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CPBJ Extra Blog

Dear Pennsylvania: We need pension reform

By - Last modified: June 19, 2013 at 9:12 AM
Jason Scott
Jason Scott

With time working against him on several key policy objectives, Gov. Tom Corbett reached back into his bag Friday and pulled the open letter card.

His intent was pretty obvious: Remind taxpayers how much their property taxes could go up if lawmakers do not act on legislation to revamp the commonwealth’s public sector pension systems.

The State Employees’ Retirement System and the Public School Employees’ Retirement System have combined unfunded liabilities of more than $47 billion.

Democrats have argued that reforms made in 2010 should solve the problem over time. It could be bumpy for awhile.

However, the Republican majority has been pushing a multifaceted approach that would convert the systems to defined-contribution plans for new hires and make changes to future benefits for current employees.

The Corbett-backed plan also would make short-term collar adjustments on the annual increase in the employer contribution limit.

Now is the time to make these reforms, the governor and many Republicans have said. General fund contributions are expected to rise to about $3.4 billion by the 2017-18 fiscal year, a major increase from the $518 million contributed in 2010-11, according to the administration.

And Corbett was sure to note that local taxing bodies are in the same boat. More than one-third of public school districts have applied for exceptions to increase property taxes above normal limits, he said, citing pension costs as the primary cause.

But with a 2013-14 budget in the works, plus liquor privatization and transportation infrastructure funding dominating the current dialogue, the floating pension bills don’t appear to have the necessary backing to get through here in June.

Maybe the letter will work. Maybe taxpayers facing the prospect of a $13,000 pension contribution — that number according to the administration to eliminate a pension debt of more than $65 billion by 2018 — will call on lawmakers to make these major tweaks.

If they don’t do it this year, there probably is no chance of it happening next year in a much bigger election year.

What do you think will happen here in June? What about the fall?


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