State Pension Funds Ticking Time Bomb Brought About by Gross Neglect

Governor Ed Rendell fiddles while Pennsylvania burns, dumping massive pension fund shortfall into the lap of his pitiable successor.

Those who follow the machinations of Pennsylvania state government know that the Commonwealth is in the midst of a self-inflicted employee pension calamity.

According to the administration of Gov. Tom Corbett, the state pension funds covering legislators, public school teachers and rank and file employees is more than $40 billion underfunded. The "can" has been kicked down the road to the greatest extent possible over the years, and now, it is time to pay the piper.

The greatest mystery to me in this debacle is why former Gov. Ed Rendell is not being held accountable for his inaction on the pension ticking time bomb throughout his long eight-year reign as our "leader."

One of the fatal flaws of government is that it engages in profligate spending in both good times and bad. With the belief that pension fund surpluses would continue forever, our greedy General Assembly colluded with then-Gov. Tom Ridge in 2001 to enact 50 percent legislative pension hikes and 25 percent boosts for others covered by the plans. Pension contributions from beneficiaries were increased and employees have paid their mandated increased share over the years since 2001, but the Commonwealth elected to contribute little or nothing to the funds for many of those years. Ridge successor Rendell was elected the following year and chose not to take action or even to sound the alarm about the crumbling pension funds, thus the crisis metastasized and has now been dumped in the lap of Rendell successor, Gov. Tom Corbett, who to his great credit, is exhausting all efforts to address the problem. Unlike President Obama, Gov. Corbett has most graciously and generously declined to lay blame for current fiscal problems where much of it belongs, on his predecessor.

It would appear that state law precludes pension tweaking for current employees, and if this is upheld, it would tie the hands of those who seek to make the funds solvent, limiting their options significantly.

According to the Commonwealth Foundation, the state's pension obligations will rise from $1.7 billion to $6.1 billion over the next five years. Where will we get that money? I suppose Ed Rendell would respond, "Easy, simply raise taxes!" If that plan were followed, it would require mammoth tax hikes to deal with the gross neglect of the pension crisis.

Government service is one the pursuits in which an individual can make calamitous decisions and evade responsibility for their actions. How can Gov. Rendell be looked up to as an esteemed elder statesman, one who is often sought out by the media for analysis, when his two terms as governor featured grand scale mismanagement which has come back to haunt and bury us?

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Oren Spiegler November 28, 2012 at 11:10 PM
You are a most well-informed individual, Mr. Connelly, and you are correct on all counts. Thank you, sir!
SWYKLocal November 28, 2012 at 11:59 PM
There are a number of proposals on the table for addressing the under funding of PERS which is going to kill homeowners in the Commonwealth. I suggest you take a look at and support PA HB 1776 - The Property Tax Independence Act. The Act would make the state responsible for funding the teachers much like it is done in other states.
Roger November 29, 2012 at 12:45 AM
Quoting: "... The Act would make the state responsible for funding the teachers much like it is done in other states." As if the state has the unending supply of money to do the funding.... When I hear these kinds of statements, I shudder. They always imply that as long as somebody gets funding from an agency one, or two steps higher, the supply has no consequences, and the money will flow freely without impact to anybody (other than the recipient). Ha, ha ...
SWYKLocal November 29, 2012 at 04:10 PM
Roger – point taken, but not what I intended. The State made the deal and they need to find a way out of it. Dumping the enter burden of education system on home owners is just plain ridiculous. A story for another is the growing cost and lack of quality in our education system. Nothing make me cringe more that hearing the politicians talk about investing in education. I personally don’t believe that throwing more money at education will solve the problems. In fact, I think the US will suffer greatly unless we can make getting a quality education in expensive.
Daniel Santiago November 29, 2012 at 04:22 PM
The education system isn't losing quality. It's all the prescription pills those crazy kids are poppin' these days.


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