May 15, 2015
May 14, 2015
Wolf: Auditor General DePasquale To Lead Task Force On Municipal Pensions
Gov. Tom Wolf Thursday announced he has named Auditor General Eugene DePasquale to head a Task Force on Municipal Pensions.
Joining Auditor General DePasquale on the task force will be Mary Soderberg, former secretary of the budget, Janet Yeomans, former vice president and treasurer of the 3M Corporation, and Susan Hockenberry, currently the executive director of the Local Government Academy.
Below is the letter Gov. Wolf sent to Auditor General DePasquale regarding the formation of the Task Force on Municipal Pensions:
Dear Auditor General DePasquale:
Although most municipal pension plans in Pennsylvania are financially healthy, a significant minority are substantially underfunded. This underfunding can threaten both the retirement security of municipal employees and the ability of municipalities to provide basic services at a reasonable cost to their residents. It is for this reason that I have created a Task Force on Municipal Pensions. I am pleased that you will serve as Chair of the Task Force. The members of the Task Force are Susan Hockenberry, Mary Soderberg and Janet Yeomans.
I hope that the Task Force will make recommendations that address the unfunded accrued liability of Pennsylvania’s municipal pension plans and place those plans on a sound financial footing for the long term, while at the same time maintaining retirement security for municipal employees without imposing undue risk on them.
The following are among the specific ideas I hope the Task Force will consider.
Eliminate needless administrative expenses by consolidating municipal plans into the Pennsylvania Municipal Retirement System (PMRS) and prohibiting state assistance to municipal plans from being used for administrative expenses.
If any municipal plans are to remain outside of PMRS, professionalize investment decision-making by setting mandatory qualification standards for municipal pension fund investment managers.
Please also consider requiring municipalities with distressed pension plans to take reasonable steps to reduce costs and increase revenue dedicated to reducing unfunded pension liabilities.
To reduce costs, municipalities with distressed plans might be required to refrain from providing benefit enhancements to existing or future employees as long as their plans remain in distressed status. Municipalities could choose from a number of options for increasing revenue dedicated to reducing unfunded liabilities. Those options include securitizing revenue streams from municipally owned water and sewer systems and issuing pension obligation bonds if it is financially prudent to do so.
I look forward to receiving your report on solving Pennsylvania’s municipal pension funding problem in a way that is fair and sustainable for municipal employees, municipal governments, and the Commonwealth.
Auditor General Eugene DePasquale released this statement regarding his appointment--
“Pennsylvania’s underfunded municipal pension liability has now grown to nearly $8 billion, an increase of $1 billion over a two-year period, straining the budgets of many large and small municipalities across the state. I appreciate Governor Wolf’s strong interest and commitment to finding workable solutions to this critical municipal pension challenge.
“Everyone involved understands the urgency of this issue. We want to get the job done as quickly as possible, and as thoroughly as possible. This work group’s job is not to study the problem. We will cull through the potential solutions and make recommendations to the governor and the General Assembly.
“As I said nearly two years ago when I initially raised the issue, our municipal pension challenges are not going away. We must act now to prevent this municipal pension issue from crippling state and local taxpayers, and jeopardizing the future for our communities and the retirement incomes of thousands of municipal employees. Waiting out this situation is not an option.”
The auditor general’s municipal pension report released in January found that nearly half of the employee plans statewide are in distress.
May 13, 2015
Senate Passes GOP Pension Restructuring Plan They Project Will Save $18.3 Billion
The Senate Republican plan to reform state and school pension systems-- Senate Bill 1 (Corman-R-Centre)-- passed the Senate Wednesday by a party-line vote of 28 to 19, according to Senate Republican Leaders.
This substantial legislation restructures the state’s two public employee pension systems – the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS) – in order to make them viable in the long term.
“Senate Bill 1 creates significant savings by restructuring the systems while reducing liabilities and preserving current employee retirement benefits. School districts will find themselves with additional resources to direct toward the classrooms, instead of simply raising property taxes,” said Senate Majority Leader Jake Corman (R-Centre). “Today we took an important step toward getting the taxpayers out of the risk business with pensions while shielding employees, taxpayers and retirees security from political risk.”
