Make pension contributions
Gov. Tom Corbett, in his state budget pension proposal, wants to substantially reduce the state's pension contributions below those required by current law. This reduction, achieved by lowering the state's pension ‘collars' (i.e., the maximum annual increase in pension contributions), would be 2.25% of salaries in 2014-15, 4% of salaries in 2015-16, and as much 5% to 6% in 2016-17 and 2017-18.
Corbett's own November 2012 pension report and pension experts across the board have recognized the state's failure to make required annual contributions to pensions as the main reason that Pennsylvania has a large pension debt today. In fact, Pennsylvania ranks 48th out of 50 states measured by the share of required annual contributions it has made since 2003.
Reducing contributions to pensions is not an effective recipe for addressing Pennsylvania's pension debt.
I also worry the governor wants to spend the savings from an unspecified legislative change to state pensions. He made a similar proposal in his 2013 budget address. But three actuaries reported the Corbett proposal to shift new employees into 401(k)-type defined contribution pension plans would not decrease the state's pension debt, but increase it by $40 billion.
Making the pension contributions required under law should be the starting point for lawmakers considering the ‘14-15 budget. Anything less is, to borrow the Governor's phrase, ‘kicking the can down the road.'”
The writer is an economist and executive director of the Keystone Research Center in Harrisburg.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- ‘Affordable’? Not for him
- Arnold’s garbage
- Pass GMO label bill
- ATI’s broken promises
- Thinly veiled disdain
- Wrong on immigration II
- Helping the horses
- Right on race
- Report reactions II
- PNC: New roles for helpers