Representative Matt Smith Slimed Again

In the latest slimy attack ad against State Representative and State Senate candidate, Democrat Matt Smith, he is tagged with no supporting documentation for increasing state taxes by $2.4 billion and destroying Pennsylvania business, leaving the informed voter to ask, "How? What vote or votes are being referenced?" We are not told.

The climax of the spot, though, zeroes in on Smith for accepting a Cadillac state pension which could pay him, it is alleged, over $100,000 per year for life.

Yes, the pension provisions for state legislators are outrageous, but the ad does not delve very deep into the genesis of the giveaway.

In 2001, rank and file state employees and legislators enjoyed a superb defined benefit pension based upon a multiplier of 2 percent per year, i.e., an individual who retired after 35 years of service would receive 70 percent of the average of his or her three highest years of compensation. This payment would be set for life subject to potential cost of living increases if and when approved by the General Assembly.

Infamous Act 9 of 2001 changed the pension formula to boost the mutiplier by 25 percent to 2.5 for the rank and file while hiking it 50 percent to 3 for members of the General Assembly. e.g., a legislator then could retire after 33 1/3 years of service at 100 percent of his or her final salary. The measure was approved overwhelmingly with bipartisan greed, 176-23 in the House, 41-8 in the Senate. (Ironically, the currently imprisoned former Republican State Senator Jane Orie was one of the band of eight that voted against it in the interest of being fiscally prudent and responsible.) The leadership of both parties endorsed the pension grab as it did the 2005 legislative pay heist. Matt Smith was not a member of the House in 2001 or 2005, but Republican State Representative John Maher was.  Maher, the only Certified Public Accountant in the House then and now, and current candidate for State Auditor General, voted for this unnecessary and outlandish pension boost, naively buying the line of actuaries who contended that it would not ever cost any state taxpayer a dime. I wonder if Maher would have funded a 50 percent pension boost had his money been on the line rather than that of state taxpayers. I am betting that the accounting firm he co-founded, Maher Duessel, does not offer such a spectacular pension benefit to its employees as that which is enjoyed by Maher and his cohorts in the General Assembly thanks to his vote and those of other Republicans. Republican Governor Tom Ridge had promised that he would not allow enhancements of General Assembly compensation within his period of service. He broke his promise and signed the bill.

The General Assembly and governors in office since 2001 failed to appropriate a sufficient amount of money to the employer share of the pension funds and there were years in which nothing was added by the Commonwealth, this as state employees did their part, consistently paying 6.25 percent of their gross salaries into the fund. 

We now have a pension fund debacle in which there is a shortfall estimated by the Corbett administration to be a staggering $37 billion. Actions that can be taken to address this catastrophe are limited, as courts have ruled that pensions promised to current employees cannot be diminished. Short of the Commonwealth filing a petition for bankruptcy, something which is most unlikely, benefits promised will be paid and the deficit will be made up by taxpayers for decades to come. This is already the primary driver of hikes in our onerous school district property taxes.

For full disclosure, I will note that as a Commonwealth employee with 28 years of service, I will benefit from the enhanced pension provisions. This is a facet of my compensation over which I am embarrassed. I did not ever lobby anyone for an increase and a boost to a generous pension plan was entirely unnecessary, and the pre-Act 9 provisions far exceeded anything that is offered to non-executives in private industry.

If an attack is to be made against Matt Smith for being a pension beneficiary and for legislation that he did not vote for, shall Representative Maher and other Republican leaders who knew better, yet voted for the hike, also be slimed? Surely the maker of the ad will continue to cherry-pick facts in order to make Matt Smith look like he is the bad guy for something which he did not set into motion. Politics is a dirty business in which distortion is the order of the day.