FEBRUARY 6, 2012

Even Big Government Advocates Understand the Welfare Trap

Big government lobbyists and CF don't agree on much with welfare, but funnily enough, even they acknowledge that Pennsylvania's welfare system keeps people in poverty.

It [a food stamp asset test] encourages poor people to avoid building up their savings, and to spend down their assets in order to stay on food stamps.

They're right on the overall effects of welfare, but wrong on what an asset test does. The newly announced higher asset limits for food stamps and the long list of exemptions give beneficiaries plenty of opportunities to build wealth while still receiving benefits. But as a whole, welfare programs encourage dependence. When families earn more their total income declines because as their salary increases, their benefits (which are worth more than their raise) are reduced.

Basically, there are two solutions to the problem of perpetual poverty. One solution is to expand food stamps to everyone so no one is needy. Or we can look at reforms that encourage independence and employment. Work requirements, time limits, and restructuring Medicaid to give patients the freedom to choose their own health care insurance are just a few ways to reorient the system.

The welfare trap doesn't just harm the poor, it's also bankrupting today's taxpayers. Welfare spending in the commonwealth is out of control, growing 52% since 2002-03. If we ever hope to reduce poverty levels and balance the budget, we must completely overhaul the welfare system to encourage work and restore individual dignity.

posted by ELIZABETH STELLE |  08:30 AM |  0 comment
Related : Welfare

FEBRUARY 3, 2012

Largest Growth in Pennsylvania Private Sector Jobs Since 1999

The Bureau of Labor Statistics has updated their employment data by state through the end of 2011 (subject to revision).

Looking at December job data ("not seasonally adjusted") over the past couple decades reveals some interesting trends:

• 2011 saw the largest one-year growth in private sector jobs in Pennsylvania since 1999, according to Bureau of Labor Statistics data.
• Manufacturing job growth in Pennsylvania was higher than any year since 1990.
• From 2000 to 2010, the private sector lost 116,400 jobs, while government jobs grew by 30,800.
• In 2011, government jobs declined by 20,200, but the private sector grew by 79,000 jobs.

posted by NATHAN BENEFIELD |  00:44 PM |  0 comment
Related : Economic Policy, Economy

FEBRUARY 2, 2012

Is State Corrections Spending Sustainable?

The chart below shows the unsustainable growth in Pennsylvania state corrections spending and inmate population.

The criminal justice system's goal shouldn't be to simply lock up as many people as possible, but also to ensure offenders are rehabilitated before reentering society. When the Pew Center on the States looked at prisoners released in Pennsylvania between 1999-2002 and 2004-2007, it found the rate of prisoners returning to prisons increased.

As we mentioned yesterday, we need to replace ineffective correction policies with those that lower crime rates, reduce re-offending, and control spending. To learn more about correction reforms, see our criminal justice recommendations.

posted by KATRINA CURRIE |  03:16 PM |  0 comment
Related : Budget & Spending, Criminal Justice

FEBRUARY 2, 2012

Yes, Welfare is for Poor People

The Department of Public Welfare announced its plan to impose an asset test for food stamp recipients. The proposal would limit food stamps to most households with under $5,500 in assets, or $9,000 in assets for anyone over age 60 or with a disability (see below for clarification of "assets").  Elizabeth and Jay wrote on the merits of asset testing last week.

In a Capitolwire (subscription) piece, Rep. Mike Sturla lashes out at the administration's policy saying,

"We're going to take the concept of the safety net and flip it and tell people they have to impoverish themselves before they get the benefits."

Just to make sure I wasn't misunderstanding the outspoken representative, I Googled the definition of impoverish and came up with "To reduce to poverty; make poor."

Indeed! Welfare programs like food stamps were designed to help poor people, and the administration's policy will work to ensure it serves only poor people.

