ShareThis Page

State surplus may provide temporary relief for Pa. pension problems

| Friday, April 12, 2013, 8:57 p.m.

HARRISBURG — Smaller-than-expected payrolls for many school districts have left a surplus of state funds that could help ease Pennsylvania's public pension problems and also undercut legislative support in the first test of Gov. Tom Corbett's pension-reform agenda.

The state reimburses school districts for an average of 56 percent of their payrolls. If payrolls shrink, so do the payments.

In the year that ended June 30, $69 million of the state appropriation for school districts had not been spent. That money was earmarked for pension reimbursements, and the trend of shrinking payrolls appears to be continuing this year, according to the Public School Employees' Retirement System, the statewide school employee pension fund.

So lawmakers could have an extra $140 million to spend as they scrutinize competing demands for scarce dollars in the state budget for the year that starts July 1, rough estimates by PSERS indicated. System officials cautioned Thursday that the amount of any surplus this year could vary according to payroll growth during the next three months.

Some legislators want to plow any surplus back into the state's share of pension costs instead of refinancing that obligation. Corbett has proposed refinancing to free up $175 million to help balance the 2013-14 budget and reduce the short-term cost to taxpayers. Many lawmakers are reluctant to revisit that strategy so soon after a similar refinancing in 2010.

Tapping the reimbursement surplus would provide the lion's share of the savings from Corbett's proposal with much less impact on other spending priorities or paying down debt, making it a politically attractive alternative to the only component of the governor's plan that requires action this year.

“If that's determined to be real money, I think you'll see people coalesce around that,” said Steve Miskin, spokesman for the House GOP majority.

Drew Crompton, chief of staff to Senate President Pro Tempore Joe Scarnati, R-Jefferson, acknowledged that a sizeable surplus of reimbursement money is “not a wild rumor,” but that he is still analyzing its political implications.

Word of the surplus also has spurred discussion within organizations with an interest in the outcome of the pension debate.

“It's encouraging news and, if there were little reason for lawmakers to support Corbett's pension plan before, there's even less reason to do so now,” said Wythe Keever of the Pennsylvania State Education Association, the state's largest teachers union.

Steve Robinson, spokesman for the Pennsylvania School Boards Association, warned that the windfall might become an excuse for legislative inaction on pension reforms.

“Now is not the time to let up on any reform that may take place this year,” he said.

TribLIVE commenting policy

You are solely responsible for your comments and by using 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.