Legislation that started as an innocuous law to set the oath of office for members of the state pension board somehow morphed into yet another swipe at Comptroller Peter Franchot.
Franchot is asking Gov. Larry Hogan to veto the bill that would ensure no Maryland comptroller would ever again chair the pension board. Instead, under the legislation, that role would fall in perpetuity to the state treasurer — a change that raises questions about whether Treasure Nancy Kopp will continue in the job or might be replaced by House Speaker Michael E. Busch.
Franchot called the change “outrageous” and claimed it would have an effect on how bond rating agencies view the stability of the state.
“I’d be very interested in finding out who proposed this amendment, why it was proposed and why wasn’t the treasurer — the chair of the board — informed, if she wasn’t,” Franchot said.
Senate Bill 178, as passed by the Senate, was meant to codify the oath of office for members of the state employees’ pension system board of trustees and how it is administered.
On the last day of the session, the House Appropriations Committee amended the bill to ensure that the treasurer chairs the board in perpetuity. The amendment was a committee amendment and it is not known who proposed it.
Franchot in comments to a reporter and in a letter to Gov. Larry Hogan, cited concerns about how the changes will be reacted to by bond rating agencies who closely monitor how the state administers its pension system. He also criticized the legislature for passing the change in what he called “a clandestine manner.”
Kopp, who has chaired the pension board for the last 11 years, said the current system has worked well and added that she didn’t know about the proposed changes until after they were passed.
“I think this was perhaps a message to (Franchot),” said Kopp without using Franchot’s name. “Another one, yes.”
“I’m not sure there is a benefit to it other than traditionally the treasurer has had more experience in pension issues, but beyond that,” said Kopp.
A Hogan spokeswoman declined to comment on whether the governor would sign or veto the bill. Any bill vetoed by the governor this year would not be eligible for an override vote next year.
Del. Maggie McIntosh, D-Baltimore City and chair of the House Appropriations Committee, did not return a call seeking comment.
Franchot has found it more difficult to deal with the legislature controlled by his own party, as leaders of the House and Senate have expressed frustration with his behavior both on the Board of Public Works and on social media. They also have been irked by his relationship with Hogan, one they view as too cozy for a Democrat to have with the Republican incumbent.
In the just-finished legislative session, the General Assembly killed Franchot’s top legislative priority — legislation to ease state restrictions on craft brewers.
McIntosh was directly involved in another poke at Franchot, authoring amendments to a school construction bill that cuts out the Board of Public Works in overseeing the disbursement of state aid to construction and renovation projects. McIntosh said the amendment was directed at Franchot.
Hogan vetoed the bill, but the General Assembly overrode his actions quickly.
Some State House insiders have pointed to the proposed change on the pension board leadership as a harbinger of a potential change in state government involving Kopp and Busch.
While the positions of the chair and vice chair of the pension board are not determined by law, tradition has held that one of the two constitutional officers on the board — the comptroller or the treasurer — serve as the leader of the panel with the other in the vice chairman role. The assignment of positions is typically determined by seniority.
Kopp, who was selected by the General Assembly in 2002, has five more years experience than Franchot and has led the board for the last 11 years. She would likely continue to lead the board until she retired and a new treasurer is selected, at which point Franchot, with his greater seniority than the newcomer, could expect to take over.
If the bill becomes law, a new treasurer with less experience would assume the chair of the pension board over Franchot.
The legislature elects the treasurer, but typically the House, by virtue of having three times as many members than the Senate, tends to pick who serves in the position.
Kopp, 74, has been the subject of rumors that have her either not running or stepping down after another term. Busch, 71, and the longest-serving leader of the House in state history, has also been the subject of transition rumors.
Those rumors, which include a move to the state treasurer’s office, continued after the speaker’s liver transplant last summer. Busch is running for re-election to his seat and a spokesman declined to comment on the bill and amendment for this story.
“The speaker has filed for re-election and fully intends to continue serving as speaker of the Maryland House of Delegates,” Alexandra Hughes, Busch’s chief of staff, said in a statement. “Despite a decade of speculation in Annapolis about his interest in being treasurer, the speaker has run for re-election for Speaker every year and never sought the position of treasurer.”
Kopp said she plans to run again for the position in February.
“I’m not thinking about that,” said Kopp. “I’m not planning a transition. Obviously that would be one of the reasons for trying to protect (the pension chairmanship).”
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