Pennsylvania’s Pension Iceberg
Laura Olson of the Pittsburgh Post-Gazette has a story on the crisis in Pennsylvania’s public pensions, and Gov. Corbett injecting pension reform into the budget discussion:
Even with the revised payment plan approved in 2010, the state’s obligation will increase dramatically in the coming years. The current budget accounts for $1.1 billion in pension payments, a cost that spikes to more than $4 billion annually by 2016.
“Does anybody here see the economy growing fast enough just to cover the pension increase?” Mr. Corbett asked during his Hershey appearance earlier this month. “So we have a problem. We have an iceberg right in front of us.”
David Fillman of AFSCME blames the legislature for underfunding the plan: “‘We knew this 10 years ago, we knew this was coming,” Mr. Fillman said.
But Mr. Fillman’s complaints about the underfunding of pensions seems to be inconsistent with the fact he and his group fully supported legislation to defer these same contributions. Examples of this are Act 40 of 2003 (which actually created the 2012 contribution plateau) and Act 120 of 2010 which established the pension “collars” and further underfunded PSERS and SERS.
In fact, while the Commonwealth Foundation was sounding the alarms about the “iceberg” facing Pennsylvania’s pensions, Fillman was denying any threat from rising pension costs (emphasis added):
In short, the Commonwealth Foundation has cherry-picked data and predicted the “worst-case scenario” for every possible variable, twisting the data to further its agenda of attacking public service workers and gutting government. The Commonwealth and SERS are already tackling this issue: Pennsylvanians should rest assured that Pennsylvania is not the Titanic, and there are no icebergs in our pension fund’s future.
What is even more troubling is that state employees are forced to fund AFSCME’s lobbying effort against pension reform. AFSCME union dues are taken directly out of state workers’ paychecks without them ever seeing the money, with taxpayers funding the collection of AFSCME’s political dollars. This is how Fillman (who earned $206,000 in compensation in 2011) and AFSCME put the squeeze on Pennsylvanians.