HARRISBURG, March 12, 2014 – State Senate Democrats today said they would save Pennsylvania taxpayers billions of dollars and solve the state’s pension problem if their proposal to further reform pension rules, refinance billions and help school districts avoid escalating payments is adopted.
Senate Democratic Leader Jay Costa (D-Allegheny); the Democratic chairman of the Senate Finance Committee, Sen. John Blake (D-Lackawanna), Senate Whip Anthony H. Williams (D-Philadelphia); the Democratic chairman of the Senate Appropriations Committee, Sen. Vince Hughes (D-Philadelphia); and Sen. Larry Farnese (D-Philadelphia) unveiled the caucus’ proposal during a briefing with Capitol news correspondents.
With the State Employees’ Retirement System and the Public School Employees’ Retirement System drowning in a sea of underfunding approaching $50 billion, the Senate Democratic proposal would refinance $9 billion of that, further reform the state pension law to stop charter schools from receiving double-dip state reimbursements, and lower the collars on state and school district payments to provide short-term budget relief while also making it easier to manage future cost increases.
“The pension reform plan we are suggesting is smart and innovative. It saves money and creates a plausible responsible fiscal roadmap for the future,” Sen. Costa said. “Refinancing $9 billion in existing unfunded liabilities would decrease long-term payments by $24 billion. Over the next five years, it would save school districts $600 million and the commonwealth $1 billion.”
The Democratic Senators said they are making this proposal because it would avoid the dangers posed by Gov. Tom Corbett’s pension proposal, such as:
- $2 billion in additional payments over the next four years, including $550 million more in the 2015-’16 state budget
- $5 billion more in unfunded pension liabilities, and
- The camouflaging of increased future costs that could add millions more to the pension crisis.
Sen. Blake repeated the Democratic Caucus’ mantra that time is of the essence for these critical changes to happen.
“If we continue to delay our responsibility to fulfill our fiduciary requirement and deliver what has been promised in retirement to thousands of educators and public employees, it will be taxpayers, their children, and their children’s children who will have to pay the bill,” Blake said. “We cannot allow that to happen.
“The Corbett administration has already refinanced billions in debt to make a bad situation better when it floated nearly $4 billion in bonds to restore Pennsylvania’s unemployment compensation reserves in 2012. We must do the same with pensions,” the Lackawanna County Democrat said.
Senate Democratic Appropriations Chairman Vince Hughes urged bipartisan support for the caucus’ proposal.
“People from across the political spectrum are, and have been, educators and state employees. They are depending on us to fix this growing problem and this is the solution we need,” Hughes said. “Republicans and Democrats in the General Assembly must work together to get this idea to the governor’s desk.”
Sen. Williams said he believes fiscally responsible lawmakers will especially like the proposal to eliminate the current practice that allows charter schools be reimbursed by the state for pension payments that are completely paid for by school districts.
“This has been a good deal for charter schools, but the set up is hurting school districts, taxpayers and students across the state,” Williams said. “Making this change will significantly reduce school district pension payments because it will eliminate the 50 percent reimbursement that charter schools now receive after districts pay the escalating pension bill.”
And, Sen. Farnese said it is important for the commonwealth to continue its defined benefits pension system because it requires financial professionals to manage contributions.
“Too many people who are approaching retirement don’t have the nest eggs to guarantee them the security and independence they need to do the things they dreamed of doing when they were working,” Farnese said. “Defined benefit pensions are still the most efficient way to save for retirement. Moving away from that system will only hurt the financial security of future generations.”
The National Bureau of Economic Research in Cambridge, Mass., issued a report in February indicating that half of the households where people are on the cusp of retirement (65 to 69 years old) have retirement accounts of $5,000 or less.
-30-
Harrisburg – February 20, 2014 – Senate and House Democrats said today that Gov. Tom Corbett’s budget speech and follow up opinion pieces and interviews have painted a picture of Pennsylvania that is blurry, inaccurate and badly in need of correction.
Senate Democratic Leader Jay Costa (D-Allegheny), Sen. Vincent J. Hughes (D-Philadelphia) Democratic chair of the Senate Appropriations Committee and House Democratic Policy Chair Rep. Mike Sturla (D-Lancaster) were joined by other Senate and House Democrats to raise questions about assertions made by the governor and to unveil a new fact-check website.
“The governor’s claim that ‘Pennsylvania has turned a corner’ and is ‘now ready to hit full economic stride’ is a distortion that is in need of correction,” Costa said. “Under this governor, Pennsylvania has not turned the corner on job creation, education, health care or budget management. We just keep going down a one-way street the wrong way.
“I am concerned about the view from the governor’s office because it is not the same as what most Pennsylvania families are seeing.”
[hdvideo id=101 ]
Given the governor’s slanted view of the problems that face Pennsylvania, Democrats said that it was important that citizens can access objective information. That’s why they have produced a new website where the governor’s claims can be reviewed. The website can be found at www.checkthefactsgovcorbett.com.
“The governor has made job, deficit, health-care and education claims that are distorted,” Hughes said. “The citizens of Pennsylvania need an honest appraisal of the problems that we face and a roadmap that takes us in a new direction.”
