HARRISBURG, Pa. (AP) — A report issued Monday by Pennsylvania Gov. Tom Corbett's administration warned of higher taxes, program cuts, lower business growth and steeper borrowing costs because of the state's financial obligations toward the two large public-sector pension plans.
The budget office report said the State Employees' Retirement System and the Public School Employees' Retirement System together have an unfunded liability of $41 billion.
Growing pension costs could force spending cuts throughout the state budget, according to the report, a scenario made even worse by projections of higher spending on debt, medical assistance and prisons.
"Like an oncoming tidal wave, pension costs threaten to overwhelm the general fund budget and the vital programs and services that it funds," the report says. The same dynamic is expected for public schools, said the report, which was published by Corbett's budget office.
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