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Friday, July 27, 2001
Two months ago, the Legislature, Gov. Ridge and Pennsylvania's teacher unions hatched a late-night deal that enacted the administration's latest education overhaul, in exchange for hefty pension increases for school employees, state workers and legislators.
The governor got a back-door vouchers program funded by corporate tax credits and the go-ahead on a nebulous option called "independent schools." In exchange for the Pennsylvania State Education Association and the Pennsylvania Federation of Teachers dropping their opposition to such proposals, school employees were given a 25 percent increase in future pensions and legislators got a 50 percent pension jump.
It was not hard for the Post-Gazette and others to condemn the package. No one in the Legislature made a financial case for the pension improvements. No one subjected the education proposals or pension plans to public debate. And it was disturbing to see legitimate skepticism about new ways to fund and deliver education snuffed out for a price.
Two months later, there's another reason that this unholy pact appears hasty and ill-conceived. State and school employees who are already retired reacted bitterly when it became known that the agreement contained no provision to improve their pensions.
In other states, pension boards decide when it's time for retired public employees to receive cost-of-living increases. But in Pennsylvania, it takes an act of the Legislature to approve even a modest raise for retirees. And if the pensioners get overlooked in the kind of midnight run it took to pass May's stealth pension bill, they have to start from scratch to build political support for their next increase.
That is no way to adjust the pensions of a quarter-million people who used to serve the public.
Now it's clear that there were substantive as well as procedural problems with the bill ---- not that process and substance are unrelated. Indeed, had the pension increase been a matter of open debate, it would have occurred to lawmakers that that was also the appropriate time to consider a cost-of-living adjustment for retirees.
Retired state workers ---- whether teachers, clerks, police or janitors ---- typically get a cost-of-living increase approved by the Legislature every four or five years.
The last one came in 1998, with increases ranging from 1.86 percent for recent retirees to 25 percent for longtime pensioners. They, like other retired workers, know the eroded buying power of a fixed income.
While the deal between Gov. Ridge, the Legislature and the teachers unions is over and done, there is unfinished business regarding those who are already living on pensions.
With the support of the PSEA and the PFT, the General Assembly needs to review this fall whether it's time for another cost-of-living increase for state and school retirees. Better than that would be a new law that removes the question of future pension improvements from the realm of politics -- and places it in the hands of the appropriate retirement board.