McCord: Pension Reform Unnecessary

When it comes to pensions, Rob McCord has his head in the sand.

HARRISBURG — Republican Party of Pennsylvania Chairman Rob Gleason released the following statement regarding Pennsylvania Treasurer Rob McCord’s recent comments on Governor Corbett’s pension reform plan. In an interview with the Patriot News, McCord said, “Some people are saying it’s a crisis — that it’s Armageddon — but it’s not,” said state Treasurer Rob McCord. “This governor is panicky. He responds to challenges the same way a pit bull responds to sudden movement.”

Chairman Rob Gleason responded: “If Governor Corbett is a pit-bull attacking the fiscal problems facing Pennsylvania, Rob McCord is like an ostrich that puts his head in the sand. Isn’t it alarming that Rob McCord, the supposed steward of our taxpayer dollars, either doesn’t know how serious Pennsylvania’s $47 billion unfunded pension liability really is, or he just doesn’t have the guts to fix it? It’s an embarrassing admission from Rob McCord, one of Pennsylvania’s top fiscal officers, to not understand how serious our fiscal problems really are.”

“Governor Corbett has proposed bold solutions to tackle Pennsylvania’s toughest issues, and thanks to his leadership, Pennsylvania is putting people back to work. After two balanced budgets, zero tax increases and helping the private sector create over 125,000 private sector jobs, Governor Corbett’s leadership is propelling Pennsylvanian in a positive and prosperous direction.”


WHAT THEY’RE SAYING: Governor Corbett’s Leadership on Pension Reform

Corbett has “political fortitude” to tackle pensions

  • Express Times: “Yet the Legislature should deliver on one item that Corbett has shown the political fortitude to tackle: pensions… Corbett deserves to be heard on pension reform. Without changes, the next governor and Legislature will be looking at draconian tax hikes just to keep up with contractual demands.” (EDITORIAL: Corbett budget on target on pensions. Express Times. 2/6/2013.)

Corbett proposed a “commonsense solution”

  • Patriot News: “Corbett has proposed a commonsense solution that we support and one that deserves serious consideration by the Legislature. At its simplest, it protects retirees and the benefits accrued by current workers. But it alters future benefits for existing employees and changes the system entirely for yet-to-be hired state workers who would be placed into a defined-contribution system similar to the 401(k) retirement plans used by the private sector.” (Editorial: Corbett pension plan is the path back to fiscal stability. Patriot News. 2/27/2013.)

Corbett’s measures are “fair and necessary”

  • Philadelphia Regions Business: His proposed budget attacks the pension crisis, a massive financial mess created by a number of his predecessors who were too weak-willed to address it, even though it threatens the financial stability of the commonwealth. The measures are tough, but fair and necessary. (Editorial: Corbett’s Budget Sticks To Principles, Shows Some Finesse. Philadelphia Regions Business. 2/7/2013.)

Pennsylvania Association of School Business Officials (PASBO) Supports Corbett’s Plan

  • Altoona Mirror: According to The Pennsylvania Association of School Business Officials, school pension costs will continue to increase, dramatically resulting in more program and personnel cuts in future budgets as well as draining reserves at unsustainable rates. Because the association’s members are also members of the Public School Employees Retirement System, the state Department of Education considers the PASBO’s support to be crucial in urging the General Assembly to pass Corbett’s proposed reform with the state budget. “It means a lot for [PASBO] to come out and support what the governor is doing. They deal with finances daily and see the burden on their school districts and ultimately taxpayers when it comes to these pensions,” department of education spokesman Tim Eller said. “School pension reform is a critical and immediate need, which is why we believe that a reasonable modification of future benefits for current employees is unfortunate but necessary,” stated PASBO executive director Jay Himes. Corbett gains pension reform support. Altoona Mirror. 4/3/2013.)

Current pension system is “clearly apparent” and is a “huge problem”

  • Pocono Record: The problem Pennsylvania faces is clearly apparent, as top gubernatorial aides and the governor himself outlined to representatives from five Ogden Newspapers in Pennsylvania, including The Express, the Williamsport Sun-Gazette, Lewistown Sentinel and The (Altoona) Mirror, last week in Harrisburg. Simply put: Bad decisions by previous legislatures and governors coupled with economic downturns that trashed investment returns for much of a decade have left Pennsylvania with a huge unfunded liability that threatens to swallow up larger and larger portions of the state budget. There is a $41 billion shortfall between the funding on hand and what the State Employees’ Retirement System and the Public School Employees’ Retirement System are obligated pay out based on current formulas. And it’s up to the state and school districts, i.e. taxpayers, to fill that hole. (Corbett must get serious on pensions. Pocono Record. 12/26/2012.)
  • Post Gazette: Regarding public employee pension plans — a huge problem with a $41 billion gap between their assets and liabilities — Mr. Corbett has said he will address the issue when he presents his 2013-14 budget proposal in February. Although the state is projecting revenue growth next year of nearly $819 million, pension costs are expected to eat up 62 percent, an estimated $511 million that won’t be available for other programs and services unless there are changes to the pension funds. Similar fallout will impact school districts, and the sums are projected to increase significantly for at least five years. (Editorial: The pension crisis: Gov. Corbett must signal the reforms he wants. Post Gazette. 12/2/2012.)
  • Times Herald: The only certainty is that Pennsylvania’s pension liability is looming and getting larger by the day. (Editorial: Gov. Corbett is trying to get some traction on pension reform. Times Herald. 5/12/2013.)

“Anyone objectively viewing the facts knows that the state pension system must be reformed”

  • Williamsport Sun Gazette: Anyone objectively viewing the facts knows that the state pension system must be reformed, not just for the good of Pennsylvania’s taxpayers but also for the public employees of the future who will be seeking – and are deserving – of some benefits. Dreyfuss believes pension reform must be based on current funding levels and both predictable and affordable costs for the future. That equation won’t get easier with time. Pension reform that respects longtime existing employees but makes major fundamental changes for relatively new public employees and those to come is the only way to tame this monster. No amount of politicized massaging of the facts can change that. (Analyst paints a sobering pictures of state pension woes. Williamsport Sun Gazette. 5/29/2013.)

Pension funding disaster creates “fiscal abyss”

  • Delco Times: Forget the fiscal cliff. This is Pennsylvania’s version of the fiscal abyss. The state is teetering on the edge of a $41 billion pension shortfall. Taxpayers already are on the hook for a $1.6 billion public pension hit this year. That number is expected to balloon to as much as $4 billion a year and stay there for decades. (EDITORIAL: In 2013, Corbett must fix pension crisis. Delco Times. 12/30/2013.)

Things will only get worse if nothing is done

  • Lancaster New Era/Intelligencer Journal: Pennsylvania is in deep do-do, so far as state pensions go. And things are only going to get worse, unless comprehensive action is taken by the state Legislature. (Putting teeth in pension reform. Lancaster New Era/Intelligencer Journal. 4/22/2013.)

Ignoring the problem is fiscally irresponsible:

  • Patriot News: “Give Gov. Tom Corbett credit: He has served up a bold plan that would make a big dent in the $47 billion unfunded liability now facing state pension plans. He may not have the perfect solution — reducing future benefits already promised to current employees raises serious constitutional questions — but he is trying to tackle a huge problem before it inflicts needless pain. The Legislature’s Republican leaders don’t seem eager to run with their fellow Republican’s plan. However, just ignoring the problem and hoping that a booming stock market will solve it is not fiscally responsible. (Editorial: Corbett’s pension fix is a bold start; do critics have a better one? Patriot News. 5/8/2013.)