WEST HAZLETON - Pension obligations have the potential to harm Pennsylvania's financial outlook, and state Rep. Mike Tobash said Friday state officials need to prevent that from occurring.
"We really need to stop the bleeding," Tobash, R-125, said during the Legislative Roundtable sponsored by the Northeast Pennsylvania Manufacturers and Employers Association at the Top of the 80's Restaurant.
About 50 business people listened to Tobash and other Northeastern Pennsylvania legislators discuss their ideas for pensions, the state budget and other economic issues.
Tobash said Gov. Tom Corbett's $29.4 billion budget proposal, which was unveiled Tuesday, includes an effort to slow the growth of spending on pensions, which could top $6 billion by 2018.
"There are a lot of plans being offered," according to Tobash.
He said his is a hybrid proposal that includes elements of defined benefit plans, in which workers are guaranteed a certain monthly payment on retirement, and defined contribution ones, in which employees set aside a certain amount from their paychecks for retirement, with employers usually adding money, too. Its effects will be on future employees only, according to Tobash.
"The hybrid plan we're working on now ... does not touch current employees," he said. "It's about a realistic, sustainable pension policy."
Tobash said the intent is to shift some of the risk from taxpayers to government employees, reduce the costs and deal with present and future budget concerns.
Legislators also focused in present budget concerns, promising to examine Corbett's proposal carefully.
"I learned a long time ago that the budget proposal in February is not going to be the budget enacted in June," state Rep. Neal P. Goodman, D-123, said. "It's our job to go through this thing."
Corbett's proposal represents the most the state should spend, according to state Rep. Jerry Knowles, R-124.
"I'm going into this thing with an open mind," Knowles said.
State Sen. John R. Gordner, R-Columbia, a member of the Appropriations Committee, said the budget includes no new taxes and is designed to stress three things: jobs, education and healthy lifestyles.
"There are moneys in this budget to help bring back manufacturing," he said. "We are seeing more and more businesses looking at our state."
Knowles and Goodman clashed on proposals to bar the automatic collection from employees' paychecks of union dues, political contributions and "fair share" payments from nonunion employees to unions for their work on behalf of those employees.
"They absolutely, positively shouldn't be" taken from paychecks, Knowles said. "If it doesn't cost a lot of money, why shouldn't unions do it themselves? There is a portion of this that is dedicated as political money."
Goodman said the issue should be left to negotiations between employers and unions without government interference.
"No one is forced to join a union," he said. "It's a bargaining thing."
Knowles did find considerable support for his proposed legislation to give tax credits to companies that allow employees to serve as volunteer firefighters during working hours, as both state Rep. Karen Boback, R-Luzerne, and state Sen. John Blake, D-Lackawanna, said it was a good plan.
However, partisan divisions showed in discussing taxing the natural gas industry.
"We have failed" by not enacting a severance tax, Blake said. Such a tax is in effect in other states that produce natural gas, he said.
Gordner said it is wrong to focus on that levy alone.
"These companies are paying every other tax," plus an impact fee that goes to counties where the industry is operating, he said. "This is an additional tax."
Knowles agreed.
"We are taxing gas. They're paying all the taxes you are. These are portable rigs" that could be moved out of state if taxes get too high, he said.
State Rep. Tarah Toohil, R-Luzerne, reminded people there was no severance tax when Republicans took control of state government after the 2010 election, and Blake said Corbett's predecessor, Democrat Ed Rendell, had made a mistake when he asked for too high a tax and lost Republican support.
Republicans and Democrats found common ground in backing efforts to increase emphasis on linking education with the needs of the work force.
"We need to steer our kids" to educational efforts that help them find jobs, Goodman said. "Try to find a plumber, a carpenter, an electrician. You're always going to need those people."
This time, Knowles agreed with Goodman.
"We need to focus on reality," he said. At least some state education money needs to go to schools where people are graduating with real jobs, Knowles said.