March 27, 2013

Corbett administration continues to mislead on pension issue

Gov. Tom Corbett's administration renewed efforts to persuade news media that the governor's ill-conceived changes proposed to current public workers' pensions would not violate the state Constitution.

PSEA President Mike Crossey commented on the Corbett administration's March 27 briefing for reporters.

“Saying something is constitutional doesn't make it true, regardless of the number of media events the governor's office orchestrates.

"Here are the facts. Gov. Corbett's pension proposal would change benefits for current employees. Pennsylvania's Constitution doesn't allow this, and Pennsylvania's Supreme Court has issued clear opinions rejecting unconstitutional approaches nearly identical to what the governor is proposing today.
“The governor's plan is bad policy because not only does it fail to solve the problem of the Commonwealth's pension debt, it also adds costs to taxpayers and presents serious constitutional problems,” Crossey said.

The Pennsylvania Constitution has a clear prohibition against impairment of contracts by the Legislature. Article 1, Section 17 states: “No ex post facto law, nor any law impairing the obligation of contracts, or making irrevocable any grant of special privileges or immunities, shall be passed.”

The Pennsylvania Supreme Court has applied this rule in two precedent-setting cases, striking down changes to current workers' pensions: APSCUF v. State System of Higher Education, (Pa. 1984); and Pennsylvania Federation of Teachers v. School Dist. of Philadelphia, (Pa. 1984). In both cases the Legislature increased contribution rates that applied prospectively to current participants of both the school employees and state employees' retirement systems. 

The court said that the change unconstitutionally impaired the contract rights of all existing members in the systems.  The court specifically determined that changes in law could be effective upon anyone who subsequently joined either system.

“This very clear precedent establishes that the governor's plan to unilaterally alter the pension benefits of current workers is unconstitutional,” Crossey said. “Teachers, nurses, public safety officers, and other public employees contribute at least 7 percent of their salaries toward their pensions, and according to the Pennsylvania Constitution, it is unlawful to unilaterally cut pension benefits for these employees.”

“PSEA and other unions will litigate to prevent unconstitutional changes to current workers' benefits,” Crossey said. “It makes more sense for the General Assembly to reject the governor's plan and avoid unnecessary litigation. Lawmakers should allow Act 120 of 2010 – which achieves greater savings and cost efficiency than what the governor proposes – time to work, and focus on revenue changes to fund essential state government services such as education, transportation and health care.”

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