Pennsylvania's Public Employee Retirement Commission was an unlikely target for budget hawks, with a staff of five and a budget of not quite a million dollars. Not only was the watchdog agency designed to monitor the vastly larger sums managed by the state's numerous public pension funds - wherein a rounding error could pay for the commission - but its budget amounts to about two-hundredths of a percent of the new state spending Gov. Wolf has proposed in just the last year.
The governor's office nevertheless cited the "redundant and unnecessary" expense of PERC in eliminating its funding in the latest state budget and then its existence. The administration further weakened its already flimsy rationale by finding jobs for most of the commission's employees elsewhere in the government, diminishing whatever modest savings could be claimed and suggesting more dubious motives.
Created by the legislature in 1981, PERC produced objective analysis of legislation affecting public employee pensions, evaluated the soundness of the state's municipal pension funds, and determined the distribution of about $250 million a year in state aid to those funds. Pennsylvania's unusual proliferation of state-subsidized local pension funds, many of them serving 10 or fewer employees, made the commission particularly necessary. The commonwealth is home to a quarter of the nation's pension plans, some 3,200 of them, and they are underfunded by an estimated $7.7 billion.
Auditor General Eugene DePasquale told the Inquirer's Joseph DiStefano that the elimination of PERC was "a mess." Republican legislators sued to restore the agency, noting, rather persuasively, that it was created by law and can't be unilaterally dissolved by the governor.
DePasquale and the commission's longtime executive director, James McAneny, agreed that PERC's work has to continue and that the Auditor General's Office is the most likely place for it, though it was not prepared to take it on immediately. Wolf's office, which had suggested somewhat nonsensically that the state's pension funds could evaluate the municipal funds, didn't appear to have considered the question very carefully, offering wanly, "We appreciate the auditor general's offer."
In the absence of a more convincing plan or coherent reasoning, Wolf's decision looks careless at best and, as McAneny put it to the Allentown Morning Call, "personal" at worst. PERC certainly poses the threat of considered objectivity to an administration whose approach to Pennsylvania's pension crisis has been noticeably unserious. Last fall, for example, PERC issued an unfavorable analysis of a pension bill that was part of a failed budget deal between Wolf and Republican legislators. McAneny has also expressed justified skepticism about borrowing to pay pension obligations, a possibility floated by Wolf and Democratic lawmakers.