Senator Bob Mensch Budget Update

Harrisburg – In a budget update on January 28th, Senator Bob Mensch (R-24) underlined that the unfunded pension liability is the budget’s most serious cost-driver and will put Pennsylvania in a devastating financial position if it is not addressed.

“Skyrocketing pension costs are the number one reason for increases in school property taxes and cuts to school programs, and now they threaten to increase state taxes,” said Mensch. “Without reform, this system will continue to devour every new dollar we invest in our schools, further degrade the state’s bond rating, and cause even more seniors to lose their home due to unreasonable property tax hikes.”

Senator Mensch underlined that it is irresponsible to suggest increasing state spending by billions of dollars, and asking for more money from the pockets of our citizens, without taking any action to correct this problem. The Senate has passed three historic pension reform bills, beginning with the sweeping Senate Bill 1, which was vetoed by the Governor.

A report by Standard and Poors found that public employee pension obligations are continuing to grow at a rate that can’t be sustained by current revenues.

“That’s something that we absolutely have to fix in order to get our fiscal house in order and prevent credit downgrades and painful tax increases in the future,” said Mensch.

Governor Wolf had initially supported a budget discussion that included pension reform, however, he was unable to obtain a single Democrat vote for pension reform in the House of Representatives.

A recent report by the Independent Fiscal Office outlined state revenues in FY2016-17 are expected to grow modestly, however, cost drivers (e.g., pensions, Medical Assistance and debt service) continue to drive expenditure growth. The IFO report underlined that the most recent spending bill reduces short-term deficit but the long-term pattern of increasing structural imbalance remains largely unchanged.  Despite a grim economic forecast, the governor continues to call for an increase in taxes totaling $4 billion and historic increases in spending. Senator Mensch and the Senate believe that enormous tax increases to offset more government spending will not benefit Pennsylvania’s economy.  Instead, they call for responsible controlled spending.

Senator Mensch expressed his strong unwavering effort to conclude this unprecedented budget impasse.

“While there are no easy answers to this crisis, the governor’s veto undoubtedly leaves part of our work unfinished,” said Mensch.  “We have been working and have voted on some tough issues, like pension reform, in order to continue to move the state forward. We believe in policy over politics.  Despite all of the frustration and uncertainty this impasse created, I remain sincerely committed to doing my part to end this gridlock.”

CONTACT: Sarah Rasmussen srasmussen@pasen.gov  (215) 541-2388