Corbett Plan Would Cut Pa. Pensions by $12 Billion

Corbett plan would cut Pa. pensions by $12 billion 

Posted: Tuesday, February 26, 2013 6:03 pm | Updated: 7:01 pm, Tue Feb 26, 2013.

Corbett plan would cut Pa. pensions by $12 billionAssociated Press |

State and school employees in Pennsylvania stand to lose nearly $12 billion worth of pension benefits over the next 30 years if Gov. Tom Corbett's pension reform plan is approved.The administration released a printed summary of the financial implications of Corbett's proposal late Tuesday afternoon.

The $12 billion in savings would come exclusively from the Republican governor's plan to reduce future benefits for current employees. It's unclear whether there is enough legislative support and, even if it's approved, unions have vowed a court challenge.
The summary says Corbett's plan to move new hires into a 401(k)-style plan would save more than $5 billion through 2043.
But those savings would be partly offset by proposed limits on how fast taxpayers' share of pension costs may grow in the next few years.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
Pennsylvania's state treasurer and a labor-affiliated research group on Tuesday criticized Republican Gov. Tom Corbett's plan to cut costs by diverting newly hired state and school employees into 401(k)-style retirement plans.
Democratic Treasurer Rob McCord and economist Stephen Herzenberg of the Keystone Research Center said the proposal wouldn't save money but would instead cost taxpayers more. It's a key provision in Corbett's overhaul of the state's two largest public pension plans.
An administration spokesman countered that the critics ignored Corbett's companion proposal to reduce future pension benefits for employees in the current, defined-benefit plan to save an estimated $11.5 billion over 30 years.
"Their argument is based on only half the facts," said state budget office spokesman Jay Pagni.
That proposal, however, is fraught with legal and political challenges, ensuring it faces a steep uphill battle in the Legislature and possibly the courts.
In a teleconference with reporters, McCord and Herzenberg said the introduction of the new plan would reduce the return on investments needed to provide benefits for the aging employees enrolled in the current plan as fund managers seek less risky assets.
At the same time, the cost of the state's 4 percent matching contribution for new hires automatically enrolled in the new pension plan will come from existing pension fund assets, further increasing the cost to taxpayers, they said.
"The governor's proposal will dig a deeper pension hole with taxpayers on the hook," Herzenberg said.
McCord, who is considered a potential challenger to Corbett's re-election bid in 2014, voiced concern about the governor's plan to initially reduce the taxpayers' share of pension costs and limit annual increases for several years.
McCord said it would add $5 billion to what is currently a $41 billion unfunded liability in the Public School Employees' Retirement System and the State Employees' Retirement System, which together include more than 800,000 active and retired members.
"It's basically a planned tax hike on anybody who plans on living in Pennsylvania in 2019 and beyond," he said, citing the year Corbett would complete a potential second term.
Corbett's proposal to reduce future benefits of current employees is all but certain to prompt a legal challenge from public employee unions even if it passes the Legislsature. Many Democratic lawmakers oppose it, and it has received a cool reception from the leaders of the Legislature's GOP majority.
On Wednesday, representatives of the two major pension funds are scheduled to appear before legislative committees scrutinizing the governor's state budget plan for the fiscal year starting July 1.

Morrisville Schools Discuss Cyber School Option

MORRISVILLE SCHOOLS
Morrisville schools discuss cyber school option

Posted: Wednesday, February 13, 2013 5:15 pm | Updated: 7:45 pm, Wed Feb 13, 2013.

Morrisville schools discuss cyber school optionBy GEMA MARIA DUARTE Staff writerPhillyBurbs.com

Posted on February 13, 2013       

 

A group of parents this week got a glimpse into the possibility of Morrisville High School becoming a cyber school.As part of the Morrisville School District’s Education Committee monthly discussion series dealing with the district’s future, the panel of four touched on how such a move could fit into Morrisville.

“It would get more students back to our schools,” Superintendent Bill Ferrara said at this week's meeting. “It would reduce the cost per student. In the long run it changes your operating cost.”

