Some type of pension change package is likely to figure into Gov. Tom Corbett’s budget address to Pennsylvania’s General Assembly Tuesday.
In advance of that speech, lawmakers and unions have adopted a defensive stance.
Corbett has said he’s looking into reducing the unearned pension benefits of current and future state and public school employees to help address the state’s rising pension costs.
But the chairman of the Senate Appropriations Committee says changing pension benefits alone doesn’t address the issue of the state’s pension debt — or its rising contributions to pay down that sum.
“If we say, ‘OK, we’re going to modify this, and, oh by the way, really we still haven’t solved the problem, we’re still going to have to come up with $500 million next year … ,’ I’m not for that,” says Sen. Jake Corman, R-Centre.
“That doesn’t solve my problem. So I’ll look at any plan in its totality, and it’s got to deal with the entire issue of how do we reduce the entire contribution of the commonwealth to the fund?”
Leaders of the two largest public-sector unions in Pennsylvania say they’ll sue the state if their members’ pension benefits are changed.
Pennsylvania State Education Association director Mike Crossey says such a move is blind to the whole issue of the debt the state has already accrued because of under-funded pension systems.
“In their proposal, they’re trying to compare just the costs going forward. They’re not addressing the unfunded liability, which the current Act 120 does. So they’re saying, ‘Well we could do this.’ But their plan is not addressing this huge unfunded liability, which also needs to be paid off.,” Crossey said.
Act 120 was a package of reforms passed in 2010 that refinanced the state’s existing pension debt and reduced benefits for future employees.
Any pension changes would amount to a breach of contract, labor leaders say, which has been deemed unconstitutional in past state court cases.
And the Senate President Pro Tem Joe Scarnati has said he’s wary of any pension reform plan that results in a legal battle.
“We’ve got to be able to find a solution to this that makes sense, that doesn’t involve legal challenges, and a long delay of where we go. And the menu that the governor’s talking about, does it involve a real menu?” he said. “I don’t know. I need to see the menu.”