State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Critics: Corbett's expected pension plan kicks the can

Written by Mary Wilson, Capitol Bureau Chief | Feb 3, 2014 6:12 PM
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Photo by Mary Wilson / witf

“I present a budget, and everybody shoots at it.”

That quote comes from a 2012 interview with Gov. Corbett in which he described, from his own perspective, the ritual of delivering the annual state budget address.

This year, the shooting began even earlier, as the governor went on a good news tour,  offering previews of his budget proposal – or, as he frequently puts it scooping himself.

Corbett called for more money for abuse victims’ assistance, programs serving people with intellectual disabilities, early education grants, and state parks. He has not detailed where the proposed increases would come from – a matter of some importance, given the estimated deficit of more than $1 billion in the 2014-15 fiscal year.

But Corbett is also expected to reduce what the state is scheduled to pay into its underfunded public pension systems. That was a tidbit shared in smaller meetings with select reporters -- not like the other previews, which were announced during public press events scheduled across the state.

On Monday, critics of the governor’s past proposed changes to the pension systems labeled the leaked plan a bad idea.

“That would certainly make our short term budget problems easier to handle, but it’s also a long term very bad decision for the state’s fiscal health,” said Democratic Auditor General Eugene DePasquale.

“That’s exactly how we got in this mess in the first place,” DePasquale continued, calling out state government and school districts for “not putting in what they were supposed to for their pensions. And we’ve got to get beyond the one-year quote unquote quick fix, which only makes the long term situation even worse.”

The state’s bill is expected to jump by $600 million next fiscal year. Corbett has likened it to Pac-Man, threatening to eat up all the commonwealth’s discretionary spending.

“It would be remarkable, given how we got into the current situation with pensions, if the governor proposed to kick the can down the road once again,” said Stephen Herzenberg, director of the left-leaning Keystone Research Center.

Herzenberg said money for education and other state budget line items shouldn’t come at the expense of the already underfunded public pension systems. (He supports repealing business tax cuts in order to come up with additional funds.)

Last year, Corbett proposed a three-pronged pension overhaul plan, which also included reductions in the state’s scheduled payments to the pension funds. His budget secretary, Charles Zogby, has said such adjustments should be accompanied by changes to employee benefits and the structure of public pensions, as the PA Independent reported:

... Zogby made it clear that any changes to the collars should be made only as part of a deal to cut into that massive long-term debt.

Without those long term cost savings, it would be kicking the can down the road, Zogby said.

At one of his public budget previews last week, Corbett said his proposed spending boosts aren’t dependent on his plans for pension overhaul.

“You mean, did we tie the pension reform to these budget increases?” Corbett said Thursday. “I don’t believe so.”

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