HARRISBURG, Pa. — A spike in pension obligations could hardly come at a worse time for Pennsylvania’s public schools.
Gov. Tom Corbett, who has pledged to oppose any tax increase, will be proposing his second state budget on Feb. 7, and public school officials are worried about getting more bad news after working through the most difficult budget year in just about anyone’s memory.
The Corbett administration is projecting that its school employee pension obligations will rise by $320 million next year — or more than 50 percent — after more than doubling in this fiscal year.
Meanwhile, public schools are suffering through cuts of more than 10 percent to state aid. The cuts, approved by the Legislature and Mr. Corbett, fell most heavily on Pennsylvania’s poorest school districts, which officials argued get the most state aid.
It seems that no one in the public school community expects Mr. Corbett to propose more money for public schools next year, and he may even seek another round of cuts in light of his administration’s projection of a year-end deficit and rising costs in other parts of the budget, such as Medicaid and debt service.
Thomas Gentzel, executive director of the Pennsylvania School Boards Association, said Corbett administration officials have told him that they didn’t plan to cut public school aid again.
“But the question is, what are they counting?” he said.
If Mr. Corbett counts pension dollars as part of the state aid that helps keep the lights on and teachers in classrooms, then “there could be some significant cuts in major funding areas, although the overall funding may not be going down,” Mr. Gentzel said.
Mr. Corbett’s top budget adviser, Charles Zogby, declined to comment.
Rising pension obligations are being driven, in part, by lackluster investment performance on the money being paid into the system and a 2001 law under then-Gov. Tom Ridge that guaranteed 50 percent pension increases for most legislators and 25 percent increases for more than 300,000 state workers and teachers.
There’s not a whole lot that can be done about it.
The state constitution bars curtailing pension benefits for current or retired state employees and teachers. Meanwhile, a 14-month-old state law signed by then-Gov. Edward G. Rendell is designed to blunt the severity of the pension cost spike by deferring some payments past 2030.
That means that pension obligations shared by the state and school districts will jump to 12.4 percent next year, rather than 29.7 percent — a difference of about $2 billion, according to the Public School Employees’ Retirement System.
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