Pension bill brought back to House floor

An amended pension reform bill may have found new life Wednesday after it was tied to a bill authorizing Philadelphia to impose a $2 tax on cigarettes.

The bill was brought back to the state House floor Wednesday as part of a compromise between Democrats and a group of Republicans who opposed the pension reform and is likely on the agenda for the fall. The cigarette tax bill, mostly championed by Democrats, passed 119-80.

The pension bill was almost spiked entirely Tuesday when House Democrats and a small group of Republicans voted 107-96 to send it to the House Human Services Committee, where it was expected to die.

Rep. John McGinnis, R-Altoona, said House Republican leaders were likely caught off guard by Tuesday’s vote to essentially kill the pension reform bill, which led to the compromise.

“That was unsettling to me and unsettling to leadership,” he said. “They were completely surprised.”

McGinnis voted against sending the bill to committee on Tuesday, even though he doesn’t agree with the provisions. Rep. Jerry Stern, R-Martinsburg, and Rep. Mike Fleck, R-Huntingdon, voted in favor of sending it back to committee.

The current version of the pension reform bill is an update of House Bill 1353, originally introduced by Rep. Warren Kampf, R-Paoli. It was later changed by Rep. Mike Tobash, R-Schuylkill Haven.

McGinnis, a sponsor on Kampf’s version of the bill, said the amended version fails to address needed aspects of pension reform. The original bill, he said, aimed to enroll employees in defined contribution plans, which would specify how much money would go into the employees’ retirements.

The updated pension plan, however, instead is built mostly around defined benefits plans, which many corporations are now moving away from, though it has some components of defined contribution plans.

Gov. Tom Corbett has championed pension reform in recent months and suggested this week that he would not approve the state budget without some kind of pension reform also passing.

In a statement, he commended House Republican leaders for getting the bill back to the floor.

“This vote demonstrates that we can set partisan politics aside – giving Pennsylvania taxpayers the fighting chance that they need to keep property taxes from spiraling out of control,” Corbett said in the statement.

McGinnis and Stern both noted that the plan would not address the state’s unfunded liability, which could rise to more than $65 billion by 2018, though their votes Tuesday were different.

Stern said the current proposal would “kick the can down the road” with needed payments.

McGinnis said that the state is underpaying the liability and that it will never be easy to convince legislators to spend more money for these type of expenses.

“How do you refund the system over 30 years when you need to refund it in 15?” McGinnis said. “If it’s politics versus math, they’ll pick politics. It’s just easier.”

McGinnis said the bill is set to come up for a vote in the fall, though Corbett could conceivably call a special session of the General Assembly to push it through sooner.

Mirror Staff Writer Paige Minemyer is at 946-7535.