Saturday, August 30, 2014
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PA's Pension Problem

As the year winds down, the chatter over fixing PA's pension problem picks up...and it sounds like a solution won't be easy.

PA's Pension Problem

As 2012 winds down, chatter over fixing PA's public pension problem picks up. But about the only thing that's clear is how difficult a problem it is to fix.

Gov. Corbett Tuesday told the Pittsburgh Tribune-Review editorial board that among options are raising the retirement age for state and public school workers, changing the formula for calculating pensions (i.e. reducing them) and applying such changes not only to new state workers but also to those not yet vested in the system.

This immediately brought a response from the president of PA's AFL-CIO, Rick Bloomingdale, who called the debate a "phony crisis," and from the Republican state House where its top spokesman Steve Miskin said, "I wish he (Corbett) would talk to the leaders before he goes to the press" with proposals.

So not exactly a unified front.

But the long-festering problem -- caused by years of greed, leadership neglect, bad decisions and a sour economy -- apparently really is coming home to roost.

Corbett's office says pensions for state workers and school employees cost taxpayers $1.5 billion this year, jump to $2.2 billion next year, $5.2 billion by 2019 -- and it projects a $41 billion unfunded liability.

The Harrisburg Patriot-News in a Wednesday editorial notes the only options are raising more revenue (though Corbett rules out any tax increases) or cutting benefits (which surely leads to years of litigation).

The Patriot points to the booming natural gas industry, the paltry local "impact fee" it pays (thanks to its friend in the governor's office) and suggests that a real drillers' tax could bring state coffers anywhere between $24 billion and $48 billion to deal with pension costs.

Problem is Corbett is a "Grover" on taxes and again pledges not to raise them. The Legislature is incapable of doing anything other than collecting annual, automatic pay raises. And unions remain a powerful special interest with deep pockets to mount and sustain litigation against pension changes.

All of which suggests the money just to pay for current pension obligations (not to fix the unfunded liability) will come from the only place it can: big-ticket state budget items such as welfare and education.

So stay tuned, Pennsylvania. Your pension problem is likely to get painful rather than fixed.

 

John Baer Daily News Political Columnist
About this blog
John Baer has been covering politics and government for the Daily News since 1987. The National Journal in 2002 called Baer one of the country's top 10 political journalists outside Washington, saying Baer has, "the ability to take the skin off a politician without making it hurt too much." E-mail John at baerj@phillynews.com.

John is the author of the book "On The Front Lines of Pennsylvania Politics: Twenty-Five Years of Keystone Reporting" (The History Press, 2012). Reach John at baerj@phillynews.com.

John Baer Daily News Political Columnist
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