HARRISBURG, Pa. (WHTM) – Gov. Tom Wolf signed a pension reform bill into law Monday afternoon and checked off a priority that has eluded lawmakers for years.
“What we are saying with this legislation is that this will never, ever happen again to the people of Pennsylvania,” said Sen. Jake Corman (R-Centre), the Majority Leader.
Senate Bill 1 will give state and school district employees hired after 2019 a pension choice between partial or full 401(k)-style plans. It will minimize the risk to future taxpayers and stops the bleeding of a broken pension system that endangers the state’s fiscal health.
Elected officials in 2037 will love that this bill was signed in 2017.
“You can say, yeah, that’s not until 2037, but had we not done that today, whoever is in the position of responsibility in 2037 would not have that, so that is a real reduction of expenditures.”
Pension reform has been thorny for governors and lawmakers for at least a decade, so Monday’s signing was an accomplishment.
Unions accept it without complaint.
Fiscal conservative groups applaud it.
State Sen. Scott Wagner (R-York) voted against it. He thinks all future hires should be in a full, not partial, 401(k)-style pensions.
“That’s what the rest of the world has,” Wagner said. “Why is there a special class here in Harrisburg/? Why? It’s wrong.”
The new law does little for the unfunded liability, estimated between $60-$70 billion, which continues to gobble up increasing amounts of state and school district tax dollars.
“You and I are gonna be paying more in school taxes this year and next,” state retiree Barry Shutt said. “So they say they fixed something. They didn’t fix it.”
For almost three years, Shutt has come to the Capitol calling for pension reform. He created the state’s pension debt clock that sits outside the cafeteria flashing the latest unfunded liability. It continues to grow and the new law doesn’t slow it down or pay it down.
“If you don’t do that, you’ve done nothing,” Shutt said.
Then he softened his stance and admitted the new law is a good first step. He says the second step is to find a dedicated revenue stream to pay off the debt.
“That would take a massive billion-dollar-plus tax increase,” Corman said. “A billion-dollar-plus property tax increase; there’s not gonna be the votes for that and it wouldn’t be good for the economy.”
The new pension law will be good for taxpayers at some point.
Is it good enough for now?