Audio: Wolf's Campaign Rhetoric Meets Governing Reality

JANUARY 30, 2015  | by JONATHAN REGINELLA

Governor Wolf has made some bold promises on his campaign trail, but very soon the campaign rhetoric will meet governing reality.

CF’s President and CEO Matt Brouillette recently discussed Gov. Wolf’s policy agenda and how it will affect the people of Pennsylvania on The Gary Sutton Show.

As Matt points out in this interview, Wolf’s policy agenda of higher taxes, increased spending, and bigger government are “bad policies that have put Pennsylvania in jeopardy” and will not benefit middle- and low-income families.

Rather than creating opportunities for everyone, big government solutions like raising the minimum wage have dishearten aspiring entrepreneurs and potential business owners. As Matt points out, small business owners – or the “little guys” - have trouble establishing themselves due to the barriers erected by a government that “makes it difficult to even enter the marketplace”.

Listen to Matt’s latest interview with Gary Sutton on WSBA 910AM:

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

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Breaking Out of the Fortress & Into the Frontier

JANUARY 30, 2015  | by JAMES PAUL

Health Care

What is the ultimate goal of health care reform? Is it to provide all Americans with insurance cards? Or is it to enhance access to quality care at more affordable prices? Debates over health care are notorious for their singular focus on the former, but a new study from the Mercatus Center at George Mason University presents a different approach.

Robert Graboyes from Mercatus identifies two sharply contrasting health care visions: the fortress and the frontier.

In the fortress, doctors, hospitals, insurers, and medical manufactures are shielded from competition and granted unique regulatory protections. The fortress—which epitomizes America’s current health care system—stifles innovation, drives up costs, and erects barriers for the most vulnerable to access quality care.  

Alternatively, on the frontier, it is understood that high-quality health care requires multiple providers taking risks and competing to offer dynamic new services, medicines, and technologies—all at lower prices. The frontier encourages a spirit of entrepreneurialism that is markedly absent in many of today’s health care markets.

The relevant question is, “How soon will the health care industry experience the dramatic transformations already seen in the modern information technology industry?” In a Frontier world, many of these innovations … could become commonplace within the next five or ten years. In a Fortress world, however, they may take a generation or more.

We must break out of the fortress and advance into the frontier. Take a look at this video from the Mercatus Center that further explains how innovation can save health care.  


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Mary's Law is Introduced

JANUARY 28, 2015  | by ELIZABETH STELLE

Paycheck protection legislation, known as "Mary’s Law," was officially introduced in the state House of Representatives as HB 238. With the backing of 39 co-sponsors, Mary’s Law seeks to end the taxpayer-funded collection of union political money.

Mary's Law is named after Mary Trometter, a PSEA member from Williamsport who saw the union use not only her dues, but her name in endorsing a candidate she didn't support. You can watch her story here.

Recently the PA Independent highlighted the questionable nature of the PSEA's political activities under current law, noting that the PSEA has been ignoring reporting requirements for 40 years.

Trometter filed a complaint with the Pennsylvania Labor Relations Board in November. Her attorney, David Osborne of The Fairness Center, argues that the NEA letter and PSEA publications supporting Wolf’s candidacy are illegal under a 1970 state law.

The law says unions cannot use organization funds to make contributions in support of a political candidate, and they must report violations to the state within 90 days, he argued.

The PSEA and NEA responded that the letter and pro-Wolf material in a PSEA magazine are not contributions.

The passage of Mary’s Law is a matter of ethics, as Reps Cutler, Evankovich, and Knowles write in a recent op-ed. The bill would ensure that public resources are never used for politics and would empower union members by requiring union officials to directly seek support for political activities.


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The State of School Choice in Pennsylvania

JANUARY 27, 2015  | by JAMES PAUL

In many respects, Pennsylvania is a pioneer of school choice. With 173 charter schools—14 of which are cyber charters—and two scholarship tax credit programs, the commonwealth is the envy of choice advocates across the country. But as we recognize and celebrate National School Choice Week, more can be done to ensure that each Pennsylvania child has the opportunity to reach her full potential.

As Philadelphia's School Reform Commission (SRC) weighs the application of 40 charter schools—many of which have an impressive track record of serving city students—House speaker Mike Turzai is optimistic that multiple new charters will be granted permission to open in Philadelphia:

We are very hopeful that when the final decisions get made that a significant number of the charter applicants are approved.

