By Debra Erdley

Published: Wednesday, November 28, 2012, 12:01 a.m.
Updated: Wednesday, November 28, 2012

The Legislature and other stakeholders must develop ways to overhaul the state pension system, which a new report has shown doesn't have $41 billion needed to pay future pension obligations, a spokeswoman for Gov. Tom Corbett said.

The governor will not issue specific recommendations for tackling the issue, said Corbett spokeswoman Christine Cronkright.

“As far as we're concerned, the next step is concerted work with the Legislature and other stakeholders to develop concrete ways that we can address the pension issue in Pennsylvania. … We cannot develop solutions in a vacuum,” she said.

Jerry Shuster, a political communications professor at the University of Pittsburgh, said Tuesday it is not surprising that Corbett is approaching the issue gingerly even though Republicans control the governor's office and both chambers of the Legislature.

“This is one time where being in the majority is a disadvantage. I think the Democrats are going to sit back and say, ‘Let the governor make a proposal, and we'll see how it works out,'” he said.

Many public employees consider pension promises a sacred trust, said Terry Madonna, a political science professor at Franklin & Marshall College, who paid into the state pension system when he worked at Millersville University.

He acknowledged the problem is pressing. The $41 billion unfunded liability is about one and half times as large as the state's annual budget, and state contributions are increasing every year.

“It's not just a hot potato, it's a monster hot potato,” Madonna said.

One Pennsylvania pension fund covers state employees; a second covers public school workers.

No one wants to be remembered for inflicting pain on large public employee unions with powerful political action committees, Shuster said.

Union officials say that appears to be the Corbett administration's approach by ruling out new taxes and suggesting that there may be a way to reduce benefits that current workers earn in the future.

Mike Crossey, president of the Pennsylvania State Education Association, said suggesting a future reduction sets up false expectations since Pennsylvania courts have consistently held that pension benefits of public employees cannot be adjusted.

David Fillman, executive director of AFSCME Council 13, which represents 45,000 state employees, said the administration's pension report on Monday offered no new solutions for a problem that has been growing since lawmakers boosted pension multipliers in 2001 and then failed to make the state's full contributions when market returns were strong.

Employees didn't create the problem, he said.

Debra Erdley is a staff writer for Trib Total Media. She can be reached at 412-320-7996 or derdley@tribweb.com.

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