HARRISBURG - No pension reform, no state budget.
A top Senate Republican said Monday that if Gov. Wolf doesn't address the state's skyrocketing pension costs during budget negotiations with the legislature, there will be no budget.
Majority Leader Jake Corman (R., Centre) said that reining in the cost of public employee pensions is a priority, and that he and his colleagues will not pass a spending plan if it is not addressed.
"We are not doing a budget without it," Corman said during a monthly press club luncheon in Harrisburg, comparing the state's pension problem to a "tsunami" that has already reached land.
His comments drew yet another political line in the sand as the Republican-controlled legislature and the Democratic governor prepare to spend the next few months working out a deal over Wolf's proposed $30 billion budget.
Taxpayers' share of pension payments for retired school and state workers is expected to grow by hundreds of millions of dollars next year. In his budget address this month, Wolf proposed borrowing $3 billion to help pay down the state's pension debt, and use proceeds from modernizing the state's wine and liquor stores to help pay it off. Republicans roundly rejected that idea.
The deadline to enact a budget for the next fiscal year is July 1.
Corman said Monday that Senate Republicans will introduce a pension-reform bill within weeks and vote on it by May. He revealed few details, but acknowledged that he and his colleagues were considering a plan similar to one pushed by Gov. Tom Corbett in 2013 - and rejected at the time by Senate Republicans as too legally risky.
Corbett's plan was controversial and complex, calling for significant changes in the way future benefits are calculated for current employees and putting all new employees in 401(k)-style retirement plans.
The plan went nowhere, even though both chambers were controlled by Republicans. Many believe the proposed changes for current employee benefits could tie the state up in litigation for years.
Corman on Monday told reporters that his caucus' proposal would move future employees into 401(k)-style plans, but also look to reduce the cost of current workers' benefits. For current employees, that could mean rolling back generous pension enhancements that the legislature approved in 2001.
Corman also argued that if the legislature could have changed benefits in 2001 without legal repercussions, it could do so again.
"We're basically going back to where we were before 2001," the senator said. "So what makes us not have the ability to go back to where we were? . . . And again, it's only moving forward, nothing that they've invested to date."
Legal challenges aside, the Senate Republican plan would also face significant political push-back from the administration.
Wolf has been unequivocal: He does not support moving to a 401(k)-style plan for new employees.
"The governor doesn't believe the benefit structure is the problem," spokesman Jeff Sheridan said. "The problem is that we've been underfunding [the system] for 15 years or more."
Sheridan, too, noted the similarities between Corbett's failed pension plan and the one now being pushed.
"It went nowhere," he said of Corbett's plan. "And that was with a Republican legislature and a Republican governor."