Pennsylvania’s pension debt continues to mount; critics alarmed

04.10.16 | Bob Price

Time, as the saying goes, is money.

Nowhere is that truer than in Pennsylvania’s mounting pension debt.

“It’s growing, if you haven’t figured it out, at $143 a second,” Barry Shutt of Lower Paxton Township said.

Shutt, a pensioned retiree himself, commissioned a pension clock similar to the national debt clock in New York City. He paid for it and positioned it just outside the Capitol cafeteria. That’s a fitting spot because pension debt has an insatiable appetite for tax dollars.

“It’s at $4.5 billion a year and it’s jeopardizing the future economic growth of Pennsylvania,” Shutt said. He is a citizen activist who has hung around the Capitol for two years trying to cajole lawmakers into focusing on the state’s pension problem.

Pensions are the elephant in the budgetary room, but both Elephants (Republicans) and Donkeys (Democrats) have mostly ignored it.

“The pension doomsday clock is inching towards midnight,” Eric Epstein of Rock the Capital said at a recent unveiling of the pension clock. “Make no mistake, to do nothing is to knowingly blow up our children’s future. ”

“Shame on you. Shame on you,” Epstein said to lawmakers and the governor, who just completed another budget without addressing the pension issue.

The crisis dates to 2001 when benefits to retirees were enhanced without an additional revenue stream to support those increases. School districts and state government then for a decade made less than the minimum payment on their pension credit cards. Add in a recession that ravaged investments and ridiculously rosy projections on those investment returns, and you’ve got a sinking pension ship.

Rick Dreyfuss is an actuarial consultant. Here’s how he describes the problem: “We are dealing with overstated assets and understated liabilities coupled with poor funding practices.”

And a poor ability by legislators to wrestle the problem into submission, critics say. They point out that lawmakers voted for the pension boondoggle, and benefit from it, but have thus far failed to fix the boondoggle.