Corbett: State Pensions Cost $9,000 Per Household
Tom Corbett’s been promising to do something about the growing specter of state employee pensions: On Tuesday, he opened his campaign:
On Tuesday, he pointed out that it was not only the state budget at stake, but household budgets as well.
The pension’s $47-billion unfunded liability amounts to a $9,000 bill for each household in Pennsylvania, the governor said. On its current course, the liability will top $65 billion by 2018, bringing the per household total to more than $13,000.
“That’s the cost of doing nothing,” Corbett said. “Are you ready to write your checks?”
Of course, that’s the gap between what the state promised workers for their retirements and how much it’s actually put away. But Corbett has a fix in mind:
The pension proposal, affecting hundreds of thousands of employees, attempts to tackle escalating costs in two ways: by reducing the annual amount the state is required to contribute to its two retirement funds (one for state employees, the other for public-school teachers and staff), freeing up about $175 million in the next fiscal year; and by reducing future pension benefits for current employees by changing the way those benefits are calculated.
The administration has been adamant that retirees’ benefits won’t be affected – and Corbett stressed that point again Tuesday – and that benefits accrued to date by current employees will also be left intact.
But over time, it would result in reduced benefits. Which is why the plan has a tough road ahead:
Among Republican lawmakers distancing themselves from the plan is state Rep. Glen Grell. His Cumberland County district is full of state employees — and he thinks the Legislature should pass something this year.
But he disagrees with parts of the governor’s plan, and he doubts it can pass by the end of June.
“Eight weeks to do something as substantial as this is unlikely to me,” he said.