Currently there are a number of students who attend school outside the borough.
The three school board members and the superintendent who make up the committee touched on the following issues in a conversation with a group of 14 residents at the Tuesday night meeting:

• Cyber classes could be offered at home or at school
• Students may or may not be provided with computers
• Costs per student would be lower
• Cyber classes would cover core subjects, and maybe a few others such as health and foreign language
• Classes could be offered as early as the beginning of the 2013-14 school year

Cyber classes would provide students with more schedule flexibility.
The committee has been discussing the future of the district since November. Since then, members have come up with nine options. Each month, they discuss the pros and cons of each. For now, there's no hard deadline as to when changes might happen once the district decides on a route.
The options are:

• Keep the status quo
• Go to a five-period day (currently, the high school runs with six periods)
• Bring in cyber courses
• Increase the number of students attending Bucks County Technical High School in Bristol Township
• Send borough high school students to another district by paying their tuition to enroll
• Increase dual credit enrollment with Bucks County Community College
• Engage in a complete merger with another district
• Go to a split schedule (staggering school entrance times)
• Enroll students in multi-district cyber courses (a pool of districts offering a variety of online classes)

Morrisville has offered cyber classes during summer school since 2011 with online make-up classes in the district’s Dropout Prevention Program. It started with six students; by summer 2012, enrollment increased to 16.
The summer school program is based on a curriculum developed by the district’s faculty and implemented with the use of Compass Learning software, officials said.
“The use of cyber courses have enabled us to assist students in graduating and provided the opportunity to try new programs and work out the problems,” said school board President Damon Miller said. “Therefore, should we decide to increase the use of cyber courses to reduce the cost of our high school students we are confident we can provide a variety of options to our students.”
Ferrara explained that the summer school model would be implemented in any year-round program, but not all features would be used.
In cyber summer school, students take a test at the beginning of the program and a follow-up test after the program has ended. A student must score 70 percent or higher on the post-test to receive credit for the course.
A teacher is available at the school once a week to meet and assist students with the course work during summer school. Students also can e-mail teachers if they face difficulties during the week.
To add to the district’s cyber experience last year, Morrisville became a member of the Bucks County IU Bridge Program, a county-wide cyber school.
Additionally, four home-based students in three years have been placed in Morrisville's cyber alternative school.
The first student was unable to function in a normal school setting and remained in cyber alternative school in her junior and senior years. Since then, three other students have done the same.
A parent at Tuesday's meeting asked if science would be taught as a cyber class, resulting in the elimination of hands-on experience of lab time such as dissecting an animal.
Ferrara explained the district is already moving into virtual labs, a move that would eliminate the material costs, therefore saving the district money.
He added that cyber classwork would be geared at the pace of individual students, and wouldn’t be offered in a period-by-period style.
Because previous committee meetings were poorly attended by parents and residents, before delving into the cyber school option, the committee rehashed last month’s discussion on tuitioning out students to other districts.
A parent asked how the committee is determining the pros and cons of each option.
Miller said that it’s based on “what we feel.”
Another parent asked if merging was an option.
Yes, Miller responded, adding that Morrisville would have to find another district it is willing to merge with.

Potluck #72

A fresh one.  Nice turnout at last night's Education Committee meeting, by the way.

Corbett shifts stance on cuts to school funds

Angela Couloumbis, INQUIRER HARRISBURG BUREAU

Posted: Tuesday, February 12, 2013, 9:04 PM

HARRISBURG - The budget ax might not land on public schools after all.

