If no other pension reform gets done before lawmakers break for the summer, the highest-ranking state senator is calling for the Legislature to at the very least act to move all elected officials in the legislative, executive and judicial branch out of the state’s defined benefit pension plan.
Senate President Pro Tempore Joe Scarnati, R-Jefferson County, is dead serious when he says pension reform is a must-do for the Legislature before it wraps up its business for the summer.
“It’s not going to have significant impact on savings, but you know what? I think it sends a strong message that we’re serious about getting our finances under control,” said Senate President Pro Tempore Joe Scarnati, R-Jefferson County.
Scarnati offered this last-resort pension proposal in a telephone interview after expressing concern that none of the pension- reform plans being worked on in the House or Senate has yet to draw the votes needed to pass.
He said if any consensus plan does gain traction, he wants to see elected officials in all three governmental branches be treated like new employees and pushed out of the guaranteed pension system and into a 401k-style plan upon their election or re-election.
The State Employees’ Retirement System, of which most elected officials are participants, and the Public School Employees’ Retirement System faced a $47 billion debt for pension benefits that retired and current employees have accrued but the systems lack the money to provide. As a result, the state and school districts face dramatic increases in payments for many years to come to pay off that debt.
“Everybody believes we are the pension problem, so let’s take ourselves out of it. Then we’ll see what the real pension problem is,” Scarnati said.
“We can move ourselves out and you’re still going to have the spiked payments for years and unfunded liability. So I want to get the conversation going and I’m up for the task.”
Northern Lebanon School District Superintendent Don Bell, who has railed about lawmakers reluctance to tackle pension reform, called Scarnati’s idea an “excellent first step, but more importantly that action would finally show that the legislators are beginning to get serious about solving the financial challenges associated with pension reform.”
Scarnati said he doesn’t want to go home for the legislative summer recess having to defend keeping his pension while asking others to absorb funding or service cuts that are bound to be included in next year’s state budget given a $1 billion-plus revenue shortfall.
The symbolism loaded into Scarnati’s proposal would demonstrate to the public that lawmakers recognize they need to do more than talk the talk, said Christopher Borick, a Muhlenberg College political scientist.
“If you are talking another round of cuts, if there’s nothing to show the electorate regarding cuts that affect you as a legislator, it does ring a little hollow,” Borick said.
Scarnati was careful to say he wouldn’t be satisfied if booting the elected officials out of the defined benefit pension system was the only pension reform that passes this month.
“But at least I’m not going home to have anybody look at me and say sure you got your pension and I got my services cut. I think that’s the real political question that elected officials have to ask themselves when they do this budget. If they’re willing to cut [something that impacts others] but you won’t cut yourself, that’s hypocritical.”