Gov. Tom Corbett said recently any rollbacks in pension benefits for Pennsylvania state employees and teachers should be applied across the board to include lawmakers and judges. That's the correct stance to take, given that the state's pension costs have become a $41 billion unfunded liability.
Beyond that, pension modifications should not penalize those state employees on the verge of retirement who have worked hard with the understanding these benefits would be in place.
But if the governor and Legislature are to even think about modifications to get the pension plan under control, there can't be any sacred cows. And it is an absolute necessity to attack the pension problem if the state is to avoid its own version of a fiscal cliff in a few short years.
In fact, the latest pension report to the state said the pension liability threatens to "overwhelm" the state's general fund budget and the programs and services it pays for. The report paints a scenario of increasing pension obligations that will claim a greater and greater share of school district budgets, crowding out funding for all facets of education from classroom instruction to sports, facilities and maintenance.
Much of this scenario could have been prevented had the problem been addressed by the previous administration and Legislature, but it was not, even as the state's General Fund spending was being increased by 36 percent over an eight-year period. Somebody's got to clean up the mess and as tempting as it might be to paint Corbett as the Grinch who stole Christmas, the state would be well served if all parties would resist killing the messenger.
Instead, the following formula should be pursued:
Maintain promised benefits for current employees, especially those within 10 years of retirement.
Offer early retirements, which would save money and benefits long-term with hiring of younger employees at lower salaries.
Revise the formula for new employees.
Pursue a move away from a fixed benefits plan to something closer to the private sector's 401k plans for new employees.
There's no magic there, just an imperative reality.