During the most recent school year, the average Philadelphia charter school outperformed traditional public schools on the Pennsylvania State Performance Profile. What makes this even more impressive is that charter schools spend and receive fewer dollars per student than their district counterparts. Given the academic success of the charter sector, as well as the sizeable demand for schools of choice, the SRC should approve the highest-performing applicants and allow more Philadelphia families to reap the benefits of choice.

In Pennsylvania, school districts are tasked with authorizing new charter applications. This arrangement makes it difficult for even the highest quality charter schools to open new buildings. School districts are fully aware that by approving a new charter school they are essentially approving a new competitor. In order to realign incentives to promote great schools, lawmakers should pursue statewide or university authorizers for charters.

The commonwealth is the first state in the country to enact an education scholarship tax credit aimed at corporations. Thanks to the passage of the Educational Improvement Tax Credit (EITC) program in 2001, more than 430,000 scholarships have been awarded to students from low- and middle-income families seeking better, safer schools.

Scholarship tax credit programs exist in a dozen states, and Pennsylvania is one of only three states to have multiple programs. In 2012, Pennsylvania enacted its second tax credit program—the Opportunity Scholarship Tax Credit (OSTC). This program is reserved for low-income students residing in the geographic boundaries of the lowest-achieving public schools in Pennsylvania.

In 2013-14, the OSTC provided more than 7,000 scholarships. Legislation passed late last fall streamlined and simplified the application process for both tax credit programs, which should lead to even greater participation in coming years.

The EITC is capped at $100 million—with $60 million reserved specifically for K-12 scholarships—while the OSTC is capped at $50 million. Lawmakers should look to increase these caps and provide more scholarships—at a savings for taxpayers—to students in need.  

Education savings accounts (ESA) are another innovative policy for Pennsylvania lawmakers to consider as a complement to the tax credit programs. ESAs, which have been implemented in Arizona and Florida, could allow parents to deposit their tax credit scholarship funds into a savings account that can be spent with more flexibility.

Instead of reserving the funds strictly for scholarships, ESAs allow parents to purchase textbooks, tutoring services, online courses, curriculum materials, standardized tests, educational therapies, and other approved items. Unspent ESA funds roll over from one year to the next and can be eventually used to pay for college tuition. Lawmakers supportive of the EITC and OSTC should look at ESAs as the logical next step for school choice in Pennsylvania.


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Podcast: A Local-Only Teachers Union?

JANUARY 27, 2015  | by JOHN BOUDER

Michigan teacher Jim Perialas has an unusual story. In 2012 his school, Roscommon Area School District, became the first in decades to decertify (or leave) the state-wide Michigan Education Association (MEA) and the National Education Association (NEA) to form a local-only, independent union.

Jim readily admits he’s not anti-union, “unions do good and bad things . . . but I still think they should play a role in the workplace.” So, why did teachers at Roscommon want to leave the MEA? They were simply frustrated by the undemocratic, expensive, and secretive state union. “We talk about the lack of a voice . . . there is a so-called democratic process, but really it’s not,” explains Jim. 

This same frustration with distant and unaccountable union leaders is felt in Pennsylvania by teachers like Keith Williams from Adams County and John Cress from Ellwood City.

And as Nathan Benefield blogged on this date last year, most teachers’ union members never hear from state and national union officials. It’s no wonder teachers are looking for better options.

Going local wasn’t easy. Jim warns that any district considering the local option needs to be united and prepared to withstand immense pressure from the state union, but the rewards can be worth it.

Today, members of the independent Roscommon Teachers Association have seen their dues decrease from $980 to $600 a year and members still have access to grievance support and other services. Most importantly, members have local control and can clearly see how their money is being spent.

Hear about the challenges Jim and his fellow teachers faced during the decertification process in our latest podcast.


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Will Gov. Wolf Stay True to "Openness" in Government?

JANUARY 26, 2015  | by NATHAN BENEFIELD

Gov. Tom Wolf's first week in office included several moves to paint a picture of ethics and transparency in state government.

First Wolf issued executive orders banning executive staff from accepting gifts, and forbidding no-bid legal contracts. Barry Kauffman, Pennsylvania head of the liberal group Common Cause says this is about ending conflict of interest:

"So, you give a $50,000 campaign contribution and you get a $2 million reward through a no-bid contract … That's a heck of a return on the investment."

Then, in a controversial move to terminate a Corbett appointee, Wolf defends his action on grounds of openness and transparency

"We need to be as ethical as we can and be as transparent as we can. To me the way this process was done was anything but open and politicized. What I'm concerned with is a less than open process." …

"We ought to do this right and find the best possible person for this job and not make this a backroom deal that so often erodes trust in government."

