Pensions for state employees and teachers have been a wrench in the gears of Pennsylvania government for decades.
In 2001, Gov. Tom Ridge signed a law that expanded pensions for those employees by 25% — and even more for state lawmakers. He was thrilled to do it, saying it was something he’d waited years to accomplish.
But that law had two problems.
First, it set in motion a pension problem that became a full-blown crisis because of the Great Recession of 2008. The surpluses of 2001 had disappeared and markets were no longer stable. From 2010 to 2016, taxpayer contributions ballooned by 400%.
That meant years of school districts trying to pare budgets to cover their shares of something the state obligated them to do. It was also a contributing factor for multiple budget showdowns between lawmakers and governors.
Second, there were the people it left out of the increase. On the one hand, maybe that wasn’t a problem given how much worse it could have made the way school districts were drowning in contribution demands. But people who had already retired definitely had a reason to be angry that they weren’t included.
Are lawmakers setting up a replay? On Tuesday, the state House of Representatives approved a $1.8 billion increase in pensions f or state and school retirees by a margin of 140-63. It wasn’t a party-line vote, but every Democratic legislator supported it.
There is no doubt that the 69,000 affected public servants don’t deserve “to be marred by financial hardship,” as sponsor Rep. Steve Malagari, D-Montgomery, said. No one wants that.
But after years of pension-induced panic in every school district in the state, it’s hard to see this proposal and not brace for a gut punch.
Passage in the GOP-led Senate is much less certain. Discussion there, however, should include deeper dives into the cost of the increases for both the districts and the individual property-owning taxpayers.
Should those retirees who were left out of increases under Ridge see a way to better cope with rising costs and inflation? Probably — although it is worth noting that anyone qualifying for a pension also should be seeing such a cost-of-living adjustment with their Social Security checks.
But Pennsylvania taxpayers have been owed tax reform for far longer.
— Pittsburgh Tribune-Review