Gov. has better options to reduce deficit
Gov. Corbett, pressing for pension reform now, has reported that our state’s underfunded pension liability, without pension reform, will increase to $65 billion by 2018, necessitating him to bring forth his pension reform plan.
Many of the proposed changes – capping future pension, removing overtime from pension computations and reducing the multiplier used to calculate pension amount for current employees for the remainder of their state employment after 2014 – possibly violate Pennsylvania’s constitution and are likely illegal under existing state union contracts.
These changes will be challenged in court, delaying their implementation.
Any pension reform action pursued must avoid any delaying court challenge. The following actions taken requiring Democratic and Republican cooperation meet that criteria and can be done now:
1) Offer pension buyouts to some state employees;
2) Issue Pension Obligation Bonds (POB) to raise funds to reduce pension shortfall, an action being taken by other states with underfunded pensions.
3) Identify and sell excessive state assets such as unneeded prisons, land, other holdings, placing some of the receipt in the two underfunded pensions.
4) Divert some of the state’s other income into the underfunded pensions. For example: Use some of the income received from the state’s 18 percent tax on liquor sales generated by a tax passed in 1936 to help fund Johnstown’s recovery from the 1936 Johnstown flood.
5) Modernize Pennsylvania’s State Liquor Store system rather than selling that franchise, avoiding laying off 4,000 state employees who pay into the SERS Pension Fund.
Contact your state lawmakers, telling them to pursue these five practical actions.
Melvin Fees, Cresson