Time for pension reform nearing; start internally
Gov. Tom Corbett will propose pension reforms within the next few weeks. He should begin with demanding that state lawmakers - who mortgaged the state government's future to their own and other public employees' pensions, then took out a second mortgage by making it retroactive - return to 2001 rates.
Lawmakers solemnly nod in unison when asserting that the extravagant pension benefits they bestowed upon themselves, state employees and teachers cannot be scaled back. It's obvious that the state government cannot scale back benefits that lawmakers and other public employees already have accrued, but the idea that rates for benefits not yet earned never can be reduced defies common sense.
Such is the hubris of the political class, lawmakers who have shielded themselves from the same economic forces faced by their constituents - including the law of gravity.
That hubris never was on display more so than in 2001, when legislators raised their own pension benefit by 50 percent and dealt in teachers and state workers for 25 percent - making Pennsylvania the only place on the planet where a massive 25 percent benefit increase can be made to look modest by comparison.
Not only that, they made the increase retroactive. So, while asserting that benefits going forward never may be reduced, lawmakers in 2001 had no problem going backward to exponentially increase their benefit.
(It should be noted that state Sen. John Gordner voted against the increase at the time, keeping him at the old rate permanently, and state Reps. Kurt Masser and Lynda Schlegel Culver were not in office in 2001.)
Beyond the lawmakers hubris was incompetence. They jauntily assuaged taxpayers' concerns about the massive increases, claiming that the plans' investments would cover the cost. That notion that began trailing smoke with the collapse of the "dot-com bubble" soon after the benefit increases were passed, and it crashed in a fireball with the Great Recession in 2008.
Lawmakers reacted by deferring the bill for a decade. The bill is due and taxpayers are stuck with it. There will be a minimum $513 million increase at the state level this year along with millions more from school districts.
If the proposals for reform are accepted, lawmakers can take solace in the fact that they'll still will have far more extravagant pensions than the vast majority of their constituents.