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Pension Reforms Fall Short
The House-approved plan toreform the state’s ailing pensionsystems is a good start. I supportedseveral amendments that would pro-vide for real reform. The plan revertsback to the pension formula that wasin place in 2000 including increasedvesting periods, increased retirementages, and caps on increases to savetaxpayers money.I supported amendments by myRepublican colleagues to HouseBill 2497 that would have further softened the financial blow that iscoming in 2012 when the state’scontribution to the plans is scheduledto rise sharply, but a vote on theseamendments was blocked.While we approved major reformsto the state pension systems, I want-ed those reforms to go much further.Cost-saving amendments that werenot considered would:
Establish a statewide definedcontribution plan for future state andlocal public employees, includingpublic school teachers.
Convert PSERS to a definedcontribution/defined benefit plan for future employees.
Allow federal stimulus moneynot targeted to a specific program tocover PSERS’ unfunded liability;
Minimum contribution rates toeliminate future spikes in contributionrates.
Increase PSERS employer con-tribution rate to allow school districtsto pay off shortfalls before the pro- jected rate spike.
Removal of the cap on schooldistrict reserve balances for futurepension contributions, permittingschool districts to contribute moreand taxpayers to save in the future.Pennsylvania is currently facing amulti-billion dollar unfunded liabilityin its pension systems. The changescontained in HB 2497 will not affectretirement benefits for existing SERSor PSERS members. Instead, theywill apply to new hires. The plan willhelp address future expenses andwill enable the state and school dis-tricts to better manage their annualpension obligations.Both retirement systems arefunded by employee and employer contributions and investment earn-ings. Lagging employer contributionsand a down economy are largelyresponsible for the pension crisis thatwill require an estimated 30 percentincrease in employer contributions in2012, if not addressed by legislativeaction.To help avert a crisis, it was nec-essary to restructure the plan for future employees by changing con-tribution rates, extending the time ittakes for a new employee to becomevested, increasing the retirement ageand eliminating the lump sum payoutoption.The pension system will look dif-ferent for future employees. Changeswere necessary to smooth out whatwould have been a certain fiscal di-saster. It is unfortunate we were notpermitted to do more.The pension bill passed by a widemargin in the House and now restswith the Senate where I am hopefulit will be further amended to includenecessary reforms.
Table Games Revenue Should SupportProperty Tax Relief
Legislation to allow slot machine gambling in Commonwealth passed in 2004 on the promise that it was toprovide substantial property tax relief to Pennsylvania citizens. Six years later, the relief we have seen falls far short of substantial.Now we have table games and the bill that was passed to allow this expansion of gambling in Pennsylvaniaprovided no promise of tax relief. In fact, I did not vote for table games because I believe it offers Pennsylvaniataxpayers no relief of any kind.Senate Bill 711 was rushed through the General Assembly and a conference committee and did not containsufficient reforms to correct problems already plaguing the gaming industry in Pennsylvania. Further, I believethat 100 percent of state proceeds from table games should be directed toward property tax relief. I supportedan amendment that would have done just that.I am disappointed that the legislation still allows for a major conflict of interest in that the Pennsylvania Gaming ControlBoard can conduct its own background checks and those of vendors and licensees through its Bureau of Investigationand Enforcement. Many of my Republican colleagues and Ibelieve that the state police or the Office of Attorney General – both law enforcement agencies – should conduct the back-ground investigations and have greater oversight regardinglaw enforcement.Although we have been able to put mechanisms in place toincrease transparency and accountability in the state’s gamingindustry, our work in this regard is far from over.
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