School Funding Doublespeak


How can school funding be "slashed" yet "technically rise"?

Take a look at this excerpt from a recent article in the Philadelphia Inquirer, (emphasis mine):

Education funding to public schools has been slashed by more than $1 billion on the current governor's watch, noted Stephanie Robinson, a teacher at Barry Elementary in West Philadelphia. (Corbett, who has repeatedly publicly blasted PFT members for not contributing toward their health insurance, maintains that he has granted record amounts of aid to city schools. But, PFT and other opponents contend that although technically school aid under Corbett has risen above Rendell-era levels, the rise is minimal...)

Unfortunately mass confusion about education spending in Pennsylvania abounds, thanks to a well-funded campaign of deception from government union executives. 

The Inquirer piece notes, for instance, that the political action committee of Pennsylvania Federation of Teachers gave $100,000 to Tom Wolf between May 6 and June 9 alone. According to the most recent campaign finance reports, the Pennsylvania State Education Assocation gave him another $200,000.

Unions have invested heavily in commercials and newspaper ads promulgating the myth that Gov. Tom Corbett cut a billion dollars in education funding. In fact, the PA Families First "SuperPAC", which we highlighted before, has been running election-related TV ads spreading the "$1 billion cut" lie. Not coincidently, the American Federation of Teachers and National Education Assocation recently gave $1 million to PA Families First, directly from union dues.

Of course, education funding cannot be "slashed" and "technically rise" at the same time. Only one can be true. And the truth is that state education spending is at an all-time high.

But as long as union leaders are willing to cut million dollar checks promoting their billion dollar myth, it’s no surprise a teacher from West Philadelphia is unclear about the facts.  

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You may have heard about a nationwide Great Communicators Tournament in which SIX of our team members were semi-finalists.

Well, I’m proud to announce that—out of hundreds of participants—our Director of Marketing and Outreach Dawn Meling won second place!

She delivered a speech on the vital need for public pension reform, using a Pennsylvania teacher as a practical example, and answered judges’ questions with great poise before an audience of more than 500 people. You can read a transcript of her remarks here.

What could top that?

CFM Overton

The indispensable Charles Mitchell, CF’s executive vice president, won the Overton Award for his tenacity in fighting for freedom and for being the mortar that binds our freedom infrastructure together. This award has only been given to one other person since its inception more than ten years ago!

Thank you for your continued support and know that you are helping some exceptional people fight for Pennsylvania’s future.


Audio: Is There Really a Public Pension Crisis?


Short answer: Yes!

But some—like government union leaders—deny that anything needs to be done or that there’s a crisis at all.

The truth is, the consequences of inaction on public pension reform are felt by students in schools which are paying ever-higher portions of their budgets on legacy costs and by property owners whose taxes seem to rise year in and year out.

Not to mention that a child born today will be paying off our pension debt until the age of 30!

Katrina Anderson discusses the pension crisis and solutions on WSBA’s The Gary Sutton Show. Listen here or below:

The Gary Sutton Show airs daily on WSBA 910AM in the York area.

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

And for mobile listening, get the SoundCloud iPhone and Android apps.

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Charter Schools Promote Segregation? Not So!


My letter to the editor in the Lehigh Valley Express Times refutes a claim that charter schools are promoting racial segregation:

A recent article cites claims by both Bethlehem NAACP President Esther Lee and Bethlehem School District Superintendent Joseph Roy that charter schools are resulting in segregation. Roy even claims students are leaving the district for charter schools because they “don't want their kids around kids who speak Spanish or poor kids."

But enrollment data from the state Department of Education show they are wrong.

According to state enrollment data, the Bethlehem School District is 37 percent Hispanic, 10 percent African American, and 47 percent White.

Charter schools in the area are collectively near mirrors. The three charter schools serving Northampton County are 39 percent Hispanic, 11 percent African American, and 37 percent White (with a higher percentage “Multi-Racial”). That’s the opposite of segregation.

Indeed, a recent study from the Center for Rural Pennsylvania finds that charter schools across the state have significantly higher enrollment of African-American and Hispanic students.

Lee and Roy are either grossly misinformed about charters schools or misleading readers to advance their agenda. Either way is disappointing from folks in education policy leadership roles.

