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Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

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Administration hints at pension overhaul 2.0

Written by Mary Wilson, Former Capitol Bureau Chief | Dec 20, 2013 1:50 PM
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Photo by G.R. Wilson

Gov. Corbett's team seems to be gearing up for round two of the fight to overhaul the state's public pension systems in 2014, despite the looming obstacles in the year ahead as the state budget picture continues to look bleak and the gubernatorial election begins to heat up.

The administration has released estimates showing an eye-popping budget shortfall in next year's spending plan budget, due in part to rising pension costs.

The governor tried and failed to advance a plan last June that would alter pension benefits and shrink the commonwealth's scheduled payments on its pension debt.

Democratic opponents question the proposal's constitutionality and cast doubt on its effectiveness to reduce the debt, last pegged at $47 billion dollars and growing. But the administration is hinting that new proposals are in the works.

Budget Secretary Charles Zogby said at his mid-year budget briefing this week that there's interest in relieving some of the burden of rising pension costs for school districts.

"We're looking right now at, I think, some options that could potentially provide some promise for a strong reform package in the new year," he said.

And pension overhaul is on the tip of the tongue for others in the administration.

"It has to get addressed at some point - even if it's just starting the process," said Leslie Gromis Baker, the governor's chief of staff. "It's not saying that we're going to solve it all in one year or in one initiative but we got to just start the process of getting the pension crisis under control."

Democrats mobilized around the governor's pension overhaul plan this past year, and one of the eight announced Democratic gubernatorial candidates is state Treasurer Rob McCord, who blasted Corbett's plan as one that would ultimately add billions of dollars to existing pension costs.

Baker said the governor isn't shying away from the issue, even as he enters an election year, but she suggested he may scale down his wish-list when he goes to the Legislature in February to deliver a budget address and his major policy objectives for the year.

"He's never been afraid to take anything on," Baker said, referring to Corbett. "But we deal with reality, and the reality is it's hard to get really big initiatives done all at one time."

Charlie Gerow is a Republican consultant in Harrisburg who now employs the governor's former press secretary, Kevin Harley. He said Corbett can build on his success delivering transportation funding by pivoting now to the pension issue.

"I don't know that they'll get everything they want," Gerow said. "They may not get a lot at all, but I think you'll see some effort in that regard."

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