But as I noted in a recent op-ed, Gov. Wolf will soon be facing his own potential conflict of interest, when he negotiates contracts with government union leaders.

These contracts, which include salary and benefit provisions, cost taxpayers billions of dollars. Moreover, they can include provisions where the state, at taxpayer expense, will collect the political money that is given to candidates—like Governor Wolf himself.

During the 2014 election, government unions contributed $3.4 million to the Wolf campaign—far more than the paltry contributions Barry Kauffman is concerned about—and spent millions more on independent expenditures through Super-PACs.

By no means should any politician be able to negotiate over the collection of his own campaign contributions.

We hope Governor Wolf will stick to his pledge of transparency and make these contract negotiations open to the public rather than a backroom deal. And we look forward to working with Gov. Wolf and advocates like Barry Kauffman toward reforms that reduce the conflict of interest when negotiating contracts with political donors.


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PLCB Limitations Shackle Entrepreneurs

JANUARY 26, 2015  | by BOB DICK

“I’ve got products in the pipeline that I can’t sell, because they didn’t get approved,” said Mike Gonze, president of Dreadnought Wines in a Pittsburgh Post-Gazette article that perfectly encapsulates why state government should not be in the booze business.

In the article, Bill Toland details how the Pennsylvania Liquor Control Board (PLCB) had to place a moratorium on special liquor orders (SLOs) because they were short on staff. In this instance, short on staff means losing two of four data-entry employees in the PLCB's special liquor order processing unit.

If you're wondering how losing two employees could cause a backlog, and headaches for entrepreneurs, here's a look at how the PLCB handles SLOs: 

The process works like this: A vendor finds a new wine or spirit and wants to distribute it to buyers in Pennsylvania. First, the vendor must ask the state to approve the new item. Once that item is approved—a process that used to take a few weeks but now is taking several months—an individual buyer or a restaurant can order it by calling the PLCB’s special purchases division, or by stopping by a state store to place the special liquor order in person.

After the order has been made—some vendors require a minimum order of six bottles—the vendor sells the product to the state, which applies its own price markup and re-sells the item to the end buyer and delivers it to a wine and spirits store for pickup.

It’s a complicated process, complicated further by the slowdown. Small vendors who don’t represent or import high-volume wines and spirits rely on the special liquor order process for much, if not all, of their sales traffic.

To state the obvious, our booze monopoly has limitations that consistently fail entrepreneurs and consumers. But the news isn't all bad.

After receiving some pressure from those affected by the decision, the PLCB decided to end its moratorium on new SLOs. Yet, this decision does not solve the underlying problem: the government’s inability to efficiently manage a business.

Losing two state employees should not have serious repercussions for numerous businesses and their patrons. Imagine if a private company told customers they had to put a hold on all orders. It wouldn’t be in business for very long. The same can't be said for the PLCB. Despite the Board's less than stellar operation, it remains with us today.

Naturally, many will tout "modernization" as a solution to the PLCB's innumerable problems. But recent modernization efforts have been both futile and expensive. A case in point is the wine kiosk program. A purportedly “free” initiative, the program now has a price tag of $300,000 due to legal costs, according to Kari Andren of the Tribune-Review.

The only way to avoid such expensive mistakes, and fix our outmoded system, is through full privatization. That means turning over the retail and wholesale side of liquor sales to the private sector, which would end the bureaucratic backlog hampering businesses.


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Corrections Reform Proves a Win-Win

JANUARY 23, 2015  | by ELIZABETH STELLE

Unprecedented reductions in the prison population, $69.9 million in taxpayer savings, and lower recidivism rates all indicate that the 2012 corrections reforms are working.

Earlier this month Don Gilliland over at the Tribune Review chronicled some of the big accomplishments of the two-year-old initiative to get smart on crime:

The drop in prison population in 2014 'was the largest one-year drop in our population since 1971, and only the fourth time in the past 40 years that our population has shown an annual decrease, rather than an increase,' said Bret Bucklen, Corrections' director of planning, research and statistics.

The state ended the calendar year with 50,756 inmates. Four years ago, the prison population was expected to top more than 56,000 inmates by the end of 2014.

My colleague Nate Benefield points out that fewer prisoners means no new guards to hire, no new prisons to build and no need to pay other states to board our prisoners (which we did in 2009). All of those developments mean big savings for taxpayers.

The drop in inmates avoided approximately $69.9 million in costs in 2014 alone, and a total of $222 million during Corbett's four-year tenure, according to estimates from the department.