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PA House Takes Another Step To Reduce Debt


Every man, woman and child in Pennsylvania owes just over $10,000 in state and local debt. Today, the state House made another positive step towards reducing that debt burden. HB 2420 passed the chamber on a 114-82 vote. A related bill, HB 2419 has advanced from committee and awaits a floor vote when the legislature is next in on October 6.

HB 2420, sponsored by Rep. Kerry Benninghoff, would reduce the state's borrowing for the RACP programs by $50 million each year beginning in 2018-19 until it reaches $2.95 billion. Last year, RACP's debt limit was reduced from $4.05 billion to $3.45 billion.

RACP allows taxpayer-backed borrowing for private projects, like sports stadiums and corporate headquarters. RACP has a long history of funding questionable projects such as the Arlen Specter Library, the bankrupt August Wilson Center in Pittsburgh and a $3 million grant to the Second Mile, the charity founded by convicted child molester Jerry Sandusky.

HB 2419 sponsored by Rep. Mike Turzai would cap the annual borrowing for new projects beginning in 2015-16. Specifically, the bill would cap:

  • Redevelopment Assistance Capital Projects, known as RACP, at $125 million
  • Flood Control Projects at $25 million
  • Highway Projects at $25 million
  • Public Improvement Projects at $350 million
  • Transportation Assistance Projects at $175 million

House lawmakers should be commended for tackling Pennsylvania’s borrowing problem, and recognizing that RACP subsidies crowd out private investment and prevent broad-based tax reduction to stimulate job growth for all.

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Solving Health Care Without Obamacare Headaches


Montana's Rib and Chop House in the Pittsburgh area is taking an innovative approach to providing health care coverage to employees, in spite of Obamacare. The Pittsburgh Tribune-Review reports the small business is using privately-run (not government-run) insurance exchanges to offer employees a variety of insurance plans.

This approach makes a lot of sense. Employers can offer a "defined contribution"—providing funds for health care without having to get involved in the bureaucracy of insurance mandates. Employees can then choose the insurance plan that best meets their needs for their family.

Of course, there is a downside, as the Tribune-Review notes:

There are other obstacles as well. One is a penalty under the Affordable Care Act that fines large companies $2,000 per employee for not providing coverage.

Another is the substantial tax benefit to workers from employer-sponsored health insurance that would go away if companies stopped buying health insurance.

"You've got to make the tax treatment for nonemployer-based coverage basically the same," said Stuart Butler, an economist with the liberal Brookings Institution in Washington. "It's got to be neutral."

In other words it's bad tax policies, not employers, that are blocking access to affordable health insurance. Employers get a tax benefit for providing insurance coverage. But individuals buying coverage for themselves don’t get the same treatment.

To encourage innovations that provide more choices, like those enjoyed by Montana’s Rib and Chop House employees', policymakers should look to a couple of reforms Commonwealth Foundation has recommended for years.

Congress should level the playing field and treat individuals purchasing health insurance the same as businesses buying insurance. The state can do the same.

And state lawmakers should allow "list-billing," like that adopted in Missouri, allowing companies to contribute and collect for an employees’ individual insurance plan.

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Audio: Taxpayer Protection Act Responsibly Limits Spending


Taxpayer Protection Act

Last week, legislation moved out of the Senate Finance Committee that would set guardrails on state government spending, establish a “Rainy Day Fund,” and, potentially, even send rebate checks back to Pennsylvania taxpayers.

Sound enticing?

Check out our new Taxpayer Protection Act handout for more information.

So, what are some of the benefits of responsible spending limits?

CF’s Nate Benefield answers in a conversation with radio host Gary Sutton. Listen here:

The Gary Sutton Show airs daily on WSBA 910AM in the York area.

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

And for mobile listening, get the SoundCloud iPhone and Android apps.

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Teachers Sue PSEA in Landmark Case


Jane Ladley was a special education teacher in Chester County for more than 25 years until she retired this year. She may have left teaching, but she has a bone to pick with the Pennsylvania State Education Association (PSEA), the union that represents some 180,000 educators around the state.

In a landmark step, Ladley and Lancaster County teacher Chris Meier sued the PSEA for violating their rights as "religious objectors." It's the first case for newly established public interest law firm, the Fairness Center.

Ladley and Meier are fee payers—teachers who don't officially join the union, but by contract rules and state law are forced to pay a "fair share fee" to the union to cover representation. However, both teachers became religious objectors who, because their faith conflicts with union support of policies such as abortion, decided to have their fee instead donated to a charity.