For weeks, Gov. Corbett and members of his administration have sent strong signals that they would likely look to education funding for budget cuts if the legislature did not act to rein in the state's skyrocketing public-employee pension costs.
But on Tuesday, the governor softened his stance. Surrounded by school administrators at a news conference in the Capitol, he said it was the legislature that would ultimately have to choose where to cut in order to recoup dollars for the state's two major pension funds.
"In years past, the legislature has taken what we've said, and come in, and we've negotiated," Corbett said. "So it's now over in their camp. . . . We've made our proposal, now they get to massage it."
He added: "I've said this before: What goes at the front end into the budget isn't what comes out at the back end."
As recently as last month, the administration was offering a somewhat different narrative.
The Republican governor told the Inquirer Editorial Board on Jan. 23 that he would not be cutting aid, as he had in previous years, for public schools or the state-related universities - Pennsylvania State, Temple, Pittsburgh, and Lincoln. But he said he would not rule out changing that scenario if legislators fought his proposal to stem pension costs.
His budget secretary, Charles Zogby, also told a room full of lobbyists, advocates, and reporters at a Jan. 28 press club luncheon that pension reform was "essential" to avoiding deep and immediate budget cuts. When asked where those cuts might occur, he noted that the bulk of the next fiscal year's pension costs arise from benefits paid to public school teachers.
"There will be some who will argue that because it's a public-school funding cost, that maybe it ought to be borne in other things in public education," Zogby said.
That stance angered top Republican legislators, who balked at what they perceived as a strategy to force them to act on the complicated - and controversial - issue of changing pension benefits by holding public school funding hostage.   

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A number of legislators have concerns that Corbett's pension overhaul plan, which, among other things, calls for changing the way benefits for current employees are calculated, would not pass muster in the courts.
But Corbett used Tuesday's news conference mostly to sell his new education agenda - this after suffering politically for deep cuts to public schools over the last two years.
The governor noted that his $28.4 billion budget proposal for the fiscal year that begins July 1 devotes an additional $90 million to education.
And once again, he trumpeted his plan to sell the state liquor stores and turn the projected $1 billion in proceeds into block grants for public schools over the next four years.
That will be a heavy lift. Several governors before him have tried to privatize the liquor system, running into opposition from both Democrats siding with unions and conservative Republicans who favor strict controls on alcohol sales.
Corbett said he was optimistic, noting that public opinion is on his side. The latest poll to bear him out was announced Tuesday by the Commonwealth Foundation, a Harrisburg-based libertarian think tank, which found 60 percent of Pennsylvania voters strongly supported ending the state monopoly on the sale of liquor and wine.
"Selling liquor is not a core function of government," Corbett said. "Education is."

Morrisville Files Court Paper to Dissolve Pool Group

MORRISVILLE
Morrisville files court paper to dissolve pool group

Posted: Thursday, February 7, 2013 4:55 pm

Morrisville files court paper to dissolve pool groupBy GEMA MARIA DUARTE Staff writerPhillyBurbs.com

Posted on February 7, 2013

 

Morrisville Borough Council has filed a motion in Bucks County Court to take ownership of the former community pool's property inside the borough's 40-acre Williamson Park.
The petition is to legally dissolve the group that had managed and still owns the property.

Sean Kilkenny, the borough’s former solicitor working on the case, filed the petition last week for involuntary dissolution of the Morrisville Community Swimming Pool Inc. -- the nonprofit group created in 1955 to take over ownership and oversee the management of the pool property at 300 N. Delmorr Ave.

