Shift Ed Funds to Bolster Pensions

State Senate Republican leaders are pressing Pennsylvania Governor Ed Rendell to take advantage of an increase in federal education aid. They want him to redistribute state money to help fund public pensions.
When Congress passed a federal medical funding bill this month, lawmakers also approved a multi-billion dollar aid package for local school districts.
That gives Pennsylvania an unanticipated $380 million for education spending, and State Senate Republicans want Rendell to substitute that money for the 200 million dollar boost this year’s budget provides for the state basic education subsidy.
Caucus spokesman Erik Arneson says the Republicans want to redirect the state money, and use it to help pay for pension costs.

"So we think that it makes more sense to reallocate the 200 million dollars to the pensions, which are significantly underfunded. Even in this year’s budget we put less into the pension systems than the actuaries recommended we put in."

House Democrats oppose the idea, saying the state needs to maintain its support for education, no matter what federal aid levels are. Spokesman Brett Marcy says his caucus is skeptical about the proposal.

"What the House Democrats have been consistent in saying is, we cannot abandon our commitment to property taxpayers and abandon our commitment to our children to adequately fund public education in Pennsylvania. It has to be funded adequately at the state level."

The Senate Republicans say they’re worried all the federal money for schools will create a billion-plus dollar cliff, leading to budget problems when the funding disappears next year.