SCRANTON TIMES-TRIBUNE EDITORIAL: …The bill would create a new defined contribution plan for future state employees akin to the 401(k) plans that are common in the private sector. It passed along purely party lines, with the Republicans who authored it and passed it calculating that it would save $11 billion in state contributions over 30 years, compared with the existing plans.
It would not, however, resolve the pressing current problem. The two big state pension plans are underfunded by about $53 billion, and the pension bill will not ease the pressure on state and school district budgets to meet that obligation. Both will continue to rise. Statewide, many school districts already have passed budgets with property tax increases partially to account for the rising pension costs.
Unfortunately, Republicans got cold feet at the last minute in several ways. First, they exempted from the regime for new employees a favored GOP constituency — state police and corrections officers.
And, the Republicans retreated from an originally proposed initiative that would play a major cost-reduction role. Recognizing that the Legislature acted against the public interest in 2001 when it unconscionably raised pension benefits for lawmakers by 50 percent and for all other state and school employees by 25 percent, the current Republican legislators planned to re-establish the 2001 rates for all benefits earned going forward. Senate Republicans killed that provision at the last minute, allowing the outlandish increased rates to stand. (To their credit, the bill does apply the rollback to all new legislators, and to current legislators who are re-elected.)… (more)
