Fire unions backed the mayor’s reelection. Now he wants to boost their pension

Adam Willis

The Baltimore Banner

August 26, 2024

Almost 15 years ago, Baltimore slashed retirement benefits for its cops and firefighters. They never forgot about it.

Now, police and fire workers are on the cusp of getting some of those lost benefits back.

Under a proposal being pushed by Mayor Brandon Scott, tens of millions in taxpayer dollars could go toward reinstating a few key benefits in the police and firefighters’ pension, which the city cut in the wake of the 2008 financial crisis.

This plan comes, though, as a hole in the pension fund has widened, falling $1.2 billion short of what’s needed to meet the estimated needs of its future retirees, according to reporting by the pension’s managers.

Both of Baltimore’s fire unions endorsed Scott’s reelection campaign this spring. Two days after winning the Democratic primary, his administration submitted a bill to City Council that would reinstate several key benefits for police and fire retirees.

The proposal looks poised to sail through City Council. During a brief, 25-minute hearing last month, members raised few questions before advancing it unanimously out of committee. The full City Council is scheduled to take a preliminary vote on the measure Monday night.

According to Scott’s budget officials, the plan would be expensive.

A report submitted to the council by the Department of Finance projected that the bill will likely cost the city more than $9 million a year. Even after the post-financial crisis cuts, the $3.2 billion fire and police fund remains on “unstable ground” that has put a “significant burden” on city finances, the department said. And that’s without expanded benefits.

It doesn’t matter what Baltimore used to offer its retired cops and firefighters, said Joshua Rauh, a finance professor who leads Stanford University’s Hoover Institution State and Local Government Initiative. What matters is whether the city can afford to pay them today.

For years, the amount of unfunded obligations in Baltimore’s police and fire pension, known as the F&P Employees’ Retirement System, has been growing.

“Wishful thinking” has left Baltimore and many other cities in a “great financial hole,” Rauh said. “By just continuing to expand the benefits, they’re running the risk of digging that hole even deeper.”

In a statement, Scott’s office defended the pension expansions, arguing that supporting public safety workers with strong retirement benefits is “simply the right thing to do” and an important step for addressing Baltimore’s ongoing shortage of police and fire officers.

The fire unions have backed the bill for similar reasons. If approved, the pension proposal would roll back several cuts made in 2010, under then-Mayor Stephanie Rawlings-Blake. The police and fire unions sued to overturn those changes, but the contentious, decadelong fight won back little of what they’d lost.

Significantly, Scott’s bill would shorten the end-of-career window that is used to calculate a member’s pension compensation — a measure aimed at hiking the payments. It would also do away with a two-year waiting period before cost-of-living adjustments kick in, increase an annual match the city tacks onto workers’ contributions and establish a vesting period for new hires, allowing members who walk away from service after 10 years to get some form of benefit.

These changes wouldn’t address one of the most significant 2010 reforms, which pushed back the tenure required to qualify for the pension from 20 to 25 years. The fire and police unions have welcomed the reforms outlined in Scott’s bill — and fire union leadership has asked City Council for even more generous benefits.

Some, though, expressed skepticism that these new benefits would help Baltimore’s shortage of police officers and firefighters.

Recruits are more likely looking at their immediate salary than these retirement benefits, which largely help the members deep into their careers or already in retirement, argued Jeffrey Hooke, a professor at the Johns Hopkins Carey Business School.

“They’re throwing them a bone,” he said.

The fire unions’ endorsement of Scott came at an intense moment in his reelection campaign, as a super PAC backing Sheila Dixon was launching attack ads on TV.

A month after the fire unions endorsed Scott, the national union pumped $50,000 into a super PAC backing Scott’s reelection. Two other firefighter groups added $21,000. Less than two months after drawing the endorsements, in early May, the Scott administration doled out $10 million in federal pandemic aid to the fire department.

Scott’s office said any attempt to link the pension legislation with the fire unions’ endorsement is “misguided” and “only serves to tarnish” a lengthy negotiation process. Discussions with the three public safety unions over new pension benefits began in July 2023 and weren’t finalized until late March – after the fire unions made their endorsement, Scott’s office said. In April, staff at City Hall began drafting legislation before introducing it to the council at the earliest possible date, two days after the primary.

Unlike the fire unions, the Fraternal Order of Police did not take a side in the mayor’s race.

Matthew Coster, president of the International Association of Fire Fighters Local 734, said fire unions have long had a rocky relationship with former mayor Dixon, Scott’s challenger, and his group’s endorsement decision didn’t come down to this pension plan.

Backing Scott was a “no-brainer,” he said.

osh Fannon, president of the IAFF Local 964, pushed back on the costs outlined in the Department of Finance report, calling the agency’s conclusions disingenuous and noting that the F&P’s actuary estimated a somewhat lower, $7 million annual cost for the proposed benefits.

And Fannon said this issue wasn’t a decider. Just about every candidate endorsed expansions to his members’ retirement benefits.

City Council members were quick to give their stamp of approval at a committee hearing last month.

“It should not be a fight here. This should be nice and smooth,” committee Chair Robert Stokes said at the top of the morning hearing, advising his colleagues that the Scott administration and firefighters had worked out a deal.

Several members spoke to the importance of a comfortable retirement for public safety workers. A representative from the Department of Finance fielded just one question from the council and was not asked to testify on the bill’s costs.

Stokes seemed pleased with the committee’s quick work.

“This is moving real fast,” he remarked before all of the committee members voted in favor of the bill. “I mean, y’all be able to still have breakfast.”