Video: Tax Credit Scholarships Give Options to Thousands


The Educational Improvement Tax Credit program (EITC) offers businesses the chance to be more involved in their communities by offering tax credits in exhange for sholarship funding. This program allows students in failing or dangerous districts to attend thriving educational organizations like Logos Academy in York.

Matt Brouillette, CF’s president & CEO, and James Paul, a CF senior policy analyst, recently sat down with David Taylor, president of the Pennsylvania Manufacturers’ Association, to discuss the EITC program and the opportunities it affords students who are trying to flee failing school districts.

Season 4, Episode 8: Educational Improvement Tax Credit from PMA Perspective on Vimeo.

These scholarships help students who want a better quality education, but lack the resources to obtain one. As Matt describes, these businesses “are either going to pay that money to Harrisburg or give it to a scholarship organization that is rescuing kids and families” from dangerous and violent school districts. Seems like an easy choice, doesn’t it?

Both the continual growth and increasing political support of the EITC program show how beneficial educational choice can be for students. James describes the program’s success by pointing out that “since the implementation of the EITC program in 2001, Pennsylvania has seen nearly 500,000 scholarships awarded”­—scholarships targeted at students in the lowest performing school districts.

Aaron Anderson, CEO of Logos Academy, calls programs like EITC a “no brainer” since they provide  businesses the opportunity to give a student who is in a struggling school district a real opportunity and a real alternative to get a world class education. EITC is ensuring that every child in Pennsylvania has access to a quality, safe school of their choice.

For another example of the benefit tax credit scholarship programs bring to Pennsylvania families, read James Paul's commentary Scholarships Offer Lifeline to PA Students.

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"This is Not a Union Ballot"

APRIL 15, 2015  | by DAWN TOGUCHI

This is not a union ballot, according Jeffrey Sheridan, press secretary for Gov. Wolf.

UHCW ballot

UHCW Ballot 2

The ballot you see was mailed to a home health care worker. Gov. Wolf issued an executive order that effectively unionizes home health care workers, potentially adding millions to government union coffers. Last election cycle, government unions gave $3.4 million to Gov. Wolf's campaign.

United Home Care Workers of Pennsylvania is a joint project of two government unions, AFSCME and SEIU. On its website it self-describes as "a union". In a mailer sent to home care workers, they offer "a special message about your union election."  (emphasis added)

"It’s not a union ballot," Jeffrey Sheridan told the Post-Gazette. "It's just not. They’re wrong."

Mr. Sheridan doesn't have to call it a "ballot." He can call it a unicorn if he wants, but the fact remains that deceptive tactics are being used against those who serve some of the most vulnerable Pennsylvanians.

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The Worst "Subsidy" Study You'll Never Read


Energy Policy

The radical environmentalist group and corporate welfare lobbyist PennFuture has updated an absurd study about the "subsidies" Pennsylvania taxpayers pay for fossil fuels. While we oppose subsidies for any industry, most of PennFuture's "subsidies" are the absence of higher taxes on consumers.  

PennFuture's analysis show less than $60 million in actual direct subsidy for fossil fuels (some of which is for alternative energy programs). What they consider a "subsidy" is not taxing certain goods and services.

Most of their "subsidy" total comes from not applying the sales tax to gasoline and electricity. That is, taxpayers would "save" by paying more in sales tax at the pump and in their heating bills.

But wait, you must be thinking, don’t we have a gasoline tax and an electricity tax?

Why yes, yes we do. They are claiming we are subsidizing gasoline by taxing it, but not taxing it twice.

  1. Almost 44 percent of these "subsidies" are for NOT imposing the sales tax on gasoline. Yet gasoline is taxed separately under the Oil Company Franchise Tax. In fact, as of 2015, Pennsylvania has the highest state gasoline tax in the nation.

    Gasoline is exempted from the sales and use tax for that reason and that reason alone—it doesn't make any sense to double-tax a product. To suggest state taxpayers are "subsidizing" gasoline production by imposing a tax on gasoline (but not two taxes) is beyond ridiculous.

  2. Another 20 percent of these "subsidies" are for not imposing the sales tax on electricity and heating fuel. Again, these utility bills are taxed separately under the Gross Receipts Tax. Making consumers pay another tax on their electric bill or heating bill does not repeal a subsidy, and in certainly doesn't save taxpayer.

Both of these tax exemptions—making up almost two-thirds of PennFuture’s estimates of "subsidies"—suggest we should impose taxes on top of taxes on consumers at the pump or in their utility bills. Either PennFuture doesn't understand how taxes work, or are deliberately misleading their readers, but either way, they what they are suggesting is higher taxes on families.

