The tremendous financial crises looming for the state pension system hangs over Pennsylvania taxpayers like the sword of Damocles.  Yet people know little about it and many legislators have yet to address it.  Nearly a year ago, the Town and Country offered an editorial describing it.

                We stated in part, “It was just eight short years ago when the Pennsylvania Legislature agreed to increase teachers’ pension benefits by 25 percent as part of a political deal that also saw their own pension benefits increase.  To make that action politically acceptable, legislators delayed increasing taxpayer contributions until 2012.” 

                That’s when somebody will have to pay.

                These plans are “defined-benefit” which means that beneficiaries receive a predetermined amount regardless of the pension investment plans’ performance.  Those who argue that their defined-benefit plan is responsible and doing well need to ask themselves the question, “Is the value equal to or greater than what I am contracted to receive?”  The difference between the pension’s value and what is guaranteed needs to be paid by someone (read taxpayer).  Don’t let anyone fool you – the figures don’t come close to balancing.

                More and more school district officials in Pennsylvania are aware that when the horsehair breaks and the sword drops, they will be the ones standing under it – through no fault or decision of their own!  Taxpayers will be standing with them.

                The issue will be addressed at the upcoming meeting of the Upper Perkiomen School Board on February 11, starting at 7 p.m.

                Board President Harry Quinque wants to offer the public the opportunity to hear about the issue and the discussions that should follow.  There is a real possibility that current state law will not allow school boards to raise taxes high enough to cover the payments that will be required by – you guessed it, state law.  If the Commonwealth fails to come through with increased contributions to the retirement fund, what will happen?  This is not a problem brought on by the school boards.  It was inherited from state legislators in 2001!

                The continuing practice of state legislators failing to plan for the impending 2012 debacle is getting worse.  The budgeted state contribution to the school employees’ retirement has dropped from $451.2 million in 2008 to $334.5 million in 2009. 

                Part of the problem is that government employees are due to receive the same pension benefits. 

This newspaper supports Quinque as he brings this issue to the board table to educate the public about it.  We hope and support any efforts for a board resolution to send a message to Harrisburg to reform the pension system and increase the state’s share of the payments.

                Without action taxpayers may have to brace for an enormous property tax increase (estimated at 29 percent in 2012). 

                Attend the meeting on February 11 and become informed.  The Upper Perkiomen School Board meets at the Education Center, 2229 East Buck Road in Upper Hanover Township.