the political cake.

But setting political motives aside, there’s merit to taking action on pensions. Certainly, it’s hard to argue that politicians who commit crimes should remain eligible for their full pensions. It’s also apparent that Maryland needs to do something about retiree benefits -- governments at every level are struggling to fully fund pensions these days.

The senator’s proposal won’t exactly close the state’s multi-billion-dollar projected budget deficits. Delegate Bill Frank, the Baltimore County Republican who tried the same tactic in the House, estimates a savings of only about $750,000 a year. But such a self-sacrifice would be at least a symbolic indication that lawmakers are serious about badly needed benefit reforms.

The next target should be state retiree health insurance benefits -- a $15 billion liability that there is no way Maryland can possibly afford. Switching more state employees to defined contribution programs (the public sector equivalent of the 401(k)) and away from defined benefit or pensions is also a worthwhile target.

Add the state’s total pension deficit with the retiree health benefit shortfall, and Maryland’s unfunded retiree obligation is now as big as the entire $30 billion state government budget.

Democrats can grouse that Senator Harris, a candidate for Congress, is more interested in milking the issue than working on it. Certainly, the press release he issued Monday reads more like talk radio fulminations than a thoughtful discourse on the pros and cons of public employee retirement options.

But Senator Harris wouldn’t be in a position to embarrass General Assembly leadership if their record on controlling the costs of state employee benefits was something about which they might be proud. It isn’t, and so he can.