State Budget Secretary Charles Zogby dubbed 2013 as the year of pension reform.
And if that doesn’t prove to be the case, he suggested schools might want to be brace themselves for more cuts.
“To not do pension reformwill mean we then have to go back into the general fund budget to find savings. That will mean cuts,” he said during remarks delivered at today’s Pennsylvania Press Club luncheon at the Hilton Harrisburg.
Pointing out that the bulk of the state’s $511 million increase in pension obligations will go toward funding the school employees’ pension fund, Zogby said, “if we don’t the savings there, should other areas of the budget bear the brunt to those savings going away? Or should that fall in public education.”
Zogby said those are some of the tough questions that the Corbett administration and General Assembly will have to deal with in the ensuing months as they get to work on a 2013-14 spending plan.
Corbett will unveil his budget proposal on Tuesday.
Few details have emerged about what will be included in that budget other than the linkage that he plans to make between pension reform and education funding and possibly other priorities such as transportation funding and state store privatization.
That linkage, however, has drawn opposition from Pennsylvania State Education Association’s President Mike Crossey, who said in a news release this morning, “It looks like the governor is ready to hold Pennsylvania’s students and taxpayers hostage if he doesn’t get his way on other issues.”
Sharon Ward, director of the liberal-leaning of Pennsylvania Budget and Policy Center in Harrisburg, called it a “false choice,” particularly after cutting $1 billion from public education two years ago.
“If you take money out of the classroom, you got to put money into the classroom,” she said. “And the governor has an obligation to undo some of the damage that was done to our school students regardless of what happens on the pension side.”
Zogby said to look for the governor next week to issue a challenge to lawmakers about the tough work that lies ahead.
“We have to continue the progress and pace of reform if we’re going to be able to do things elsewhere in state government and I think pensions is first and foremost on the list.”
Zogby also said Corbett’s state store privatization plan will most likely be released on Tuesday along with his pension reform plan and his transportation funding plan.
He said the governor’s 2013-14 budget proposal will not likely call for deep cuts in welfare spending and will continue the governor’s push for a “leaner and more agile” state government that will include further reductions in the size of the state government workforce.
As for the pension reform plan that the governor will offer, he reassured school and state government retirees that their pension benefits are safe. He said the governor will first look to change the pension benefits for future hires and if that doesn’t produce the savings that is needed, he will look to changing future pension benefits for current employees.
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