Pennsylvania House passes pension reform
By Debra Erdley
Published: Thursday, June 17, 2010,
The state House on Wednesday passed by an overwhelming margin a bill to cap state and local payments to Pennsylvania's two large public pension plans, defer costs and reduce benefits for new hires and incoming lawmakers.
The bill, awaiting action in the Senate, would reduce a looming spike in taxpayer payments to the state employee and teacher pension funds by a maneuver akin to refinancing a mortgage for a longer period of time. A second provision would slice benefits for new employees and lawmakers.
"I think it is a significant first step in the process of dealing with pension reform," said Senate Majority Leader Dominic Pileggi, R-Delaware County, whose staff was reviewing the bill.
The House bill that passed 192-6 would not cut benefits to current employees, sitting lawmakers and judges.
Johnna Pro, a spokeswoman for House Appropriations Committee Chairman Dwight Evans, D-Philadelphia, said the state constitution bars any reduction in benefits for judges.
Experts estimate increased government contributions to the two pension plans that come due in two years -- barring legislative action -- would boost property taxes on average by more than $500 per homeowner. Overall annual tax-funded payments would increase about fourfold.
Pileggi cautioned the bill's cost could be an issue with the Senate. He said the plan to refinance obligations over 30 years carries a $52 billion price that is offset only partially by reductions for new hires. Experts estimated those reductions would save the state $25 billion over 30 years, leaving taxpayers with $27 billion in additional costs.
The House bill's provisions to cap payments for the immediate future and defer higher costs mirror proposals by Gov. Ed Rendell in his budget address.
The bill would reverse many benefit increases the Legislature approved earlier this decade when lawmakers granted themselves a 50 percent pension boost and extended a 25 percent increase to state and school employees.
Benefit reductions would affect state and school employees hired after Jan. 1 and lawmakers who take office after Dec. 1. Benefits would be calculated on a lower scale; the retirement age would increase; vesting for full membership in pension plans would rise from 5 to 10 years; and members would be prohibited from withdrawing their contributions, plus earned interest upon retirement.
The leaders of the state's two largest teachers unions, the Pennsylvania State Education Association and AFT Pennsylvania, support the bill.
"Although we would have preferred not to have any benefit reductions, we believe this amendment will help solve the pension funding crisis and offset unprecedented layoffs, furloughs and cuts to academic programs faced by school districts," PSEA President James Testerman said.
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.
- Corbett seeks approval for Medicaid alternative
- Grants aren’t the same old payouts, Corbett says
- Pa. to vie for Boeing plant
- Bill would require disclaimer on Liquor Control Board ads
- Deer an active threat to motorists
- Mother, daughter killed in buggy crash identified
- Former postmaster pleads guilty
- Older volunteers leave big shoes to fill
- ‘Moving Memorial’ on way to Somerset, drives home dangers of DUI