Overall, the corrections budget for 2015-16 is still set to increase, thanks to rising pension costs for corrections officers, but the overall fiscal situation is much more manageable today thanks to the actions taken two years ago.

And the final bit of good news? Governor Wolf's decision to retain Secretary of Corrections John Wetzel indicates the reforms will continue improve both the quality and cost-efficiency of our prison system.


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Five Ways Dollars Are Kept Out of Philadelphia Classrooms

JANUARY 22, 2015  | by ELIZABETH STELLE

The school district of Philadelphia saw a $1 billion increase in revenue over the past decade, even as enrollment declined. Yet many claim there isn't enough funding for basic classrooms supplies. The question is: Where is the money going if not into the classroom?

1. Union Leader Salaries

The PFT forces teachers to pay more than $700 for the average teacher each year in dues (or more than $500 in fair share fees to keep their jobs). Teachers never see that money as it is deducted from their paycheck just like taxes. 

At the same time, president of the American Federation of Teachers (AFT), Randi Weingarten, makes an astounding $550,000 a year off of teachers' dues. In fact, AFT has more than 200 staffers making more than $100,000 in compensation, according to the Center for Union Facts

Without such high dues, teachers could keep more of their salary and higher take home pay would help attract high quality teachers.

2. Political Spending

Philadelphia teacher union dues are being spent on political ads at the rate of $70,000 per minute. PFT ran two 30-second TV ads during an Eagles football game attacking Governor Corbett and select lawmakers. The cost of those two ads alone were $35,000 each, according to records filed with the FCC.

Nationally, the AFT spent more money on elections this year than ever before, including a gift of $500,000 from teachers’ union dues to fund attack ads via a “SuperPAC.” This money could buy countless classroom supplies the union claims Philadelphia schools lack. The teacher’s union’s actions indicate leadership is more concerned with playing politics than providing resources to struggling teachers and students.

3. Administrative Costs

The School District of Philadelphia has among the highest administrative costs in the state. In 2012-13, Philadelphia had a higher administrator to student ratio than the average Pennsylvania school district. In addition, the average administrator salary is $129,573, which ranks in the top 25 most generous school districts in Pennsylvania. These high overhead costs focus resources on adults instead of kids.

4. Health Care Costs

This past fall, for the first time, Philadelphia teachers were asked to contribute a portion of their salary towards health care premiums, a request made of teachers in every other Pennsylvania school district save one. With this change, approximately $54 million could go directly to classrooms if teachers begin to contribute just a percentage of their own health care costs. The School Reform Commission proposed teachers pay between 5 and 13 percent of their health care costs. That is about half of the 23 percent the average Pennsylvanian pays towards employer sponsored family coverage.

Former Governor Rendell, Philadelphia Mayor Nutter, and the Philadelphia Inquirer editorial board all agree with the necessity for reasonable concessions—but the PFT refuses to compromise. Without these savings, more teacher layoffs will be necessary.

5. PFT Health and Welfare Fund

Apart from health insurance, the school district contributes to the PFT Health and Welfare Fund. This entity, controlled by the PFT, provides supplemental benefits, such as dental and vision, along with a wide variety of other programs, such as term life insurance and an annual educational conference.

By simply ending the PFT’s monopoly control over these benefits, and selecting a high-quality benefit provider in the marketplace, the school district would save an estimated $22.4 million. Teachers will still receive these benefits with the savings would being directed back into the classroom for the benefit of students.


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Audio: School Choice Offers New Direction to Academic Excellence

JANUARY 21, 2015  | by JONATHAN REGINELLA

Pennsylvania’s students deserve the best education opportunities available, and the recent academic performance of York City School District—the second lowest district in the state—makes clear that we can do better than the status quo. School choice is a growing and increasingly popular solution for poorly performing schools districts like York City.

Being able to provide these students with the best educational service is crucial for the future of Pennsylvania, so why leave students trapped in underperforming school districts?

James Paul, a CF senior policy analyst, recently spoke with WURD radio 900AM host Stephanie Renée about how expanding school choice offers parents and students a new direction to academic excellence.

There is already evidence of charter schools being able to outperform and be more efficient than their school district counterparts. Adding alternate educational providers, such as charter schools, provides needed choice for families who want the best for their children.

Listen below to hear James explain how we can improve the academic performance, as well as the financial situation, in school districts throughout Pennsylvania.

The Mid-Morning MOJO with Stephanie Renée airs Mondays through Thursdays on 900AM-WURD. 

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