The State of Pennsylvania’s bond rating was recently downgraded by Moody’s Investment Service from an Aa3 to an Aa2. The company says the value of $11 billion dollars of state bonds is worth less due in part to the looming Pennsylvania state employee pension deficit. Below is an editorial written jointly by a number of Pa. business groups that are concerned about that news and its impact on business and the state’s economy.
This week’s announcement that Moody’s has downgraded Pennsylvania’s credit rating shouldn’t come as a surprise to anyone here in the Keystone State. For months, financial analysts have been warning lawmakers that the Commonwealth’s growing pension deficit was raising serious concerns about the state’s overall fiscal stability.
With a public pension system that is buried beneath $50 billion in red ink, this deficit is the single-greatest threat to our state’s financial future.
Unfortunately, there remains a concerted effort among some in Harrisburg to downplay, or even ignore, the severity of this problem. Rather than consider ways to control costs and reform what is clearly a broken and unsustainable system, far too many of our elected officials continue to target job creators to pick up the growing public pension tab.
In a state that is already considered among the most expensive in the nation to do business, the last thing any Pennsylvania employer needs is to be tapped for new taxes. Ask any business owner or operator, and they will say with unwavering certainty that this is a recipe for failure.
There is a long list of lawmakers who are committed to reforming our pension system, and they should be applauded for their efforts. But those lawmakers who are instead opposing reform and pressing for new taxes owe it to their local businesses to explain why they believe job creators should pay more to support a broken system that they refuse to fix.
Hopefully Pennsylvania’s credit downgrade sends a new warning to lawmakers and prompts them to take action. But if not, every business should be prepared to send more money to Harrisburg and every working resident should be prepared to see more jobs leave for other states.
This is certainly not an outcome we welcome, but it’s the harsh reality of inaction.
Gene Barr, President and CEO, Pennsylvania Chamber of Business and Industry
David Patti, President and CEO, Pennsylvania Business Council
Kevin Shivers, Executive State Director, National Federation of Independent Business – Pennsylvania
David Taylor, Executive Director, Pennsylvania Manufacturers’ Association
# # #