Thursday, July 10, 2014

Gov. Corbett warns of looming pension crisis in the state

February 19. 2013 7:14PM
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HARRISBURG — A new report by the Corbett administration is warning of higher taxes, lower business growth and steeper borrowing costs because of the state's public-sector pension plans.

The budget office on Monday released a study with updated cost figures to fully fund pension plans for state workers and public school employees.

The report says the two plans together have an unfunded liability of $41 billion.

The state paid nearly $1.1 billion into the State Employees Retirement System and Public School Employees Retirement System during the fiscal year that ended in June.

That figure is projected to pass $2.2 billion next year and reach $5.1 billion by 2019.

The report says higher pension costs threaten the state budget and will claim a greater share of local school spending.

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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