Wolf vetoes Pa. pension reform bill, irks lawmakers


Republican lawmakers from York County didn't mince words when they called Gov. Tom Wolf's veto of a pension reform bill on Tuesday, and his recent vetoing of the state budget and a bill to privatize liquor sales, disappointing — and bad governing.

"He's basically saying 'no' to everything," said Sen. Scott Wagner, R-Spring Garden Township, who co-sponsored the pension reform bill. "I didn't expect anything less. He's so influenced by the unions."

Wolf, a Democrat, shot down the key Republican agenda when he vetoed a GOP-crafted bill to overhaul Pennsylvania's two major public employee pension systems, saying it would provide no immediate cost savings and inadequate long-term savings.

Wolf's latest veto is the fifth since he took office, noted Rep. Seth Grove, R-Dover Township.

"It's disappointing," Grove said. "He's a smart guy. No one's discounting his intelligence level. But he should be able to work out a deal."

Since becoming governor in January, Wolf, a Mount Wolf native, has signed 28 bills into law. He has vetoed five bills, including one that would have amended the public school code, according to the governor's office.

Reaction: Even before Wolf vetoed the $30.2 billion Republican budget plan last week, his administration and Republicans in the Legislature were in a stalemate over policy.

Rep. Stan Saylor, R-Windsor Township, said Wolf doesn't seem to want to work with Republican lawmakers during budget and other discussions.

The governor doesn't agree.

"(Wolf) went above and beyond" to reach out to Republicans during budget talks, but instead the Legislature passed a budget that included "their priorities and nothing else," according to a statement from the governor's office.

"The Republican budget failed to include a commonsense severance tax, it does not restore cuts made by Republicans to education over the last four years or reduce property taxes, and the Republican budget would increase — rather than responsibly address — the structural budget deficit," the statement says.

The bill: The pension reform measure, Senate Bill 1, would have ended the traditional pension benefits in favor of an alternative that would include 401(k)-style defined contribution plans for future state and school employees.

Lawmakers also would have been removed from the pension plan almost immediately, Saylor said.

The bill would not have affected about 700,000 current employees, retirees and beneficiaries in the traditional defined-benefit pension plans. But most future state and school employees would have seen changes designed to reduce payments of roughly $11 billion over three decades on an estimated $53 billion pension debt.

Republican Sen. Mike Folmer, whose district includes part of York County, said debt increases each day the pension system isn't reformed.

"It's been one of our major cost drivers," he said.

The scuttled plan would have combined a 401(k)-style defined-contribution plan, whose cost would be shared by employees and employers, and a "cash-balance" plan financed by the employees.

Future employees would have been required to contribute at least 3 percent of their salary into the defined-contribution plan, and employers would have had to contribute an additional 2.9 percent for school employees and 4 percent for state workers.

The employees also would have been required to contribute 3 percent of their salary into the cash-balance plan, which would guarantee them a 4 percent return, and any excess investment gains would be shared between the employee and employer.

Wolf: During and after his campaign for governor, Wolf maintained that he supported the existing traditional pension benefit and opposed scrapping it in favor of a 401(k)-style plan.

Wolf said the bill would have forced newly hired state government and public school employees to help pay down the cost of existing pensions. In addition, Wolf said, an element of the legislation would have violated federal tax law.

The measure was an improvement over earlier GOP plans, Wolf said. But "it's still not good for employees moving forward. We are not going to attract good employees to our system with that particular pension bill," he said Thursday in a live telephone interview with a Pittsburgh radio station.

In a separate statement from his office, Wolf said the GOP's pension bill "does not address the problems facing our pension system comprehensively and fairly."

The Associated Press contributed to this report.

— Reach Greg Gross at ggross@yorkdispatch.com.