Here is another important bit of information in the Capitolwire piece, namely, what isn't counted as "assets" under the standard:

• Homes and surrounding land and buildings which are not separated by property that is owned by others;
• A home temporarily unoccupied because of employment, training, casualty, illness or natural disaster if the household intends to return;
• A second home if it is up for sale;
• A lot on which a household which currently does not own a home intends to build a permanent home;
• Personal effects and burial plots (clothing, jewelry, gift cards);
• Household goods;
• Life insurance and pension plans;
• Income producing property and equipment;
• One vehicle per household, vehicles under $4,550 in value and any vehicles used to generate income;
• Government payments;
• Inaccessible resources (e.g. frozen bank accounts);
• Installment contracts;
• Resources previously prorated as income;
• Non-liquid resources with liens;
• Disaster and emergency assistance payments;
• Certain government resources such as tax refunds, federal child tax credits, earned income tax credit, WIC, and education assistance;
• Indian funds and lands;
• German reparation payments;
• Education savings accounts;
• Family savings accounts; and,
• Seed accounts.

posted by NATHAN BENEFIELD |  02:25 PM |  0 comment
Related : Welfare

FEBRUARY 1, 2012

Happy Digital Learning Day

Today is national Digital Learning Day, during which groups across the country will commemorate how technology is changing education for the better. So what exactly IS digital learning?

Digital learning occurs when students use online programs—guided by teachers—to learn math, science, English and every other subject they would study in a regular classroom.  Most importantly, it allows students to control the pace and location of their study, meaning they can learn as slowly or as quickly as they need. We tracked the trend in Commonwealth Foundation's latest report on digital learning, The Learning Revolution.

In Pennsylvania, digital learning has exploded in popularity, with nearly 28,000 children now enrolled in cyber schools (from zero when they began about 10 years ago). Children learn at home but are in constant contact with their teachers, and also participate in "real-life" sports and arts programs.  The flexibility especially helps students who are sick, have demanding sports or performing arts schedules, are gifted, or who are struggling academically. Take 14-year-old Caela, from Lake Ariel, Pa., for whom cyber school has been a lifesaver:

Between kindergarten and sixth grade she was hospitalized 16 times from bronchitis, pneumonia, allergies and asthma. In fifth grade, she missed 83 days of school; in sixth, 67. In 2010, Caela enrolled in Pennsylvania Cyber Charter School and completed a full year's worth of English and science courses in just five months.

Best of all, her mother says, Caela is off all her medications and has not been sick since starting cyber school. Thanks to digital learning, students like Caela don't have to give up good schooling, and having online tools that help teachers adapt means we can tailor education to every student's needs.

posted by PRIYA ABRAHAM |  00:11 PM |  0 comment
Related : Cyber Schools, Education

FEBRUARY 1, 2012

Criminal Justice Reforms to Reduce Spending & Crime

Change is on the horizon for Pennsylvania's Department of Corrections - now the third-largest state agency in the General Fund budget - which along with state debt, pensions and welfare threatens to bankrupt the state if left unchecked.

Last week, Gov. Corbett launched Pennsylvania's Justice Reinvestment Initiative (JRI), a working group tasked with controlling correction costs while maximizing public safety and reducing recidivism. The new panel has support from the Council of State Governments Justice Center and the Pew Center on the States; both experienced at helping states develop meaningful criminal justice reforms.

The JRI is a step in the right direction for the commonwealth, which needs to replace ineffective policies with those that lower crime rates, reduce re-offending, and control spending. To learn more about correction reforms, see our see our criminal justice recommendations.

posted by KATRINA CURRIE |  08:00 AM |  2 comments
Related : Budget & Spending, Pennsylvania State Budget, Criminal Justice

JANUARY 31, 2012

Corporate Welfare Not Needed to Get a Cracker

The Pittsburgh Tribune-Review reports that Pennsylvania lawmakers are pushing a special tax deal to attract a "cracker" plant to the state. The proposed Shell cracker—which breaks down natural gas into ethylene, used in plastics—has been much talked about, with the Keystone State reportedly a finalist with Ohio and West Virginia. The plant would create thousands of jobs, at least by internal estimates.

The proposal would expand Keystone Opportunity Zones, exempting certain businesses from taxes (primarily targeted to the cracker). What's wrong with a KOZ? Well for one thing, tax breaks for a few require higher taxes, spending being equal, on all other businesses. Further, a Legislative Budget and Finance Committee report finds that the KOZ program has little accountability, and the promised jobs often failed to materialize. Most importantly, tax breaks and corporate welfare don't actually generate economic growth, they simply shift resources.

Rather than expanding corporate welfare, here is what lawmakers need to do to make Pennsylvania more attractive:

• Enact a natural gas policy that removes the political uncertainty stemming from the Frack Attack, and provides predictability for the gas industry.
  
