Pension reform, gaming fix/expansion headline action items for legislature’s remaining session days

Author: Jason Gottesman/Monday, October 24, 2016/Categories: News and Views

With the 2015-2016 legislative session of the Pennsylvania General Assembly expected to come to a close Wednesday, lawmakers started separating the wheat from the chaff in terms of what might become law Monday with items like pension reform and a possible fix and/or expansion of gaming in Pennsylvania taking top position of what lawmakers hope to get done before heading home for the election.


On pension reform, the legislature Monday circled behind closed doors once again to vet a potential Republican agreement on a plan after the Independent Fiscal Office issued an actuarial analysis of the proposed amendment to Senate Bill 1071.


According to the analysis, put together by the IFO after the dismantling of PERC earlier this year, the pension reform plan being most heavily considered at the present moment would change the current defined benefit plan for future hires by providing a choice between two different side-by-side hybrid pension plans with different contribution rates and multipliers and a straight defined contribution plan.


The plan also makes a number of other changes including altering the vesting period, requiring any lump sum withdraw be actuarially neutral, extending the shared/risk shared gain provision of Act 120, and providing new actuarial funding provision, among others.


The analysis showed that while the plan could save anywhere between $209 million and $2.6 billion over 30 years and shifts the risk away from the taxpayer from the Commonwealth to the benefit holder, it also lowers the amount of retirement benefit for the retiree and has a lower amount of replacement income than the current plan.


After seeing the note Monday, top Republican lawmakers were still hoping to get a final reform plan completed by the time the legislature intends on putting a stop to substantive votes for the session.


“Ideally we’d like to do a conference committee tomorrow [Tuesday], but we’re waiting for our friends from the House to give us the ‘high sign’ that they’re ready to move forward,” said Senate Majority Leader Jake Corman (R-Centre).


Sen. Corman also didn’t mince words about the importance of the issue to what he sees as the overall fiscal health of the Commonwealth and its pension plans now and into the future.


“What we’re trying to accomplish is trying to move the risk from the taxpayers,” he said. “It would be if we can get it accomplished…it would be a historic vote. This would be the first pension bill that we voted on that doesn’t benefit today’s budget or today’s issues, it benefits the future.”


While House Majority Leader Dave Reed (R-Indiana) confirmed to The PLS Reporter Monday that the House shares the hope that pension reform can get done before the end of Wednesday, it was unclear after Monday’s House caucus whether there was enough support there to garner a majority in the House to get the plan to the governor’s desk after a conference committee report.


“We’re still discussing pensions and I would expect that to come to a head pretty soon,” said House Republican Caucus spokesperson Steve Miskin after Monday’s caucus.


He said while the bill “has support” with in the House Republican caucus, whether there’s enough support is something “obviously we’ll find out.”


“The caucus discussions were pretty simple: is this the perfect bill in people’s minds? For some people it’s a great bill, for some people it’s a very strong bill, for some people they’d obviously like to go further,” he added. “This is the bill in front of us and it has some really positive [components].”


In the House, Republicans should expect to do a large share of the heavy lifting in getting the bill accomplished should it come to a floor vote.


Monday, House Appropriations Committee Minority Chairman Joe Markosek (D-Allegheny) noted why member of the House Democratic Caucus oppose the legislation.


“The new pension system would represent a three-headed monster if it succeeded, and it would quickly be labeled as one of the most complex plans in the country,” he said.


“Implementing the new plan would cost Pennsylvania taxpayers $20 million in start-up and administrative expenses, and it would cost school districts and the commonwealth $100 million over 10 years. Also, the plan falls short of any meaningful reduction in debt, and we would not realize any savings until about 2040. But even then, those savings would be minimal.”


Sen. Corman said despite the plan not being perfect, it represents a product that’s “achievable.”


“Some of my members would like it more like Senate Bill 1 or a straight defined contribution, but that’s not achievable, the governor’s not going to sign that,” he said. “If it’s a purely academic process, we might have a different product, but it’s not an academic process, it’s a political process and this is what we can get together to gather the votes and what the governor will sign.”


He added that the change ensures that the Commonwealth and local school districts will not have to endure the kind of funding pain they are currently going through in the future.


