Pension jockeying stalls Pennsylvania budget

House puts plan in committee as governor’s holdout continues

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HARRISBURG — Gov. Tom Corbett’s push for a pension bill to accompany the state budget suffered a setback Tuesday when the House relegated the legislation to a committee whose chairman had criticized the changes proposed for future state and school employees.

The move in the House came after Mr. Corbett cited the failure of legislators to approve such a bill in a statement Monday night announcing he would withhold his signature from the Pennsylvania budget, even as the state’s new fiscal year began Tuesday.

After the 107-96 vote Tuesday to send the pensions bill from the House floor back to committee, it was unclear how Mr. Corbett intended to proceed. Jay Pagni, a spokesman, said the governor is discussing the proposal with legislators “and will continue to do so as long as necessary.” If the governor were to refrain from signing or vetoing the budget until July 11, 10 days after it reached him, it would become law.

In the meantime, Mr. Pagni said federal funds and money remaining from the previous budget would allow state services to continue without interruption, at least for the time being.

“I’m not going to speculate when and if any programs would be affected,” he said. “No immediate effects to the services that we provide will occur while the governor continues to review the budget.”

Mr. Corbett believes pension contributions have become an unsustainable burden on state and school district budgets.

After Mr. Corbett’s late-night announcement, the House took up the pension bill Tuesday morning, but after some debate, Rep. Gene DiGirolamo, one of the House’s more liberal Republicans, took the floor to say he believed the plan had not been properly vetted. Mr. DiGirolamo, R-Bucks, voted against the Republican-crafted budget Monday and has been a prominent advocate for expanding eligibility for Medicaid.

“What’s the rush? Why are we doing this now?” he said.

He made a motion to move the bill to the Human Services Committee, of which he is chairman. Despite a request from Majority Leader Mike Turzai, R-Marshall, the House agreed.

The vote was seen as a sign the bill is unlikely to move forward, at least in the near term. Rep. Warren Kampf, R-Chester, a proponent of the legislation, described the vote as a “setback.” Rep. Seth Grove, R-York, another supporter, issued a statement titled “Pension Overhaul Stumbles on Procedural Vote.”

Asked what the path forward was for pension legislation, Steve Miskin, a spokesman for House Republican leaders, said: “Right now, your guess is as good as mine.”

In a statement, the Democratic leader, Rep. Frank Dermody of Oakmont, said the bill would “cruelly and harshly” cut benefits for future workers.

“The question must be asked: Why was Governor Corbett pulling out all the stops to jam this complicated proposal through the House, including holding up critical legislation in his attempt to build support for the bill?”

In the Senate, the Democratic leader, Jay Costa of Forest Hills, said it appeared Mr. Corbett had delayed signing the budget without knowing that he could get a pension bill passed.

“He may have overplayed that card, and consequently, the perception is that he’s weak within his own party,” Mr. Costa said.

Mr. Corbett has touted three consecutive on-time state budgets in his campaign for re-election this November.

The plan the governor supported would close the State Employees’ Retirement System and Public School Employees’ Retirement System to new workers, instead enrolling them in a hybrid plan that would provide a limited pension benefit accompanied by a 401(k)-style plan for annual income of more than $50,000.

An analysis the Public Employee Retirement Commission published found the changes over 30 years could save $11 billion in employer contributions for the two systems. Labor unions noted actuaries also concluded the “loss of retirement security” for new workers would be greater than savings to the state.

House Republicans have tried for weeks to win enough support to pass the bill. Mr. Corbett attempted Sunday to bridge the gap by publicly offering Philadelphia Democrats authorization of a school-funding cigarette tax within the city in exchange for their pension votes.

Karen Langley: or 717-787-2141 or on Twitter @karen_langley. Kate Giammarise: or 717-787-4254 or on Twitter @KateGiammarise. First Published July 1, 2014 12:00 AM

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