It's not often that I have anything especially good to say about our boys in Harrisburg. Today is the exception. I congratulate the state house for finally passing a pension reform bill. Needless to say it will disappoint those who sought greater reform, however, for Harrisburg it is as much as I hoped for. Understand that even under a Republican Governor, with Republicans in charge of both houses, it failed to pass.
Although 50% of the pensions for teachers and state workers will remain guaranteed, the other half will be governed by the market, as it is for most people in the private sector, those who still even have a pension. No previous or existing employee's pension will be affected by the reform, which will only effect new employees, starting in 2019.
Tax relief advocates now hope to shift school taxes from real estate to income. I don't think we will see that anytime soon, if at all.
Mike,
ReplyDeleteThis small step is long overdue but all should be grateful our elected officials have started to at least move in the right direction. Residents need to understand the unfunded liabilities of the state employee defined payment pension system is now over 60 billion dollars and growing. To understand the scale of this problem the liability is twice the state's annual budget. Relief will be years off as the state's/our obligation to existing employees that those that will retire before 2019 must be met. The truth is, even with this reform the odds of the state being able to meet these obligations is slim. The entire system is a house of cards, they(politicians)have known this for years but merely kicked the can down the road hoping they would be out of office by the time the s*** hit the fan.
The pension system was fine for years, until governors from Casey all the way up decided to funnel money away from it. I do believe this is a good plan going forward, but the mess our state government created by telling school districts, "hey take ten years off from paying your share of the liability, the stock market will go up forever." is what put us in this situation to begin with.
ReplyDeleteThe underlying problem was one of greed, the politicians voted themselves in on this generous pension plan and the rest is history. The state employee unions didn't cause the problem, but with the power of union dues they have been able to effectively buy off the very people necessary to fix it.There are no innocent parties here, they are all guilty of driving the state to bankruptcy.
ReplyDeleteThanks Scott,
ReplyDeleteIt's nice of you to admit that the repubicans, of which I am one, are not innocent in all of this!!