Fresh Start, or Stale Policies of Decades Past?

SEPTEMBER 30, 2015

At the beginning of 2015, we heard a lot about a "fresh start" for Pennsylvania. But nine months later, it's difficult to identify anything fresh about Gov. Wolf's tax, borrow and spend plan.

In fact, Philadelphia Daily News columnist John Baer pointed out that every Pennsylvania governor since the 1970s has raised taxes. Reading that, I naturally thought, “Yeah, well maybe we should stop doing that.”

Some Democrats argue that tax increases are part of responsible governing, noting that every governor elected since the '70s - Milton Shapp, Dick Thornburgh, Bob Casey, Tom Ridge, Ed Rendell, Tom Corbett - raised taxes (the argument is Corbett's fuels-tax hike for $2.3 billion in road and bridge repairs counts).

But Republicans say maybe that's the problem. Maybe the state's economy would be better with lower taxes.

Nate Benefield, of the conservative Commonwealth Foundation, makes the case against raising taxes: "Overall, our tax burden has gone up, and yet we have stagnant growth, among the slowest in the country."

Pennsylvania's ranking in state and local tax burden, according to the respected D.C.-based Tax Foundation, is 10th heaviest among states and third heaviest among the most populous states, behind New York and California.

In other words, for 45 years Pennsylvania politicians have been raising taxes—resulting in anemic job growth, income growth and population growth.

Ironically,Gov. Tom Wolf suggests his $4.6 billion, $1,400 per family of four tax increase represents a new way of doing things in Harrisburg. Raising taxes to historic highs, while rejecting real pension reform or liquor privatization, isn't fresh or innovative. It's the same thing we’ve been doing for decades.

It’s time we stop repeating the same failed mistakes of the past.

posted by NATHAN BENEFIELD | 10:10 AM | Comments

Leader of the Free World?

SEPTEMBER 16, 2015

What do Switzerland, the United Arab Emirates and Canada have in common? Their citizens all enjoy more economic freedom than Americans.

According to the 2015 Economic Freedom of the World Index, the United States ranks 16th, down from a rank of 2 in 2000. Americans are losing their economic freedoms while the rest of the world is becoming more free.

The Economic Freedom of the World Index measures economic freedom by analyzing five areas: size of government, legal structure and property rights, access to sound money, free trade, and regulation. The U.S. scored the lowest in the size of government and protection of property rights categories.

Economic freedom is more than an academic concept; it's critical for prosperity. Economic freedom is positively associated with higher average per-capita GDP, longer life spans, higher incomes for the poor and more civil liberties.

To read more about the benefits of expanding economic freedom visit

posted by ELIZABETH STELLE | 03:12 PM | Comments

Ridesharing Freedom En Route to Pennsylvania

AUGUST 28, 2015

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.

posted by JAMES PAUL | 09:14 AM | Comments

A Cooked Goose Lays No Golden Eggs

JULY 21, 2015

Gov. Wolf continues to promote a severance tax on natural gas, even as Pennsylvania energy companies report financial losses and job reductions.

This week, Consol Energy projected a second quarter loss—largely because of low energy prices—and said it would record a significant write-down on certain oil and gas assets. Consol stock is down 43 percent over the past three months. It is cutting 470 workers across its coal, gas and corporate operations.

Numerous other energy companies have instituted cutbacks in Pennsylvania operations. Among them are Noble Energy, Chevron Corp., Universal Well Services and Halliburton.

As is often said, those who cannot remember history are doomed to repeat it. Wolf's tax push brings to mind the federal windfall profits tax on oil companies 35 years ago.

Ignoring huge tax receipts routinely generated by the oil industry, politicians reacted to rising gasoline prices with the enactment of the Crude Oil Windfall Profit Tax Act of 1980 to punish "greedy" energy producers.

The tax depressed the domestic oil industry, increased foreign imports and raised only a tiny fraction of the revenue forecasted, according to a 1990 Congressional Research Service study.

The view that energy companies are geese with an infinite supply of golden eggs flies in the face of economic reality, and is refuted by news reports almost daily.

