The state's school employee pension fund has seen healthy investment returns this year, but instead of resulting in lower taxpayer contributions, the Pennsylvania School Employees' Retirement System is telling local school districts to keep their contribution levels unchanged.

While a healthy return on those pension investment funds is good news, this news story serves as a reminder of the 2001 pension grab in which state lawmakers boosted their own pension benefits by 50 percent and increased payouts for teachers by 25 percent. That vote, much like the controversial 2005 pay-raise vote in Harrisburg, is an example of lawmakers voting for their own self-interests over those of average citizens.

The strong investment returns in the teachers pension fund would suggest that property taxes in the state's 501 local school districts could be reduced — or probable increases moderated. But the people overseeing the pension funds are telling school districts not to count on seeing a reduced contribution rate when they work on their 2008-09 budgets, apparently recognizing that strong investment returns are not guaranteed to repeat from one year to the next.

A spokesman for Gov. Ed Rendell said, "We believe it is prudent to ask school districts to adhere to the current contribution rate to avoid potential budget problems in the future."

That statement should immediately trigger two thoughts in the minds of taxpayers.

First, if state officials had wanted to be prudent, our public servants in the legislature would never have approved such a massive increase to their own pensions and those of teachers. At the time of the vote in 2001, Wall Street had been experiencing an extraordinary bull market. Soon after the vote that essentially stripped away the pension funds' surplus by taking that money and promising it in additional pension payments, the stock market sank.

The prudent thing to do in 2001 would have been to leave the surplus alone as a cushion for a time when the stock market was weaker. But lawmakers chose instead to vote for their own financial self-interests and those of public school teachers, only after that group complained about lawmakers' own pension boost.

Second, concerns over school districts having to face "potential budget problems in the future" apparently were not on the minds of state lawmakers who passed the pension-grab legislation, or former Gov. Tom Ridge, who signed it into law.

There was no public discussion over what the massive pension boosts would do to taxpayers.

Either the lawmakers foolishly assumed double-digit stock market gains would continue uninterrupted, or they simply didn't care about the impact on taxpayers, so long as they got a big increase in their pension checks.

Both viewpoints probably were in play at the time.

Because of the major jump in pension benefits, most analysts are predicting big tax increases will hit property owners in 2012. The state's two major retirement systems are predicting that local property tax payers will be hit hard when the cost to subsidize the two big pension funds triples to $3 billion a year in 2012. That day of reckoning is dependent on stock market returns, but it would be much less threatening without the 2001 pension grab.

The pension vote of 2001, which voters did not hear about until after it was passed, was as greedy and ill-advised as the notorious pay-raise vote of 2005. The pay-raise vote was repealed later in 2005 due to voter anger. And the pension grab should similarly be undone — either by legislation or by legal challenges that lead the courts to find that it was passed in an unconstitutional manner, just like the pay-raise vote.

Another option would be conversion of the defined benefit pension programs to a defined-contribution system or a 401(k)-type program in which taxpayers' contributions would be strictly limited.

While it is good to hear a state official urging a prudent approach and concern for taxpayers when it comes to finances, it would have been better to have heard someone in 2001 raise those concerns. But asking lawmakers to place the financial interests of taxpayers ahead of their own self-interests is apparently too much, at least in Pennsylvania.

The time bomb tied to the public employee pension fund still is ticking. Voters need to understand how and why they might be facing major tax increases four or five years from now. They also should press their elected officials in Harrisburg to rescind that unwarranted pension boost, in the interests of struggling taxpayers across the state.