Other "subsidies" include not taxing the government for its use of fuel (because we don’t tax the government for anything) and not imposing property taxes on the value of natural gas. This is a tax that would hit homeowners; it is not a subsidy for the businesses.

PennFuture seems to have no idea what a subsidy actually is. Ironically, they are lobbying for new subsidies, specifically $225 million in subsidies for alternative energy under Governor's Wolf budget proposal.

Worse yet, these subsidies will come from borrowed dollars. Governor Wolf wants to borrow funds and pay it back (with interest) using a new tax on natural gas severance. In other words, PennFuture not only wants to double-tax fossil fuels, they want to place a special tax on natural gas to subsidize cronies in the wind and solar power industry.

It's clear that these subsidization schemes not only punish taxpayers, but fail to create jobs. Pennsylvania continues to see anemic job growth, despite $2.9 billion in taxpayer-financed alternative energy loans and grants since 2003.

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Wolf's Stealth Unionization is Happening Now


Two lawsuits filed in Commonwealth Court last week say Gov. Wolf’s February executive order is an illegal attempt to unionize thousands of Pennsylvania homecare workers. But both the governor and his spokesman have consistently denied it does any such thing. Now, secret ballots sent to homecare workers for a union ambush election show those claims to be deceptive.

The Fairness Center, which sued to halt the executive order along with the Pennsylvania Homecare Association last Monday, obtained this union secret ballot delivered to Pennsylvania homecare attendants. It must be returned by April 23.

The ballot is for a final union election which would unionize tens of thousands of homecare workers under the United Home Care Workers of Pennsylvania—a "joint effort" of the Service Employees International Union and the American Federation of State County, and Municipal Employees.

Yet last week, Wolf spokesman Jeff Sheridan told WITF that the order "doesn’t allow [homecare workers] to organize." When asked about the lawsuits during a Wednesday East Liberty visit, Wolf himself said, "I'm not forcing anyone to join a union, nor am I granting collective bargaining rights or making anyone a state employee," according to the Pittsburgh Tribune-Review.

The fact that SEIU and AFSCME are organizing for their union right now directly contradicts these statements. People like Don Lambrecht—who has cared for his friend and employer David Smith day and night for the past 25 years—are being cajoled to vote for the union.

Indeed, the Pittsburgh Post-Gazette’s editorial board called Wolf’s order "an example of politics at its worst," and pointed to the SEIU's substantial donations to Wolf’s gubernatorial campaign as his likely motivation.

The Wolf administration's cozy relationship with the SEIU is being revealed elsewhere today. The Pittsburgh Tribune-Review is reporting that Wolf’s chief of staff advised the University of Pittsburgh Medical Center to "let the SEIU unilaterally organize” their workers. A UPMC spokesman called Wolf’s approach “straight of out SEIU’s playbook."

A pattern of union favors is developing in the Wolf administration that should give Pennsylvanians pause.

Wolf accepted nearly $1 million in campaign contributions from the SEIU and employs a former executive director of the SEIU Pennsylvania State Council as a special assistant. AFSCME, between its national and state arm, gave Wolf another $550,000 in campaign support. Those contributions seem to be paying a dividend for union leaders.

Even before SEIU and AFSCME's ballots were sent, it was clear that the order’s purpose was to unionize workers.

The union could actually win the election with just a majority of those who return ballots. Even if just 20 percent of homecare workers cast a ballot, SEIU and AFSCME would become the monopoly representative for 100 percent of homecare workers and could begin collecting union dues and campaign contributions right out of Medicaid payments.

It’s disgraceful that these deceptive tactics are being used against those who serve some of the most vulnerable Pennsylvanians. It’s a shame that it’s being done by a man who claims to be a "different kind of governor."

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Pennsylvania's Economy Ranks a Dismal 39th

APRIL 10, 2015  | by BOB DICK

Pennsylvania Economy

Is placing 39 out of 50 in any competition acceptable? Most people would say no, which is why a new index published by the American Legislative Exchange Council (ALEC) is so unsettling.

Released on an annual basis, the Rich States, Poor States index ranks states based on their economic performance and economic outlook. In the first category, Pennsylvania performed poorly, ranking 39th. Future economic performance doesn’t look promising either. The authors of the index place Pennsylvania in the bottom ten at 41.

The rankings are based on fifteen different variables that include tax rates, debt service as a share of tax revenue, labor regulations, and tax or expenditure limits. Pennsylvania ranks poorly in nearly all of these areas year after year. As Jana Benscoter of Watchdog points out, Pennsylvania’s economic outlook ranking has never been higher than 33rd.

This isn’t surprising given the dramatic growth of government spending and taxation since 1970 and Pennsylvania’s inhospitable regulatory environment, both of which are roadblocks to job creation and prosperity.

