Remember a long time ago, in a far off land when Governor Rendell, and the legislature declared that our pension problems were solved?
Act 120, the pension solution, was signed into law in 2010.
We were told all we needed was time. The politicians gave themselves a time-out. Taxpayers were served a time bomb.
Then came Tom Corbett who promised more pension reform, did nothing, and cashed in on a sizable pension.
Mr. Corbett was followed by Mr Fix-It. Tom Wolf has bided his time, and refused to acknowledge we have a pension crisis. He and the legislature passed a pension hoax. Taxpayers were offered as sacrificial sheep to feed the Pension Wolf.
The pension debt in September 2014 was almost $57 billion, and has continued to climb at an alarming rate. During that time, legislators have collected cash, COLAs, gifts, per diems, and grew their slush funds during a budget impasse. For his part, Mr. Wolf has increased the legislature’s bloated budget.
In the three ring circus that is the continuing state budget morass, there is no scenario under which we will budget the funds necessary in FY 2017-18 to begin paying off the ever-growing unfunded liability over the recommended 20-year (or shorter) duration.
The recent pension changes failed to address this issue and effectively tabled such a discussion indefinitely. How politically convenient.
The next credit downgrade, which will occur for a variety of reasons beyond pension debt, will generate many subsequent political talking-points, and allow politicians to keep cooking the books.
At the end of the day, the unfunded liability remains an immoral and unsustainable transfer cost to the next generation.
Rock the Capital’s Pension Cake Recipe
The pension cake is high in fat, low in nutritional value, and layered with bad investments, poor public policy, and rudderless leadership. The cake is filled with political lard, sweet investment fees, and then topped off with the empty pockets of Pennsylvania’s grandchildren.
Grease the pan with Act 9: This portion of the cake changed the pension recipe multiplier by 25% for some state workers, and increased the slice of the pension cake by 50% for legislators and judges.
Beat in Act 38: This delicious confection was designed to cap employer contributions. But this edible gimmick turned the pension fund into an upside-down cake.
Mix in Act 40: This artificial additive reduced the employer contribution rate in the event the cake didn’t rise. By adding this ingredient – and subtracting the substance of the cake mix – there was more dough for the main dish, i.e., the budget. But alas, the pension cake collapsed.
Pour on Act 120: This ingredient was a time release treat. It looked good, tasted sweet, and you could eat as much as you wanted without gaining weight. This half-baked, magical formula placed contribution collars on employers, and claimed that you could eat your way to fiscal fitness.
Blindly apply SB 1: This hybrid additive is high in sugar and hype; low in solutions. Too much of this decorative ingredient turns your dessert into Devil’s Food Cake.
Before serving the pension cake to taxpayers:
1) Do not bake while incumbents are in the kitchen.
2) Allow cake to chill until sitting lawmakers have retired.
3) Brush the crumbs off for 30 years.
4) Frost with poker chips, liquor revenues, and tobacco butts.
5) Decorate the top with sound bites.
6) Serve to your grandchildren; watch the fireworks from your tax haven in Florida.