Corman exhorts pension reform to balance budget
Senate majority leader speaks to Rotary Club
LEWISTOWN — State Sen. Jake Corman, R-Bellefonte, said state government has a tendency to govern by crisis.
“It’s high time we change our thinking,” he said at a meeting of the Rotary Club of Lewistown, held Tuesday afternoon at Rec Park Community Center.
Corman spoke briefly about public pension reform and the way government plans for the future.
Public pensions have long been what Corman referred to as “main drags” in Pennsylvania’s budget. Since the state must pass a balanced budget annually, he said policymakers tend to make financial decisions that solve short-term funding challenges but fail to invest in the future.
Corman said pensions have a significant effect on the budget because benefits cannot be cut — only enhanced — for current public sector employees. When a recession happens, maintaining those expenditures strains the budget.
Moving public employees to a 401(k) system begins to take the risk away from state government, Corman said. He supports pension reform that would create a system in which lawmakers can prioritize investments over operating costs.
The reform Corman has helped put forward would put into practice a defined contribution system for new hires.
In the past, a bill to categorize re-elected officials as new hires was accepted by the Senate but did not pass House vote.
Corman said the challenge of balancing a budget amid growing expenditures and less revenue forces government to push for change.
It is a simple math equation, he said, that has to be solved. Rather than constantly increasing taxes to meet a short-term budgetary goal, he said pension reform could provide more protection against a volatile economy.