With such a backdrop, a Wolf energy tax won’t bring the fabled golden eggs, but could fatally cook the goose of Pennsylvania's economy. 

posted by GORDON TOMB | 08:13 AM | Comments

Losers Outnumber Winners Under King v Burwell Decision

JUNE 26, 2015

Yesterday’s US Supreme Court decision to uphold taxpayer subsidies on brought a collective sigh of relief to Pennsylvanians, like Barbara, who depend on subsidies to make health insurance somewhat affordable. But lost in much of the news coverage are the losers, like Mark, who still can't afford his premiums. In fact, there are ten times as many losers as winners thanks to the court's decision.

Had the court ruled federal subsidies illegal, more than 460,000 Pennsylvanians would have been freed of the individual mandate tax due to an affordability exemption. Likewise, employers would have been freed of the employer mandate. The American Action Forum estimated the exemptions would have added 62,693 to the workforce by 2017.

Broadly speaking, no one wins under the Obamacare status quo. Instead of health insurance premiums going down, as promised, they’ve increased. Even Pennsylvanians with highly subsidized exchange plans are bracing for large rate hikes. Some exchange insurers are asking for premium increases of more than 50 percent next year. Add in the burden of high deductibles, and one has to question exactly how the Affordable Care Act is making health care more affordable.

Even people receiving subsidies want to see major changes to the law.

It’s now up to Congress to deliver the type of consumer-centered reforms that will give Pennsylvanians more choices, lower rates and better access to quality care.

posted by ELIZABETH STELLE | 09:39 AM | Comments

30,000 Jobs at Risk

JUNE 23, 2015

Middle class job opportunities are at risk.

We all know that strong middle class employment is at the heart of a healthy economy, but Gov. Wolf’s massive tax increases would dramatically suppress future job creation.

The Commonwealth Foundation analyzed the overall impact of Gov. Wolf’s proposals—and the results aren’t pretty.

Approximately 30,000 jobs would not be created in 2015-16 under Gov. Wolf’s budget proposal, according to an economic modeling program from the Beacon Hill Institute at Suffolk University. To put that figure in perspective, consider that the Bureau for Labor Statistics estimates Pennsylvania added roughly 50,000 jobs over the last 12 months.

Total Employment

Fiscal Year

Without Wolf Taxes

With Wolf Taxes

Jobs Not Created





















If one excludes government employment—which would slightly tick up as a result of Gov. Wolf’s government spending increases—more than 39,000 private sector jobs would not be created in 2015-16.

Private Sector Employment

Fiscal Year

Without Wolf Taxes

With Wolf Taxes

Jobs Not Created





















This is bad news for thousands of Pennsylvanians looking for work. Families can’t afford to be squeezed between higher taxes and fewer job opportunities.

posted by ELIZABETH STELLE | 03:45 PM | Comments

The Next 1,360 Days

APRIL 30, 2015

Governor Wolf marked his 100th day in office by providing a list of accomplishments. In reality, the memo is more of a status update since many of his initiatives, including the natural gas tax and his budget proposal, are a long way from passage.

But the real question is not what the governor accomplished in an arbitrary 100 days, but what he can do over the next 1,360 days to improve the lives of Pennsylvanians. Here’s a few suggestions based on the governor’s goals for Pennsylvania:

Protect taxpayers to foster "jobs that pay."
Elected officials should pass the Taxpayer Protection Act (TPA) to protect the middle-class from reckless spending and tax increases. The TPA limits future government spending to inflation plus population growth. Reining in government spending is critical to creating an economic climate that attracts jobs—and working Pennsylvanians deserve a government that lives within its means.

Put students first to build "schools that teach."
Our education system is broken. From the commonwealth’s senseless funding formula, to wasteful mandates like prevailing wage, to the need for more school choice, there are many ways for the governor to create an education system that truly serves students. Gov. Wolf should work with the legislature to create a funding formula where dollars follow the students, repeal prevailing wage and remove obstacles to greater school choice, such as creating alternative authorizers for charter schools.

