Corbett Not Letting Up On Public Pension Overhaul
Gov. Tom Corbett is not giving up the ghost of a public pension overhaul proposal — saying he may still call a special session of the state Legislature to address the issue.
The measure still does not have enough support in the House and Senate, Corbett said at a roundtable discussion in Hummelstown Friday.
The governor has been making daily statements about the plan, which would reduce retirement benefits of future public workers.
Supporters say the changes would reign in long-term costs of public pensions.
Democrats say a better solution is to find new funding by raising taxes or levying new ones.
“They just feel, well you have to tax more,” Corbett said. “Well, you’d have to tax, and tax, and tax everybody. You couldn’t tax any one business enough.”
The governor has begun to acknowledge that the proposal in question would not generate short-term savings for the state or school districts, both of which are buckling under rising pension costs.
“This is a first step,” Corbett said. “This stops the bleeding by moving everybody over to a different system.”
Opponents say even the long-term relief Corbett promises is in question.
“The actuarial studies show these very small savings in some of the out years,” said Stephen Herzenberg, director of the left-leaning Keystone Research Center. “But the actuarial studies also point to a potential transition cost.” Herzenberg says switching future public employees to a partial 401(k)-style retirement system, as has been proposed, would leech money from the state’s traditional pension plan funds.
Passing the pension overhaul would not make immediate reductions to the state owes now in pension payments – a growing sum of about $50 billion. But Corbett said grappling with that existing debt should happen after pension benefits (i.e., pension design) are changed for the long-term.
“We need to sit down and think about what brings relief sooner and saves money for the school districts, but more importantly for the homeowners, and the taxpayers and property owners,” said Corbett. “And there should be more discussions.”
The governor isn’t carrying the torch in a vacuum. The gubernatorial election looms four months away.
Corbett will face Democrat Tom Wolf, the man who won the May Democratic primary in a landslide and who surpassed Corbett by 20 points in a June poll. The candidates disagree over how to handle both the state’s large and growing pension debt, and existing public pension benefits.
Wolf is against changing pension benefits, though he has said he may support borrowing to reduce the size of the state’s existing pension debt. Corbett is no longer pushing any particular proposal to reduce the current debt, which is the immediate source of rising pension costs for the state and school districts.