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Counties to absorb some teacher‑pension costs and face local aid cuts under budget

Judicial Proceedings Committee · February 4, 2026

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Summary

The governor’s budget shifts an estimated $39 million in teacher retirement costs to county governments and levels disparity grants to fiscal 26 formula amounts, disproportionately affecting Prince George’s and Allegany counties.

Committee members pressed budget staff on local impacts. Dave said the plan shifts about $39,000,000 of teachers', librarians' and community college retirement costs to counties — a permanent change that adds to roughly $98,000,000 shifted last year. He directed members to page 56 of the fiscal briefing for county‑by‑county impact numbers.

Disparity grant and community college changes: Dave said the disparity grant is level‑funded at the fiscal 26 formula level, saving roughly $27,000,000; Prince George’s County would lose about $17.5 million and Allegany County about $6 million. Community college funding grows $11,000,000 overall but caps individual school growth at 3%, saving about $21,000,000 statewide.

Member concerns and context: Senators asked whether the teacher‑pension shift is permanent; Dave confirmed it is. Members said they wanted specific data for Harford County and other localities; Dave said the fiscal briefing provides breakdowns. The committee did not take formal action; members asked staff for follow‑up information.

Next steps: Committee members requested county‑level analysis and staff follow‑up on how the combined shifts will affect local budgets and service delivery.