3:05 PM EST, March 8, 2012
Baltimore County Executive Kevin Kamenetz’s political blind spot on the issue of pensions apparently knows no bounds. A man who has secured for himself and some of his closest political associates a retirement benefit far beyond what ordinary county workers would be allowed is, once again, seeking to reduce the benefits for others. First, he pushed legislation in Annapolis that would reduce benefits for county workers who had previously been employed by the state or another local government, and now he is trying to do so for a group of union laborers in the Department of Public Works and other agencies.
This time, he happens to be absolutely right on the policy issue involved — but the way he’s going about addressing it is all wrong.
For the past three decades or more, for reasons no one now knows, a particular class of county workers represented by theAmerican Federation of State, County and Municipal Employeeshas been allowed to include overtime in calculations of average final compensation, which is the basis for a retiree’s pension benefit. Because those calculations have been based just on the highest consecutive 12 months of service (not a more common standard, like the average for a worker’s final three years of employment), the inclusion of overtime had the potential to radically distort individuals’ benefits. All a worker would have to do in order to secure a disproportionately golden retirement is to work a huge amount of overtime during one year of his or her career.
Some cases provided by the county illustrate the point. One worker’s salary is $56,000, but because he racked up $48,000 in overtime during one 12-month period, his pension will be more than $54,000 a year. Another worker with a base salary of about $58,000 will retire with a pension of more than $62,000 — his pension will actually be higher than his salary. That makes no sense whatsoever, and it should be changed.
The problem is that the legislation the Kamenetz administration introduced in the County Council on the matter comes in the middle of contract negotiations with AFSCME, which have broken down over this very issue. Last summer, the county proposed an extension of AFSCME’s current contract but with an addendum specifying that overtime would not be used in the calculation of pensions. The membership rejected the proposal — though it’s not clear that the overtime provision was the only reason. When negotiations on a new contract began in the fall, the county brought up the use of overtime in calculating average final compensation, and talks eventually broke down over the issue.
The union is complaining that the legislation represents a sign that the county is not bargaining in good faith, and it has a point. Had Mr. Kamenetz pursued this legislation before the negotiations, to take effect with the new contract this summer, that would have been fine. If he were to do so after this round of negotiations is finished, to take effect with the next contract, that, too, would be fair. But as it is, it appears that the county doesn’t like the way things have gone at the bargaining table and is trying to legislate its way out of the problem.
That’s reminiscent of its bungling of the pension issue for former employees of the state or other county governments. The county is currently in litigation over the way it calculates their benefits, and it has lost at both the Baltimore County Board of Appeals and at the circuit court level. The case is now pending before the Court of Special Appeals, but Mr. Kamenetz has in the meantime sought to short-circuit the legal process by changing state law, a fact members of the House of Delegates noted with disapproval during a hearing on the matter last month.
But the problem Mr. Kamenetz faces on this issue is more fundamental. Although he is right on the policy question of overtime in average final compensation calculations, he has no moral authority on pension reform whatsoever. Mr. Kamenetz is currently earning his $150,000 a year salary as county executive while banking his $41,000-a-year pension from his 16 years as a county councilman and earning a new pension as executive. That’s called “double-dipping,” and it’s ordinarily illegal. But thanks to a law he helped vote into existence two years ago, he is allowed to do it — provided he is approved for the benefit by the county administrative officer, who serves at the executive’s pleasure. Mr. Kamenetz lined up the same benefit for two former council colleagues who are now top aides in his administration; another aide and confidant is being allowed to earn a $180,000 a year salary and bank a $111,000 pension from his previous county service.
Yes, the AFSCME workers are getting an outsized benefit that is unavailable to others and which serves no public policy purpose. But so is Mr. Kamenetz.
Copyright © 2012, The Baltimore Sun