It managed the property until 2009. Although the board of directors has since dissolved, Morrisville Community Swimming Pool Inc. is still legally an organization.
Under the petition, the borough is seeking the “distribution of the corporation’s assets to the borough as the sole creditor,” according to the petition.
Morrisville has paid the group’s state and federal liens and outstanding mortgages in the amount of $29,565 -- an amount that was negotiated after the pool's closing.
In the recent court filings, the government's lawyer said it needs the help of the one remaining corporation official and its treasurer until early January. That's Joni Cappuccio.
As treasurer, Cappuccio refused to sign the documents that would turn ownership over to the borough, Kilkenny's law office said Thursday.
"Despite the cooperation of Ms. Cappuccio," reads the petition. "Ms. Cappuccio refused to cooperate in the documentation required for conveyance of the property to the borough, including an agreement of sale, settlement documents and a deed."
Cappuccio said she has no authority to do such a thing.
"I have been more than cooperative. I've done everything they have asked me to do," she said. "They wanted me to sign the pool over, but I don't have the authority to do that because there is no board of directors and in accordance to the bylaws of the corporation I have no power or authority to do that, sign the pool over."
She added that she's puzzled as to why the borough would need her since the 1955 deed, according to Cappuccio, has a clause stating that if the pool is abandoned, ownership of the property would revert to the borough.
But that's not automatic, according to Kilkenny's law firm. Some sort of process needs to happen for the borough to obtain the title, the firm said Thursday.
Morrisville Community Swimming Pool has been dormant since 2009, when the board of directors was disbanded.
Cappuccio has continued overseeing the group’s bank account, which still has the approximately $600 left when the group ceased operations, according to the court filing.
“However, Cappuccio did not participate in, nor was she responsible for, any mismanagement of the corporation,” according to the court papers.
She submitted to the borough her letter of resignation from the group Jan. 2.
Morrisville Community Swimming Pool Inc. acquired two properties from the borough on Sept. 28, 1955, and May 8, 1963. The deeds had restrictions: The property could only be used for a nonprofit community swimming pool unless the borough permitted other usage; and the property would always remain a park, playground and swimming pool area, according to the filed petition.
The group constructed a swimming pool in 1955, then a second swimming pool in 1963. The latter was destroyed by flooding and removed from the property.
In 1999, the pool group obtained additional funding through two mortgages in the amounts of $30,000 and $10,000 held by Atlantic National Trust. What the money was used for has not been disclosed.
From about 2004 to 2006, the nonprofit group didn't pay its federal and state unemployment taxes. As a result, the Internal Revenue Service, the Pennsylvania Department of Revenue, and Pennsylvania Department of Labor and Industry filed liens against the property for the unpaid taxes for those who worked at the pool, according to the court papers.
In 2007, Atlantic National Trust initiated foreclosure proceedings because of the group’s failure to pay on the two 1999 mortgages.
In December 2010, borough council expressed concern with the deteriorating condition of the property and initiated a takeover plan. The council, by increasing real estate taxes throughout the borough by 4.25 mills, raised $58,898 to acquire the property.
Cappuccio granted a power of attorney to the borough’s lawyer, Kilkenny, who negotiated the group’s debt with Atlantic National Trust, and federal and state agencies.
On Nov. 21, 2011, the borough agreed to pay Atlantic National Trust $18,500 for the two outstanding mortgages. The mortgage foreclosure action brought by the company was terminated by Bucks County Court last Dec. 13.
Meanwhile, the IRS compromised, agreeing to $2,500 as payment for the outstanding federal lien.
The state revenue department agreed to waive its actions against the pool group in return for $3,473. Labor and industry agreed to do the same for $5,092, according to the court filings.
The court papers do not mention the initial amount owed, and borough officials didn’t have the exact totals.
“The borough discharged all outstanding debts of the corporation, with the cooperation and acknowledgement of the corporation’s sole remaining officer. Accordingly, the borough’s status as a creditor of the corporation is clear, the corporation has admitted the borough’s status as creditor, and the borough is entitled … to seek issuance of articles of dissolution of the corporation and distribution of the corporation’s assets,” Kilkenny stated in the petition.
The borough is planning to involve the community in deciding what is to become of the property if the court approves the petition, council President Nancy Sherlock said.

Potluck #71

Corbett: Overhaul pensions — or else

      

Angela Couloumbis, INQUIRER HARRISBURG BUREAU

Posted: Tuesday, February 5, 2013, 11:57 AM

HARRISBURG - Gov. Corbett on Tuesday unveiled a $28.4 billion budget for the next fiscal year that appears to hold fast to his campaign promise of no new taxes, and would send more dollars to public schools as well as health and social welfare services.

