With a new Democratic governor taking office in Pennsylvania in January and poised to face hefty Republican majorities in both houses of the state Legislature, the Keystone State is shaping up as the site of the next battle royal over public employee pensions.
Newsmax spoke to officials of both parties this weekend at the 116th annual Pennsylvania Society event in New York City.
The remarks of Gov.-elect Tom Wolf as well as those of GOP legislative leaders certainly point toward Pennsylvania soon having a nationally watched debate on the state pension issue in much the same way as Wisconsin did in 2011-12.
With his state gripped by a deficit caused in large part by liability for public pensions, Wisconsin’s then-newly elected GOP Gov. Scott Walker guided through the Legislature a plan to require most public employees to pay a portion of their pension and healthcare plans.
What followed was nothing short of political high drama.
Irate public sector unions forced Walker to go through a recall election in 2012, from which he emerged the winner — and the first governor in U.S. history to survive a recall. This year, Walker faced a grueling re-election battle and, again, came out the winner — and by a larger-than-expected margin.
"Crisis" is no understatement to characterize the pension dilemma Pennsylvania officials will soon be grappling with. As state Sen. John Blake told Newsmax, "We have a pension liability of more than $50 billion. This is due to nothing less than the abject failure of the commonwealth [of Pennsylvania] to meet is actuarially defined yearly payments."
This view was seconded by state Sen. Jake Corman, who recently became majority leader following a coup that deposed the more moderate Sen. Dominic Pileggi from the Senate GOP helm.
Corman pointed out that $600 million a year in revenue goes toward public pensions at a time when there are 2½ people working for every one retiree.
But where Wisconsin’s Walker eventually won out with his vision of pension reform, the political landscape is far different in Pennsylvania. The outcome of such a debate is uncertain. Walker dealt with Republican majorities in both the state House and Senate, as well as a Supreme Court in which his fellow Republicans held a one-judge advantage.
In contrast, Democrat Wolf will have to deal with a state Senate in which Republicans gained three seats last fall and now hold 30 seats to 20 for the Democrats.
Republicans also picked up eight new seats in the state House, which gives them 109 seats to 84 for the Democrats. In addition, there will be three open seats on the seven-seat state Supreme Court, which means the Republicans’ current one-judge edge could easily be upended.
Corman vowed over the weekend that Senate Bill 1 (the first measure to be dealt with by the incoming Senate) would address pension reform and "there would be
no consideration [emphasis added] of any new revenues" until the crisis of state pensions was addressed.
Asked later about Corman’s remarks, Gov.-elect Wolf told Newsmax: "I will approach this with strong empathy toward the public employees and their needs.
"But I will also look at this issue with the understanding of the situation Pennsylvanians are facing over pension liability."
John Gizzi is chief political columnist and White House correspondent for Newsmax.