Speaking of the governor, according to press secretary Jeff Sheridan, he will review the legislation if it reaches his desk.


"Gov. Wolf has worked to try and reach a compromise agreement on comprehensive pension reform," he said. "While the governor has indicated he will sign reform if it gets to his desk, he first looks forward to reviewing the final product developed by the House and Senate Republicans before taking action on any potential legislation."


As to gaming, when asked if the House currently has plans to return to voting session after the General Election, House Majority Leader Reed told The PLS Reporter the failure to enact gaming expansion and a fix to the nixing of the local share assessment by the Pennsylvania supreme court might play a factor in that decisions.


“We hope not, but obviously we’d like to get a conclusion on the gaming issue, too. We’re still waiting to hear from the Senate on that,” he said. “We always said fix the local share, get us the $100 million for the budget, and we’re done.”


Sen. Corman, however, noted that the issue remains a complicated one in both chambers.


“It’s sort of like putting the square peg in a round hole, there’s a lot of different interests in that from just trying to fix the LSA to iGaming, which obviously we want to get done since that was part of the budgetary process, but to try and get that done has been elusive,” he said. “We’re working through it. Hopefully, we’ll still be able to achieve it.”


He noted there is a vehicle in place—House Bill 1887—should a global agreement occur in the next couple of days, but he noted a bipartisan effort will be needed to get any gaming bill across the finish line.


“I don’t believe we’d have 26 Republican votes for any gaming bill, because a decent amount of our Republicans don’t believe in gaming at all, so to increase gaming in Pennsylvania, we need both sides,” he said, noting his caucus is working with Senate Democrats to develop a product they support.


That being said, he noted while the issue could wait for the new legislature, there is an incentive to getting gaming done this session.


“I’d rather not [leave it until next session], because then you bring in all sorts of other gaming issues…which just weighs everything down,” he said. “So, we are efforting to try and contain it here and get that accomplished, but we’ll see.”


Another to-be accomplished issue, increasing consumer convenience in alcohol sales, bubbled up Monday when an amendment was attached to House Bill 1169 by the Senate Rules Committee.


The amendment is aimed at increasing customer convenience by allowing beer distributors to sell beer in any amount/configuration or growler for off-premises consumption, among other changes like allowing Sunday sales to start at 9:00 a.m. and removing the food requirement and allowing mixed drinks to be consumed in stadiums in the same areas where beer can be consumed.


The bill later passed the Senate—with only Sen. Scott Hutchinson (R-Venango) voting opposed—and heads to the House where Republican spokesperson Steve Miskin said the House will review changes made to the bill before deciding whether to take it up for a vote.


According to Sen. Corman, the legislation was the product of negotiations between the four chairmen of the liquor oversight committees in the legislature.


“It goes to continue to try and deal with convenience,” he said. “For years we’ve tried to come up with a global package on liquor and it’s always failed by its weight.”


One bill that the legislature was looking to get done made some of its last moves to the desk of Gov. Wolf Monday night when the Senate concurred in House amendments to Senate Bill 984—a move that will likely lead to the full legalization of ride-sharing services like Uber and Lyft in Pennsylvania with the governor’s signature.


While the bill did pass the Senate 47-1 on Monday, Senate Minority Leader Jay Costa (D-Allegheny) voted against the bill due to his belief that the legislation inappropriately puts a retroactive cap on fines that can be placed on these companies that he feels could lower the $13 million fine placed on Uber by the PUC to $250,000.


Sen. Corman, both in committee and on the Senate floor, assured legislators that lowering such a fine is not the legislative intent of members.


Monday, Gov. Wolf’s press secretary Jeff Sheridan noted the governor is looking forward to bringing a final agreement to a conclusion.


"The governor has supported the legalization of ride-sharing companies like Uber and Lyft throughout Pennsylvania, and he believes we should be finding ways to help these companies grow across the commonwealth," he said.


"The governor looks forward to finalizing a long-term agreement that he can sign and he is encouraged by the progress of this legislation, but he will review the final product before making a decision."


The General Assembly now has two voting session days remaining in the current legislative session.