The Tribune Democrat, Johnstown, PA

Editorials

May 7, 2013

Pennsylvania’s pension plight

All involved must reach workable solution

— Pennsylvania’s pension crisis debt has been estimated at $40 billion, and a battle to find answers will be bloody. We applaud Republican state Sen. John Eichelberger of Blair County for his willingness to enter the fray, but he’s alreadying finding out that a leadership role could foster enemies in powerful circles.

The state’s two pension systems – for state government workers (SERS) and public school employees (PSERS) – face a tremendous shortfall not of their doing but one that taxpayers must cover. Some estimates are that it could amount to an average $1,000 increase in contributions per household by 2017.

That’s huge.

Gov. Tom Corbett and other state leaders have weighed in, and now Eichelberger has announced a plan he sees as being more than just a starting point in addressing one particularly thorny aspect.

As outlined on Sunday by our Dave Sutor, Eichelberger will introduce what he says is a “common sense,” seven-point proposal for amending the collective bargaining law for police officers and firefighters.

Eichelberger believes his plan, which deals with how arbitration cases are handled, especially would benefit cities, townships and boroughs in Pennsylvania’s Act 47 program for distressed municipalities.

That includes Johns-town, whose pension fund is only 49 percent funded, City Manager Kristen Denne told Sutor. She added that it would need an additional $20 million to make it full.

“The problem we’re looking at is that the cities are simply running out of the cash ability to pay off the pension plans,” Denne said.

As expected, Eichelberger’s plan drew flak from the Fraternal Order of Police and Pennsylvania Professional Fire Fighters Association.

They call the proposal an attack on individuals who risk their lives every day to protect citizens.

We respect and admire our firefighters, our police officers, our teachers and those who represent us in Harrisburg, and we understand their interests in securing benefits including solid pension packages. That’s something all workers want. But as taxpayers, too, they recognize the financial mess facing Pennsylvania and other states and can see that business as usual won’t work.

We’re not endorsing an Eichelberger plan we haven’t seen, but rather urging all sides in this debacle to come together and find a pension plan we all can live with.

Corbett’s solution to the overall pension crisis includes moving the state’s pensions to a 401(k) model, a “defined contribution” like what is now in effect in most private-sector workplaces.

Under such a system, the state would annually put a set amount of money into employees’ retirement plans, while workers would continue to contribute a portion of their salaries to their pensions.

Corbett says reform is preferable to tax hikes or service cuts, and we agree.

Unfortunately, state taxpayers are also watching debate on another crisis, involving deteriorating highways and bridges, and one whose solution no doubt will also be costly.

It’s interesting yet uneasy times in Harrisburg and in taxpayers’ homes. It’s also a time for deep thinking, bipartisanship legislative action and cool heads from all involved.

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