But the more generous spending - the governor's plan is about 2.7 percent more than this year's $27.65 billion budget - comes with a big caveat: the legislature must approve Corbett's proposed overhaul of Pennsylvania's public pension spending.The pension question will be controversial, as it would require all new employees to move into a 401-K-style retirement plan and make significant changes to the way future benefits are calculated for current employees."The rebuilding of the Commonwealth's programs and services begins today," Corbett said. But, he warned: "We must take action [on pensions] to provide budgetary relief, to prevent these costs from consuming our ability to fund core programs and services."He added: "Now is not the time to be timid in our approach. Now is not the time to cling to old ideas and the status quo . . . Now is the time to be bold. Every one of us had come here to make things better for all Pennsylvanians."As expected, the governor's budget also makes a pitch for several other big-ticket items, including privatizing Pennsylvania's wine and liquor stores and raising several billion dollars for roads, bridges and mass transit.Specifically, Corbett wants to sell off the state stores - and allow supermarkets, convenience stores and big-box stores to finally sell beer and wine - in order to raise $1 billion. That money would then be given to public schools, over four years, to spend on school safety, early learning programs and other designated areas. The first installment of roughly $200 million would be available for the 2014-15 school year.On transportation, the governor's plan would uncap the so-called oil franchise tax, a fee levied on the wholesale price of gas (which is now capped at $1.25 per gallon). The plan would be phased in over five years, and, coupled with cuts in some administrative costs, would produce a half billion in funding in the next fiscal year, the administration estimates.

All are major proposals that will require nimble negotiating with the legislature. And on his transportation plan, Corbett will have to beat back criticism from some corners that uncapping the oil franchise tax would result in an increase for consumers of gas at the pump - and buck the governor's no-tax pledge.

But the big fight with the legislature will likely center around pension changes. Corbett's plan would reduce future pension benefits for current employees by changing the way those benefits are calculated. Even if the legislature approves his proposal - a heavy lift to begin with, as legislators would also be reducing their own pensions - it will likely face a legal challenge and could be tied up in the courts for months or even years.That leaves this question: how will Corbett make up for the $175 million he estimates in savings from pension reforms in the next fiscal year if the legislature doesn't approve his pension proposal, or if it is held up by legal challenges.The governor and other administration officials have signaled that if the legislature does not act, they will likely have to look for cuts in education, setting the stage for a showdown come the summer. The budget must be approved by July 1, the start of the new fiscal year.As it stands now, Corbett's proposal calls for a $90 million increase in basic education funding, and would increase spending on early childhood education, including a 5 percent increase for pre-kindergarten programs. Higher education would be funded at this year's levels, an improvement over the steep cuts over the last two years.Corbett's budget proposal would also boost funding by $40 million for people with intellectual and physical disabilities to live independently, and would expand community health services to help people in rural areas.His spending plan also calls for a series of continuing business tax cuts. Corbett's budget would end the capital stock and franchise tax, increase the amount of net operating losses businesses could carry forward from $3 million to $5 million; and begin in 2015 a long-term reduction of the corporate net income tax from the current 9.99 percent to 6.99 percent.

Education Politics will be Key in Corbett's Plans

Education politics will be key in Corbett's plans

    

Posted: Saturday, February 2, 2013 11:37 am

Education politics will be key in Corbett's plans

Associated Press |

                                                   

HARRISBURG, Pa. (AP) — The plight of Pennsylvania's public schools will dominate many of the Legislature's debates this spring as the politics of education grows increasingly volatile.It'll start with Gov. Tom Corbett releasing his budget proposal Tuesday.

Corbett has left open the possibility that he'll propose more aid for public schools. School districts continue to struggle a year after Republicans pushed through deep reductions in state support.
But he's also sent signals that cuts in aid to schools are possible if the Legislature doesn't approve the changes he'll propose to public pension benefits.
Senate President Pro Tempore Joe Scarnati, a Republican, is warning Corbett against balancing cuts to schools against the pension changes. Democrats say Corbett and Republican lawmakers are worried about a public perception that they've bungled their handling of public schools.