Gov. Tom Corbett may not like ranking priorities, but the pension crisis facing Pennsylvania needs to be one of his top issues this year.
The problem Pennsylvania faces is clearly apparent as top gubernatorial aides and the governor himself outlined to representatives from five Ogden Newspapers in Pennsylvania, including the Mirror, on Monday in Harrisburg.
Simply put: Bad decisions by previous legislatures and governors coupled with economic downturns that trashed investment returns for much of a decade have left Pennsylvania with a huge unfunded liability that threatens to swallow up larger and larger portions of the state budget.
As demands of the pension system grow, they will squeeze out other things in the budget and/or eventually leading to tax hikes.
The same issue will hit school districts as well because they and the state split the employer cost for pensions for public school employees. Already a number of districts are struggling with the higher pension contributions.
Currently, there is a $41 billion shortfall between the funding on hand and what the State Employees' Retirement System and the Public School Employees' Retirement System are obligated pay out based on current formulas. And it's up to the state and school districts i.e. taxpayers to fill that hole.
It's important to note that state and school employees have been contributing their required amounts toward the pension systems each year.
The same can't be said for the state and school districts. In an effort to soften the blow for investment declines over the past decade, legislators capped below the amount required what the state and schools have to contribute in pension payments.
This put off the day of reckoning until later.
Well, later has arrived.
The percentage of payroll that the state and school districts have to contribute to the pension systems will increase annually for most or all of this decade and then remain at those peak levels into the 2030s or beyond assuming investments earn at least 7.5 percent annually.
Putting this in dollars, the state's share of the pension costs will increase from slightly more than $1 billion this fiscal year to $1.5 billion in the next. Pennsylvania is projected to be on the hook for $4.3 billion in payments to the pension plans in fiscal year 2016-17 and for $5.1 billion in fiscal year 2019-20.
Those increases pose a huge problem.
While Corbett is providing an important service by alerting the public much like Paul Revere did in the Revolutionary War to fix this problem, the Keystone State is going to need a general forcing a plan of attack if we are to have any hopes of securing a victory.
That's not likely to happen unless Gov. Corbett ranks it as a top priority.