Signaling the importance of pension changes in the coming months, the Corbett administration released a detailed report Monday warning of steep budget cuts if a way is not found swiftly to rein in public-pension spending.
The 19-page report labeled Pennsylvania’s pension funding problems a crisis, saying it had been created by a combination of generous enhancements over the last decade to member and retiree benefits, lackluster investment returns, and nearly a decade of underfunding by state government and local school districts.
The result: The state’s two public pension plans, for state employees and public school workers, have an unfunded liability of $41 billion. What’s more, pension cost increases in the next few years will skyrocket, threatening to gobble most of any additional revenue coming into state coffers and leading to steep cuts and even property tax increases.
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