Pa. candidates agree pension system needs fix

The Republican and Democratic candidates for governor, all together for the first time last night, bemoaned one of the most pressing issues facing the state's next chief executive - the looming pension crisis.

But they offered no certain solutions.

When Gov. Rendell's second term ends in January, he will leave state government with a $20 billion pension gap. Although taxpayers are scheduled to pay $1.3 billion next year to help fund the pension system for state and school employees, that amount may have to grow severalfold in order to avoid default.

For years, the state has deliberately underfunded pension programs, the candidates said, leaving the system in need of major fixes over the next several budgets.

Meeting at the National Constitution Center in a forum sponsored by the Greater Philadelphia Chamber of Commerce and covering a wide range of issues, the two Republicans and four Democrats gave no point-by-point answers on how they would address the situation.

Instead, they pointed in the general direction of where they said they would look for solutions.

"We are insolvent right now," said Republican State Rep. Sam Rohrer of Berks County, beginning the discussion.

He noted that the pension problem was separate from the legislative battle over Rendell's proposed $29 billion budget, which could fall $450 million into the red if the federal government refuses to permit tolls on I-80.

"If Pennsylvania does not deal with this [pension] issue . . . we are only two years behind California right now, which is functionally bankrupt," Rohrer said.

He ruled out higher taxes, saying the answer would have to come from savings.

Democrat Jack Wagner, state auditor general, noted that municipal pension programs around the state were also in trouble.

Philadelphia's pension plan is $5 billion in the hole.

Wagner proposed that the "100-plus" pension programs for police and firefighters be rolled into one. That would eliminate scores of costly pension managers and advisers, he said.

He called it ridiculous that state employees are vested - guaranteed pension benefits - after five years of employment.

"How many private pension plans is it only five years?" he asked. "It needs to be increased to 10 years, or 15."

Allegheny County Executive Dan Onorato, also a Democrat, agreed that pension plans should be consolidated.

He suggested that all of the 3,100 pension programs across the state, mostly in small municipalities, be combined.

"Instead of having 3,100 professional advisers," he said, "you have one."

State Sen. Anthony H. Williams, a Philadelphia Democrat who formally announced his candidacy only recently, was brief. He said reductions in benefits had to be considered for workers.

"It is not music to many people's ears," he said, "but that is the truth."

State Attorney General Tom Corbett, a Republican, drew a laugh by commenting that after hearing so many calls for cost-cutting, he felt as though he was at a GOP convention.

"We have people retiring at 55 and living for 30 years. . . . Nobody ever factored that they would be that long in the pension system," he said.

He said he would call for a special session of the legislature "now" to address the crisis, and agreed with Wagner that five years of employment was too little for vesting.

"Employees are not going to want to hear that," he added.

Democrat Joe Hoeffel, a Montgomery County commissioner, agreed "the pension was made too lucrative."

But he pointed out that state employees and teachers had faithfully paid their share of costs while government employers had not.

"School boards and the state have not done their part," he said.