The Independent Fiscal Office’s projection that the Commonwealth of Pennsylvania faces a $1.8 billion structural deficit for the fiscal year beginning July 1 is now beyond dispute. And we at the Pennsylvania Budget and Policy Center (PBPC) believe that there are only two ways forward. One path leads to a relatively small tax increase that closes the deficit and restore funding for education and human services. The other path leads to devastating cuts in education and human services.
In response to that stark choice, Senator Corman has decided to change the subject by focusing on pension costs in his column in Pennlive.
But Senator Corman must know this is a complete fantasy. PBPC has analyzed various pension “reform” proposals over the years and we’ve shown not only do they barely reduce expenditure in the short term, they also don’t save much money in the long term. We’ve also demonstrated that pension costs for state workers are not out of line with what other states and the private sector pay.
But don’t take our word for it. The Republican leadership put forward a pension proposal last year. It failed in the House and a majority of Republicans votes against it. Why? Precisely because it didn’t save much money in the short or long term. As a few of the honest Republicans pointed out, the only provisions that actually did have an impact on the budget were unconstitutional because they violated the state’s contractual agreements. As Senator Corman knows full well, after five years of obsessing about the issue, he and his caucus have no actual proposal to cut pension costs.
Corman is right only in this: Pension costs are taking more of the state budget. But the reason is that in the past governors and the General Assembly have consistently underfunded them one among many ways in which they “balanced” the budget with gimmicks and flimflam.
Governor Wolf rightly has said he won’t sign a budget that is “balanced” in name only. And if we avoid budgetary deception, we do face the difficult choice described above, to raise revenues or make drastic cuts in education and health care costs.
If you read Senator Corman’s column closely you will see he almost recognizes this. He says “…it is important to realize this is not the first time that lawmakers have faced a shortfall in state revenues. Five years ago, the deficit had reached $4 billion.”
The Senator doesn’t really need to remind us of that; Pennsylvanians remember it well. Five years ago we faced the same choice then that we do now: raise taxes or deeply reduce the budget. Five years ago, over the protests of the majority of Pennsylvanians, we saw Governor Corbett and the General Assembly make the wrong choice. The results in our schools and communities were so horrible that Pennsylvanians, for the first time in our history, denied an incumbent Governor reelection.
This time, we need to take the other path. Pennsylvanians are ready to pay a little more in taxes to avoid the devastation of one more Corbett-Corman budget.