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Taxpayers Tapped As Penn State Scandal Rolls

Kelly Phillips ErbNovember 14, 2011May 18, 2020

The first football game that my kids ever attended was a Penn State football game. They now own Penn State jerseys and Nittany Lion pillow pets. They’ve been tailgating in Philly (when PSU played Temple) and in State College. They’ve clamored over the Nittany Lion statue and eaten at the Creamery, brunched at the Corner Room, and traipsed over to Old Main. They’ve yelled together with the Penn State cheerleaders and watched the Blue Band take the field.

For them, Penn State has always been a wonderful place where kids can be kids.

We all know by now that hasn’t been the case for every child. The allegations of the horrors committed by former Penn State defensive coordinator Jerry Sandusky – and the cover-up that followed – have made headlines across the world. It’s been hard for any of us to understand. I found it especially difficult as a mom to explain to my 9-year-old daughter, who is the same age as many of the victims identified in the indictment, why the Philadelphia Inquirer featured Penn State with JoePa was on the front page when it wasn’t game day. (For the record, the discussion that followed focused not on the specifics of what happened but on the importance of telling the right people if you see someone being hurt.)

The resulting fallout and an investigation that seems to grow wider and wider by the minute has been tough for many of my friends in Pennsylvania. Like the network of colleges in my home state of North Carolina, there is a lot of pride in the greater community across the state that has put its faith and its money in a state-funded public university. Here, Penn State is thought of as THE Pennsylvania State University. The sheer number of alums and others with connections to the university is staggering.

I have refused to jump on the bandwagon that says that those folks are not entitled to their feelings because they aren’t a victim of the scandal. While I agree that the real victims are those little boys and their families at the heart of this tragedy – and they are those that we should focus on and hold in our hearts – I firmly believe that those who were misled by those that they trusted should also be allowed to mourn and be sad. It’s not about football or JoePa or national championships. It’s about a lie. A lie that was bigger than almost any of us could imagine.

I also understand why they’re angry. And in Pennsylvania, many are about to become more angry.

The Harrisburg Patriot-News, the top newspaper in the state’s capital, has reported that Sandusky will continue to receive an annual pension of $58,898 from the State Employees Retirement System (SERS). This is in addition to the $148,271 that he collected in a lump sum when he was quietly forced out retired in 1999.

Those attached to the scandal will also likely receive top dollar. Gary Schultz, accused of participating directly in the cover-up, received a lump sum of $421,847 in 2009 (after the investigation began) and will collect a whopping $331,000 a year in pension. That works out to a monthly (yes, monthly) pension worth $27,558 – or nearly four semesters of credits for a resident Penn State freshman.

According to the Patriot, former Athletic Director Tim Curley and former Penn State President Graham Spanier were not members of the state pension system though Curley, who is on administrative leave at his own request, continues to draw a taxpayer-funded salary.

SERS is a statewide retirement plan for public employees; as a result, benefits paid out from the plans can be a mix of deferred compensation, state-funded contributions, and investment earnings. As a public university, Penn State receives a sizable amount of funding from the Commonwealth. In 2010, funding from taxpayers was $334 million; that number was reduced to $165 million after Governor Tom Corbett (R) took office.

Taxpayers also continue to foot the bill for Curley and Schultz’ legal counsel; Penn State spokesperson Lisa Powers explained that the allegations against the men concern how they fulfilled their responsibilities as employees, so Penn State is paying for their counsel. With these kinds of charges, you can bet they’re paying big.

Taxpayers have also borne the cost of investigating the charges for nearly three years though it’s unclear why it’s taken quite so long. More victims are expected to come forward – and more charges are expected to pile up – as the investigation continues. And the onslaught of civil lawsuits hasn’t even started yet.

The U.S. Department of Education is also spending federal dollars on the case. The department announced its own investigation into whether Penn State failed to comply with the federal Clery Act. Failure to comply can result in civil penalties of up to $27,500 per violation and can affect federal student financial aid programs.

It is an expensive mess. And it could have been avoided if, at just one point along the way, someone who cared dug in their heels and yelled until someone important agreed to listen and actually do something.

But that didn’t happen.

State and federal dollars are wrapped up in investigating the acts of adults who had the opportunity to make this stop. The taxpayers of Pennsylvania are now eating the cost of defending at least two men whose actions seem, at least on the surface, indefensible. And taxpayers will watch as state-run pensions are paid out to alleged criminals because, while the law failed to protect those little boys, the law will ensure that the men who might have contributed to their suffering live well.

No part of this makes any sense.

I just can’t get past that. I wanted to come up with some pithy conclusion that would wrap up this whole piece nicely but I can’t. I’ve decided that’s okay. Sometimes, no matter how desperately you want one, there’s no neat ending.

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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Jerry Sandusky, Joe-Paterno, Nittany Lion, Penn State, Pennsylvania, Pennsylvania State University

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