HARRISBURG – Over concern that current proposals fail to adequately address Pennsylvania’s public pension crisis, Rep. John McGinnis (R-Blair) today introduced legislation for eliminating the state’s massive pension debt. The combined unfunded liability of the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS) currently totals more than $55 billion.
House Bill 900
would pay down the pension debt with equal dollar contributions annually over a 20-year period. McGinnis, who unveiled his legislation at a Capitol news conference, said the annual payments would total about $6.9 billion.
“The window of opportunity for effectively dealing with this problem is closing fast,” said McGinnis. “Today, we are at a decision point – continuing on a course of massive and irreversible damage for the future of Pennsylvania or changing course with a proper policy of paying off the pension debt. When enacted, my legislation will require the unfunded liabilities of SERS and PSERS to be paid down in a timely and effective manner. It’s that simple.”
McGinnis was joined at the news conference by lawmakers from both sides of the aisle, including several co-sponsors of House Bill 900.
“Why is this bill good for PSERS? This bill would make PSERS financially whole,” said Rep. Stephen Bloom (R-Cumberland), a member of the PSERS board of trustees. “It would enable PSERS to fulfill its obligations to the tens of thousands of beneficiaries who have a vested interest in their retirement benefits.”
“Doing nothing is not an option,” said Rep. Thomas Caltagirone (D-Berks). “We’ve got to wrestle with this bear and come up with some kind of a solution. This is the very first step in dealing with the issue.”
McGinnis noted that his legislation does not identify a revenue source for paying down the pension debt.
“If you understand pensions at all, you understand they are a direct cost of government services and education, no different than salaries and health care benefits,” McGinnis told reporters. “It’s understood that those costs will be covered by General Fund revenues which will be determined through an appropriations process. To try to morph this bill as one that is required to supplant the appropriations process is not just wrong, but probably an intention to defeat it so we can continue our derelict funding. I believe that some people are asking that question so they will have an excuse not to vote for it. Well, we’ve been trotting out excuses for improper pension funding for 15 years and it is past time for the excuses to stop.”
“The solution to the pension crisis is not more borrowing,” said Eric Epstein of Rock the Capital. “We cannot afford any more pension gimmicks. We are not going to solve the crisis by pretending it does not exist. The financial solution will be painful and require shared sacrifice.”
House Bill 900 currently has 21 co-sponsors, including House Speaker Mike Turzai (R-Allegheny).
A video of the entire news conference is available for viewing on McGinnis’ website, RepMcGinnis.com
Representative John McGinnis
79th Legislative District
Pennsylvania House of Representatives
Media Contact: Andy Briggs