Pennsylvania education spending is at at all-time high and ranks near the top in dollars spent per student among the states. But all of that extra spending isn't helping kids succeed.
In fact, SAT scores have declined while spending has soared. According to a new Cato Institute analysis, Pennsylvania students perform worse, on average, on the SATs now compared to 1972, despite an almost 120 percent increase—adjusted for inflation—in spending per student. See the chart below.
How are we spending so much more without improving education outcomes? The answer is simple: There is no correlation between spending and achievement. How the money is spent is more important than how much money there is to spend. The Cato analysis finds the correlation between state spending and academic achievement is not significant:
Correlations are measured on a scale from 0 to 1, where 0 represents absolutely no correlation
between two data series and 1 represents a perfect correlation. Anything below 0.3 or 0.4 is
considered a weak correlation. The 0.075 figure reported here suggests that there is essentially no link between state education spending (which has exploded) and the performance of students at the end of high school (which has generally stagnated or declined).
The answer to our education woes is not more spending, but smarter spending. Education reform should also mean protecting high performing teachers, embracing different education models (themed public charter schools or public cyber charter schools) to serve different learning styles, and reforming the archaic student funding formula.
School choice and competition is the key to saving students, not never-ending spending increases.
RELATED : ACADEMIC ACHIEVEMENT, SCHOOL CHOICE, EDUCATION SPENDING, EDUCATION
Despite claims that union dues aren't used for politics, the amount Pennsylvania’s five largest government unions reported spending from union dues on "political activities and lobbying" increased in 2013 to $5.5 million.
This is in addition to the $4.7 million collected for government union PACs (i.e., campaign contributions) using taxpayer resources during the last election cycle.
Our newest policy points on government unions' political spending summarizes what unions report each year to the U.S. Department of Labor, including how much they spend on politics from dues along with contributions to other organizations. The analysis also gives several examples of how union dues are used for political action.
|Government Union Profiles, 2013|
|PSEA||AFSCME Council 13||UFCW 1776||SEIU Local 668||PFT|
|Members and Fee Payers||186,578||61,201||20,618||19,752||30,916|
|Political Activity & Lobbying||$3,764,154||$813,659||$454,048||$376,699||$116,982|
|Chief Executive||Michael Crossey||David Fillman||Wendell Young, IV||Kathy Jellison||Theodore Kirsch|
|Regular Dues for Full Time Member||$489/year||1.5% of salary||$16.97/week||1.39% of salary||$10.30/month|
|Sources: Office of Labor-Management Standards, “Form LM-2 Labor Organization Annual Reports,” http://kcerds.dol-esa.gov/query/getOrgQry.do|
On top of this, a recent court ruling will allow Pennsylvania union dues to go to "Super PACs." As I wrote in a Forbes commentary, this will significanltly increase the political power of government unions.
The group that won the case, General Majority, spent $6 million in New Jersey last year—with about 3/4 of that coming from union dues. Their stated goal is inherently political and partisan: "We have to take back state legislatures that have been overrun by Republicans."
Super PACs can't give directly to candidates, but they can spend money on "independent expenditure" ads supporting or opposing candidates. This means they can take unlimited amounts of union dues to fund their "independent" political ads. For a more thorough explanation, the Pennsylvania Department of State has posted a notice on this ruling:
The PI [preliminary injunction] order allows a political committee that is properly registered with the Department of State (as required by the Pennsylvania Election Code) to accept contributions from corporations, unincorporated associations and/or labor unions, so long as that registered political committee does not make contributions to, or coordinate expenditures on behalf of, candidates or political committees controlled by political parties.
Amazingly, some union leaders continue to lie to their members by saying union dues aren't used for politics.
Shocker! (Not really). A new Gallup poll finds that the majority of Pennsylvanians—58 percent—think state taxes are too high.
Pennsylvania's polling falls right in line based on our tax burden. Pennsylvanians pay $4,374 in state and local taxes per person, or 10.3 percent of income, ranking 10th highest in the nation, according to the Tax Foundation.
Of course, some of our neighbors—New York, New Jersey, and Maryland—have a higher tax burden. Not coincidently, more voters in those states (77 percent in New York and New Jersey, and 67 percent in Maryland) feel their taxes are too high.
Well, people move with their feet—and Pennsylvania certainly benefits from having high tax neighbors. IRS data shows that from 1993-2010 the Keystone State gained 104,000 taxpayers on net—and a whopping $7.9 billion in net income—in moves from New York, New Jersey, and Maryland.
