Gov. Tom Wolf Thursday vetoed the Republican pension reform bill-- Senate Bill 1 (Corman-R-Centre), and said in a statement--
“I understand the need for pension reform, but this legislation provides no immediate cost savings to taxpayers and does not maximize long-term savings for taxpayers. We need pension reform that works. There are provisions within this legislation, which as part of a comprehensive pension proposal I could support; however, Senate Bill 1 does not address the problems facing our pension system comprehensively and fairly.
“The plan I delivered to the General Assembly would save at least $10 billion, while at the same time ensuring that the commonwealth will make all actuarially required contributions to fund our future pension obligations and reducing the burden placed on the commonwealth and school districts in the short term. Since my budget proposal I have found and shared an added $7 billion in savings, a total of $17 billion in savings to our retirement systems, which I have communicated to the General Assembly. Furthermore, the plan I proposed would reduce the over $700 million in fees paid annually to Wall Street firms to manage our investments, Senate Bill 1 does not address these excessive fees.
“This legislation was pushed through without negotiation by Republicans along with an unbalanced budget, and this legislation produces no savings to our deficit in the next fiscal year. We need a comprehensive agreement on the issues facing Pennsylvania including education funding, the need for a commonsense severance tax on natural gas, balancing our budget for the long term, and pension reform.
“Furthermore, during my consideration of this legislation, it became clear that this legislation violates federal tax law as it would be considered an impermissible cash or deferred arrangement (CODA). In addition, the bill forces newly-hired employees to pay down the unfunded liability of existing pension plans, caused by years of government failure to make necessary payments, while denying those new employees the full benefit of their contributions.
“I urge the General Assembly to resume negotiations and work to enact a comprehensive plan that will balance our budget, invest in our schools, make oil and gas companies pay their fair share, and solve Pennsylvania’s pension problem.”
Republican Reaction
Senate President Pro Tempore Joe Scarnati (R-Jefferson), Senate Majority Leader Jake Corman (R-Centre), Senate Appropriations Committee Chairman Pat Browne (R-Lehigh), Speaker of the House Mike Turzai (R-Allegheny), House Majority Leader Dave Reed (R-Indiana) and House Appropriations Committee Chairman Bill Adolph (R-Delaware) have issued the following statement regarding Gov. Wolf’s veto of pension reform legislation:
“We are dismayed by Gov. Wolf’s comments on KQV radio today stating that he will veto the pension reform package because ‘it’s still not good for employees moving forward…we’re not going to attract good employees to our system with that part of the pension bill.’ Further, the notion that we are close to a compromise on a pension reform plan, when we only learned this morning of the veto via the press, is a bit disingenuous.
“It is remarkable that Gov. Wolf would oppose a proposal to move new public employees into a 401k-style retirement plan which he, himself, adopted for his employees at Wolf Organization. Apparently, the Governor believes this type of plan, which is common in the private sector, is adequate for most hard working Pennsylvanians, but not for legislators or members of public employee unions.
“With this planned veto, he is rejecting tangible, systematic changes to reform the public employee pension systems, which are currently the number one reason for property tax increases. Gov. Wolf’s plan to borrow to pay pensions does not fix the problem. We have clearly seen that Gov. Wolf’s actions speak louder than his words on wanting to provide property tax relief.
“We are unsettled by his continued willingness to bow to the desires of special interests while disregarding what the people of Pennsylvania recognize as needed reform. The reality is that with this veto, Gov. Wolf will be taking another step to ensure Pennsylvanians pay significantly higher taxes, in order to fund an outdated retirement system which is out of step with what average Pennsylvanians receive.
“In the last 10 days the Governor has vetoed a balanced, no-tax-increase budget; an historic liquor privatization plan to finally give consumers convenience and choice when purchasing alcohol; and now today has said he will veto a pension reform bill that would save taxpayers over $10 billion. Instead of working with the General Assembly to move Pennsylvania forward, Gov. Wolf continues to be fixated on massive income and sales tax increases. For someone who has pledged to create a ‘government that works,’ he’s certainly doing everything he can to make sure it doesn’t.”NewsClips:
Wolf Vetoes Republican Pension Bill
Wolf Vetoes GOP Pension Bill, Republicans Dismayed
Republicans Dismayed By Wolf’s Veto Of Pension Bill
