Rep. Curt Schroder Introduces $520 Million Legislative Cost Reduction Plan

Measures propose to cut pay and perks, make Legislature more
cost-effective

HARRISBURG – The Pennsylvania budget is expected to be $2.3 billion
short this fiscal year and House Appropriations Committee Chairman
Dwight Evans (D-Philadelphia) predicts that figure could climb as high
as $5 billion next year. In this time of budget crisis and bailouts
borrowed from future generations of taxpayers, Rep. Curt Schroder
(R-East Brandywine) is proposing drastic reductions to the operating
costs of the state Legislature that would cut at least $520 million out
of the state budget.

"It is important that the General Assembly set the example and lead the
way in cost reduction," said Schroder. "I am proposing a package of
bills that will cut the cost of state government, starting with the
Legislature. House Bill 1056 would essentially return Pennsylvania to a
part-time legislature, saving taxpayers $12.8 million. This would be
achieved through a reduction in salaries of House and Senate members
from more than $78,000 a year to $30,000, and trimming the amount of
additional compensation afforded those in leadership positions. I am
also proposing to eliminate state-paid health benefits for lawmakers at
an additional savings of $4.4 million annually."

Schroder argues that future cost-of-living adjustments (COLAs), as well
as health care, can then be obtained through the private sector
employment obtained by legislators. House Bill 1057 would achieve
additional savings through the elimination of cost of living increases,
meritorious raises or other salary increases for members of the General
Assembly. Schroder said the wage freeze would save the state as much as
$3.5 million this year alone. Under his bill, salary increases would
only be granted with movement to a job classification that provides for
a higher salary.

Two additional bills would free up funds from surplus accounts and
eliminate discretionary grants. House Bill 1058 would annually transfer
unspent or uncommitted funding contained in legislative accounts to the
state Treasury. These accounts currently contain surpluses of about $200
million. House Bill 1059 would eliminate discretionary grants, also
known as walking around money or WAMs. It is estimated this move would
save taxpayers up to $600 million annually.

House Bill 1061 would change the pension system for state legislators
who take office after Dec. 1, 2010, to a defined contribution plan. This
investment plan would be structured to provide cost savings over the
long term for lawmakers. A looming state pension crisis, which threatens
to spike in 2012, provides all the reason necessary to move the state’s
pension programs to defined contribution plans.

"For nine straight months, state revenues have been well below
administration estimates. We are faced with a spending crisis that no
bailout is going to fix," said Schroder. "The legislative package I am
proposing would provide immediate and significant savings to the
Commonwealth and its taxpayers, and the impact would be long lasting."

Schroder noted that he hopes to amend these items to the COLA repeal
legislation the majority House Democrats have pledged to run, or any
similar legislation that comes over from the Senate.

Contact: Donna M. Pinkham (717) 260-6452

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