New Castle News

Closer Look

December 8, 2012

John K. Manna: How to share state’s burden of pension costs

NEW CASTLE — We’re all in this together, which is the only good thing about Pennsylvania’s massive pension problem.

The state’s two pension plans that cover public school and state employees has a current unfunded liability of about $39 billion and is expected to grow by about another $22 billion in the next six to seven years.

How the state got into the mess is similar to that of the city of New Castle and other cities in Pennsylvania. Insufficient funds were put into the plans over the years, plus Sept. 11 and the 2008 stock market crash didn’t help.

There are two possible ways that have been suggested to begin paying off the debt. One is raising more revenue or cutting benefits that have already been earned. The Patriot-News in Harrisburg notes that attempting to do the latter would end up in the courts, with precedent being on the side of the workers.

And then there is Gov. Tom Corbett, who opposes increasing taxes. The alternative to that would be a cut in programs to solve the pension crisis.

Besides employee contributions, money for the pension funds comes from two sources: Local school districts and the state. However, the state established both pension systems, the first in 1917 and the second in 1923.

Someone — which I would suspect resides in Harrisburg or members of the Legislature — may suggest that if it means more revenue, then the state and the school districts should share the burden equally. I disagree.

While school districts may be at fault for not putting enough into the one fund over the years, the fact is that the state dictates the amount of money that goes into the fund. Plus, the state established the defined benefit plan. Therefore, if the answer is increasing taxes, then the state should pick up most of the cost.

Furthermore, raising school property taxes would place a bigger burden on individual taxpayers than would an increase in a state tax. The state naturally has a broader tax base, meaning individuals would not only pay less, but also pay equally.

The alternative would be cutting programs. Mentioned as the likely targets are the usual suspects — welfare and education. But why should those who had nothing to do with creating the problem be the scapegoats?


Text Only | Photo Reprints
Closer Look
  • Lottery.jpg Lottery officials: Seniors should get smaller payout

    State lottery officials say less means more for seniors. The lottery took in $3.8 billion in sales last year and will give more than $1 billion of it — or 28.5 percent — to programs for senior citizens.

    July 31, 2014 1 Photo

  • phone.jpg Attorney general warns of phone scams

    Assorted scams in the commonwealth have prompted a warning from the Pennsylvania Attorney General’s Office. Attorney General Kathleen G. Kane said several scams have been reported to the Bureau of Consumer Protection in recent weeks.

    July 30, 2014 1 Photo

  • disability.jpg Disabilities group unveils new icon

    Disability Options Network is joining forces with the Accessible Icon Project. Officials of the community organization, located at 1929 E. Washington St., said its new icon will replace the current international symbol for accessibility.

    July 29, 2014 1 Photo

  • well.jpg Auditor: State doesn’t have enough inspectors to monitor wells

    The state’s 83 well inspectors face a daunting enough challenge keeping tabs on 120,000 active oil and gas wells that have been drilled over the last century.


    July 29, 2014 1 Photo

  • vote.jpg Independent hopefuls may widen gubernatorial field

    Just when Pennsylvania voters were getting used to the idea of a gubernatorial election showdown between Republican incumbent Tom Corbett and Democratic challenger Tom Wolf, other hopefuls may soon be joining the fray.

    July 28, 2014 1 Photo

  • manna.jpg John K. Manna: Measuring the money

    Should we even bother to have an election in November? By some accounts, maybe the results of some contests are already in.

    July 26, 2014 1 Photo

  • shooting.jpg Man injured in city shooting

    A man was flown to a Pittsburgh hospital Thursday morning following a shooting on West Lincoln Avenue.


    July 25, 2014 1 Photo

  • police.jpg Police: Man pulls gun on construction workers

    Construction workers in Neshannock Township flagged down police Thursday claiming a business owner had pulled a gun on them.


    July 25, 2014 1 Photo

  • Shooting.jpg Shooting witness arrested for giving false name

    State police have arrested a second Detroit area man after questioning him about Sunday’s fatal shooting in Ellwood City. DeMarco Dorian Hoskins, 22, of Highland Park, Mich., was the third man in a private car that transported the deceased to look for a hospital. Hoskins allegedly gave police a false identity when they questioned him as witness.

    July 24, 2014 1 Photo

  • bridgerepair.jpg PennDOT seeks outside help to make bridge repairs

    State officials are poised to sign a massive deal that will enlist outside help to rebuild and maintain up to 600 bridges, marking the Corbett administration’s latest foray into privatizing key government functions.


    July 24, 2014 1 Photo

House Ads
Seasonal Content
Section Teases
Must Read
Continuous Super Bowl Coverage