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June 27, 2016

Eugene DePasquale, Pennsylvania Auditor General

Pennsylvania Auditor General

Eugene DePasquale was elected to the office of Auditor General in 2012. Before that, he served as State Representative for the 95th District from 2006. As Auditor General, DePasquale and his office are responsible for making sure state funds are used properly. Among many duties, the office audits corporate tax returns, district courts, and critically, municipal pension plans.

Crunching the Numbers For PA Municipal Pensions

After taking the job, DePasquale saw a growing problem with these plans. “We have shown over my term in office that there is about $8 billion dollars in unfunded municipal pension liabilities in Pennsylvania.” To determine the scope of the problem and recommend solutions, Governor Tom Wolf convened a task force and asked DePasquale to chair it.

The Task Force issued a report in June, 2015. “We did everything from looking at how to save administrative costs to board transparency to trying to make the plans more affordable across the board.” The Task Force’s recommendations focused on structural and operational changes. “We believe that the estimated rate of investment return needs to be lowered. We certainly think the funding formula for the state needs to be reformed. We believe that plans that are in distress should be administered by the Pennsylvania Municipal Retirement System.”

Pension Crisis Affects Everyone

Since chairing the Task Force, DePasquale has seen the problem with municipal pensions continue, and it’s not just a big-city problem. “We know Pittsburgh has its challenges. We know Scranton has its challenges. Philadelphia has its challenges. But we also see many smaller towns all over the state with the same challenges.”

The Auditor General gives a clear example of how the pension problem affects everyday citizens across the state. “The number one job of local government is public safety. If the city has to put more money into their pension plan, the number one area that would likely be cut would be public safety costs. The city of York this past year was looking at potentially laying off 40% of the police force.”

The politics surrounding the pension crisis are complicated, but DePasquale believes that both sides can agree it’s a problem that needs to be addressed. “If you’re a Republican or a Democratic state legislator, this impacts districts all over the state regardless of party.” He stresses that voters should contact their state Senators and state Representatives and let them know that they need to fix the numbers. “We believe that our task force report put a lot of common sense solutions on the table. There may be other good ideas that are out there. But the time for action is now.”