State Senate takes symbolic step on pensions, further reforms left waiting

By Eric Boehm | PA Independent

The state Senate on Monday approved a bill to create a new pension system for state officials, but it’s a symbolic step that will do virtually nothing to address Pennsylvania’s $50 billion unfunded pension debt.

Republicans in the state Senate spent several days discussing a plan to create a new retirement system, similar to the 401(k) retirement plans common in the private sector, for all future hires in state government and at local school districts.

In the end, they passed a bill that would move only the 253 state lawmakers, plus the governor, attorney general, auditor general, state treasurer and all state judges, to such a plan. Current lawmakers and state officials would be entered into the new system after winning re-election and judges would make the switch after their next retention election.

All other state workers and public school employees — the vast majority of public employees — will remain in the existing pension system. The state’s two pension plans — the State Employees Retirement System, or SERS, and the Public School Employees Retirement System, or PSERS — are deep in debt and continued underfunding is making the long-term costs increase.

“We must continue working to address the estimated $50 billion shortfall in the state’s two pension systems, but this bill is a significant and necessary first step,” said Senate Majority Leader Dominic Pileggi, R-Chester, in a statement.

The vote was unanimous.

Further changes to the state pension system were still being kicked around in both chambers Monday as state lawmakers put the final stamps on the 2014-15 state budget, but it seemed increasingly unlikely there would be enough votes for any of those plans.

In the state House, Republican lawmakers pitching a pension bill made some last-minute changes in the hope of getting the necessary 102 votes from within the GOP ranks.

Democrats have unanimously opposed pension efforts in both chambers, and Senate Minority Leader Jay Costa, D-Allegheny, read the writing on the wall earlier in the day when he declared pension reform “dead” in the state Senate.

State Rep. Warren Kampf, R-Chester, said the Senate proposal was “symbolic and important” but was well short of a comprehensive overhaul of the pension systems favored by House Republicans.

“We’re looking at the big picture here,” he said Monday afternoon.

They may all get to look at that big picture a little longer.

Gov. Tom Corbett said Monday night he was withholding his signature from the state budget — something he threatened to do over the past two weeks, if lawmakers did not approve a pension bill.

“It does not address all the difficult choices that still need to be made,” Corbett said of the budget. “It leaves pensions, one of the largest expenses to the commonwealth and our school districts, on the table, leaving the weight on Pennsylvania taxpayers and perpetuating the tug of war over state funding every single year.”

But lawmakers might not heed Corbett’s words — typically, once the state budget is passed they’re already half-way out the door for the summer.

That’s why the state House let the budget run right down to the final days, while spending the past two weeks trying to find a consensus on the pension issue.

“As you look across the caucus, I think that we have been working very hard to educate members on each individual question that they’ve had,” said state Rep. Mike Tobash, R-Schuylkill, on Monday.

As of Monday night, there were still enough questions to keep the pension bill on the sidelines in the state House.

A symbolic gesture from the state Senate might be the extent of pension reform in Pennsylvania this year. The upper chamber can vote Tuesday on the bill, SB 922, which would then also have to pass the state House to reach Corbett’s desk.

Boehm is a reporter for PA Independent and can be reached at Eric@PAIndependent.com. Bureau chief Andrew Staub contributed to this report.