But Pennsylvania doesn't have to continue down this path. If the commonwealth lowers the tax burden on businesses and families, restrains spending growth, and fixes its regulatory climate, we can shed these low rankings and grow an economy that works for everyone.

We're at a watershed moment, with a choice between the largest tax hike in Pennsylvania's history or reducing government spending to leave more in the pockets of Pennsylvanians. It's a choice between prosperity or economic stagnation.

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Audio: Reforming Pennsylvania's Pension System


While Gov. Wolf seems to think borrowing money will solve the pension crisis, the commonsense approach to getting out of our $53 billion pension hole is to “stop digging”–i.e., stop piling more people into the current, failing system.

CF’s Nate Benefield was recently on the Gary Sutton Show to discuss Pennsylvania’s public pension problem and the need to overcome roadblocks to reform.

Defined contribution plans offer an alternate solution to the current pension system that would benefit both state employees and taxpayers and are always “fully-funded” (meaning they can’t pile up public debt).

Without much-needed legislative reform, public pensions will bankrupt cities like York—which has a quarter of its budget dedicated to pension funds—and continue to dig the commonwealth into a deeper financial hole.

Listen below to hear some of Nate’s interview with WSBA’s Gary Sutton and to learn more about pension reform.

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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Trapped: One Teacher Tells His Story


Frank is a high school teacher in Lackawanna County who has been frustrated with the NEA’s support of abortion for a long time: “I just don’t want to see any of my money going to support abortion in any way.” Unfortunately, Frank’s desire has been ignored.

According to the NEA’s financial report disclosed to the U.S. Department of Labor, $1.15 million in donations went to the AFL-CIO and another $15,333 went to the SEIU, both of which donate to Planned Parenthood.

As a member of the NEA, Frank’s dues are spent on many political causes that violate his moral beliefs. “The union does not represent or even respect my deeply held convictions. It forces me to violate them,” he explains.

So when Frank learned he could resign his union membership and donate his fair share fee to a charity, he knew he was morally obligated to do so. “I have been in the union for 28 years. I never knew that I had a religious objection option. Had I known that earlier, I would have taken action.”

But there was a problem. Frank’s current contract prohibits him from resigning from the union until June 2017, after he’s eligible for retirement. “I haven’t made any decisions yet [about retirement], but it doesn’t appear that there is any way for me to stop funding the pro-abortion movement short of leaving my job.”

Frank’s experience isn’t uncommon. Contracts give educators little opportunity to opt-out or resign their union membership. Pennsylvania’s regulations are especially restrictive.

If a school district collective bargaining agreement contains a maintenance of membership provision, teachers have a very brief window to resign their membership. This is frequently an annual 10-day or two-week period, or a 15-day period right before a contract expires.

In rare cases, a teacher could be denied the right to leave their union for decades. If a union and employer agree to a new contract before the opt-out window, the window is vacated and employees operating under the contract cannot leave their union.

Additionally, no teacher has successfully challenged a valid maintenance of membership provision in Pennsylvania, despite the constitutional concerns presented by such a provision.

Frank hopes his story will help other educators become aware of their opt-out options and that lawmakers will take notice to of these oppressive regulations that limit the freedom to teach.

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"Ludicrous" Union Dues Skim Faces Lawsuits


Pennsylvania's Government Unions

On Monday, two separate lawsuits were filed in response to Gov. Wolf's February executive order which opens the door to unionizing tens of thousands of home health care workers. This would give SEIU—the largest of Wolf’s many public sector union political donors—access to a potential $21 million in union dues every year.

But Gov. Wolf's team denies the executive order does anything but let home health care workers talk to the governor’s office. Why that would require an executive order is anyone's guess.

"It doesn't allow them to organize," Wolf press secretary Jeff Sheridan told WITF. Sheridan told the Tribune Review the suits are "ludicrous" and that "the executive order is about helping the disabled and elderly, not union organizing."

Who’s got it right? Let's review Wolf’s executive order (emphasis mine):

An employee organization that has as one of its primary purposes the representation of direct care workers in their relations with the Commonwealth or other public entities may petition the Secretary to represent a particular unit of Direct Care Workers.

The truth is "employee organization" is simply a legal term for a union. The order specifically allows unions to seek to represent (i.e., organize) direct care workers.  It even offers to provide a list of workers’ home addresses to help the union organize.

Wolf's order also defines a new "Direct Care Worker Representative" (emphasis mine):

All Direct Care Workers identified on the most recent Direct Care Worker List (at the time the election is requested) shall be eligible to vote in an election.  If the majority of votes cast in the election are for the petitioning organization, the American Arbitration Association shall certify the election results, and the Secretary shall recognize the organization as the Direct Care Worker Representative.  There shall only be one Direct Care Worker Representative recognized at any time.

