Pension clock continues to tick, unfunded liability tops $74B

HARRISBURG, Pa. (WHTM) – The red numbers flash at a dizzying pace. The pension clock is ticking at the Capitol.

The LED numbers change silently. But they scream out to passersby $74 billion plus and counting in unfunded pension liability of 10:15 Tuesday morning.

“That should frighten every Pennsylvanian,” said clock creator Barry Shutt, “and embarrass every member of the General Assembly and the governor.”

Shutt, a 69-year-old retiree from Lower Paxton Township, has been coming to the Capitol nearly every day for nearly three years to cajole elected officials into fixing the problem. He commissioned the pension clock and installed it 11 months ago outside the cafeteria. Shutt’s watched the debt grow by $10 billion in that time.

“It’s not fair. It’s inter-generational theft,” said activist Eric Epstein of Rock the Capital. “If we do nothing, we’re putting a noose around the neck of future generations.”

But for years, legislatures and the governor have, in effect, done nothing, according to Rep. John McGinniss (R-Blair). He says the fix isn’t complicated, it’s basically a two-part solution. First, put new school and state hires into a 401(k)-style retirement plan. Secondly, McGinnis said, is put the state on a 20-year untouchable payment plan to pay off that pension debt, all $74 billion of it.

“It’s not gonna be the best-testing medicine to be sure, but this approach will be 100-percent effective for what ails our pensions,” McGinnis said at a Tuesday news conference spotlighting the pension problem.

All sides say that the cure is likely a combination of increased revenues and cuts in state spending, which are not politically popular decisions.

Pennsylvania does not tax pensions or retirement income. Shutt, who gets a state pension, says it should be taxed. He estimates it would raise $3 billion a year.

“There’s no reason in the world why I shouldn’t pay taxes, and other people in my category, a lot of state workers, shouldn’t pay a PIT (personal income tax) on my retirement,” Shutt said.

But seniors vote and lawmakers like to get re-elected, thus pension paralysis in Harrisburg.

“What we’re looking for is political courage,” Epstein said, “someone to understand that doing the right thing may cost them their job, and we don’t have that. There’s a deficit of political courage on this hill.”

How toxic is the topic for lawmakers? Just two of them appeared at Tuesday’s pension news conference.

Contrast that with the stairway full of legislators calling for solutions to the opioid crisis last July. Nearly every representative and senator made a point of showing up.

Many like Rep. Paul Schemel (R-Franklin) believe pensions are just as harmful as drugs.

“This is every bit as immediate,” he said. “It’s not death. It’s fiscal death for the commonwealth. It takes 15-20 years to get there, but it’s death all the same.”

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