Wolf says he’ll work with Legislature to deal with pension woes
Democratic gubernatorial nominee Tom Wolf said on Tuesday in Pittsburgh that he’s open to working with the Legislature on pension reform, a major financial issue for Pennsylvania and a burgeoning campaign issue in the governor’s race.
“I’m not going to kick the can down the road anymore,” Wolf said of the pension situation during a campaign event in Bakery Square. “As to how I plug the hole that has been created over the last 10, 14 years, I will work with the Legislature and those interested parties to come up with a solution that is fair to beneficiaries but also doesn’t swamp the taxpayer.”
During a visit to Pittsburgh on Monday, Gov. Tom Corbett said he’s the only candidate who can address the problem.
Corbett’s campaign and the state Republican Party have hammered Wolf for denying what Corbett describes as a pension crisis. The two funds for state employees and public school teachers carry a combined $50 billion unfunded liability, and taxpayer-funded contributions are on pace to grow every year.
Corbett said in a meeting with Tribune-Review reporters and editors that he is considering a special session for the GOP-controlled Legislature to address a bill that would establish a hybrid pension plan for new employees. It would provide guaranteed benefit contributions up to a certain level of salary or years of service, followed by a 401(k)-style savings plan.
Corbett said he’ll fight for reform until it happens and doesn’t think his opponent would do the same.
Wolf said he supports allowing Act 120, the law dictating the state’s pension contributions, to stay in place. But that law means the state has to contribute more than $3 billion to the pension funds in 2017-18, according to the Corbett administration.
Wolf said a pension obligation bond taken out at a low interest rate could be one way to meet the contributions. He is open to other proposals.
Citing pension concerns, Moody’s Investors Services on Monday lowered Pennsylvania’s bond rating for its $11.1 billion in general obligation bond from Aa2 to Aa3.
Analysts said the state’s decision to use one-time revenues to balance this year’s state budget played a role in the downgrade.
Wolf, a former Reveune secretary under ex-Gov. Ed Rendell, said the ratings downgrade reflects “a reasonable lack of confidence” in the state’s financial leadership.
“It is a reflection, I think, in one agency’s verdict on the lack of management and leadership in Pennsylvania the last couple of years,” he said.
Wolf visited TechShop, the membership manufacturing workshop in Bakery Square that President Obama visited this year.
The Democratic businessman from York County has made generating manufacturing jobs a central tenet of his platform.
He proposes accountability-based tax credits only if companies generate jobs and finding ways to spin off university research into companies that employ Pennsylvanians.
“We have a market here, but we also have the skills,” Wolf said. “We have the design capacity, another reason why manufacturing should be really strong here.”
Melissa Daniels is a staff writer for Trib Total Media. She can be reached at 412-380-8511 or [email protected].