Wolf vetoes GOP-backed pension bill

HARRISBURG - Gov. Wolf on Thursday vetoed the Republican-backed pension reform plan, striking down the final piece of a trifecta of budget bills from the GOP-controlled legislature.

Wolf said that he understood the need for reining in the skyrocketing cost of public-employee pensions, but that "this legislation provides no immediate cost savings to taxpayers and does not maximize long-term savings for taxpayers."

"We need pension reform that works," Wolf said in a statement.

Legislators passed the bill last week, and Wolf's decision not to act on it immediately raised the prospect that it could be a middle ground or opportunity for compromise during a contentious budget negotiating season.

His veto instead turned out to be the latest sign of the gap between the sides, and it led to more volleys in their public war of words. No face-to-face talks are scheduled between Wolf and Republican leaders, and - with the budget nine days past due - there is no end in sight to the stalemate.

The pension bill had proposed moving all new state and public school employees into a 401(k)-style plan. It would not have affected current employees, whose pensions are calculated using a formula that relies on their years of service and highest three years of pay.

The governor has instead proposed borrowing $3 billion to help pay down the state's pension debt, and using proceeds from modernizing the state's wine and liquor stores to help pay the debt off. Republicans have rejected that idea.

Pension reform is just one of the signature concepts in the budget talks. Wolf wants to end the reliance on property taxes to fund schools, and pay for his $29.9 billion plan with hikes in the state income and sales taxes as well as a new tax on natural gas drillers.

The new fiscal year began July 1. Without a budget to guide spending, the state loses some of its authority to pay bills. By month's end, the state will be unable to pay its contractors as well as local governments and nonprofit organizations that rely on state funding to provide social services.

The Wolf administration early in the day released a statement that the governor had tried, but that "Republicans have brought nothing to the table but gamesmanship, rhetoric and an unbalanced budget."

Republicans, in turn, accused him of "campaign-style," negative attacks and have complained that while Wolf comes to the negotiating table, he has refused to budge on any of his half-dozen proposed tax increases, which they say they cannot support.

"His plan needs $8 billion in taxes," said Rep. Bill Adolph (R., Delaware), chairman of the Appropriations Committee, "and he has not moved off any of that. That's the problem."

Adolph and others called the governor's veto of the pension reform plan another example of unwillingness to compromise.

"He is rejecting tangible, systematic changes to reform the public employee pension systems, which are currently the number-one reason for property-tax increases," top Republicans, including Senate President Pro Tempore Joe Scarnati (R., Jefferson) and House Speaker Mike Turzai (R., Allegheny), said in a joint statement.

They added: "Gov. Wolf's plan to borrow to pay pensions does not fix the problem. We have clearly seen that Gov. Wolf's actions speak louder than his words on wanting to provide property-tax relief."

Wolf late last month vetoed the Republican-backed $30.1 billion budget in its entirety.

He has also vetoed a GOP-authored bill to privatize the sale of wine and liquor.

On Friday, Wolf plans to resume his statewide tour to tout his budget proposal, this time with a stop in Allentown.

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