While trying to gather support for the new Pennsylvania State pension reform plan, Gov. Tom Corbett has suggested possible future cuts in state education funding if pension reforms aren’t adopted, Penn State Professor of Education William Hartman said.
“Kindergarten through 12 [classes] should be funded regardless of the pension reform,” Hartman said. “Gov. Corbett indicated that he would have to rethink funding for K-12 if pension reform isn’t done, but hasn’t made any indication of connecting it to Penn State’s funding.”
Hartman also said that Corbett is trying to establish a permanent budget cut for Penn State by keeping the budget for the university flat after the massive cuts were made two years ago.
Failure to solve the issues with the state pension plans will likely cause severe cash flow problems for the state in the future, Hartman said.
Executive Director at the Keystone Research Center Stephen Herzenburg said that Corbett has created a false choice by comparing the state funding for education with the pension reform plans.
“The reality is that education funding is down to the bone and they really need to restore it to be competitive again” Herzenburgh said.
Herzenburgh also said that if Pennsylvania were to attract good quality teachers such as those graduating from Penn State with education degrees, the state needs to have a fair and competitive salary and benefit package.
Senior Policy Analyst at Allegheny Institute for Public Policy Eric Montarti said that if the pension reform plans are adopted, it will affect all new hires in the Pennsylvania State Police, teachers in the state’s 500 school districts and any individual working for the state.
If the new pension reform plans are passed, all the new hires will be put into a defined contribution plan similar to a 401(k) instead of the existing defined benefit plan, Montari said.
The proposed changes to the state pension will also affect the current employees starting from 2015, Montarti said.
“People who are currently working will need to put more money in to get the same multiplier they would have gotten [if changes are not made],” Montarti said.
Montarti also said that if reforms in the pension aren’t made, it will start cutting into the state budget, which in turn will cause the state to face problems to fund other programs.
“It’s too soon to say what domino effect [the pension debt obligation] will have in the future but will cause budget cuts in education, especially in the elementary and secondary school districts,” Montarti said.