By Eric Boehm | PA Independent
Facing $2 billion in mandatory pension payments next year, Gov. Tom Corbett is looking for a way out.
On Tuesday, Corbett outlined his budget proposal for the 2014-15 fiscal year, which begins July 1, and called for theGeneral Assembly to defer about $300 million in pension payments at the state and local level next year. Though the deferments will add to the state’s long term pension costs — already exceeding $47 billion and set to grow as high as $65 billion within a few years — the administration promised to offset the additional costs with changes in benefits for new employees.
“We must fix this,” Corbett said. “The only question is whether we will do it now, when it’s still a manageable problem, or let others do it later, when it’s an all-out crisis.”
Corbett’s plan would yield $170 million in state-level savings by deferring part of the $600 million increase in pension cost this year. Another $130 million in savings would be realized at the school district level, since schools pay about half of the retirement cost for their employees.
But the word “savings” is a bit of a misnomer in this instance. That $300 million — and much more — will still have to be paid.
Full story: Inside Corbett’s budget proposal: Gov looks to defer $300 million in PA pension payments Eric Boehm, PA Independent, 2/4/14