Aging population aggravates Pennsylvania's budget problems
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HARRISBURG -- A report on Pennsylvania finances points to budgetary pressures -- including pensions, health care, education and an aging population -- that have been highlighted by officials from the Corbett administration and Independent Fiscal Office.
Like other states, Pennsylvania faces underfunded pensions, high health care costs, constraints in education funding and flattening revenues, says a report by a joint project of Harvard University's Institute of Politics at the Kennedy School, the Fels Institute of Government at the University of Pennsylvania and the nonprofit American Education Foundation.
"The state is also one of the oldest in the nation, and all signs indicate that the commonwealth is only getting older -- posing further problems for an economy that is sputtering and a system of public benefits, including Medicaid, pensions and other post-employment benefits for public employees, that is stretched to the limit," the report says.
Emigration of young people from rural counties has helped make Pennsylvania the second-oldest state in the nation, the publication says.
The report echoes concerns raised in an economic and budget outlook released this month by the state Independent Fiscal Office. The IFO report found that if current policies and tax laws remain in effect, the growth of employer pension contributions coupled with modest increases in revenue will cause the state to move from a net surplus this year to a net deficit in five years.
"Pensions are probably, first and foremost, the most pressing concern moving forward," said IFO director Matthew Knittel. "They're legally mandated, so they must be paid."
A pensions report released this week by the Office of the Budget pegs the state's unfunded pension liability at $41 billion. The retirement systems for state employees and public school employees have a combined funding ratio of 68 percent, below the 80 percent level that is considered healthy, according to that report.
First Published November 28, 2012 12:00 am