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Looming Pension CrisisCould Mean Tax Hike forPennsylvania Families
The Public School Employees’ Retirement System(PSERS) and the State Employees’ Retirement System(SERS) are the pension plans for hundreds of thousandsof Pennsylvania teachers and public employees. Both aredefined benefit plans, which means each employee is entitledto a specific retirement benefit, established by a formulabased on years of employment. These plans are funded by acombination of contributions from the employee, the employer which in the case of PSERS and SERS means the taxpayersof Pennsylvania, and returns on investments made by theretirement system.In the 1990s, PSERS’ and SERS’ investment returns werehigh. As a result, contribution amounts for employers andemployees were reduced, and benefits were increased for retirees of both systems. Unfortunately, after the attacks onour nation on Sept. 11, 2001, the financial markets experienceda dramatic downturn and the returns on investments made byPSERS and SERS began to decrease. Act 40 of 2003 allowed both systems to spread the effectsof those investment losses over 30 years, while enjoying thebenefit of investment gains over a ten year period. That 10-year period is set to expire in 2012-13.The current economic recession is having a negativeimpact on the value of these plans and additional contributionswill be required. Because the employee contribution level isset by law, Pennsylvania taxpayers are on the hook to makeup the difference when the 10-year period expires in 2012-13.While the exact amount of the rate increases depend onmarket conditions, it is clear that both PSERS and SERSare facing substantial rate increases in 2012-13. This crisisrequires immediate attention by the General Assembly. HouseRepublicans are currently considering legislative solutions tohelp us avoid this crisis without imposing an enormous taxincrease on hardworking Pennsylvania families.
Hand-Held Cell Phone BanPasses House
Recently, I supported legislation to make Pennsylvania’sroads safer by banning the use of hand-held cell phones whiledriving.House Bill 2070 bans text messaging for all drivers and cellphone use for novice drivers. The measure, which includes aban on the use of hand-held cell phones for all drivers, includesexceptions for law enforcement officers, drivers of mass transitvehicles, operators of emergency vehicles when on duty, anddrivers using a hand-held cell phone to report a traffic accident,or make a 911 emergency call. According to Pennsylvania Department of Transportation sta-tistics, since 2003, there have been 6,877 accidents in which theuse of hand-held phones was listed as a contributing factor.California, Connecticut, New York, New Jersey, Utah,Oregon,Washington, and the District of Columbia have alreadyenacted bans on the use of hand-held cell phones while driving.I am pleased to help Pennsylvania join them.
Measure Would ChargeMunicipalities forState Police Services
d by the House of Representatives
A measure being consatrol services provided
would charge a fee on municipalitiest
by the Pennsylvania State Police if those municpahave their own police forces, do participate in a full-time regionalpolice force, or do not have a contract with another municipalityfor full time police forces.This measure would force local officials to come up withthousands of dollars to turn over to the state government in order to comply. Pennsylvania’s small communities are all strugglingto make ends meet. Imposing this burdensome surcharge willalmost certainly result in huge tax increases in small communitiesacross Pennsylvania.House Bill 1500 is currently before the House AppropriationsCommittee. If it is brought to the floor for a vote, I intend to op-pose it.
Pennsylvania’s BudgetProcess in Need of Reform
. ,approved until early October, more than four months after thelegally mandated deadline.Many residents have contacted me to express their frustrationthat lawmakers and the governor cannot come to agreement onthe budget by the deadline. Many of them rely on services fundedby the state budget including state colleges and universities,ublic schools, and county social services. I believe somethingust be done to reform the budget process and ensure that thispe of impasse never happens again.
tTo enable critical services to continue to function in the eventbudget impasse, I have co-sponsored House Bill 2101 whichof s that if there is a budget impasse beyond July 31, thestatous year’s general appropriations act shall become law at aprevicent reduction until supplemented by a new budget.20 pember of other legislative proposals have been offered to A nur budget process. Among them:reformse Bill 2014
uwould require that if a new budget is notce by the end of the fiscal year on June 30, the previousin
plabudget will become the budget for the upcoming year.year
2Huwould go one step further. If a budget is not in
he end of the fiscal year on June 30, this legislationplace byse the previous year’s budget with each line itemwould imp20 percent. Since costs for services tend toreduced
byyear, this bill provides a powerful incentive for increase
eachmplete the budget process on time.lawmakers to couse Bill 913
oue Bill 1ld prohibit the furlough of Commonwealthwoent of a budget impasse.employees in the eHouse Bill 1460
House ill 1460ld require the establishment of awoase detailing state revenue andsearchable online dataexpenditure information.House Bill 1915
Houe Bill 11ablish the Emergency Statewould
ese that state employees willEmployee Salary Fund to ensua budget impasse.continue to be paid in the event o
ow we can improveI would like to hear your thoughts ont me at my district
the budget process. Please feel free to contaoffice or visit my Web site at RepKnowles.com.
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