Pennsylvania House Democrats are calling the governor’s search for pension reforms wrong-headed, because rising costs are on track to subside.
They say the key now is to find new revenue to pay for the debt connected to the state’s pension plans.
Since last summer, Gov. Tom Corbett has repeatedly said he wants to find a way to tamp down rising pension costs. Next fiscal year, state and public school employee pension costs will require an additional $530 million just from the state’s general fund.
But Bernie Gallagher, a budget analyst with the House Democrats, says based on projections, rising pension costs will taper off in about seven years and then decline.
“If you have a very short time horizon that you’re interested in, it’s a big problem,” Gallagher said. “If you have a long view, it’s a much smaller problem.”
Gallagher says by the year 2030, the state’s pension plans should be funded at a healthy level again, due to projected economic recovery and the fact that the state essentially refinanced its pension funds in 2010.
The governor hasn’t introduced a specific pension reform plan, but has said he’s interested in changing the unearned benefits of current and future state and public school employees.
House Democrats say such a move would land the state in court over whether it has the ability to fiddle with workers’ contracts.