Audio: Weathering the Budget Impasse

SEPTEMBER 2, 2015  | by JONATHAN REGINELLA

Another day passes without a state budget in Pennsylvania, causing panic among public officials who can't pay the bills and among parents who have children attending schools unable to make payroll

Still, Gov. Wolf refuses to make meaningful compromises with state legislators. As a result, the people in both the public and private sector dependent on state funding are forced to make difficult choices to keep their operations going.  

So how has this budget impasse unfolded? CF’s Matt Brouillette joined WDAC’s Greg Barton to discuss its origins and why Gov. Wolf is standing in the way of a solution. 

Matt explains how Gov. Wolf's “veto of the budget in totality”–despite agreeing with 274 of 400 line items in that budget–could mean he won't be budging from his plans to levy the largest tax increase in state history any time soon.

Legislators have attempted to compromise with Gov. Wolf by offering a $400 million increase for education in exchange for pension reform. Two weeks after the offer, Gov. Wolf has yet to respond.

With no sense of urgency on the part of the governor, Matt believes it may take a crisis to move things along: “This, of course, is going to only come to a precipice when we see schools clamoring or having to borrow significant amounts of money because they’re lacking in state aid or the service agencies not being able to provide the services that needy citizens need.”

Click here or listen below to hear more.

Greg Barton’s Spotlight program airs on WDAC 94.5 FM on Saturdays at 12:30 pm.

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Corruption is Spelled P-L-C-B

SEPTEMBER 1, 2015  | by DAWN TOGUCHI

When it comes to government corruption investigations, Attorney General Kathleen Kane has dominated the conversation this summer. But now, as if seemingly miffed at the spotlight being taken away from their own scandals, the Pennsylvania Liquor Control Board's (PLCB)'s culture of corruption is once again making headlines.

For those of you catching up, we've written about various recent PLCB scandals here, here, here, here, here, here, here, and here.

And today, we add to the list former Director of Marketing & Merchandising James Short. Short pleaded guilty to federal charges of soliciting and concealing bribes and kickbacks that ranged from all-expense-paid golf trips to shiny new cuff links. Short accepted these from vendors seeking to do business with the PLCB at its stores statewide—namely, the stores that Pennsylvanians are forced to shop from if they want to buy wine and spirits in state.

The culture of corruption at the PLCB shows precisely why Gov. Wolf was wrong to veto liquor privatization this summer. When a few bureaucrats like James Short are given the power to control what products Pennsylvania residents can buy, it's no surprise that vendors offer lavish gifts to earn bureaucrats' favor. Clearly some officials are all too willing to accept them.

For years now, the government liquor monopoly’s headlines of ethics scandals have sounded more like a broken record than breaking news. But the biggest scandal of all is that taxpayers continue to fund the state-run system—of which only Utah is a counterpart—that invites this corruption.

As long as Gov. Wolf determines that bureaucrats have the power to determine wine winners and liquor losers, customers, job creators, and taxpayers pay for the scandals, inconvenience and inefficiencies of a government alcohol monopoly.


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Putting Students First in Chester Upland

AUGUST 28, 2015  | by JAMES PAUL

Although Gov. Tom Wolf’s recent actions have thrown Chester Upland School District into a state of turmoil, local unions in the district are rising above politics and putting students first. Teachers and support staff in Chester Upland School District agreed to work without pay so their students can return to school on time.

They should be commended for doing so.

The Delaware County Daily Times has the full story:

More than 300 Chester Upland School District faculty members and support staff voted Thursday to work without pay if necessary after learning from Superintendent Gregory Shannon during their first day back at school that there are insufficient funds to meet the district’s first payroll of the school year.

Chester Upland Education Association President Michele Paulick said that at a morning convocation Shannon read a letter from Francis Barnes, the state-appointed receiver for the school district which has been in financial flux for 25 years, that the district currently does not have the funds to make payroll for Sept. 9. Classes are scheduled to begin Sept. 2. 

“We knew that the district was in financial straits but we didn’t know it was so immediate so, yes, we were very shocked,” said Paulick Thursday evening.