• Improve Pennsylvania's business climate for all businesses. Indeed, lawmakers should take the lesson from the Keystone Opportunity Zones—that businesses are attracted to lower taxes—and apply it statewide.

posted by NATHAN BENEFIELD |  01:31 PM |  0 comment
Related : Corporate Welfare, Economic Policy, Economy, Natural Gas

JANUARY 31, 2012

Not a Joke: Learn from Louisiana

Here in Pennsylvania, we like to think we're better than states like Louisiana.  Those folks used to have slaves, but our founder was a Quaker.  They're poor, but we're rich.  Their schools are infamously bad, but around here we've got districts like Garnet Valley (where I grew up), Cumberland Valley (which is much in the news here in the midstate), and North Allegheny (which I always hear about while traveling out west).

Here's the rub, though:  We're fat, happy, and languishing while and Louisiana is turning itself around.  Over the last twenty years, Pennsylvania ranks 41st in the nation in job growth, 46th in population growth, and 48th in personal income growth.  Those are the kind of numbers you'd normally associate with...well, Louisiana!  Meanwhile, as I've written before, the Pelican State has a governor, Bobby Jindal, who's mustered a 70-percent approval rating and two-thirds election majority while aggressively cutting the state budget, privatizing services, and giving parents educational choices.

Now, Gov. Jindal is doubling down on his past success.  He just proposed what the Wall Street Journal is calling "America's largest school voucher program, broadest parental choice system, and toughest teacher accountability regime—all in one legislative session."  And he understands that the way you respond to bogus charges is by speaking the truth loud and clear:  When union bosses in his state attacked poor families, saying they can't make good choices for their kids, he went on national television to defend them.

The lesson of Louisiana is clear:  Boldness begets boldness and turns states around, whereas milquetoast satisfies no one and perpetuates mediocrity.  The question is:  Are Pennsylvania pols paying attention?

posted by CHARLES MITCHELL |  00:45 PM |  0 comment
Related : School Choice, Teacher Unions, Education, Principles

JANUARY 31, 2012

The "Facts" on Food Stamps

City Paper contributor Daniel Denvir tries to diminish the impact of our Philadelphia Inquirer column on food stamps by offering "facts" in rebuttal. Unfortunately, most of these "facts" are merely matters of opinion or simply wrong.

The first "fact" claims that we shouldn't worry about food stamp growth because most of the money is "federal dollars." But federal funds are not free money, and yes, residents of Pennsylvania pay federal taxes. The high cost of federal spending on food stamps—and costs are growing rapidly—should worry taxpayers. In just eight fiscal years, total costs for food stamps (formally called SNAP) have more than doubled in Pennsylvania.  The national picture is even worse, with food stamp spending doubling since 2008.

Denvir then cites an Inquirer reporter citing advocates citing a federal report that the "fraud rate" (really referring to the error rate) is 0.1 percent. Except this isn't true—the reported error rate is at actually 40 times higher. According to the USDA, the latest SNAP payment error rate for Pennsylvania is 3.93 percent. Twenty-two states have better error rates, and Pennsylvania's rate is slightly above the national average of 3.81 percent.

Another "fact" cited is that there must not be errors, because the Inspector General has a unit to look at fraud and waste. But eliminating the asset test and other eligibility limits was a deliberate decision to reduce the official error rate-you can't make an eligibility error when everyone is eligible. On top of broadening eligibility, the Rendell administration cut in half the number of fraud referrals to the Inspector General. In 2002, approximately 47,000 cases of suspected welfare fraud were referred annually to the Inspector General. However, by 2010 the Inspector General received only 27,645 referrals, even though caseloads had dramatically increased. Is it any surprise the state won awards for low error rates when so few cases were investigated?

Finally, the City Paper claims there is only one known millionaire who collected food stamps, so this really is all unnecessary. This is a straw man argument. While the savings from an asset test may be small in the scope of government spending, and there may be only a few cases of millionaires receiving benefits, Pennsylvanians with adequate resources should not be allowed to abuse the system. Reinstating an asset test is not about punishing the poor, but protecting the truly needy at a time when taxpayers are stretched thin.

posted by ELIZABETH STELLE, NATHAN BENEFIELD |  11:10 AM |  0 comment
Related : Budget & Spending, Economic Policy, Welfare