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Pension Problems Could be Budget Growth Downfall

Pennsylvania Governor Tom Corbett's budget discussions have lately included warnings about the state's rising pension costs, but union representatives say those bills have to be paid.

Mike Crossey is president of the state's largest teachers' union, the Pennsylvania State Education Association. He acknowledges that pension costs are going up, but he says the state's unfunded pension obligation can also be traced back to a deal made in 2001, when state and school district contributions were not boosted along with a hike in benefits.

"The employees have been paying their side, their fair share of this, and it's the state and the districts that didn't pay in their fair share, so now they turn around and they say, 'Well, we want another bite at the apple and we want you to reduce pensions.' It's like, 'Well wait a minute, we paid our fair share,'" said Crossey.

Crossey said the most important pension reforms have already happened: a law passed in 2010, which reduced benefits for future employees, and increased the state and school districts' pension fund contributions.

"Act 120 is a responsible solution to a debt owed by the state. This is all debt created by, one, by the state not paying its share for a 12-year period, and two, by dropping [drops] in pension funds from the two recessions," said Crossey.