“In his employment claims, Governor Corbett fails to mention the 20,000 education jobs lost, the health care jobs that would be created under Medicaid expansion, and that our college grads are fleeing PA for jobs created in our neighboring states all while our unemployment rate is consistently above the national rate.” Sturla said. “He continues to throw money at defending the Tea Party backed policies he’s championed.”
Specifically the Democrats questioned the governor’s assertion that 150,000 private-sector jobs were created. They said that he fails to acknowledge that Pennsylvania has a 180,000 jobs deficit relative to federal economic growth and we’ve moved from seventh to 48th in job creation since Corbett took office.
The Senate Democrats also disputed the governor’s claim that he has invested in education.
“Since the governor took office, he cut $1 billion from education, failed to increase the basic subsidy, treated less affluent districts poorly and ended a long-term funding equity plan that would have rectified funding disparities,” Costa said. “The governor’s new-found election year desire to invest in education cannot overcome the massive problems he caused for schools and taxpayers.”
Hughes said that Corbett has also failed to fully explain his unconscionable decision to by-pass Medicaid expansion and instead is rely on a problematic private insurance-based health care proposal.
The West Philadelphia lawmaker said that the governor’s failure to expand Medicaid “costs $400 million, prevents 500,000 Pennsylvanians from accessing health care and keeps 35,000 from job opportunities.”
Hughes also questioned the governor’s budget balancing saying that “the governor used one-time gimmicks, an inflated growth rate and policy tricks that add billions to the unfunded pension liability to make the $1.2 billion deficit disappear.”
Costa said that many states are examining ways of investing or returning budget surpluses this year and are still not dealing with fiscal despair.
“For the fourth year in a row, under this governor, we’ve had to struggle with revenues because we have not created an environment that is conducive to economic development and job creation,” Costa said. “Many of our surrounding states have invested wisely, grown their economies and regained their fiscal health, while we have been stuck in reverse and going the wrong direction.”
The Democrats said that the narrative that the governor has been pitching across the state since his budget address is an election-year ploy to cover a four-year record of failed economic, job, health and budget initiatives.
###
Harrisburg, February 4, 2014 – Senate Democratic leaders today called Gov. Tom Corbett’s 2014-15 budget proposal election-year pandering and woefully lacking on multiple levels.
“The governor really needs to stop promising and start delivering for Pennsylvania.” Senate Democratic Leader Sen. Jay Costa (D-Allegheny) said today following the budget address. “Today’s budget presentation was election –year political pandering that doesn’t move Pennsylvania forward. It simply backfills and covers over problems that the governor created over the last three years.
[divider top=”0″]
[hdvideo id=99]
[divider top=”0″]
“While it is a step forward that the governor has started to focus on priorities such as education with his $241 million block grant, it is still not good enough because schools are still struggling to deal with the governor’s previous $1 billion cut in education.”
The governor presented his $29.4 billion General Fund spending plan before a joint session of the General Assembly.
In the speech, the governor outlined his plan which is a 3.3 percent increase over the current year spending. The budget is balanced through the use of more than $1.1 billion in one-time funding options and shifts.
[divider top=”0″]
[hdvideo id=98]
[divider top=”0″]
[hdvideo id=100]
[divider top=”0″]
He called for a new education block grant that would be distributed by a funding formula based on student count, aid ratio, poverty and English proficiency.
Gov. Corbett’s plan also includes $429 million more for the Department of Public Welfare – although a lion’s share of this funding is due to a declining share of federal dollars for Medical Assistance — and an increase of $78 million for corrections. The governor also called for lowering the pension collars from 4.5 percent to 2.25 percent. This would reduce state pension payments by $170 million and school pension payments by $130 million.
Costa said that Corbett’s previous $1 billion in education cuts, failure to detail a job creation strategy, inability fix the holes created in the social safety net and his stubborn refusal to expand Medicaid are coming back to haunt him.
Senate Democrats said that the governor’s new found attention to key issues was insufficient given the lack of leadership over the last three years.
“Senate Democrats have offered a host of solutions including a new $300 million investment strategy for education, and the PA Works job-creation plan and we will support the governor if he expands Medicaid, hikes the minimum wage and puts real dollars into human services programs,” Costa said.
Costa said that it has taken the governor three years, repeated calls by Senate Democrats and a tough re-election fight to see that education needs more funding. He said that recognizing these problems and responsible solutions “shouldn’t have taken so long, been so difficult or include an unbalanced distribution formula.”
Senate Democratic Whip Sen. Anthony H. Williams (D-Philadelphia/Delaware) said the governor’s new proposals were too little, too late.
Williams said the troubling jobs deficit of 180,000, the bottom-ten ranking in job creation, and the state’s poor fiscal health, illustrate the glaring gap in the governor’s understanding of the needs of the citizens.
“Every surrounding state that has increased minimum wage has increased their jobs. New York state alone grew 10,000 jobs – and they increased the minimum wage,” Williams said. “They did it not in the government sector, but in the private economy.”
Williams said that while other surrounding states are dealing with budget surpluses, Pennsylvania is still dealing with deficits.
