HARRISBURG PA – The re-elected leader of the Pennsylvania Senate said the Legislature needed to radically reform increasingly more expensive pension plans for state employees and teachers, or face dramatic budget cuts in other programs this year and into the future, The Pennsylvania Independent online news service reported Thursday (Jan. 9, 2014).
Senate President Joseph Scarnati, a Jefferson County Republican chosen earlier this week to lead the state’s senators for an eighth consecutive year, said paying the pension bills “will mean that we are forced to flat-fund or reduce fund many areas of the budget that have already been cut close to the bone,” according to The Independent.
It claimed “pension reform might finally rise to the top of the General Assembly’s to-do list,” after “two years of talk and little action,” as a result of Scarnati’s comments.
The demand to cover shortfalls in pension payments, due primarily to poorly performing investments during the depressed economy of recent years, has chewed into funds of the Pottsgrove, Pottstown and Spring-Ford Area school districts that might be otherwise used for educational purposes, their administrators regularly say.
Escalating pension costs will consume an estimated $2 billion in next year’s budget, which must be approved by the end of June, up from $1.4 billion this year, The Independent said. School districts pay for roughly half of retirement costs for teachers and other school employees, and face similar increases that threaten to swamp their budgets with red ink next year and for years to come, it added.
Addressing the pension debt will allow the state to spend more for basic education, higher education and social services, Scarnati said. It might also help Pennsylvania deal with an estimated $800 million budget deficit next year.
Scarnati gave few details for how he wants to tackle the pension problem, aside from calling for Pennsylvania to move “the pension system in line with the private sector and restoring taxpayers’ trust in our ability to deal with this financial nightmare.”
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