There was a time when finding employees to step up to work public-sector jobs was a challenge. Working for the government versus the private sector often meant long hours at lower wages with little thanks.
But that characterization no longer holds true. A 2013 report by the Bureau of Labor Statistics shows that, on average, a government worker earned more than private-sector counterparts and, on average, private-sector employees earned $29.11 an hour with $8.64 in benefits while government employees earned $42.09 per hour with $14.93 in benefits.
No longer do government entities need to attract public servants and offset low salaries with luxurious benefits. And with the commonwealth facing increasing deficits, it’s only right that the governor hold the state budget hostage until true pension reform is addressed.
Gov. Tom Corbett isn’t the most popular guy in Harrisburg, and he’ll have his hands full on Election Day; however, some may feel his zeal for pension reform is a campaign-year trick despite having pushed for reform of what he called “ a tapeworm” since taking office in 2011.
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To meet the July 1 budget deadline, the House and Senate voted for the current $29.1 billion budget plan as the midnight oil was running low.
The Republican-led Senate pushed for pension reform but couldn’t pull off Corbett’s measure, which would reduce future state and school employees’ pensions to save more than $10 billion over 30 years. The Senate instead passed a bill Monday expected to save $690 million over 38 years by shifting state judges, lawmakers, some elected executive-branch officials and the governor into a defined contribution plan.
The commonwealth counted on a 7.5 percent return on investment but received barely anything once the recession hit in 2008. In rosier times, Harrisburg expanded benefits while failing to pay into the State Employees’ Retirement System and the Public School Employees’ Retirement System, racking up $6 billion in debt.
With a gaping hole in the budget, the taxpayers burdened the load, but there’s only so much blood in a stone. Today, the SERS and PSERS hole is $50 billion and growing. And it’s estimated that if nothing is done, taxpayers will be hit with $13,000 each to make up the gap — think property tax increase.
Corbett’s plan is to gradually replace pensions with defined-contribution plans. The measure, derived from Schuylkill Rep. Mike Tobash, wouldn’t touch existing pensions; new employees whose earnings crest $50,000 a year would be offered a defined-contribution plan. The move would save $11 billion over the cost of the current pension system.
Opponents argue the measure would leave state workers —including teachers — vulnerable to the whims of the stock market. They also claim the ability to attract workers to state jobs would be more difficult.
That’s hogwash. Most workers who rely on defined-contribution plans are responsible for managing their money and generally receive contributions from their employers. And, with government jobs under Corbett’s plan still offering a public contributions and average public salaries still higher than public-sector salaries, why should taxpayers shoulder more of the burden?
The House sent the pension bill to the Human Services Committee, and whether that sees the light of day before the July 9 deadline for the governor to sign the budget, veto it or let it become law without his signature is up in the air.
Let’s stop pretending state workers — especially high-paid judges, lawmakers, executive-branch officials and the governor himself, let alone anyone’s earnings above $50,000 — are being victimized for having to pay their fair share. No one should be riding out their golden years on the backs of working taxpayers.