Unfortunately, we lost almost 310,000 taxpayers in net migration to the other 47 states (and D.C.) in that time. The cost: $18.7 billion in net income lost to those states via migration.
Lawmakers should worry that Pennsylvania voters think taxes are too high, because they tend to move to states with better tax climates, taking their money with them and leaving the rest of us poorer.
RELATED : TAXES & SPENDING, TAXATION
“We have been legitimately working very hard with them and frankly, I'm very disappointed with the turn in discussions in the last week,” said Governor Corbett (paywall) on the federal government’s unwillingness to negotiate a Medicaid expansion compromise.
Pennsylvania’s Medicaid expansion waiver (also known as Healthy PA) asks permission to implement a number of state-based Medicaid reforms, including premium sharing and work search requirements. Pennsylvania desperately needs Medicaid flexibility to preserve the safety net for the truly needy and help lift people out of poverty.
The history of welfare reform shows employment provides the path from poverty to prosperity. Work should be rewarded and encouraged in every social safety net program.
If the federal Department of Health and Human Services really wanted to help people, they would welcome this reform. Instead they are simply vying for more control, but it’s top-down government control that has turned Medicaid into the worst form of health insurance in the country.
Taxpayers spend billions on a program that was found to have no discernible physical health impacts. In fact, the largest benefit patients in the Oregon Medicaid experiment received was piece of mind, or relief from the fear of medical bankruptcy. We can provide that relief and much more at a lower cost.
As Louisiana Gov. Bobby Jindal recently wrote:
We need solutions, but not Washington-centric bureaucracy disguised as “reform”—we’ve done that already, and it hasn’t worked.
By contrast, conservative governors throughout the country have implemented successful health reforms -- from the Hoosier State’s Healthy Indiana Plan, to Rhode Island’s innovative Medicaid waiver, to the Bayou Health program we’ve created right here in Louisiana. These reforms have lowered costs -- in some cases dramatically -- improved the quality of care, and received widespread public support.
But in many states, including Louisiana, we would go further with our reforms, if only Washington bureaucrats would get out of the way. At the risk of echoing Churchill, that’s the better way forward on health care -- give states the tools, and let them do the job.
In addition to connecting Medicaid with employment, Pennsylvania can work towards giving current Medicaid patients a broader choice of providers with choice counseling. States such as Florida, Kansas and Louisiana have empowered traditional Medicaid patients to choose the provider that best fits their needs. In Florida, for example, patients can choose from up to 11 different health plans. Between 70 percent and 80 percent of patients in Florida’s program actively choose their health plan.
If Washington isn't willing to give Pennsylvania the flexibility it needs to better serve Medicaid patients, it might be time to walk away from the negotiating table and pursue other paths to real reform.
RELATED : TAXES & SPENDING, WELFARE, HEALTH CARE, MEDICAID
Did you see the PSEA's latest Voice magazine? It features a full two-page article, claiming, among other things, that "no dues money is given to candidates." This is true as far as it goes.
But they leave out key facts. Like that union PAC money—campaign contributions that are given to candidates—is collected from workers' paychecks using taxpayer-funded resources. And that union dues are used to support partisan politics and candidates—like the 5 pages in the PSEA Voice dedicated to supporting Rob McCord.
The PSEA is required by law to tell members how much of their dues go to politics. Their June edition of the Voice told members the union estimates it will use 12 percent of their dues on politics and lobbying in 2013-14. This would represent more than $7 million this year, significantly higher than the $3.8 million they reported spending on political activity and lobbying last year.
Despite what you may have heard, teachers' dues are used for politics.
RELATED : TEACHER UNIONS, UNIONS & LABOR POLICY, UNION DUES AND POLITICS
The Patient Protection and Affordable Care Act promised to provide more affordable and better health care for all. Unfortunately, the law has delivered just the opposite—so much so that President Obama continues to delay deadlines on some of its most harmful provisions, while granting exemptions to millions.
As the open enrollment period for exchange plans wraps up, lets take a look at some of the groups who sought exemptions from the law:
- Americans with Canceled Plans: A slew of new health care mandates, like maternity coverage for all, forced insurers to cancel about 5 million insurance plans. The public outcry resulted in a temporary two year extension of these plans.
- Fast Food Restaurants: Under the ACA, companies that offered insurance plans with limits below $750,000 in 2013, like McDonalds, were determined inadequate. To keep companies from dropping insurance completely and leaving low-income workers with no coverage, the Department of Health and Human Services granted 1,231 exemptions. The waivers covered 4 million individuals, about 3 percent of employee plans.
