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For Immediate Release
June 9, 2011
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Brubaker Bill Would Save Surplus to Fund Pension Obligations
HARRISBURG – Sen. Mike Brubaker (R-36) introduced
legislation today that would save a portion of any current or future budget
surplus to fund the state's existing pension obligations.
Senate Bill 1132 would transfer at least 25 percent of any
budget surplus into a newly created Pension Obligation Reserve Fund. The Fund
could be used by the General Assembly to help ease the blow of the expected
increase in state payments to the State Employees Retirement System (SERS) and
the Pennsylvania School Employees Retirement System (PSERS) in future years.
Statutorily required payments designed to pay down the
unfunded liabilities of the state's pension systems will have a significant
impact on the state budget over the next several fiscal years, Brubaker said.
"State pension contributions are expected to increase
dramatically in the near future, so it is important to save money now to ease
the strain on future budgets," Brubaker said. "It is vital to put these
unanticipated revenues to the best possible use for the Commonwealth's long-term
financial health to provide the greatest benefit to the taxpayers while meeting
our legal obligations."
Through the end of May, revenue collections for the current
fiscal year have exceeded estimates by more than $539 million. Under current
law, 25 percent of any final budget surplus is transferred to the state's Budget
Stabilization Reserve Fund, also known as the Rainy Day Fund. Brubaker's
legislation would save an additional 25 percent of any surplus to help make
future pension payments.
"Legislators will face a great deal of pressure to spend
this surplus this year, but we must also consider the state's long-term fiscal
stability," Brubaker said. "Saving a portion of this surplus now in order to
fund future pension obligations will give the General Assembly additional
flexibility to avoid tax increases and painful service cuts in future fiscal
years."
CONTACT:
Mark Ryan
(717) 787-4420 | 
