Wolf’s PERC Move Endangers Municipalities

Member Group : News Releases

Feb. 2, 2016

Wolf’s PERC Move Endangers Municipalities, Unilateral Authority Questioned

HARRISBURG – State Reps. Keith Greiner (R-Lancaster), Seth Grove (R-York) and Stephen Bloom (R-Cumberland) today responded to the news of Gov. Tom Wolf’s unilateral move to shut down the Public Employees Retirement Commission (PERC).

PERC has two primary responsibilities, to review and provide actuarial notes for all proposed pension reform legislation and to review Pennsylvania’s municipal pension plans and certify this information to the Auditor General’s office for the distribution of municipal pension aid. PERC has fulfilled these responsibilities for over 30 years, since the passage of Act 293 of 1972, Act 66 of 1981, and Act 205 of 1984.

The lawmakers issued the following statement regarding the governor’s announcement:

"Gov. Tom Wolf’s unilateral move to stop the work of PERC is extremely troubling. What authority does the governor have to unilaterally close a commission that was created by an act of the General Assembly? PERC has performed its duties for over 30 years. Why shut down PERC now when meaningful statewide and municipal pension reforms are being considered by the General Assembly? It is clear the governor, despite his lip service to the contrary, has no interest in protecting the taxpayers by supporting pension reform.

"When the governor cut PERC’s $914,000 appropriation, he created a $250 million problem. This is the amount of statewide funding that Pennsylvania’s municipalities received in pension aid from Act 205 in 2013. His shortsighted and ill-advised decision will cause property taxes to rise at the municipal level if Act 205 aid is not released. Under current state law, PERC is required to certify municipal pension data that is used to drive out the state aid from Act 205, which represents over 20 percent of the total contributions to municipal pension plans.

"Today, Auditor General Eugene DePasquale confirmed how the governor’s decision to eliminate PERC would impact Pennsylvania’s $8 billion municipal pension problem. He said: "If people think there’s a [municipal] pension problem now, wait until municipalities don’t get their [Act 205] payments." We could not agree more. Our counties receive nearly $20 million in total Act 205 pension aid.

"If PERC will not be completing its statutory duties that drive out Act 205 funding, who will? And with what funding? The General Assembly needs to address Wolf’s self-made crisis and prevent it from impacting our taxpaying constituents. We are open to discussions on whether or not PERC is the most appropriate body to complete these tasks, but that discussion must be had in the future. The General Assembly must act to restore funding to PERC which Wolf vetoed, to ensure Act 205 funding is driven out."

Greiner and Grove are prime sponsors of House Bill 316, comprehensive municipal pension reform legislation, and are co-sponsors of House Bill 1793.

Bloom is the sponsor of House Bill 1793, which would restore funding for PERC.