Cost of living cartoon

The Issue: Pennsylvania officials will be getting raises aimed at keeping up with the cost of living —  boosts in pay that range from $1,300 effective Dec. 1 for rank-and-file lawmakers to $3,000 effective Jan. 1 for Gov. Tom Corbett.

The populist question comes quickly: Why are state officials in Harrisburg getting any kind of raise, given the job they’re doing?

Our lawmakers and the Corbett administration have failed to address major issues such as the $50 billion gap between the assets and liabilities in the state’s two pension systems, privatizing or at least improving state liquor stores, and finding a way to adequately fund public schools without continuing to shift the burden to local property tax payers.

Yet, thanks to a 1995 law aimed at protecting lawmakers from having to vote for pay raises to keep up with inflation, all state lawmakers, row officers and Cabinet secretaries will be getting 1.6 percent raises.

At $85,356 per year for rank-and-file lawmakers, Pennsylvania’s General Assembly pays second-best in the nation. California pays $90,526 per lawmaker, but it has a lot fewer of them — a total of 120, compared to 253 in Pennsylvania.

It is somewhat galling that the top leaders in the House and Senate will see their pay jump the most — to $133,247 per year, a raise of $2,100.

This is a particular outrage considering the pension mess.

Lawmakers in 2001 passed a 50 percent increase in their own pensions and a 25 percent increase in the pensions of public school teachers and state workers.

They said at the time that historical gains in the stock market — paired with increased contributions by participants in the pension plans — indicated these boosts should not cost taxpayers anything.

When the stock market did not deliver, lawmakers passed bills stretching out the payments for those shortfalls rather than paying the state’s share to keep the systems sound.

Act 38 of 2002 capped the state contribution at 1.15 percent and Act 40 of 2003 manipulated the actuarial assumptions to underfund the state’s two pension funds by nearly $6 billion.

In 2010, the General Assembly passed a bill that took some reasonable steps toward reform. Among other things, the law: reduced pension benefits for new employees by more than 20 percent; increased the vesting period to 10 years, up from five; and set the stage for increased contributions by the state and local school districts.

Partially because of that final sensible but painful reform, local school districts are feeling the squeeze.

Elanco, for example, saw its pension contribution jump to $3.1 million this year, compared to $350,000 in 2004.

And Hempfield’s rose to $10.7 million in 2014, up from $1.5 million a decade earlier.

These costs are directly tied to both the General Assembly’s decision to increase pensions and its refusal to pay the bill when its bet on the stock market failed to pay off.

And yet they are being protected against inflation.

Doesn’t seem fair somehow, does it?

Related

A guide to Pennsylvania's taxpayer-funded pension crisis

The 2012 Keystone Pension Report from the governor's budget office