In this case, both teachers got stuck in limbo. The PSEA accepted their religious objections, but have nixed the charities the teachers chose. Christen Smith from Capitolwire (paywall) reported on Ladley's experience:

“I first chose a scholarship in our local community for students who showed an interest in the Constitution, which is definitely close to my heart,” she said in editorial submitted to newspapers by her attorney, Nate Bohlander, assistant general counsel for the Harrisburg-based Fairness Center. “They looked at the organization sponsoring it and said they would not agree to it based on it being a political group.”

Ladley said she searched for another charity with a similar mission — she chose one that offers classes on the Constitution, instead — but the PSEA hasn't approved it to date, either.

“They are telling me which groups I have to choose,” she said. “It’s a wrong that needs to be righted. I’m doing this on principle and for the other teachers coming up through the ranks, so that they have these options available to them.”

The PSEA has 20 days from the filing of the lawsuit (September 18) to respond.

According to the Fairness Center, the PSEA is exploiting a loophole in Pennsylvania law that effectively silences teachers: The 1988 agency shop law requires the money to go to a "non-religious charity" both union and teacher agree on, but doesn't prescribe a procedure or deadline to reach that agreement.

Ladley says the amount of money at stake or whether she's still in the classroom is irrelevant. "Why should I have to fund an organization that counters my faith and values so I can work as a teacher?" she said. Even if only future Pennsylvania teachers see their rights better protected, for her, it's worth the fight.

For more on the teachers' groundbreaking lawsuit, see stories at PennLive, LancasterOnline, the Philadelphia Inquirer, and the below TV report from Fox43.

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Safety Net Should be Reformed, not Renamed


Good news: Pennsylvania will no longer spend 40 percent of the general fund budget on public welfare.

Instead, we'll spend it on "human services."

Yesterday, the general assembly approved HB 993 to rename the Department of Public Welfare the Department of Human Services.

The stigma associated with the department has nothing to do with branding but everything to do with its failure to lift people out of poverty—despite ever-growing budgets. New census numbers reveal the poverty rate in Pennsylvania is 13.7 percent, which is a 30 percent increase since 2003.

Meanwhile, welfare spending continues to grow faster than taxpayers’ ability to pay, consuming 40 cents of every dollar spent by state government.

Lawmakers should be concerned with reforming the safety netnot renaming it. 

Their first priority should be to address the welfare cliff, in which families are punished for earning higher wages. Because safety net benefits decline more quickly than earned income increases, the system encourages families to settle for less. That's wrong. Fixing the cliff should be the primary focus for advocates of low-income Pennsylvanians.

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Treasurer Finally Accepts that Fiscal Restraint is Needed


We at the Commonwealth Foundation are pleased to welcome State Treasurer Rob McCord to the fight for fiscal restraint.

McCord, along with Auditor General Eugene DePasquale, held a press conference today to raise concerns about state finances. While DePasquale in his role as Auditor General is regularly fighting waste and abuse, such as his audit of Scranton's failing pension plan, this seems to be a first for McCord. The impetus is the state needs to borrow money from the Treasury to pay its bills until taxes roll in. 

This is a real concern, but this is far from the first time the state has been in this fix. In 2009 and 2010, Pennsylvania issued "tax anticipation notes"—borrowing funds with interest until enough tax revenue comes in to pay them off. But McCord issued no warning shot then. He simply signed onto the bond issue.

In contrast, the Commonwealth Foundation has been sounding the alarm for years about the state's fiscal health, noting the "Four Alarm Fire" facing our commonwealth, and the frequent bond downgrades we are experiencing thanks to a pension crisis and excessive debt. As we've noted, this problem has been caused by seven consecutive years of spending more than revenue.

Nonetheless, we welcome Treasurer McCord in the fight for fiscal restraint. The treasurer noted, "the state's true financial condition is even worse than it appears because Pennsylvania has papered over its problems by draining other funds to balance the last several budgets."

In other words, this is a long-standing problem caused by decades of excessive spending. We have to put our fiscal house in order.

One good start is the Taxpayer Protection Act, which passed the Senate Finance Committee today. Click here for our fact sheet on that important issue.

Lawmakers should also tackle the critical issue of pension reform. And recent House efforts to reduce the "debt ceiling" on the RACP program—which is essentially borrowing for corporate welfare projects—would be a major step towards fiscal sanity.

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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.