Pennsylvania budget to be adopted, does not address pension reform

PA Gov Tom Wolf

Pennsylvania Gov. Tom Wolf is allowing the Republican 2015-2016 budget to become law without his signature, according to a news release issued by the governor’s office.

“I am going to allow the 2015-2016 budget to become law without my signature,” said Mr. Wolf, a Democrat, in the news release. “This will allow for funding to go out to schools and other services in the short term, but we still face enormous problems that this budget does not even pretend to address.

Mr. Wolf added: “Let’s be clear: the math in this budget does not work. Next fiscal year — that already has a $2 billion deficit — will now begin with an extra $300 million deficit.”

Allowing the budget to become law comes after a long standoff between the governor and state lawmakers.

In July, Mr. Wolf vetoed a pension reform bill that proposed all new state and public school employees be enrolled in a mandatory defined contribution plan as well as offering an optional cash balance plan.

In September, Mr. Wolf proposed a new pension system that included a mandatory 401(k)-style plan for all new employees making at least $75,000 in annual income. In addition, all employees would be given the option to participate only in a defined contribution plan at their time of hire. The plan also featured a risk-sharing component for all new employees.

In December, the Pennsylvania House of Representatives shot down a pension reform bill that would have established a hybrid pension plan for future state and school employees and modify future benefits of current members of the $51.7 billion Public School Employees’ Retirement System and the $27 billion State Employees’ Retirement System, both in Harrisburg. The two plans have combined unfunded liabilities of $60.1 billion.

http://www.pionline.com/article/20160324/ONLINE/160329922/pennsylvania-budget-to-be-adopted-does-not-address-pension-reform