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Corbett's pension bill goes to the legislature

HARRISBURG - Gov. Corbett's plan for reining in the cost of public employee pensions has finally been assigned a bill number.

HARRISBURG - Gov. Corbett's plan for reining in the cost of public employee pensions has finally been assigned a bill number.

The governor's proposal was formally introduced in both the House and the Senate Tuesday, just over three months after Corbett first unveiled it during his budget speech to the legislature.

Corbett said Tuesday he still wants legislators to vote on the pension proposal before they break for the summer in July - but that timeline may prove elusive, given the number of other big-ticket and complex issues the legislature needs to address. At the top of that list: Corbett's proposed $28.4 billion budget plan.

And the governor's pension reform proposal is controversial and complex, calling for making significant changes in the way future benefits are calculated for current employees and putting all new state employees in 401(k)-style retirement plans.

But the governor warned Tuesday that doing nothing on pensions will not only mean steep cuts in the next fiscal year budget, but for many years to come.

"The cost of doing nothing is staggering," the governor said during a press conference in the Capitol.

He added: "This is not an easy issue, but it is one that we do not have the time to say, 'We can do that later'."

The pension proposal, affecting hundreds of thousands of employees, attempts to tackle escalating costs in two ways: by reducing the annual amount the state is required to contribute to its two retirement funds (one for state employees, the other for public-school teachers and staff), freeing up about $175 million in the next fiscal year; and by reducing future pension benefits for current employees by changing the way those benefits are calculated.

The administration has been adamant that retirees' benefits won't be affected - and Corbett stressed that point again Tuesday - and that benefits accrued to date by current employees will also be left intact.

Still, the pension proposal is in for a fight. Even if legislators go for it - a heavy lift, given that they would be cutting their own pensions - it will likely be dragged into court by unions arguing that case law in Pennsylvania bars changing retirement benefits for current employees.

And that leaves this question: If legislators don't go along, how will Corbett make up for the $175 million in pension costs he estimates the changes would save?

Charles Zogby, Corbett's budget secretary, studiously avoided giving specifics Tuesday, saying that is a question the legislature will have to tackle should its members decide not to vote on the pension plan.

But in the past, Zogby and other key administration staffers have strongly suggested that if the legislature does not act, they will likely look for cuts in education.

The budget must be approved by July 1, the start of the new fiscal year.

That leaves eight weeks, including this one, to address pensions, the budget, and two other high-profile issues important to Corbett: developing a transportation funding plan, and privatizing liquor sales.