Pennsylvania Week in Review: Battle over pension reform continues

By PA Independent Staff

The battle over public pension reform is ongoing in Harrisburg, with Democratic Gov. Tom Wolf and Republican lawmakers still unable to reach a compromise.

In the meantime, big pension bills are coming due. While the state’s pension problem is often discussed in abstract terms, there could be a tangible effect, as demonstrated by a proposal to raise fishing license fees to pay for burgeoning retirement costs.

At the same time, public-sector unions are blasting GOP attempts to move new hires into a 401(k)-style plan, even though they’re offering the same retirement packages to their own employees.

We took a look at those pension-related issues this week. Here’s a look back:

Anglers could be on hook for rising pension costs

The Pennsylvania Fish and Boat Commission is searching for about $9.1 million in new revenue, most of it needed to pay for escalating pension costs to come in the near future.

To get it, lawmakers are exploring raising the price of fishing licenses and permits for the first time since 2005.

Under a proposal authored by state Sen. Jim Brewster, D-Allegheny, the increases would apply to the 2017 license year. The annual resident license fee would rise from $21 to $26.25 and annual senior licenses would increase from $10 to $12.50, both 25 percent hikes

John Arway, the commission’s executive director, called it a “painful” but necessary position to take, especially considering his agency receives no general fund dollars. The commission has been sliding down a fiscal slope as costs escalate, funding remains level and license sales — curbed by past fee increases — remain down from a high set in 1990, he said.

“Right now, the fiscal cliff’s imminent. That’s why we’ve chosen to look at increasing fees for fishing,” Arway said.

Pennsylvania labor union leaders blast 401(k) plans they offer their own staff

Pennsylvania labor union leaders accrue lucrative pensions while their own employees are offered inferior retirement plans.

In the state’s ongoing pension reform battle, labor leaders like Philadelphia Federation of Teachers President Jerry Jordan have strongly opposed using 401(k) retirement plans as a way to curb skyrocketing pension costs, begging the question why 401(k) plans are good enough for his own employees but not for PFT members or Jordan himself.

Jordan and other PFT leaders have been accruing a public pension since they stopped teaching more than 30 years ago, but their own office staff is not offered a defined-benefit pension plan.

Philadelphia City Council wants more school oversight

As the new school year is set to begin, politicians and school administrators are picking right up where they left off.

Earlier this summer, the Philadelphia City Council raised concerns about how the School District of Philadelphia was spending taxpayer money. With schools — and the legislative session — set to reopen this month, Council President Darrell Clarke renewed his call for the creation of a fiscal oversight agency to keep an eye on how the district spends money.

Kane’s use off outside law firms draws scrutiny

When Attorney General Kathleen Kane sued a chain of for-profit nursing home facilities across Pennsylvania, she had backup from a powerful private law firm that stood to reap millions from a controversial arrangement with the state’s top prosecutor.

The deal allows Cohen Milstein Sellers & Toll, a firm with offices spread across six cities, to siphon off a large cut of any fines imposed upon the nursing homes, which, Kane alleges, fell short on its promises of care for residents.

Critics of such contingency fee agreements contend they’re ripe for abuse and note that campaign contributions often flow to attorneys general, who then dole out the lucrative contracts to political allies.

Golden Living, the nursing home, has fought back in court, arguing the complaints didn’t prompt the investigation; rather, the private law firm shopped its services — and its large contingency fees — to the state. Versus hourly pay, the firm will get $21 million of the first $100 million in fines collected under its agreement with the AG’s office.

“This Cohen Milstein-driven investigation is an effort to create a ‘problem’ where none exists in a search for profits for itself,” the nursing homes argued in a separate lawsuit that aims to dismantle the firm’s agreement with the state.