Put more simply, the order creates a monopoly union representative for all home health care workers.

And Gov. Wolf makes the unionization process as easy as possible—an election could be held with only 10 percent of home care workers signing up, far lower than the 30 percent threshold in the current labor law. Moreover, the election would be conducted by the American Arbitration Association, not the Pennsylvania Labor Relations Board, which is the standard in all other cases.  And the union would actually win the election with just a majority of those voting, as opposed to the true majority required under the Pennsylvania Labor Relations Act.

The order goes on to describe a "meet and confer process" over several issues that can result in a "memorandum of mutual understanding." This has the same effect as collective bargaining by any reasonable understanding—they’re just changing the terminology.  

What will they be negotiating over? Wages, health benefits, retirement, paid leave, working conditions, and—of course—payroll deduction of union dues.

Indeed, Acting Secretary of Human Services admits, under questioning from Sen. Scott Wagner, that this order would allow home care workers to join a union and pay union dues.

Without doubt, this order is stealth unionization of home care workers. To deny it by using doublespeak is—in Jeff Sheridan's own words—simply ludicrous.


Gov. Wolf's Executive Order Hurts Home Health Care Recipients

APRIL 8, 2015  | by BOB DICK

Our friends at the Fairness Center (TFC) filed a lawsuit this week defending against stealth unionization of homecare workers across Pennsylvania. In their lawsuit, TFC argues Gov. Wolf’s executive order to unionize homecare workers violates both Pennsylvania’s Constitution and the Pennsylvania Labor Relations Act.

Gov. Rendell employed this same tactic in the waning days of his administration, but he abandoned the union friendly move after a court challenge.

The Pennsylvania Homecare Association (PHA) also filed a separate lawsuit in conjunction with United Cerebral Palsy of Pennsylvania to prevent Gov. Wolf’s power grab from moving forward. As the PHA points out in their filing statement, the order allows the SEIU to go door-to-door recruiting homecare workers to join the union.

While the legal ramifications of this move are troubling, the impact it could have on the unique relationship between many homecare workers and recipients is even more distressing, threatening relationships like the one Dave Smith and Don Lambrecht share.

Dave, whose muscular dystrophy has left him wheelchair-bound, and Don, Dave’s homecare provider of 25 years, have become close friends, seeing each other as family rather than as an employer and employee.

But Wolf’s order allows the Service Employees International Union (SEIU) to step between the two men. Even though Don would not be required to pay dues, he would still be forced to accept representation, essentially forcing him to collectively bargain against Dave. The same situation applies to tens of thousands of other homecare workers, many of whom care for their own elderly parents or disabled children.

Dave sees Wolf’s effort as an unwelcome and unnecessary invasion, saying, “Don doesn’t need to pay part of his income to a group for something that he’s been able to do for himself all these years.”

Dave’s ability to have control over his own care may be in jeopardy, too.

Don, a former union member himself, says unions aren’t “practical” in this situation and that there’s just one reason for the unionization push, “Money—union dues.”

For a governor touting transparency and a “government that works,” this under-the-radar gift to one of his largest campaign donors is particularly disturbing. This, along with Wolf’s secret contract negotiations with SEIU and 15 other public unions, is another indication that his “gift ban” is all bark and no bite.

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Contract Transparency: An Idea Whose Time Has Come


State union contracts worth billions of taxpayer dollars would be available for public inspection before being signed by the governor, if proposals unveiled by two state Senators become law.

The Patriot News reports Sen. Mike Folmer is introducing legislation that would require the Independent Fiscal Office to assess the cost of proposed state union contracts. Sen. Pat Stefano has a separate bill that would require all levels of government to post contracts online before acting on them (see our post on a similar House bill).

ABC 27 explains how Gov. Wolf will be negotiating sate employee contracts worth about $3.3 billion with union leadership that contributed $2.6 million to his election campaign.

Without reform, these contracts would go on behind close doors despite the clear conflict of interest. As Bob pointed out last week, 11 states have enacted contract transparency.

What does Gov. Wolf say about such proposals? Well, not much, though his spokesman, Jeff Sheridan, offers some insults to anyone supporting these commonsense transparency and good government reforms.

We should remember Gov. Wolf's own words—"If you don't agree with my ideas, here is my request: please come with your own ideas. It's not good enough to just say no and continue with the same old same old."

Transparency is an idea whose time has come. If Gov. Wolf and his administration have better ideas for opening up state contract negotiations and ending this inherent conflict of interest, they should bring their solutions to the table.

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The Commonwealth Foundation is Pennsylvania's free-market think tank.  The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.