It’s an ocean of red – a flood of debt that threatens the financial stability of our school districts for the next 30 years. The news is no better for the state government system. The systems that currently provide state workers and school district employees with their pensions are hemorrhaging. Our state is facing a more than $50 billion debt, and taxpayers are increasingly responsible for the required cash transfusion.
Following the stock market bubble in 2001 that overinflated the investment returns earned on our pension funds, legislators increased the payouts for state and school employees. Subsequent budgets then failed to fund the systems with sufficient dollars to save for those promises. After the market crash of 2008, huge sums were obliterated and the unfunded liability exploded, now totaling more than $50 billion. This is not only unfair, but it’s also unsustainable.
Both of us are working to make fundamental changes to this system so we can move our state and school district retirement systems into the modern times. We need to have a complete or a significant move to a defined contribution or 401(k)-style public pension plan so we can reduce overall costs, pay off debt and shift the risk from taxpayers.
Dr. Clyde Hornberger, Educational Consultant and Former Director, Lehigh Career & Technical Institute
All EPLC "Focus on Education" TV shows are hosted by EPLC President Ron Cowell.
Allegheny Intermediate Unit, 475 East Waterfront Drive, Homestead, PA 15120
Pennsylvania School Boards Association Headquarters, 400 Bent Creek Boulevard, Mechanicsburg, PA 17050
Montgomery County Intermediate Unit, 2 W. Lafayette Street, Norristown, PA 19401