- The Poor: If you don't make enough income to file a tax return or insurance would cost more than 8 percent of your income, you are exempted from the individual mandate.
- Congress and Congressional Staff: Under the ACA, officials would have to pay the full cost of exchange plans. But the Office of Personnel Management finalized a new regulation allowing the federal government to continue to contribute to health-care premiums if employees enrolled in the small business exchange.
- Private Labor Unions: In the closing days of 2013, the administration exempted a narrow form of insurance plans used only by labor unions from a fee in 2015 and 2016, forcing other employers to pay more.
- Volunteer Firefighters & First Responders: Under the ACA, any employer with more than 50 employees was required to provide insurance for every employee or face a fine under the employer mandate. Regulators exempted volunteer first responders from the mandate in February.
- Religious objectors willing to go to court: Pro-life business owners have been granted temporary injunctions from offering health coverage that includes abortion in 90 percent of court cases.
- Anyone Else Without Insurance: The latest “hardship” exemption to the individual mandate isn’t limited to people who used to have insurance. Anyone can claim it by noting they can't afford insurance.
The ACA promised more affordable and quality care but with so many exemptions, it's evident the law isn't delivering.
But there is an alternative. States have been implementing successful health care reform that lowers costs and improve access to quality care- especially for the vulnerable Medicaid population.
Eliminating coverage mandates, empowering Medicaid patients to choose how they consumer care, and expanding state high risk pools to help those with chronic conditions are just a few ways states, not Washington will save our health care.
RELATED : JOBS & ECONOMY, REGULATION, HEALTH CARE
Thanks to a recent minimum wage increase, 61 percent of New Jersey businesses are likely to raise their prices. In addition, a Congressional Budget Office analysis found increasing the minimum wage to $10.10 would benefit some at the cost of eliminating about 500,000 jobs for other low-wage workers. Despite these foreboding predictions, Pennsylvania lawmakers have proposed raising the minimum wage.
Last week the National Federation of Independent Business released a study analyzing each Pennsylvania proposal. They found Pennsylvania, depending on inflation, could lose as many as 28,000 to 119,000 jobs in the next 10 years. Over half of the jobs lost will come from small businesses.
- HB 1039 raises the minimum wage to $8.75 per hour and bases future increases on cost-of-living adjustments. NFIB predicts it will cost between 46,000 and 110,300 jobs.
- HB 1057 raises the minimum wage to $9.00 per hour and bases future increases on cost-of-living adjustments. It will cost between 53,400 and 118,800 jobs.
- SB 326 does not mandate an amount, but allows the minimum wage to increase contingent upon cost-of-living adjustments. It’s estimated to cost about 56,900 jobs by 2023.
To help low-wage earners, lawmakers should steer clear of New Jersey’s bad idea and spur economic growth which increases wages and employment. According to a Mercatus study, a one-percentage point drop in the corporate tax rate would likely increase annual economic growth by 0.1 to 0.2%.
RELATED : JOBS & ECONOMY, MINIMUM WAGE, REGULATION
CF President Matt Brouillette and Simon Campbell of Pennsylvanians for Union Reform recently appeared on Business Matters to debate government union bosses Wendell Young IV of UFCW 1776 and David Fillman of AFSCME Council 13 on the merits of paycheck protection.
The two union bosses—who spent a combined $1.2 million of members' dues on political activity and lobbying in the 2011-12 election cycle—made some rather startling claims including the following (1:26):
There are no taxpayer resources being used [to collect union political money].
This is strange coming from Fillman given that the payroll systems used to collect union dues, fees, and even campaign contributions are funded by the public. In many cases, physical checks are even sent from the state to Fillman’s union’s headquarters. If taxpayers aren’t paying for this, who is?
Later, Wendell Young denied Matt’s point (5:54) that taxpayers are aiding in the collection of campaign contributions and union dues, which can be and have been used for politics. As we have repeatedly shown (here, here ,and here), union dues can be used for a variety of “soft” political activities including newspaper ads like AFT’s deceptive full-page ads on Gov. Corbett’s mythical $1 billion in education funding cuts. Unions themselves report this political spending.
After making his erroneous claim about union dues, Young continued to struggle with the facts (7:52):
As a very vocal minority of interests in Harrisburg, they’re [paycheck protection supporters] trying to silence the majority.
