Gov. Tom Wolf on Thursday vetoed the Republican-crafted bill that eliminates guaranteed public pensions for new school and state employees.
Wolf, a Democrat, said he understands the need to reform the public pension system but the legislation "provides no immediate cost-savings to taxpayers and does not maximize long-term savings for taxpayers."
"There are provisions within this legislation, which as part of a comprehensive pension proposal, I could support," he said in a statement. "However, Senate Bill 1 does not address the problems facing our pension system comprehensively and fairly."
Wolf leaked his intention to veto the bill in a morning interview on KQV Radio in Pittsburgh. He had until Friday to act.
His consideration of the bill made it clear "that this legislation violates federal tax law, as it would be considered an impermissible cash or deferred arrangement," Wolf said, "In addition, the bill forces newly-hired employees to pay down the unfunded liability of existing pension plans, caused by years of government failure to make necessary payments, while denying those new employees the full benefit of their contributions."
Wolf said he believes he and Republicans "are moving toward common ground" on pensions and the bill no longer is like the original Senate Bill 1, which curbed benefits for existing employees.
"My veto today is not to say I'm just throwing this out, but to say let's get back to work," Wolf told the radio station.
Top Senate and House Republicans said they were dismayed by the governor's decision.
"Further, the notion that we are close to a compromise on a pension reform plan, when we only learned this morning of the veto via the press, is a bit disingenuous," said Senate President Joe Scarnati of Jefferson County and Majority Leader Jake Corman of Centre County.
Those issuing the statement included House Speaker Mike Turzai of Marshall and Majoroity Leader Dave Reed of Indiana County.
They said the bill would have saved $10 billion over 30 years.
"It is remarkable that Gov. Wolf would oppose a proposal to move new public employees into a 401(k)-style retirement plan which he himself adopted for his employees at Wolf Organization," the senators said in a joint statement. "Apparently, the governor believes this type of plan, which is common in the private sector, is adequate for most hard-working Pennsylvanians but not for legislators or members of public employee unions."
Wolf's staff has strongly denied being influenced by union campaign contributions.
The governor's contention that the bill violates federal tax law "sounds like a convenient excuse on a bill he determined a long time ago he would veto on behalf of public sector unions," said Matthew J. Brouillette, president and CEO of the conservative Commonwealth Foundation.
Brouillette said Wolf "wasted a rare opportunity to meaningfully reform a broken public pension system that's piled up $53 billion in debt. Instead of safeguarding public employees' futures and taxpayers' wallets, Gov. Wolf is playing politics with the main driver of property tax increases across the state."
Many in the Capitol anticipated a veto, said GOP consultant Charlie Gerow. He said the action is "a setback on getting a real budget for Pennsylvania."
Had Wolf signed the legislation, that would have been "a big surprise," considering large campaign donations Wolf received from public-sector unions, Gerow said.
Wolf on June 30 vetoed a $30.1 billion Republican-drafted budget that does not raise taxes. He then vetoed another GOP priority, selling the state store system and privatizing wine and liquor sales.
"The Republicans passed a budget that contained their priorities and nothing else," Wolf spokesman Mark Nicastre said Thursday. "The Republican budget failed to include a commonsense severance tax (on natural gas.) It does not restore cuts made by Republicans to education over the last four years or reduce property taxes, and the Republican budget would increase, rather than responsibly address, the structural budget deficit."
(c)2015 The Pittsburgh Tribune-Review (Greensburg, Pa.)
