Corbett defends linking pensions, liquor, to taxes
HARRISBURG – Gov. Tom Corbett said Thursday that legislative approval of changes to public-sector pension systems would make him more open to the possibility of raising taxes to balance the state budget.
But in an interview with the Associated Press at his residence, Corbett also said he won’t consider a tax on Marcellus Shale natural gas extraction without changes to the state-owned liquor system.
“They want me to do something that I’m not wont to do in the first place, right?” Corbett said, with four days left in the state government’s fiscal year. “Well, this is when I’m looking to get some bills done that are important for the people of Pennsylvania.”
The Republican has not necessarily agreed to new taxes. But if lawmakers approve those changes, “I’m much, much, much, much, much more open to it,” he said. “Because they’re helping me look to the future for the people of Pennsylvania. I have to get them to look beyond the election cycle.”
Discussions about a prospective public-pension overhaul continued Thursday, largely behind closed doors, as leaders of the House Republican majority sought to win over enough caucus members to pass the proposal. House Democrats are united in their opposition.
Corbett proposed similar legislation last year, but it went nowhere. He has redoubled his lobbying for it as he campaigns for re-election this year.
Corbett favors a proposal that would replace the current guaranteed pension system with a new “hybrid” system for future school and state employees that combines a defined-benefit program with a 401(k)-style plan in which they would make their own investment decisions.
Democratic legislators and labor unions argue that the proposal would slash pension benefits for new hires while providing no short-term reduction in the nearly $50 billion unfunded liability of the state’s two major public-employee retirement systems.
At a news briefing in the Capitol newsroom, where he seldom ventures, Corbett said passage of pension legislation would send a positive signal to credit rating agencies. A reduced rating could drive up property taxes, he said.
“It helps us demonstrate that we’re willing to start working on it,” Corbett said. “Doing nothing doesn’t help us at all.”
Lawmakers are scrambling to find a way to plug a $1.7 billion hole in the state budget caused by anemic tax collections and other factors. A $29.1 billion spending plan passed by the House Wednesday scaled back some of Corbett’s proposed spending to help fill the gap.
The state House passed a liquor privatization bill last year but it has been stuck in the Senate ever since, even though the House GOP spending plan counts on hundreds of millions of dollars in new revenue from it.
Rep. Joseph Markosek, the ranking Democrat on the House Appropriations Committee, said Thursday that Corbett is holding the 2014-15 budget hostage over issues that have no bearing on the revenue gap.
On Thursday, Corbett said he could support less ambitious changes to how alcohol is purveyed in Pennsylvania.
“I believe (in) giving the people choice and convenience,” he told the AP. “Do you think it’s really that hard … for the Legislature to say, ‘Yeah, let’s give them wine and beer in grocery stores’?”