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MARCH 15, 2010

CF Podcast: Freedom in the 50 States

Listen to the latest CF podcast on Mercatus Center study, Freedom in the 50 States: An Index of Personal and Economic Freedom. The report is the first comprehensive ranking of the states on their policies affecting individual freedoms in the economic, social, and personal spheres.

Matt Brouillette talks with the report's authors, Jason Sorens and Williams Ruger, and asks them how Pennsylvania stacks up, and what our state legislators can do to improve our ranking.

posted by ELIZABETH BRYAN |  10:42 AM |  0 comment
Related : Economy, State Rankings

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MARCH 15, 2010

Sam Rohrer’s Energy Proposal

Gubernatorial candidate Sam Rohrer laid out his Energy Independence plan for Pennsylvania.

The plan includes:

• Oppose any effort to impose a natural gas severance tax in the absence of major reductions in business taxes.
• Oppose any efforts to subject the value of unrecovered gas to property taxes.
• Support expanded exploration and drilling on state lands.
• Appoint a DCNR Secretary who understands the important balance of sensible conservation, private property rights and real job creation.
• Speed up state agency approval time for permits.
• Oppose EPA and DCNR mandates that place unreasonable restrictions on well producers and property owners.
• Defend the rights of private property owners to explore, drill and extract natural gas and coal deposits.
• Fight for the phase out and elimination of Pennsylvania's anti-job Capital Stock & Franchise Tax and reductions in the State Corporate Net Income Tax.

Rohrer's plan correctly focuses on insuring the Marcellus Shale drilling remains a source of economic growth and not another slush fund for politicians.

However, while lowering Pennsylvania's overall business tax burden is critical, Rohrer leaves open the door for doing so on the back of a natural gas tax. Any severance tax should only occur after drilling companies have recouped their initial investment, and should be strictly tied to the environmental costs of drilling (though drilling companies are already being held responsible for environmental impacts through bonds and contracts.)

posted by KATRINA CURRIE |  10:05 AM |  0 comment
Related : Budget & Spending, Environment & Energy

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MARCH 15, 2010

SEPTA and I-80 Tolling

While the transportation industry is propping up the myth that I-80 tolls won't be used for transit in Pennsylvania, SEPTA officials are busy lobbying for I-80 tolling in order to get more money, suggest they'll be "back into that spiral we were in 10, 15 years ago" without that extra money. One of these days I fully expect SEPTA to come to the legislature and admit that they need infinity dollars to keep functioning.

Proponent of I-80 tolling are pushing Sen. Arlen Specter to "go see the president and get this done." This, despite the fact that the decision rests with the Federal Highway Administration, and the law covering tolling of current freeways forbids using tolls for transit and diversion to other projects. But I guess if Sen. Specter and President Obama both want it done, laws don't matter.

 

posted by NATHAN BENEFIELD |  08:37 AM |  0 comment
Related : Transportation, Mass Transit

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MARCH 13, 2010

More on the Unintended Consequences of the "Jobs Bill"

CS Monitor writes that the tax credits in the so-called "jobs bill" won't encourage small businesses to hire.  Worse yet, it might delay job creation:

And as long as the tax credit issue is alive in Congress and not passed, employers that were ready to hire (13 percent plan to hire) will wait until they can qualify for the credit, delaying much needed gains in employment.

posted by NATHAN BENEFIELD |  00:03 PM |  0 comment
Related : Economic Policy

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MARCH 12, 2010

Philadelphia Should Get out of the Garbage Business

Earlier this month, Philadelphia's Mayor Nutter proposed increasing the city's trash collection fee to $300 to deal with the city's budget deficit. Instead of finding ways to be more efficient or cutting wasteful spending, the Mayor is increasing the cost of a public service.

Philadelphia charges their residence a fee for waste collection services, but, unlike many other municipalities, the revenue collected goest directly into the general fund, and the city then appropriates money for municipal waste services.

This system provides no financial incentive for the waste service provider to develop cost-cutting improvements because they do not have control over their own finances.

Leonard Gilroy from the Reason Foundation states, "If government is providing this service, it has an obligation to provide it in the most efficient way possible," something Philadelphia is failing to do. Cities that have privatized trash services saw savings between 20% - 40%. The private sector has financial incentives to control their costs and be more efficient (Gilroy notes how Philadelphia's trash collection methods are what private vendors moved away from decades ago).

The city's trash service should be put up for competitive bidding to insure residence are getting the most for their money.

 

posted by KATRINA CURRIE |  02:10 PM |  0 comment
Related : Budget & Spending, Privatization

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MARCH 12, 2010

Obama and the Slacker Mandate

In his health care rally in the Philadelphia area earlier this week, President Obama touted a proposed regulation that insurance companies would have to allow children up to age 26 on their parents' plans - i.e. a slacker mandate - designed to appeal to the college crowd.

I wonder however, if President Obama realized the Pennsylvania already has a slacker mandate (in fact, up to age 29); state lawmakers enacted it in 2008.

In testimony to both the state House and Senate Appropriations Committees in February, Pennsylvania Insurance Commissioner Joel Ario noted that very few young adults have been enrolled under the new mandate. Ario commented, as summarized by Pennsylvania Legislative Services (subscription), that:

• The cost to insure young adults on their parents' plan was about the same as if they bought their own plan.
• "Low-risk" young adults would buy their own plan (or remain uninsured), leaving only high-risk cases looking to the slacker mandate--and insurers were naturally unwilling to give coverage to high-risk young adults as the same rates as children.
• The failure of the slacker mandate to reduce the number of uninsured is "generally symptomatic of the greater healthcare problem."

