Now Mr. O’Malley is trying to renege on the deal by grabbing back $100 million a year to plug a hole in the state’s budget deficit. By doing so, he is undercutting not only his credibility but also the state’s, and putting at risk Maryland’s coveted triple-A bond rating. That’s a bad idea, and lawmakers in Annapolis should reject it.
Maryland’s $40 billion pension fund is a vital lifeline for 138,000 retirees, who were paid almost $3 billion from it in the fiscal year that ended last summer. Like many states emerging from the recession a few years ago, Maryland was forced to find a fix for the fund, which had been battered by anemic stock market performance and years of cavalier underfunding. The 2011 deal set a course to restore it to relative good health by 2023.
We say “relative” good health because the deal was based on a goal — 80 percent of the total amount of obligations faced by the state — that constitutes a somewhat squishy definition of good health. Yet reaching even that goal would be pushed back to 2025 if Mr. O’Malley gets his way by shifting $100 million annually from the pension fund into the general budget.