Following the announcement from the superintendent, the approximately 200 teachers represented by the Chester Upland Education Association and more than 120 secretaries, teaching assistants, licensed practical nurses and other staff represented by the Chester Upland Education Support Personnel Association passed a joint resolution stating their members “will work as long as they are individually able, even with delayed compensation, and even with the failure of the school district to meet its payroll obligations, in order to continue to serve the students who learn in the Chester Upland School District.”

Interestingly, Democrats in the Pennsylvania State Housewho are also facing the possibility of foregoing monthly paychecksare taking a different approach. PennLive reports

Rep. Frank Dermody asked the Pennsylvania Treasury for "a loan, from whatever source you deem appropriate and in such amount as may be necessary, to be used during the balance of the current budget impasse to help us fulfill our obligation to pay timely salaries and related costs."

Perhaps House Democrats should take note of what is happening in Chester Upland—and follow suit. 

 


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Ridesharing Freedom En Route to Pennsylvania

AUGUST 28, 2015  | by JAMES PAUL

Uber and Lyft provide inexpensive rides to customers across the country despite numerous regulatory hurdles—chief among them the Philadelphia Parking Authority, which has previously thwarted the businesses from operating within the city. Recently introduced Senate Bill 984, however, would allow Uber and Lyft to compete in Philadelphia.  

This legislation, sponsored by Sen. Camera Bartolotta, establishes the framework under which ridesharing companies can freely and safely operate within all 67 counties of the commonwealth. SB 984 requires background checks and a zero tolerance policy on drug and alcohol use for prospective drivers. Uber and Lyft will also be required to maintain insurance coverage and abide by vehicle safety regulations.

According to a recent study from the Cato Institute, many concerns surrounding ridesharing are unfounded. Critics typically point to safety concerns as their primary objection, but Uber and Lyft actually offer a safer alternative to the taxicab monopoly—both for drivers and passengers.

A major factor ensuring this increased safety is the utilization of an electronic payment system. All Uber and Lyft transactions are completed via their respective smartphone apps. This eliminates many of the risks facing drivers. Since cash never changes hands, drivers are less vulnerable to robbery.

Additionally, unlike a traditional taxi service, where passengers are anonymous, Uber and Lyft customers must create electronic profiles to use the ridesharing services. These measures ensure added safety for drivers, as any criminal activity could easily be linked to a user’s profile information stored on the ridesharing app.

The structure of Uber and Lyft protects the passengers, too. The passenger knows the name of the driver, the make and model of the car, and the license plate number upon ordering a ride.

Immediately after the ride is over, the passenger can rate the driver from their smartphone, which gives passengers influence over future demand for the driver. Indeed, user ratings, combined with the ability to choose your driver, provides riders far more protection than government licensing mandates.

Sen. Bartolotta’s legislation will increase competition and provide consumers with more options at better prices. It’s time to bring ridesharing freedom to Pennsylvania.


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Too Close for Comfort: Gov. Wolf and SEIU

AUGUST 27, 2015  | by ELIZABETH STELLE

New documents obtained by the Commonwealth Foundation (publicized by the Post-Gazette in a recent story) show a frightening closeness between Gov. Wolf and union leaders, particularly leaders at the SEIU.

In 2014, Tom Wolf was the biggest recipient of union campaign contributions. Unions donated more than $3.4 million directly from union PACs—plus millions in additional support through union “independent expenditures”—to the Wolf campaign. SEIU led the way with more than $988,000 in contributions. It appears those donations are paying off.

Michael Brunelle, the former executive director of SEIU's PA State Council, is now special assistant to the governor and regularly collaborates with his former employer. Emails between Mr. Brunelle and union officials show the administration sharing news releases, talking points, and other documents before they are published.

Brunelle’s emails also show the administration working with SEIU, the Pennsylvania Budget and Policy Center, and the "Better Choices for PA Coalition" to coordinate press conferences in support of Gov. Wolf's tax proposals. Coincidentally, the coalition continues to blame Republicans for prolonging the budget stalemate and defend Gov. Wolf, despite his veto of all human services funding and his cancellation this week of budget negotiations.

The Wolf administration regularly discusses how many letters and calls SEIU, the Pennsylvania State Education Association (PSEA), and others are making to lobby for Wolf's budget—and advises where to send those letters.

Most worrisome is the collusion over a controversial executive order.