“Reforming public pension benefits is a primary goal for Senate Republicans as we look towards balancing the 2015-16 state budget,” said Senate President Pro Tempore Joe Scarnati (R-Jefferson). “The pension crisis facing our state did not arise overnight and requires that we work together to enact responsible reforms in a strategic manner. I am very pleased that Senate Bill 1 makes these necessary reforms, with lawmakers also leading by example and moving ourselves into a defined contribution plan upon re-election.”
With its projected $18.3 billion in savings by Republicans, Senate Bill 1 was said to provide six times more savings for the Commonwealth and school districts than the Governor’s proposal, which would increase the Commonwealth’s debt by $3 billion.
“Senate Bill 1 takes a vital step toward meaningful pension reform,” said Senate Appropriations Chair Pat Browne (R-Lehigh). “I applaud my colleagues on passage of this important measure and look forward to continuing discussions on this legislation as it moves forward.”
“We must get taxpayers out of the risk business with pensions, and this legislation represents a responsible and fair first step toward that goal,” said Senate Majority Whip John Gordner (R-Columbia).
“Today’s vote is about the sustainability of the state’s pension system,” said Senator John Eichelberger (R-Blair). “SB 1 provides employees with new benefits, choices in benefits and ownership over their investments.”
The features of Senate Bill 1 include:
— All new state and public school employees will be enrolled in a mandatory, 401-k type Defined Contribution Plan, similar to those used by private sector workers.
— Members of the General Assembly, upon election or re-election, will be enrolled in the same Defined Contribution Plan as state and public school employees.
— Current employees’ previously earned benefits will not be changed.
— Current employees will then be able to choose between increasing their pension contribution or electing to lower their future benefits.
— There will be no changes to current retirees’ benefits.
— A Public Pension Management and Asset Investment Review Commission made up of investment professionals and retirement advisors, will be established to make recommendations to the General Assembly and the Governor. Among their duties will be to evaluate the performance of current investment strategies and procedures of both state retirement systems regarding rates of return and associated fees paid for fund management.
Restructuring the public pension system is not a new issue to the Senate. Over the last two years the Senate has held numerous hearings on the issue, including one most recently last month. The information gathered during those hearings served as a valuable resource and led to the drafting of Senate Bill 1.
In addition, much of SB 1 mirrors that of SB 922 from 2014, which was thoroughly vetted by the Senate Finance Committee during public hearings.
“Pensions have been discussed in these halls for years. Today was the day we stopped talking and began taking action,” stated Corman.
A summary and Senate Fiscal Note are available. The bill now goes to the House for consideration.
Reaction
Senate Democratic Leader Jay Costa (D-Allegheny) said the Senate Republican pension reform plan that passed the Senate is illegal because it impacts benefits of current employees, is woefully short-sighted, and unfair to workers.
Sen. Costa challenged Senate Republicans in floor debate to reconcile well-established law with the proposal. He said that the plan would be immediately challenged in court, cause a litigation explosion and compel taxpayers to cover back benefits.
The Democratic leader said that the Republicans abused the process in rushing the measure to the Senate floor for a vote. Plus, he said that both Senate Democrats and Gov. Tom Wolf have offered responsible, constructive, constitutional proposals that would address high public pension costs reasonably.
Sen. Costa said the plan provided little relief even if the bill overcomes legal hurdles. The projected savings for the teachers’ retirement system would be $3.1 billion and $600 million for the state employees system.
He said the measure does not address the unfunded liability in the pension funds that spiked because Pennsylvania failed to make its actuarially required contribution for 17 years. Eighty-eight percent of current costs of the state worker and teacher retirement funds are to pay off the unfunded liability. The plan adds a cash-balance plan for new hires but uses contributions from new hires into the fund to pay retirement benefits for others.
“Senate Democrats believe that there are responsible pension reform plans that protect taxpayers and provide reasonable benefits for workers but the Senate Republican plan does neither, plus it is unconstitutional,” said Sen. Costa. “The Republican plan hurts current workers, devastates pension benefits for future employees and provides little in the way for relief for taxpayers.
“The plan puts new employees and future retirees into poverty and makes changes in public pension systems that are unreasonable. The process that was used to pass this plan was flawed and rushed and the plan itself falls woefully short of any reasonable tests of legality or fairness.”
NewsClips:
Republicans Stand Together, Pass Pension Bill
House Passes Bill To Reduce School Property Taxes By Billions
School property taxes would be lower in every district in Pennsylvania under House Bill 504 (Gabler-R-Clearfield) passed the House Wednesday by a vote of 105-86, House Majority Leader Dave Reed (R-Indiana) said.
