Senator Brubaker on Pension Issues and Lottery Privatization

Finance Committee Will Focus on Pension Issues, Lottery Privatization

As lawmakers return for the 2013-14 legislative session, addressing the Commonwealth’s serious financial challenges will be among my highest priorities. I was honored recently to be re-appointed as Majority Chairman of the Senate Finance Committee, and I look forward to playing an active role in working toward constructive solutions to these challenges this year.

Two critical issues will top the committee’s agenda in the early parts of 2013 – public pension reform and a full airing of the Governor’s proposal to privatize the management of the Pennsylvania Lottery. Both of these issues promise to have lasting effects both locally and statewide, and my priority will be to gather information from all interested stakeholders and reach a resolution that improves the Commonwealth’s long-term financial outlook.

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In recent years, lawmakers have laid the groundwork for comprehensive reform of the state’s public pension systems. A new law approved in 2010 cut more than $4 billion in costs to the state’s public pension systems and provided important protections for taxpayers. As Chairman of the Senate Finance Committee during the previous legislative session, I held hearings on this issue and worked with representatives of the public employee retirement systems to determine the depth of the problem and explore viable solutions.

Last year, I joined legislative leaders in introducing legislation that would transition new employees in the state’s public pension plans from a defined benefit program to a defined contribution plan. While this legislation would not solve the problem entirely, this step would provide significant long-term savings to taxpayers. The Governor and Senate leaders have identified pension reform as a top priority in 2013, and I look forward to working with them to resolve this issue in a way that is fair to taxpayers, public employees and retirees.

The governor’s recent plans to outsource management of the Pennsylvania Lottery to a private company have raised a number of questions regarding the future of programs and services for older Pennsylvanians. Some of these issues include the percentage of lottery proceeds that will continue to benefit seniors, the possibility of further gambling expansion, contingency plans if the private management firm fails to meet projections and the potential financial gains or losses that should be expected for the state.

Any proposal that spans decades and involves billions of dollars for important state programs for seniors must be evaluated in an open and transparent manner. To get a clearer picture of the governor’s privatization plans, the Senate Finance Committee will hold a public hearing on January 14 to gather testimony regarding the future of the Pennsylvania Lottery. The testimony gathered during this hearing will play an important role in ensuring any changes to the current lottery management meets the intended goal of better protecting our seniors.

In addition to these issues, the Finance Committee will consider any legislation that is introduced to change state tax laws. This panel played an important role in making comprehensive reforms to the Tax Code last year, and I look forward to working with committee members again in 2013 to consider other potential changes that could improve the quality of life for Lancaster and Chester county residents.

For more information on issues of importance to Pennsylvania residents, please visit my website at senatorbrubaker.com.