St. Mary’s County Commissioner Michael Hewitt
Leonardtown, MD — Several of the new St. Mary’s County Commissioners feel the previous board was over-aggressive in stoking the trust fund for future employee health care costs (called Other Post-Employment Benefits or OPEB). Commissioner Michael Hewitt (R- District 2) raised the issue during a discussion of the audit for the Fiscal Year 2014 budget and also the previous day during a budget work session.
Hewitt claims that current residents, particularly those getting close to retirement, are paying now for benefits for future generations. Hewitt, instead, wants the commissioners to consider imposing a property tax increase freeze for residents aged 65-75. He said his proposal could sunset in 10 years and the board at that time could revisit it.
Hewitt noted that Montgomery County, with all of its wealth, hasn’t funded at the rate of St. Mary’s. He also used Worchester County as a county with a larger tax base that has taken a more modest approach to OPEB contributions. Others contributing less are neighboring Charles and Calvert counties.
Hewitt asked the county’s auditor, Tim Murphy, if there were any regulatory repercussions for failing to contribute to an OPEB trust fund. Murphy said there were reporting requirements but no penalties for not funding it. The fund is aimed at spreading out the future county’s financial obligation for retiree health care over 30 years. Hewitt said the county’s contribution last year was 320 percent more than the minimum requirement.
“I don’t know why we are so committed to doing it (funding OPEB) when so many aren’t,” Hewitt said.
Commissioner Todd Morgan (R- District 4), who is the sole member from the previous board, said, “The OPEB liability is there whether we fund it or not.” He said the county is only funding about 50 percent of what actuarial studies show would be needed to have enough money to cover the health care costs.
Commissioner Tom Jarboe (R- District1) noted that he didn’t favor not funding OPEB for a while but to “just stop accelerating it.”
County Chief Financial Officer Elaine Kramer said a study was done last year about the impact of a credit for senior citizens and she would provide it to the board. Morgan noted that the county is doing a lot more than others in providing tax help to senior citizens.
The senior tax freeze will be one item to be considered as the commissioners begin budget deliberations in earnest after the first of the year.
Contact Dick Myers at dick.myers@thebaynet.com
Reporter’s Note: 12/17/14, 10 p.m. — Commissioner Todd Morgan tells the Bay Net that the 320 percent increase referred to by Hewitt was during the Fiscal Year 2008 budget before his term began.