The Commonwealth Foundation has been named a finalist for Atlas Network’s 2018 Templeton Freedom Award.
Pennsylvania was sprinting toward financial meltdown with its unfunded pension liabilities and its state lawmakers apathetic to do anything about it. That was until a small think tank sounded the alarm in 2006. The Commonwealth Foundation, or CF, published the seminal report, Beneath the Surface, which kicked off what would become a 12-year effort to avert the crisis.
Pennsylvania was sprinting toward financial meltdown with its unfunded pension liabilities and its state lawmakers apathetic to change it. That was until Commonwealth Foundation sounded the alarm in 2005. It stayed the course, and 12 long years later, a comprehensive pension reform bill finally went into law in 2017.
CF created a statewide campaign encompassing research, effective advocacy, public awareness, and marketing to advance pension reform. Its staff worked closely with state lawmakers to craft the legislation and garner support. And despite intense opposition from government unions and Pennsylvania’s Governor Tom Wolf, CF scored a major victory for the people of Pennsylvania when the state finally passed a comprehensive pension reform bill into law in 2017.
The new law reversed the growth trend of unfunded liabilities, which had grown by 730 percent from 2006 to 2016. Now Pennsylvania is holding the line against future risk to the state’s taxpayers, with a projected savings of $5 to 30 billion over the next 30 years. CF’s efforts are a decade-long case study of a state-based public policy group demanding and delivering better outcomes for its fellow citizens.
“I’m honored and humbled that Atlas Network identified the Commonwealth Foundation’s work on pension reform as a finalist for this prestigious international award,” said Charles Mitchell, president and CEO of the Commonwealth Foundation. “Our vision is that Pennsylvania once again writes a new chapter in America’s story by ensuring all people have equal opportunity to pursue their dreams and earn success. Pension reform is a textbook example of how, working in close partnership with lawmakers and business leaders, we are achieving that vision and securing a brighter future for the citizens in our state.”
Beneath the Surface
The Commonwealth Foundation’s Beneath the Surface report decried the massive unfunded liabilities confronting Pennsylvania (PA) taxpayers incurred by the state pension system. This was adamantly opposed by PA’s public sector unions, who dismissed that the problem even existed.
The Commonwealth Foundation spent the next seven years working to shift opinion among state leaders, leading them to recognize the scope and severity of this problem. Multiple reports and briefings on the pension crisis and need for reform were produced by the Commonwealth Foundation during this time.
Former Governor Corbett borrowed the Commonwealth Foundation’s own analogy, calling the pension crisis an “iceberg” repeatedly in public.
The analogy of Pennsylvania's collision course with Pennsylvania's pension iceburg was used throughout the Commonwealth Foundation's 12-year campaign.
In 2015, the Commonwealth Foundation worked with representatives to push for pension reform, and experienced preliminary success. Despite concerted union opposition, SB 1 — a hybrid pension plan — was passed by the Pennsylvania General Assembly but vetoed by the governor.
Comprehensive reform signed into law
Undeterred, the Commonwealth Foundation released an updated version of Beneath the Surface in 2016, which demonstrated that pension liabilities had grown by 730 percent in 10 years. An additional pension reform push was undertaken in October that same year, with the Commonwealth Foundation actively endorsing this initiative. But it was ultimately three votes shy of passing. This set the stage for the following year when comprehensive pension reform was successfully passed and signed into law. This was the culmination of over 10 years of tireless work by the Commonwealth Foundation.
“Runaway unfunded pension liabilities have become Exhibit A for showing the irresponsibility of so many government officials,” said Brad Lips, CEO of Atlas Network. “Pennsylvanians should be grateful for the research and advocacy of Commonwealth Foundation, which chartered a responsible path back from the brink of a real crisis.”
Members of the Commonwealth Foundation team.
The new pension system will now enroll new state employees and teachers (hired after January 1, 2019) in a hybrid retirement plan with a defined benefit component and a 401(k)-style component. Current employees can opt-in to this system, and new employees can also choose to enroll solely in the 401(k)-style plan.
As a result of this reform, taxpayers in Pennsylvania are projected to save between $5 — $30 billion dollars over the next 30 years, depending on investment performance.
About The Commonwealth Foundation:
Harrisburg, Pennsylvania-based Commonwealth Foundation's vision is that Pennsylvania once again writes a new chapter in America's story by ensuring all people have equal opportunity to pursue their dreams and earn success. The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.
About Atlas Network’s Templeton Freedom Award and the additional 2018 finalists:
Awarded since 2004, Atlas Network’s Templeton Freedom Award is named for the late investor and philanthropist Sir John Templeton. The award annually honors his legacy by identifying and recognizing the most exceptional and innovative contributions to the understanding of free enterprise, and the public policies that encourage prosperity, innovation, and human fulfillment via free competition. The award is generously supported by Templeton Religion Trust and will be presented during Atlas Network’s Freedom Dinner on Nov. 8 in New York City at the Intrepid Museum Manhattan. The winning organization will receive a $100,000 prize, and five additional finalists will receive $25,000 prizes. The finalists for Atlas Network’s 2018 Templeton Freedom Award are:
- The Buckeye Institute (Columbus, Ohio), “Increasing Safety, Liberty, and Justice: Comprehensive Criminal Justice Reform in Ohio”
- The Commonwealth Foundation (Harrisburg, Pennsylvania), “A Titanic Shift: Pension Reform in Pennsylvania”
- The Egyptian Center for Public Policy Studies (Cairo, Egypt), “A Better Budget for a Better Egypt”
- Libertad y Progreso (Buenos Aires, Argentina), “Downsizing of Argentina’s Government”
- Lipa, Taxpayers Association (Zagreb, Croatia), “Campaign Against the Introduction of the Property Tax in Croatia”
- The Mercatus Center at George Mason University (Arlington, Virginia), “Unleashing Prosperity by Cutting State Regulations”