If You Are Not a Retired Teacher, Be Afraid of The State Budget

The following letter is from Mt. Lebanon resident John Ewing.

If You Are Not a Retired Teacher, Be Afraid of The State Budget

The European problems have caused the growth rate of the U. S. economy to be cut by half in the last several months. Congress is considering significant budget cuts. The slower growth and budget cuts will impact the ability of the Federal Government to give money to the States. Pennsylvania will be negatively affected by these cuts. The State has already reduced over 1000 positions across State Government and more reductions are likely because Pennsylvania’s economic growth has been reduced too. The slower growth at Federal and State levels will filter down to the local school levels in the form of higher taxes from problems we already know.

The State Employees’ Retirement System has 75% of the assets they need to fund retirements. The Public School Employees’ Retirement System has 69.1% of the assets they need to fund retirements. The strain on the State Budget from these two items will create a State contribution increase of over $2.5 Billion dollars over the next four years. The 2012-2013 pension cost increase at the State level will cost $520 Million more next year alone. Further growth in Medical Assistance, Long-Term Care and Debt Service increases will cost 480 Million more in 2012-2013. This total of a $1.0 Billion increase does not factor in increased Health Care cost increases in the State budget.

In other words falling State revenues are colliding with rising State expenditures at the same time the MLSD has undertaken a High School renovation in excess of $100,000,000. Can we really count on stable State subsidies next year? Can school employees really count on the pensions they are expecting?

John Ewing