“The governor can’t blame the previous administration for his continued budget troubles,” Williams said. “The fiscal problems faced by the taxpayers of Pennsylvania are the result of failed Corbett administration policies, period. Both sides have talked repeatedly about extending their hands on key issues, and I’m ready to finally see the handshake that moves Pennsylvania forward.”
Sen. Vincent J. Hughes, (D-Philadelphia/Montgomery) who serves as the Senate Democratic Appropriations Committee chair, said today that Pennsylvania has a long road ahead to recover from the damage done by ill-conceived Corbett administration policies especially as they relate to schools, health care, safety-net investments and jobs.
“The governor still doesn’t get it. He has slashed business taxes by $1.2 billion, cut education dollars by $1 billion and simply refused to address key issues such as job creation, Medicaid expansion, human service funding and the minimum wage,” Hughes said. “The presentation today was an election year budget that demonstrates the governor’s inability to properly identify policy priorities.
“Pennsylvania would have been better served by this governor if he agreed to expand Medicaid to help a half-million Pennsylvanians, invest long-term in a balanced education funding plan, put more of an emphasis on programs that create jobs and help our most vulnerable,” Hughes said.
Hughes said that Senate Democrats have crafted solutions to budget issues and a savings plan of more than $1.1 billion that can be used to make key, long-term investments in schools, health care, human services and jobs. Democrats have also endorsed an increase in the minimum wage, Hughes said.
The Senate Appropriations Committee will hold budget hearings over the next several weeks to examine the budget proposal in detail.
-30-
Potential funding stream would freeze property taxes for seniors
Harrisburg – October 24, 2013 – State Senate Democrats said today they were pleased that Gov. Tom Corbett has now signaled his approval of their plan to direct revenues generated from small games of chance in taverns to the Lottery Fund. The Democratic plan would bolster lottery programs and create a potential funding source for a property tax freeze benefitting seniors.
“Senate Democrats are unified in the desire to use the revenues generated from small games of chance in taverns to help seniors,” Sen. Jay Costa (D-Allegheny), the Senate Democratic leader, said. “Our members believe strongly that these new revenues should be targeted to aid seniors instead of being disbursed into the General Fund.
“We certainly hope that the final version of the small games legislation includes our idea to target the revenue for the Lottery Fund.”
Costa, Democratic Appropriations Committee Chair Vincent J. Hughes (D-Philadelphia) and Sen. John Blake (D-Lackawanna), who sponsored the plan as an amendment to House Bill 1098, said today that the new revenues from the Senate Democratic plan would provide flexibility and create opportunities.
On Wednesday, the Corbett administration circulated an email to lawmakers indicating that they were supportive of putting the money from the tavern small games into the Lottery Fund.
The Senate Democratic plan — detailed in the Blake amendment — was voted down during a Senate Appropriations Committee meeting on Tuesday. The legislation was eventually reported from committee and passed in the Senate, 39-11. It is now in the House of Representatives.
The new tax on small games of chance in taverns is expected to generate $38 million this year and $156 million in 2014-‘15, according to Senate fiscal notes.
“Senate Democrats have tried to explain why this was so important and how it could be used to help fund critical senior programs,” Hughes said. “We are hopeful that with the governor’s endorsement of our plan, House members will adopt the approach and support it when they return to session in November.”
Blake said helping fund senior programs is important and the new revenue may be the funding conduit that allows the General Assembly to develop a property tax freeze for seniors.
“The new funds would give the legislature flexibility and resources that can be set aside to help seniors address high property taxes,” Blake said. “These new revenues must be employed effectively and a specific use must be identified.
“My amendment made it clear that the revenues should be earmarked for the Lottery Fund, from which we already provide property tax relief and from which we already fund essential programs for our seniors.”
-30-
Harrisburg, September 16, 2013 – Senate Democrats issued the following joint statement in response to Gov. Tom Corbett’s announcement of his plan to reform the state’s Medicaid program.
Senate Democratic Leader Jay Costa (D-Allegheny), Sen. Vincent J. Hughes (D-Philadelphia) Democratic Appropriations Committee chair, Democratic Health and Welfare Committee Chair Sen. Shirley Kitchen (D-Philadelphia,) and Sen. Mike Stack (D-Philadelphia) Democratic chair of the Banking and Insurance Committee comments on the Corbett proposal. The statement is as follows:
“Senate Democrats welcome the discussion about health-care access and affordability now that Governor Corbett has outlined his plan and vision for providing health insurance to 600,000 working Pennsylvanians.
“For more than a year, Senate Democrats have been focused on expanding options and providing help for those in need of affordable health care as soon as possible. We remain convinced that the best and most effective option is to enroll newly eligible individuals into Pennsylvania’s existing Medicaid program.
“Our plan, expanding the current Medicaid program, would allow 600,000 Pennsylvanians to have access to health insurance on January 1, save taxpayers $400 million annually and create more than 35,000 jobs. This is the cost-and-effectiveness standard by which the Corbett initiative will be measured.
“The process has to move quickly. The administration needs to put the final details of its proposal together and submit that plan to the federal government. Many states will have expansion in place by January 1, 2014, including the surrounding states of Maryland, New York and New Jersey.”
-30-
