Stimulus Money to Help Deal with Pension Crisis?
A number of Pennsylvania House Republicans are proposing using a portion of the federal stimulus money to pay into PSERS, the retirement fund for school employees. The $435 million payment would be only a drop in the bucket of the unfunded pension liabilities – expected PSERS pension contributions are expected to increase by roughly $3 billion per year in 2012 (and contrary to the metaphor of a “spike”, for several years thereafter) – and this proposal certainly does not eschew the need for reforming the pension system.
That said, this is one of the best ideas for using the stimulus money. Rather than create a new program, or increase spending on existing programs – which will require state taxpayers to pick up the tab once the temporary stimulus funding ends in two years – paying off some of our obligations, and reducing the need for future tax increase is a better deal for taxpayers.