Share:
House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | March 1, 2013 03:55 PM |
|---|---|
| From: | Representative Karen Boback |
| To: | All House members |
| Subject: | Pay-Down of Pension Liabilities Through the Use of the Johnstown Flood/Liquor Tax |
The significant current unfunded accrued liabilities of the Commonwealth’s two State pension funds, the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS) have received a great deal of attention in recent months. The latest actuarial valuations show the following current actuarial unfunded accrued liabilities:
To address the growing unfunded liabilities of the pension systems I am sponsoring legislation to mandate that the Liquor Tax, known to many as the Johnstown Flood Tax, be transferred to the SERS Fund and the PSERS Fund rather than the General Fund to pay down a portion of the large unfunded accrued liabilities. Estimated Liquor Tax receipts, as shown in the Governor’s 2013-14 budget proposal, are $310,400,000 in 2012-13 and $325,400,000 in 2013-14. While the amount of annual Liquor Tax revenue may seem small in comparison to the unfunded liabilities of the pension systems, paying down portions of the unfunded liabilities sooner rather than later saves money in the long run because liabilities are financed at a rate of 7.5% (the assumed rate of return for each pension system). We cannot allow continued payment delays on known obligations to further increase the burden on local taxpayers. Please join me in my efforts to pay down pension system liabilities, which will improve Pennsylvania’s overall business climate, by cosponsoring this proposal. KB/brz |
Introduced as HB1131