Pa. pension crisis is ‘tapeworm’ of state budget
GOV. TOM CORBETT likens Pennsylvania’s public pension problem to a tapeworm, a parasite that devours new revenue as fast as an improving economy can create it.
“We have to consider everything,” in fixing the problem; it’s the “tapeworm of the budget,” he told a Digital First Media editorial board meeting last week.
Corbett called pension reform the one thing he seeks to accomplish this year. Property tax reform, he says, will have to wait.
Corbett’s call to action is not without merit. The public pension drain has escalated to a crisis in Pennsylvania with nearly $700 billion in year-over-year cost growth robbing state coffers of 62 percent of any new revenue.
In recent years, both the state employees fund (SERS) and public school employees fund (PSERS) have accrued unfunded liability amounting to billions of dollars a year, according to Charles Zogby, secretary of the budget. The funds’ current unfunded liability is $41 billion, not including future shortfalls.
Just to get the funds back on good footing would require a tax increase of $9,000 on every household in Pennsylvania, Zogby said.