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Gov. Tom Wolf argued in response to a lawsuit filed by two House Republicans that he was within his bounds when he shuttered a state and municipal pension watchdog agency recently.

State Reps. Seth Grove, R-Dover Township, and Stephen Bloom, R-Cumberland County, filed the lawsuit last week after Wolf closed the Public Employee Retirement Commission, commonly called PERC, by defunding it as part of the partial 2015-16 fiscal year state budget.

The pair is asking the Commonwealth Court to issue a temporary injunction barring the governor from taking action to shut down the agency while the court rules on whether Wolf has the authority to close the PERC.

They argued in the lawsuit that Wolf went against the state constitution and that legislative approval is needed for PERC to be closed.

"It's trying to send a message we're not going to stand idly by and let the governor do whatever he wants, when he wants," Grove said of the lawsuit.

The House Republican Caucus is footing the bill to cover Grove's and Bloom's legal fees.

Response: On Wednesday, counsel for the governor's office filed its response to the lawsuit, which it described as "unwarranted," and argued Wolf was well within his rights to cut off funding allocations.

It also says some of the functions of PERC will continue uninterrupted but under the governor's Office of the Budget in order to comply with a state law.

The three full-time PERC employees were transferred to the budget office when the commission shuttered Friday, and its executive director left state employment.

"As we have said, the governor has acted to eliminate redundant and unnecessary functions and cost," Jeff Sheridan, a spokesman for the administration, said in an email. "It is unfortunate that despite their rhetoric, some in the Legislature have opposed nearly every step the Wolf administration has taken to reduce the size of government and curb costs, including his actions on PERC as well as reducing fees paid to Wall Street pension management firms and the merging of the Department of Corrections and Probation and Parole."

What it did: PERC was created by an act of the General Assembly in 1981 and "provided an independent review and actuarial analysis for all proposed pension reform legislation and to review Pennsylvania’s municipal pension plans," according to Grove and Bloom.

But as part of the 2015-16 fiscal year budget partially line-item vetoed by Wolf, $962,000 in funding destined for PERC was cut off.

Bloom has introduced a measure, House Bill 1793, that would restore funding.

Grove said he believes Wolf cut off funding as an attempt to stop Republican efforts to reform state and municipal pensions since the General Assembly must turn to PERC for information on proposed pension reform bills.

The GOP in the House and Senate has been for years trying to bring such reform but hasn't been able to get bills signed into law — Wolf vetoed  a pension reform bill in July — despite holding majorities in both chambers and once having an ally in the governor's office in the form of former Republican Gov. Tom Corbett.

"Basically, this is to stop pension reform," Grove said. It's "trying to stop the Legislature from doing its due diligence."

— Reach Greg Gross at ggross@yorkdispatch.com.

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