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FEBRUARY 6, 2012 | Policy Points by COMMONWEALTH FOUNDATION
Pennsylvania State Budget Toolkit
2012 Budget Resources
The FY 2011-12 total operating budget of $63.4 billion, which included $27.1 billion in General Fund spending, represented the first year-to-year reduction in state spending in at least 40 years. However, as the economy continues to struggle out of a recession and with increasing costs in public welfare, corrections, pensions, and debt, the FY 2
JANUARY 24, 2012 | Commentary by ELIZABETH STELLE, JAY OSTRICH
Welfare Reforms Protect Poor, Taxpayers
Regardless of where you stand on taxpayer-funded entitlements, few Americans argue against the maintenance of temporary safety nets or modifications aimed at ending welfare fraud, waste and abuse.
JANUARY 17, 2011 | Policy Report by COMMONWEALTH FOUNDATION
80 Ideas for a Prosperous Pennsylvania
A Blueprint for Transforming the Commonwealth
Pennsylvania must undergo a rapid transformation to reverse the poor policy decisions that have eroded economic freedoms and brought the state to its present condition. To provide a roadmap for success in this critical endeavor, the Commonwealth Foundation has compiled a list of 80 policy recommendations for Gov. Corbett and state legi
Recent Blog Posts
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
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
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
