PA House leaders: Pension legislation will be changed

In yet another development concerning a $700 million relief bill for Philadelphia, House Democratic leaders now vow to change the legislation sent to them last week by the Senate.

Besides providing money that could resolve Philadelphia long-outstanding budget crisis, the legislation as amended by the Senate sought to change municipal pension systems statewide. It's the pension changes that the House may now strip from the bill, possibly returning the measure to its original form, including solely a sales tax increase for Philadelphia as well as allowing the city to defer payments into its pension fund.

Here's the press release from the Pennsylvania House Democratic Caucus:

HARRISBURG, Sept. 4 - House Democratic leaders will change proposed legislation meant to stabilize underfunded municipal pension plans in an effort to allay concerns by police and firefighters, the city of Pittsburgh, the attorney general and communities around the state.

The legislation, House Bill 1828, originally was intended only to shore up Philadelphia's underfunded pension system and stave off the city's financial collapse. However the state Senate made substantive and complicated changes to the language and merged it with an existing bill to create new rules for 3,100 municipal pension systems across Pennsylvania. The new version has drawn concerns from a broad constituency, including police and firefighters, as well as the city of Pittsburgh. As a result, a scheduled House vote on the bill has been postponed from Sept. 8 to Sept. 10.

"It's not enough just to move this legislation quickly; the legislation needs to be done right and with the goal of solving the pension issue not just for our largest cities, but for every one of our municipalities that could be facing financial ruin in their pension system for years to come," said House Speaker Keith McCall, D-Carbon. "That's why the leaders and our staff are continuing our work through the entire Labor Day weekend to go through the details and come to a solution that will work for cities of all sizes and for every one of the state's 3,100 different pension systems."

"House Bill 1828 includes important language that will help thousands of municipalities throughout the state – including the city of Hazleton in my home district – that are reeling from significant financial losses in the stock market during this economic recession," said Majority Leader Todd Eachus, D-Luzerne. "This bill will provide necessary relief to these municipalities. However, we must also ensure that our first-responders retain their collective bargaining rights and their benefits are protected in this legislation."

State Reps. Jewell Williams and Dwight Evans, both Philadelphia Democrats who co-sponsored the bill, said House Bill 1828 is critically important to the short- and long-term fiscal health and viability of the city of Philadelphia. It provides for municipal pension changes and authorizes a five-year temporary 1 percent increase in the local sales tax.

If the legislation is not enacted quickly, the city will be forced to implement a wide-ranging cost-savings program that will include laying off 3,000 employees, including police officers, limiting trash collection and closing down entire departments.

"I am troubled that we were not able to deal with the statewide pension issues in a separate piece of legislation because it delays our ability to help Philadelphia," said Evans, who is also chairman of the House Appropriations Committee. "I am also deeply concerned that 3,000 people employed by the city could get layoff notices. But the changes to the bill were significant and our members and constituents raised serious concerns. I am confident we will get this done and I will do everything I can to make this happen next week despite the delay in the vote."

"The delay will give us time to review some options that will help us craft amendments on bills that will help Philadelphia and will still resolve statewide concerns," said Williams, who is chairman of the Philadelphia Delegation.

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