With the State of Maryland now facing some $18 billion in unfunded liabilities for state pension benefits plus another $15 billion in unfunded retiree health benefits, the commission created to examine state employee and retiree pensions and benefits is finally set to meet. Almost.
According to an article in yesterday's MarylandReporter, staffers will meet today to set out a meeting schedule for the Public Employees' and Retirees' Benefits Sustainability Commission. A first meeting is slated for later this month—or next month. As MarylandReporter also details, Sustainability Commission members actually hope to complete their interim report by their year's end deadline.
The new Sustainability Commission was created as part of the 2010 budget conference committee compromise. But as pointed out in an April blog post by Cecilia Januszkiewicz ("A Fig Leaf For Maryland's Fiscal Folly"), this isn't the first time the Maryland legislature has dodged the decisions that ultimately need to be made by turning the issue over to an outside commission for further study. The Maryland Legislature's evasion of responsibility on the issue goes back at least as far as its decision in the 2005 session to create a Task Force to study the state's pension liability problems. Anyway, the 2010 compromise ultimately rejected the Maryland Senate's proposal to make some changes to pension and benefit funding. The Maryland Senate's proposal, in turn, came in the wake of a report from the predecessor Sustainability Commission about ways to ensure the long-term viability of the state's pension system. So here they go again.
That said, MarylandReporter's coverage highlighted public employee unions' opposition to any possible increases in employee contributions or cuts in benefits. Curiously, one public employee union representative asserted the need for a long-term perspective instead of a snap-shot view and downplayed the seriousness of Maryland's multi-billion dollar pension deficit. But this sounds like little more than a "the-problem-will-fix-itself" approach that no responsible Maryland official or taxpayer should take seriously. And it was reliance on a snap-shot view from an earlier time that included a more robust economy and a full state treasury that played a big role in the overspending and overly-optimistic rate-of-return projections that led to the budget and pension liability woes that the state now faces.
The Sustainability Commission's presumable interim report would be followed up by another report…in 2012. Should the final report be prepared and delivered on time, then the Maryland Legislature would finally be faced once again with making changes to the state pension system for fiscal year 2013. Don't expect Maryland's pension liability problem to fix itself before then.