Pa. senate advances $30.8B budget, pension plan that doesn’t favor COs
State troopers, COs and other ‘hazardous duty employees’ would not be moved into the new plan
By Mark Scolforo
HARRISBURG, Pa. — The Pennsylvania Senate forged ahead with budget legislation late Sunday by advancing a $30.8 billion spending plan along with significant changes to Pennsylvania’s two mammoth public-sector pension plans.
The Appropriations Committee voted in favor of both bills late in the evening, providing some new details about what has been hammered out with Gov. Tom Wolf but no information about what new taxes will be needed.
The votes came one day after the Republican majority in the House pulled back from negotiations, raising doubts about whether anything will be enacted in the near future. The full Senate still must approve the bills, along with other legislation, but the positive votes were a glimmer of hope that the end of Pennsylvania’s five-month-old pension stalemate may be on the horizon.
The budget bill received just one “no” vote in committee, from Sen. Scott Wagner, R-York, who said he was concerned about some of the spending it entails. Sen. John Eichelberger, R-Blair, expressed similar reservations but voted yes.
It would increase K-12 spending by $350 million, along with $50 million for special education and $82 million for higher education, all major priorities of Wolf, a first-term Democrat.
The pension proposal, which passed 21-5, would enroll new state workers and new school employees in a combination of a traditional pension and a 401(k)-type benefit. New senators and representatives would have to go into the new system, but those already in office who get re-elected would be able to elect to retain their current benefits.
House Republicans scheduled — then postponed — meetings for Sunday to debate a less costly alternative their members want to pursue.
Senate Majority Leader Jake Corman, R-Centre, said a final vote in his chamber could occur as early as Monday, sending the budget to an uncertain fate in the House.
“I hope they pass it,” Corman said. “I don’t have an expectation. You know, every hour’s a new hour around here. This is what we have votes for.”
Appropriations Chairman Pat Browne, R-Lehigh, said the pension changes were designed to shift investment risk away from taxpayers, partly through the 401(k) element but also by making structural changes to the plans’ designs and how they are administered.
Those changes include how long it takes to become vested and how the “final average salary” is calculated to determine the size of a retiree’s pension check. State troopers, prison guards and other “hazardous duty employees” would not be moved into the new plan.
The payment “collars,” which limit how much schools and the government have to pay in, would be 2.25 percent of payroll next year and 4.5 percent in 2017-18 for both the State Employees’ Retirement System and the Public School Employees’ Retirement System.
“Unfortunately, I don’t believe we’ve really addressed the unfunded liability issues,” said Sen. Vince Hughes of Philadelphia, the ranking Democrat on Appropriations. He and four other Democrats voted no.
Republican leaders said lawyers in the House raised legal questions about whether re-elected lawmakers could properly be classified with “new” employees and therefore be forced into the new plan. Corman said he did not expect any members of his caucus to seek to remain in the current plan.
Corman said a number of tax options remain under consideration after Republican senators discussed them over the past week.
“We’re good Republicans — we hated all the revenue plans,” Corman said. “So we’re trying to find the ones that are best for Pennsylvania, that will cause the least amount of harm to the economy and to communities. There’s not a pain-free way to do this.”
A bill to make changes to Pennsylvania’s system of state-owned liquor sales is in the works and is expected to be considered in the coming week, Corman said.
Pennsylvania has not had a legal spending plan in place since its fiscal year began July 1. Wolf has vetoed budget, liquor and pension plans that passed on party lines, as well as a stopgap bill meant to get more money flowing while negotiations continue.
Copyright 2015 The Associated Press