“Our property tax reduction plan provides nearly $5 billion in property tax relief to our citizens,” Rep. Reed said. “It’s a responsible, balanced approach addressing a problem we have been discussing here in Pennsylvania for decades.”
House Bill 504 would ensure that every new dollar generated through the proposed changes be fully dedicated to school property tax relief.
It would change the Personal Income Tax rate to 3.7 percent and the Sales and Use Tax rate to 7 percent -- without expanding what’s taxed. Items currently exempt, such as day care, school books and nursing home care, would remain exempt.
The plan would generate and distribute nearly $5 billion in total relief. The bill includes a $125 million expansion of the Property Tax and Rent Rebate Program, which benefits low- to middle-income senior citizens and disabled residents across the state.
“This legislation will achieve what many thought was impossible,” Rep. Reed said. “This property tax relief bill increases the Commonwealth’s commitment to schools while reducing the property tax burden to our taxpayers. The cost controls included in the bill make sure the tax reductions stay in place, ensuring long-term relief.”
Rep. Reed said in many areas of the state some people have been forced to choose between paying their taxes, or buying food and medicine, and it shouldn’t be that way. The property tax relief bill provides a significant step forward toward increasing the fairness of how the state funds public education.
A summary and House Fiscal Note are available. The bill now goes to the Senate for consideration.
Reaction
House Democratic Leaders released the following statement on the bipartisan passage of House Bill 504, which includes an amendment that would provide historic levels of homeowner property tax relief in Pennsylvania.
"For too long, homeowners in Pennsylvania have been forced to bear a disproportionate and unfair share of the burden for funding our schools. They need relief now. This vote shows we are serious about providing that relief.
"It shows that in Pennsylvania, Democrats and Republicans can work together to find solutions to difficult problems. We don't all agree on the details of a final property tax relief plan yet, but we do agree that the effort to reduce property taxes for homeowners in Pennsylvania must continue moving forward as part of this year's budget discussion. We must give homeowners the relief they need and find a fairer way to fund our schools.
"Sending this bill to the Senate is the beginning of the conversation, not the end.
"Gov. Wolf has shown great leadership on this issue. He's made historic property tax relief a priority in his budget and has taken a very active and personal role in helping to move the discussions forward. We want to continue working with him and our Republican colleagues to create a property tax relief plan that's fair for all our homeowners and good for all our school districts.
"We are determined to do what we can to finally make significant statewide property tax relief for homeowners a reality."
NewsClips:
Pension, Tax Reforms Pass First Hurdles, Face More
Wednesday NewsClips
Senate Panel Balks At Recommending Wolf Nominee
Governor Nominees With Scranton Ties Win Panel Support
Click Here for Today's PA Environmental News
Governor Nominees With Scranton Ties Win Panel Support
May 12, 2015
PA Courts Launch PAeDocket, First State Mobile App For Finding Court Dockets
Finding public court information is easier than ever with the launch of PAeDocket – a free iPhone and iPad app that provides a quick and simple search of court cases or dockets, Supreme Court Justice J. Michael Eakin announced Tuesday.
The app provides results about cases, including charges, court dates, upcoming hearings and status of cases. PAeDocket offers a visually engaging and easy-to-use mobile experience.
“We are excited about utilizing mobile apps to provide a valuable service for the public, including lawyers, law enforcement, consumers, victims and victims’ families,” said Justice Eakin. “Pennsylvania is once again a pioneer in advancing technology, as the first state-level judiciary to launch a mobile app docket search of case information from multiple levels of the courts.”
PAeDocket makes looking for Pennsylvania case information fast and easy. Application users can search: Case number; Participant name; Organization name; Offense tracking number; Police incident or complaint number; and State ID number.
According to Justice Eakin, “Staying competitive by using state-of-the-art technology helps the courts offer easy access to court records – and mobile apps keep us on that cutting edge.”
Development has begun on an Android version of PAeDocket, which should be released later this year. The judiciary also offers a mobile version of the website for smartphones across multiple platforms.
Docket searches can also be performed directly on the mobile or full version of the PA Courts website.
To download the application, visit the iTunes stores and search for “PAeDocket.” The judiciary reminds drivers not to access PAeDocket while driving.
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