State pension news good, but doesn’t eliminate the crisis
It looks as if smaller-than-expected payrolls for many school districts have left an unexpected surplus of state funds because the state reimburses districts for an average of 56 percent of their payrolls.
And in the year that ended June 30, $69 million of the state appropriation for school districts had not been spent, much of it earmarked for pension reimbursements.
With the payroll shrinkage continuing, an extra $140 million could be available this year.
The party line is that this will further reduce pension obligations for now and the future, impeding Gov. Tom Corbett’s efforts at broad-ranging pension reform geared to getting a near-crisis shortfall on future payments under control.
That party line is dangerous.
We think it’s a fortuitous development that these extra funds appear to be available as part of the pension reform discussion.
But, folks, let’s get a grip.
The combined unfunded liability of the state system pension funds is $41 billion. That’s “b” as in billions.
To alter a pension plan geared to bringing that debt under control because of a $209 million discovery and the possibility of future reductions is like getting $20 in the mail and using that as an excuse to go spend $100 on a mall shopping spree.
Look, if these kind of projections are real, perhaps some of the tenets of Corbett’s plan can be modified to be less onerous. This could assure that benefits earned by all those in the system are maintained, which is morally correct. That would be great.
But let’s not get carried away over this news and change the big-picture parameters. The state has a pension crisis that threatens its future ability to provide services it is responsible for and remain solvent. That hasn’t changed.
We are thankful for the good news and hope the administration uses it in the honorable way – soften some of the harder edges of its pension reform plan.
-The Williamsport Sun-Gazette