Pension issue must be priority
Most Pennsylvania taxpayers wouldn’t mind a budget impasse at the end of the commonwealth’s fiscal year on June 30 over the ongoing pension-funding morass.
Meaningful action is needed to ease the budget-busting and the taxpayer-unfriendly effects of the Legislature’s 2001 pension “generosity” that gave lawmakers, other state employees and public school teachers hefty retirement increases.
A 2014-15 budget should remain in limbo until such action is forthcoming. And, “meaningful” doesn’t mean a repeat of past stopgap measures that simply kicked the pension “can” down the road.
Gov. Tom Corbett hinted during an impromptu news briefing on June 10 that he’s prepared to hold up the new budget if lawmakers fail to pass legislation capable of significantly reining in soaring pension costs for future state and school employees. He should make good on that “hint” if necessary.
Of course, if he does, the Republican governor would be doing battle with a GOP-controlled General Assembly, which makes such a battle during this legislative and gubernatorial election year seem less than likely.
Even if an impasse is avoided, the product of the needed pension action wouldn’t be great instant relief for the state government’s estimated
$1 billion-plus 2014-15 budget dilemma. Corbett was right on June 10 when he said “we’ve got to take a look at all the sources of revenue. We’ve got to take a look at all the funds that are out there.”
That search for additional revenue must include the Marcellus Shale gas-drilling industry, which currently has Corbett administration sweetheart status by not being taxed in the way other shale states are reasonably extracting revenue from that industry.
Corbett isn’t promising any tax action targeted specifically at Marcellus. He merely suggested on June 10 that he might be willing to support new taxes to ease that estimated $1 billion-plus shortfall facing the 2014-15 fiscal package.
Regarding the pension issue, Corbett supports a remedy proposed by Rep. Mike Tobash, R-Schuylkill, that would combine a limited traditional, defined-benefit pension with a 401(k)-style defined-contribution plan like more and more businesses are implementing.
But that remedy would save only about $10 billion over 30 years. It would not affect hundreds of thousands of current public employees of the Public School Employees’ Retirement System and the State Employees’ Retirement System.
Thus, the Tobash measure is not a godsend.
In the final analysis then, the tough budget-pension stance to which Corbett alluded on June 10 would be but a weak gesture targeted at a colossal budget beast that needs tamed by strong, immediate, wide-ranging remedial steps – some contrary to ill-advised Corbett campaign promises of four years ago.
The message is clear: Corbett must do better.
Whether he has the courage to break those four-year-old promises to get the state back on the right fiscal path is a question that will be answered during the next two weeks.