Pennsylvania Governor Tom Wolf called for selling $3 billion of bonds to bolster the state’s public- employee retirement system as part of his first budget.

Wolf, a Democrat who took office in January, said Tuesday that Pennsylvania should also boost the profits of the state-run retail and wholesale liquor business, which provides $550 million a year in revenue. He said the extra funds could be used to help schools cut their pension payments and pay off the bonds, according to a budget briefing.

“With these and other improvements, we are going to save taxpayers nearly $1.3 billion over the next five years while creating savings of $10 billion in the unfunded liability,” Wolf, 66, said during a speech in Harrisburg.

The Pennsylvania governor joins officials in Kansas and Kentucky who are seeking to borrow money for cash-strapped pension funds, wagering they can earn more on investments than it will cost to borrow. A group of state and local-government officials have advised against such speculation, saying it could backfire if investment returns trail expectations.

Wolf said he would create a restricted account to ensure the state continues to make its pension contributions, according to a budget presentation.

He also called for curbs on “excessive management fees” paid by the pension system, without providing details.

“Our state has been wasting hundreds of millions of taxpayer dollars on Wall Street managers,” Wolf said. “But studies have shown that simply investing this money in a safe, conservative account would produce a similar return over the long term while eliminating these excessive management fees.”

Pennsylvania administers two pension plans covering about 700,000 people. In 2013, the funds has 62 percent of what they needed to cover promised benefits, down from 75 percent in 2010.

Pennsylvania’s pension liability as a percentage of revenue, at about 130 percent, is ninth-highest among states, according to Moody’s Investors Service.