There are two problems with this claim. First, a majority of union members and Pennsylvanians support paycheck protection. Secondly, paycheck protection does not silence union members or union bosses. Government unions and members would still be free to engage in the political process, as is their right—the unions would just have to collect their own political money.
The deceptions didn’t end there. Young went on to say this about the supporters of paycheck protection (11:43):
He [Gov. Corbett] supports what they support in that he would be willing to discriminate against union workers and deny them the convenience that workers all across the country have.
To say paycheck protection is an effort to discriminate against workers is absurd. The purpose of the legislation is to level the political playing field, not single out government workers. The fact is, no other political organization can use taxpayer resources to fund a partisan political machine.
Union leaders are stretching the truth to the breaking point because they can’t justify their special privilege to use public resources for politics. For them, it’s all about control. 65 percent of union households believe paycheck protection would empower individual workers to have greater control over how their money is spent—and they don’t want that to happen.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
In 2007, the Philadelphia Youth Network needed to cut 1,100 jobs for inner-city teens. Why? Because they couldn't afford to place as many teens in jobs under the higher minimum wage.
In the end, the organization was able to secure additional funding to maintain job placements, but the experience of Philadelphia Youth Network demonstrates how the minimum wage harms, not helps low-income workers.
Raising the minimum wage is ineffective for two reasons: Most low-income breadwinners do not make the minimum wage and minimum wage hikes actually shrink the number of available jobs.
First of all, the majority of Pennsylvania's minimum and near-minimum wage earners reside in households with an annual income above $40,000 a year. Only 10% of PA min wage earners are single parents who qualify for the federal EITC.
Secondly, minimum wage hikes reduce job opportunities. In 2006, a comprehensive review of more than 100 studies found, in the vast majority of cases, raising the minimum wage increases unemployment for low-wage workers. A 10% increase in a federal or state minimum wage actually decreased employment for black males by 6.5%, according to a 2011 study.
The bottom line is a higher minimum wage makes it harder for employers to offer opportunities to those who need it most.
So how do we help families struggling to make ends meet? A one-percentage point drop in the state's corporate tax rate would increase annual economic growth by 0.1 to 0.2%, leading to higher productivity, which means more jobs and higher wages. Pennsylvania can also scale back professional licensing to give low-wage earners the opportunity to increase their incomes through entrepreneurship.
Advocates for low-wage workers should be pursuing reforms that work, not policies that raise some workers wages at the expense of others.
RELATED : JOBS & ECONOMY, ECONOMY, MINIMUM WAGE
"Today's featured wine has notes of bureacracy, boondoggles, and waste, with a lingering aftertaste of corruption. May I interest you in this PLCB blend?"
Unlike a fine wine, the PLCB seems to get worse with age. The latest revelation concerning the booze bureaucracy comes to us via the Pennsylvania State Ethics Commission. The commission found three former PLCB officials violated state ethics laws.
The violations include: accepting gifts from vendors who had ongoing contracts with the PLCB, using a position in government for personal benefit, and failing to disclose gifts on annual financial interest statements. The three officials, former CEO Joe Conti, former PLCB Board Chairman Patrick Stapleton and Director of Marketing Jim Short were showered with numerous gifts during their respective tenures. The gifts included invitations to golf outings, sporting events, meals, lodging, and alcoholic beverages.
Many of these violations occurred on the taxpayer’s dime with officials attending functions and accepting gifts during work hours. Not only that, but taxpayers were actually billed for some of the expenses related to these social functions. How many of you get to bill your employer for non-work related golf outings?
The findings of the Ethics Commission aren't the only things troubling taxpayers—so are the punishments. Chris Comisac of Capitolwire (subscription required) reports that some good government watchdogs are questioning why the penalties for these public officials are so light.
"It encourages public officials to roll the dice and take the chance they won't get caught," said Barry Kauffman, executive director for Pennsylvania Common Cause. But beyond that, Kauffman said it also creates a situation where those giving the gifts are buying access to those public officials, and at least the possibility of getting what they want from those officials....
"The only real penalty is that they have to pay for what they already have," added Kauffman. "That's really not much of penalty at all."
The corruption at the PLCB is a symptom of a larger problem. When a government monopoly has the sole authority to determine what products are sold on state store shelves, it shouldn’t come as a surprise that some businesses will try to influence those with such authority. Moreover, these same officials are tasked with regulating and enforcing the state's liquor laws. It's an inherent conflict of interest, and they serve neither purpose well.
RELATED : PRIVATIZATION, LIQUOR STORE PRIVATIZATION
Total Records: 5183
Who are We?
The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.