SEIU officials helped draft an executive order that enabled SEIU and AFSCME (American Federation of State, County & Municipal Employees) to rapidly unionize tens of thousands of home health care workers—and deduct union dues from their paychecks. These dues can be spent on political activity and lobbying to push the governor's agenda. This executive order is currently being challenged in court.

As James noted in a post earlier today, Gov. Wolf's education agenda has clearly put PSEA and PFT (Philadelphia Federation of Teachers) leaders ahead of the needs of children.

Another indication of labor’s influence over the governor is David Fillman’s recent appointment as chairman of the State Employees’ Retirement System (SERS). Fillman is the executive director of AFSCME’s Council 13, representing the largest group of state workers. AFSCME's refusal to support real pension reform may lead to Detroit-style pension benefit cuts.

Union leaders' influence with the Wolf administration shows why reforms like contract transparency during labor negotiations are needed.

How can a governor in lock step with state employee labor union expect taxpayers to trust him to negotiate contracts worth billions of dollars with his largest campaign contributors—behind closed doors?

Collaborating with political allies isn't a crime, but Gov. Wolf's record of supporting one special interest to the detriment of middle-class families, students, and home care workers should trouble anyone who believes our elected officials should serve the people, not union leaders. 

Commonwealth Foundation RTK


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Audio: Helping Teachers Speak Out

AUGUST 27, 2015  | by JONATHAN REGINELLA

Teachers across Pennsylvania are being forced to contribute their hard-earned dollars to partisan politics and organizations they do not agree with.

Some brave teachers–such as Linda Misja and Jane Ladley–are fed up with this injustice and are speaking out.

Brittney Parker, CF’s Community Liaison, spoke with Dom Giordano of WPHT Talk Radio 1210 on the Free to Teach initiative, a resource available for teachers like Linda and Jane who are taking a stand against coercive union practices.

Brittney outlines many of Free to Teach’s useful tools, including the Teacher’s Bill of Rights.

Many teachers, as Brittney points out, are not aware of their rights because their unions keep them in the dark on resignation periods and union processes–complicated barriers for teachers who have questions or want to exit their union.

“We will answer teachers' questions, help them go over their collective bargaining agreement, and figure out when their resignation windows are. We can help them find a voice and be that voice for teachers who just want to be able to make decisions that are best for their own lives.”

Click here or listen below to learn more about Free to Teach.

Connect with Free to Teach on Twitter, Facebook, and Pinterest.

The Dom Giordano Show airs every weekday from 9 am – 12 pm. 

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Wolf’s Ugly Record on Education

AUGUST 27, 2015  | by JAMES PAUL

Families in Chester Upland breathed a sigh of relief this week after a Delaware County Judge rejected Gov. Tom Wolf’s efforts to arbitrarily slash payments for the district’s cyber and special needs charter students.

From The Inquirer:

After a hearing that stretched over two days, Judge Chad Kenney said the commonwealth's plan was "wholly inadequate" to restore the district to financial stability. He also faulted the state's and district's lawyers as failing to provide "meaningful specifics or details" as to how they arrived at the plan.

The ruling is a victory for Chester families pursuing high quality education—and an embarrassing setback for an administration fixated on limiting school choice in Pennsylvania.

In less than a year, Gov. Wolf has established an ugly record on education policy. Here's a recap: 

  • In March, Wolf removed Bill Green as chairman of Philadelphia’s School Reform Commission (SRC) after the SRC approved merely 5 of 39 applicants from new charter schools. This was a clear message that even tepid support for charters will not be tolerated.
  • Wolf’s proposed state budget includes massive cuts to cyber schools—reducing their revenue by one-third—and denies all charters the right to maintain rainy day reserve funds. Recent events in Salisbury and Bethlehem underscore why charters deserve to hold reasonable fund balances.
  • Wolf undermined the recovery plan in York City School District, effectively forcing out the district’s chief recovery officer as retribution for his support of charter schools.  
  • Wolf personally lobbied three Democratic state representatives who bucked party leadership in support of legislation that would protect excellent public school teachers from furloughs. After the governor met personally with Reps. Davidson, Harris, and Wheatley, the trio of Democrats were no-shows for a vote on a key amendment to the bill.
  • Wolf attempted to balance Chester Upland’s budget on the backs of special education charter students. Chester students are otherwise relegated to a school system Wolf admits “failed its students” and has been “mismanaged for over 25 years.”
  • Wolf’s Department of Education issued a “kill order” to Education Plus Academy, a cyber charter school that primarily serves special needs students, one week before the start of the school year. Why is the administration threatening to shut down Ed Plus? For spending too much time educating students in person, and not enough time engaging in strictly online instruction.

