Pa. Budget Chief Says Pension Reforms Essential

HARRISBURG – Gov. Tom Corbett will “very likely” propose cutting future pension benefits for current school employees and state workers in the state budget plan he will present to lawmakers next week, his chief budget adviser said Monday.

Budget Secretary Charles Zogby, all but confirming a cost-cutting approach that the administration first floated last fall despite questions about its legality, said decisive steps must be taken to rein in taxpayers’ fast-growing share of pension costs.

“We’ve got to pay for our obligations and we need to look at a rebalancing of our pension obligations … if we’re going to meet our needs without inflicting deep cuts elsewhere in the budget,” he said at a Pennsylvania Press Club luncheon.

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New Report Warns Of Looming Pennsylvania Pension Shortfall

HARRISBURG – Gov. Tom Corbett‘s budget office indicated Monday that the governor may attempt to reduce the pensions of current public employees, a politically volatile and legally questionable solution to what has become a $41 billion unfunded liability.

In a new report on the state’s two large public-sector pensions, the budget office warned of the potential for higher taxes, program cuts, lower business growth and steeper borrowing costs because of the state’s financial obligations toward the State Employees’ Retirement System and the Public School Employees’ Retirement System.

The financial pressures from the pension systems have loomed over state finances for more than a decade, and Corbett, a Republican, repeatedly has spoken of a desire to make changes to them.

The report says higher taxes “should be off the table,” but reductions in prospective benefits for current employees should be considered.

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