PA Senate Passes Budget to End Deadlock so Schools Can Stay Open

The PA Senate passed a $30.3 billion budget and sent it on to the Governor who has 10 days to sign it. No tax increase is required and if signed, state funding for schools and other services will become available. Republicans are generally in favor, Democrats generally less so, unfortunately, neither this $30.3 billion version of the budget or the larger $30.8 billion version favored by the governor addresses the serious problems facing the state.

The senate refused to pass the larger budget because it would have required a tax increase and no tax program to fund the deal had been submitted. Democrats are criticizing the deal, saying it cuts spending for education, when it actually increases it, just not as much as they wanted.

Unfunded pension liabilities – the monster under the budget

The enormous issue neither party is willing to address is the unfunded pension liability to state employees and teachers. There have been attempts in these budget negotiations to partially switch to a defined contribution plan, like the 401(k) plans most everyone in the private sector is familiar with, from the defined benefit plan they have now and which has almost completely disappeared outside of government. State employees and their union representatives have said they will challenge changes to the plans because they have contracts and they’ve made payments into the plan in good faith, however, the plans as designed and the defined benefits employees have been promised are simply impossible to meet regardless of contracts and payments.

Keep that in mind as state representatives and senators make statements about the budget, no matter which side they take on this particular version. Negotiations like these are no longer focused on fixing the problem, they’re just focused on getting an agreement and funding popular programs and hoping you are kept in the dark about how bad PA finances have become.