Given that educational choice continues to deliver positive results for students and families, one can only wonder why Gov. Wolf is so vehemently opposed to it. 


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Location, Location, Location

AUGUST 26, 2015  | by BOB DICK

What do real estate values and tax bills have in common? Both are driven by location. In a new report, the Tax Foundation provides a comprehensive analysis of the tax burdens faced by seven types of businesses in all 50 states. And the news for Pennsylvania isn't good.

Here’s how the foundation calculated the businesses’ tax rates, which determine each state’s rankings:

Tax Foundation economists designed seven model firms—a corporate headquarters, a research and development facility, an independent retail store, a capital-intensive manufacturer, a labor-intensive manufacturer, a call center, and a distribution center—and KPMG tax specialists calculated each firm’s tax bill in each state. This study accounts for all business taxes: corporate income taxes, property taxes, sales taxes, unemployment insurance taxes, capital stock taxes, inventory taxes, and gross receipts taxes. Additionally, each firm was modeled twice in each state: once as a new firm eligible for tax incentives and once as a mature firm not eligible for such incentives.

So how does Pennsylvania stack up to other states? If you guessed poorly, you’re correct. Check out Pennsylvania's tax rates for each of the seven businesses:

As the chart above reveals, only manufacturing businesses enjoy a relatively low tax burden because of how the tax rate is applied to manufacturers’ sales. Meanwhile, non-manufacturing businesses—like a corporate headquarters or distribution center—face some of the highest tax rates in the country.

Make no mistake: Tax rates matter. States with lower taxes see better job, income, and population growth. On the other hand, high tax states like Pennsylvania consistently struggle in these three categories. The state needs to chart a new economic course to empower both workers and entrepreneurs with life-changing opportunities.

We just can’t continue with the same old, same old.


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Audio: A Look at Gov. Wolf's "Concessions"

AUGUST 26, 2015  | by JONATHAN REGINELLA

As state budget negotiations drag on, Gov. Wolf is pointing the finger at Republicans, claiming they have refused to move after he made “concessions on everything." So what compromises are included in these so-called concessions?

To name a few, Wolf’s original spending plan; Wolf’s original plan to increase the income tax; Wolf’s original plan to increase the sales tax; and Wolf’s original plan to borrow $3 billion in pension obligation bonds.

CF’s Matt Brouillette spoke with Gary Sutton on WSBA yesterday to discuss Gov. Wolf’s alleged budget compromises.

Matt explained how Gov. Wolf’s pension plan only includes reforms for 5 percent of current employees. It would do little to upend the destructive status quo, ensuring the pension system's problems are passed onto future generations.

Legislative leaders wisely rejected this “compromise” while responding with their own offer–one they hope will lead Gov. Wolf to abandon his unpopular budget proposal.

Click here or listen below to hear more.

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.

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Vince Hughes: A Brave Man

AUGUST 26, 2015  | by NATHAN BENEFIELD

In March, Gov. Tom Wolf unveiled a massive tax increase of $12 billion over the next two years. Sen. Vince Hughes offered this tax plan—or 97 percent of it, as the natural gas tax would be separate legislation—as SB 117.

This bill can never become law—revenue bills cannot begin in the Senate under the state constitution, but must originate in the House of Representatives. Yet, no one in the House has yet introduced this legislation.

In fact, when Wolf's plan was voted on in the House as an amendment to another tax bill offered by Republicans, it received zero votes in support, and 193 in opposition—including from members of Wolf's own party. Similarly, SB 117 has no cosponsors

That is to say, Sen. Vince Hughes is the only Pennsylvania lawmaker willing to endorse Gov. Wolf's tax plan. 

Why is Gov. Wolf's tax increase so unpopular with lawmakers, even fellow Democrats? As we've noted before, this proposal: 

It takes a lot of bravery for Sen. Hughes to stand alone in support of Gov. Wolf's tax increases that would devastate working families across Pennsylvania. 


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