Pension reform highlight of Corbett budget proposal
Whatever else may be said about Gov. Tom Corbett's proposed budget, it forces state lawmakers to confront their and their predecessors' incompetence and greed in creating the state's pension bomb. Mr. Corbett's budget proposal is structured so that exponentially escalating pension costs will consume the state's ability to act on vital public needs - unless lawmakers act.
Corbett's proposals for increases in education funding, some social services and other initiatives assume that lawmakers will act to reduce pension costs far into the future. Lawmakers already have acted to spread out the costs as far possible and to penalize new state and public school employees for their predecessors' greed. Corbett wants them to reverse a fundamental cause of the problem - the massive, unwarranted and ill-considered law of 2001 that raised lawmakers' pensions by a stunning 50 percent (except for those who refused, an irreversible decision that was admirably made by Sen. John Gordner) and those of hundreds of thousands of state and school employees by an equally unconscionable 25 percent.
Benefits already accrued over the 11 ensuring years under that formula can't be rolled back, but there is nothing to prevent rolled-back rates from applying to benefits that will be accrued in the future. Even if the rates were to return to those that applied in 2001, the public pensions will continue to far outstrip anything in the private sector for comparable employees.
If lawmakers surprise just about everyone and do the right thing, the massive debt accrued over the last 11 years will remain, but it will slow down the rate of that debt's increase going forward.
The budget proposal overall is a mixed bag. It has some sound priorities in increased transportation funding, including for mass transit, a modest increase in education subsidies and increases in some social services that had been slashed in the governor's previous two budgets. But it continues to give a low-cost pass to gas drillers, while proposing to reduce the corporate income tax rate and provide business tax breaks while maintaining unfair, inequitable loopholes.
But the fundamental question for lawmakers remains whether they will include themselves in the key pension reform. It's time for them to step up.