That sounds pretty close to what I wrote (in a commentary on the slacker mandate with Benjamen Ober) two years ago:

SB 1453 [the slacker mandate], however, ignores the primary reason why young adults often go without insurance—the high cost of coverage. This is especially true considering that most young adults use very little health care. ...

Instead of more mandates, lawmakers should adopt reforms that allow individuals to purchase low-cost, mandate-lite insurance. Another alternative would be to allow individuals to opt out or waive certain coverage mandates to reduce the cost of their insurance. ... The only way to substantially reduce the cost of health care is to put individuals in charge, not government bureaucrats. This means eliminating many of Pennsylvania's costly health insurance mandates, not adding to them. Eliminating the burden of health care mandates will lower the cost of health care, provide more insurance to more individuals, and restore personal choice to citizens.

 

 

posted by NATHAN BENEFIELD |  00:30 PM |  0 comment
Related : Health Care

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MARCH 12, 2010

Could Municipalities Provide Cheaper Electricity?

Last week the State House Committee on Consumer Affairs held a hearing on legislation which would allow municipalities to act as electricity aggregators for residents, unless they opt-out for another supplier. Pennsylvania Consumer Advocate Sonny Popowsky explains:

The theory behind municipal aggregation is that by aggregating the buying power of a
large number of small customers, a non-profit municipal entity can get a better deal for those
customers than if those customers each go out and shop for electricity on an individual basis. In addition, many customers may have neither sufficient interest nor sufficient understanding to choose their own supplier of a product that they have never had to shop for.

While this could go a long way in encouraging competition, Duquesne Light and other Providers of Last Resort (POLR) point out that allowing entire municipalities to choose alternative suppliers creates more uncertainty, making it difficult for them to provide "least-cost" electricity through long and short-term contracts, as mandated in Act 129.

Any opt-out program should be free of restrictions or penalties that would prevent residents from leaving the municipalities program at any time. Municipal aggregators can be an effective tool to encourage more electricity shopping but, giving the power to elected leaders to negotiate contracts could easily lead to cronyism. Municipalities should stick to opt-in programs, where residents have to opt into the city's electricity aggregation maximizing consumer choice.

 

posted by ELIZABETH BRYAN |  10:34 AM |  0 comment
Related : Environment & Energy, Energy Policy

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MARCH 12, 2010

State and Local Government Outpace Private Pay by 44%

A new survey from the US Bureau of Labor Statistics looks at the total employer costs for workers in both the private and public sector. While wages for state and local government workers nationally outpaces that of the private sector - and for all categories, except management - the cost of benefits in the government sector is far greater.

State and local government employees earn, on average, 35% higher wages than their private counterparts, their benefits per hour are 69% higher (for a total of 44% higher compensation). Splits for categories are below.

 

 

Hourly Costs
Private	Total	Wages	Insurance	Retirement	Total Benefits
All	$27.42	$19.41	$2.15	$0.92	$8.00
Management, professional, and related	$48.19	$34.12	$3.20	$1.81	$14.07
Sales and Office	$21.60	$15.53	$1.90	$0.60	$6.07
Service	$13.66	$10.32	$0.93	$0.21	$3.34
State and Local Government	Total	Wages	Insurance	Retirement	Total Benefits
All	$39.60	$26.11	$4.61	$3.19	$13.49
Management, professional, and related	$48.15	$32.96	$5.11	$3.78	$15.19
Sales and Office	$27.57	$16.94	$4.21	$2.00	$10.63
Service	$29.37	$17.72	$3.71	$2.83	$11.65
Teachers	$54.85	$38.83	$5.63	$4.54	$16.02
Government Premium	Total	Wages	Insurance	Retirement	Total Benefits
All	44%	35%	114%	247%	69%
Management, professional, and related	0%	-3%	60%	109%	8%
Sales and Office	28%	9%	122%	233%	75%
Service	115%	72%	299%	1248%	249%

posted by NATHAN BENEFIELD |  08:47 AM |  0 comment
Related : Budget & Spending, Public Employee Pensions and Benefits

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MARCH 11, 2010

Need for an Independent Fiscal Office in PA?

A new Pennsylvania Independent Fiscal Office was the subject of a recent legislative hearing this week, with several lawmakers arguing the need for the office (which was included in last year's budget deal, but still requires enabling legislation).

On the other hand, the Rendell administrations says its not needed. Pennsylvania Budget Secretary Mary Soderberg says the office is unnecessary, because "there is no disagreement about the numbers". Pete Decoursey of Capitolwire makes a mockery of this statement (subscription).

What? This is a woman who is regularly, reliably $300 million or more wrong, nearly every year, on the amount of welfare spending the state does. Pennsylvania’s annual negative welfare balance, usually $300 million or more in the red, is the most regular ‘surprise’ in state government.

...

During budget negotiations, her predecessor, Mike Masch, used to tell legislative leaders that he could justify whatever percentage increase of the budget they wanted, once they agreed on the overall increase in budgetary spending for the coming year.

The dollar amount wouldn’t change, neither would the actual cost of running state government. But you move a program back to last year, take another one off-budget, and presto, a 5-percent budget increase is down around 3-percent. As long as nobody paid close attention, anyway.

Besides possibly correcting bad numbers, and Independent Fiscal Office would do a number of things the administration does not do now. As pointed out in our Policy Points, the office would conduct dynamic analysis of tax proposals and their effect on the economy. The new office would also provide evaluations of programs based on their established goals and measures - not just "look at all the good I've done" press releases typically put forward by politicians.

This was the subject of a recent episode of the Tempo program on WLVT Allentown, on which I made a brief appearance (via phone).

 

posted by NATHAN BENEFIELD |  02:03 PM |  0 comment
Related : Pennsylvania State Budget, Transparency