Enhance transparency and accountability to create a "government that works."
The lack of transparency in Harrisburg and special privileges enjoyed by select groups have created a system ripe for corruption and abuse. In his next 1,360 days, Governor Wolf has an opportunity to continue promoting transparency by opening the closed-door union contract negotiation process and ending the government unions’ unique privilege of using taxpayer resources for partisan politics.

These reforms are by no means exhaustive, but they would move our state in a pro-growth direction after years of profligate spending, which have failed to revive our historically weak economy. After decades of focusing on finding more revenue for state coffers, it’s time to restrain excessive government and transform Pennsylvania into a state of opportunity again

posted by ELIZABETH STELLE | 11:30 AM | Comments

Pennsylvania's Economy Ranks a Dismal 39th

APRIL 10, 2015

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.

posted by BOB DICK | 02:43 PM | Comments

Video: Debating Gov. Wolf’s Costly Budget

MARCH 23, 2015

Last week, CF President & CEO Matthew Brouillette appeared on PCN’s Call-In Program with Steve Herzenberg, the Executive Director of the Keystone Research Center, to discuss Gov. Wolf’s costly budget proposal. While Herzenberg defends Wolf’s budget proposal, Matt points to some of the hard realities it will bring to every family in Pennsylvania

Even though Gov. Wolf campaigned on a promise to not raise taxes on middle class families, his budget proposal would hit them with the largest tax increase in the state’s history

In attempt to soften the blow of this broken promise, Gov. Wolf wants to implement property tax rebates. Matt explains that even this will fail to help Pennsylvanians since, over the next two years, less than $0.30 of every dollar in new state taxes will be used for property tax rebates.

Rather than put a heavier burden on Pennsylvania’s taxpayers, Matt explains that the government’s focus should be on “creating opportunities for everyone and reduc[ing] the burden of entry into the workplace and the middle class that are trying to grow businesses.”

Watch the full discussion on PCN’s Call-In Program.

posted by JONATHAN REGINELLA | 02:46 PM | Comments

Marcellus Shale Successes Continue

FEBRUARY 10, 2015

Pitfalls of Natural Gas Tax

The stories continue: more jobs, increased tax revenue and cheap energy, all from the free-market production of Marcellus Shale gas.

Take last week's report from the Central Pennsylvania Business Journal: A study commissioned by Sunoco Logistics says two of its pipeline projects will produce more than 30,000 jobs across Pennsylvania, including as many as 400 permanent positions once the project is complete. The projects are also projected to generate $23 million in personal income tax and contribute $4.2 billion to the state’s economy.

The pipeline project is just one isolated example:

  • Dura-Bond’s Steelton plant “plans to add 150 jobs after being awarded a contract to produce $400 million worth of pipeline for the 540-mile Atlantic Coast Pipeline in West Virginia, Virginia and North Carolina,” according to PennLive. The work at the Dauphin County facility is expected to extend through March 2017.
  • Sunoco Logistics’ Marcus Hook Industrial Complex — an 800-acre energy hub for the processing, storage and export of natural gas products — continues to expand and add jobs as Delaware County officials work to identify additional business opportunities for it, reports the Philadelphia Inquirer. Sunoco Logistics’ pipelines serve the complex.
  • New Jersey’s largest gas and electric utility will decrease the typical residential gas bill by 31 percent in February and March, according to Public Service Electric & Gas “has repeatedly cut the cost of gas to its lowest rate in 14 years as a result of low-cost gas from the Marcellus Shale formation in Pennsylvania and surrounding states,” the website said.

A new tax on Marcellus Shale drilling could put at risk these jobs and countless future projects. The economic benefits from a revived natural gas industry are impressive. Marcellus Shale counties saw more than double the employment growth of non-Marcellus counties last year. While government programs continue to hand out individual grants and loans, they can't compare to the industry's track record of improving employment for entire counties with zero cost to taxpayers. Government programs simply pale in comparison to the revitalization spurred by natural gas. 

posted by GORDON TOMB | 02:15 PM | Comments

Total Records: 257

Media contact:

(O) 717-671-1901

Who are We?

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.