There is a $53 billion unfunded liability in state pension plans due to the state’s refusal to pay its full amount of actual contributions since 2005.
This is the single largest reason for the dire straits of the state’s pension plans. In 2001, state lawmakers — Democrats and Republicans — voted to boost pension benefits, along with the Republican governor.
In 2003, Gov. Ed Rendell and the state lawmakers boosted classroom education spending and ignored the funding of the state pensions.
Three governors and three legislatures have not paid the state’s full amount into the pension plan. Then the 2008 banking crash came and entered the nation into a deep recession, sucking most of the pension funds out of the plan and causing a free-market loss.
This lack of funding is the responsibility of the state government, not teachers, state workers, state troopers, judges and state university staff members. This burden must not be placed on the backs of the above-mentioned workers, who in good faith paid their full annual required contributions.
The state must raise taxes to pay its full share. There are a couple of ways to do this: Levy a proper Marcellus gas and oil tax; place a small 1 or 2 percent tax on nonessential commodities, ranging from mascara to potato chips.
If the legislature would stop trying to bend the backs of the working class, they could concentrate on thinking about how to pay back the debt they created and still owe.