GAITHERSBURG – A state senator representing Montgomery County on Thursday defended pensions for future Metro employee pensions, which the general manager proposed replacing with fixed contribution, and suggested changes for state funding of Metro.
State Sen. Richard Madaleno (D- 18) said after a news conference Thursday he believes the presence of pensions and sufficient benefits improves Metro workers’ performance in their jobs.
Madaleno cited a 2015 article by Justin Wolfers and Jan Zilinsky of the Peterson Institute for International Economics, who said, on the basis of numerous studies, that workers with higher wages and pensions were likely to perform better as employees because they were happier.
“No matter what field you’re in, an employee with a good salary [and] benefits is a better employee and able to deliver better services,” Madaleno said. “Do you want a happy, focused bus driver driving 35 people around, or do you want an unhappy, distracted bus driver?”
About 75 people, many of them seniors, attended the news conference, which was hosted by local community organization Action in Montgomery at Church of the Ascension in Gaithersburg. AIM spokesperson Cynthia Marshall said the seniors traveled from retirement communities in the county to support their local bus drivers.
“The cheapest thing to do is to make sure that people have adequate benefits so that they are able to afford a healthy retirement as opposed to having government step in and pay for those costs later,” Madaleno said.
He said Metro should not replace pensions with 401(k)s for future employees because pensions would be the best value for the money.
“Having a pension helps ensure that a worker, a current worker, is able to be self-sufficient – financially self-sufficient as a senior citizen,” Madaleno said. “If they aren’t, it’s often the government that steps in and provides either for healthcare or for living expenses.”
It increases the likelihood that future retired employees won’t have to rely on government for such post-retirement costs, he said.
“It’s a classic ‘You can pay me now, or you can pay me later,’” Madaleno added.
Montgomery County Council President Roger Berliner (D-1) said he disagreed with Madaleno’s point of view.
“I don’t have a pension,” Berliner said Friday. “It isn’t clear to me why future hires should be in a system where basically no one has one anymore.”
“I don’t take any issue with Paul Wiedefeld’s efforts to find cost savings going forward to help create a sustainable Metro,” Berliner said.
“First, we have to make sure Metro services and functions in a safe and efficient manner that meets the needs of our community,” Madaleno said. “Then second, it’s important for us to protect employee benefits in general, and for those who work for public agencies.”
Madaleno said all three jurisdictions have money they could put toward a dedicated funding source or guaranteed source of finances that could specifically fund Metro. He specified where the state of Maryland has money it could spend on this.
“We’ve had a dedicated revenue source,” Madaleno said. “It’s called the gas tax.”
Maryland House Appropriations Committee member Del. Marc Korman (D-16), who represents Montgomery County, said he agreed with Madaleno on Metro pensions and he believes the Washington Metropolitan Area Transit Authority can find other ways to cut down on costs.
“If the conversation is we need to find ways for Metro to save money, that’s a broader issuer than to say, ‘Let’s cut (and replace) pensions,’” Korman said.
Wiedefeld, in his April proposed fiscal management plan and proposed changes to Metro’s business model, requested the three jurisdictions, D.C., Virginia and Maryland, contribute an additional combined $500 million in dedicated funding, on which Metro could sell bonds. He left the decision as to the source of the money to each of the jurisdictions.
The source of the money, or “dedicated funding source,” has been a cause of disagreement between the funding jurisdictions to WMATA in the last several months.
Korman said he believes Metro will continue to receive Maryland money through the Transportation Trust Fund, which is where money from the gas tax goes.
“Historically Maryland has funded our commitment to Metro through the gas tax and the other revenue in the transportation trust fund,” Korman said. “Many of us would like to see that continue.”
Members of the Maryland General Assembly would have to agree to approve some technical changes to how the state gives transportation money to Metro before Metro would be able to sell bonds on it, Korman said.
Korman said he agreed with Madaleno that pensions for front line Metro employees should stay.
“I don’t think there’s any need to do that,” Korman said Monday.
Action in Montgomery is composed of several community and faith organizations in Montgomery County and is a member organization of the national group Industrial Areas Foundation.