North Philadelphian Carol Johnson* saved $2,000 from her pension checks by storing the money in an upstairs bedroom. One day, the 87 year old's savings vanished in a matter of minutes—taken by law enforcement after Carol’s husband Kevin* was found with two marijuana joints in their home.
Carol was never charged with a crime, but it didn’t matter. Under Pennsylvania’s civil asset forfeiture laws, cash, cars, and even homes can be forfeited without a hearing. As opposed to most legal proceedings, civil asset forfeiture turns justice on its head, forcing property owners to prove their innocence and that their property itself is innocent. It’s a system in desperate need of reform.
SB 869, sponsored by Senators Mike Folmer and Anthony Williams was designed to stop the abuse of this practice by requiring a conviction before a person’s property can be seized. Unfortunately, the bill was gutted in the Senate Judiciary committee last week. The new bill language makes a few procedural changes to the process, but it continues to allow confiscation without a conviction. That’s why we've withdrawn our support of the bill along with the Philadelphia Bar Association, the Pennsylvania Institutional Law Project, and the ACLU of Pennsylvania.
No one should have their property taken away from them because of a crime they didn’t commit. The new version of SB 869 does nothing to prevent this injustice.
*Names have been changed to protect of privacy.
RELATED : PROPERTY RIGHTS, TAXES & SPENDING, CRIMINAL JUSTICE
In a recent interview with Stephanie Renee, host of WURD AM’s The Mojo, Nathan Benefield discussed the roots of Pennsylvania’s pension crisis and how to fix it.
Pension debt has stacked up significantly since 2001, when lawmakers retroactively increased pensions for state workers, public school teachers, and even themselves. Nate noted that an increase in pension benefits, coupled with reliance on the not-so-reliable stock market, have led to our $63 billion pension debt.
Additionally, overly optimistic assumptions that our pension investment funds will return 7.5% interest each year haven't borne out. More than a decade of underfunding our pension system has only served to push the burden of skyrocketing pension debt onto future generations.
The Department of Corrections alone owes over $3.3 billion in pension liability, while the Department of Human Services owes over $2.3 billion. The Turnpike Commission, which rounds out the list of PA’s ten agencies with the most pension debt, faces over $300 million in pension liability.
To see the impact of this debt, just look at higher tolls on the turnpike, higher tuition at state universities, and higher prices at our state-run liquor stores.
Nate explained that moving to a defined contribution plan, similar to the private sector’s 401(k) plans, would alleviate some of the pending pension trouble. Not only would it protect the system from the uncertainties of stock market returns, but it would also protect public employees and taxpayers from political influence.
Click here or listen below for the full interview:
RELATED : ACCOUNTABLE GOVERNMENT, GOVERNMENT DEBT
All men are created equal.
This simple idea—just five words—changes world history, according to Matthew Spalding, author of We Still Hold These Truths and Associate Vice President and Dean of Educational Programs for Hillsdale College in Washington, D.C. “It’s the key to everything. It’s the key to understanding America.”
In this week’s episode, we talk to Matthew about the forces that shaped the American mind and why now, more than ever, people fear the federal government.
Election season is in full swing, but so is the fall legislative session. This time of year elected officials walk a narrow line to avoid the illegal practice of using public resources for politics. Yet, public resources are used all-year round to funnel union dues and campaign contributions from workers' paychecks to union leaders.
Since 2010, PSEA, AFSCME 13, SEIU, UFCW and PFT unions have contributed $18 million from Political Action Committees (PAC). These same unions reported spending $40 million on "political activities and lobbying" using union dues. A significant chunk of PAC money is donated to state legislator's campaigns. The following Pennsylvania elected officials are the largest recipients of government union PAC contributions.
It's time to end this unfair use of public resources to collect political money by passing paycheck protection. Paycheck protection strengthens the rights of all government workers, giving them power over their own money and choice of political association.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
New union contracts will make state government more expensive, according to two analyses released by the Independent Fiscal Office (IFO).
The IFO projects contracts negotiated by the Wolf Administration with the state’s two largest unions—AFSCME and SEIU—will cost taxpayers an additional $507 million over three years.
Prior to this law, neither lawmakers nor the public knew the true cost of these contracts.
In the near term, the contracts will add to the state’s challenging fiscal predicament. The current budget is “balanced” by borrowing money and counting on unreliable revenue from harmful tax increases and other changes to state law.
Add to this the additional costs of the new contracts, which will require an estimated $61.4 million more in General Fund spending (plus another $100 million in other funds) in 2017-18, and Pennsylvania’s budget picture now looks even bleaker.
Note, in addition to the cost estimates calculated by the IFO, the Office of Administration estimates the savings due to higher employee health care contributions would be $4.7 million for SEIU and $13.6 million for AFSCME. The IFO says each of these is “a reasonable estimate.”
Currently, the wage base (not including benefits) of affected workers is $1.835 billion. The IFO represents the increase in costs, both salary and benefits, above this baseline resulting from the new contracts.
The IFO did not consider savings from administrative changes to the PA Employees Benefit Trust Fund (PEBTF), as these savings are irrespective of the union contracts.
The lack of legislative oversight over the collective bargaining process is a glaring problem. This is why Rep. Garth Everett is sponsoring HB 2289. The legislation, which passed the House State Government committee just yesterday, would give the General Assembly the authority to rescind state labor contracts negotiated by the governor.
The proposal would provide a much needed check on the governor, who has the power to negotiate contracts with campaign contributors behind closed doors.
RELATED : ACCOUNTABLE GOVERNMENT, TRANSPARENCY, UNIONS & LABOR POLICY
Yesterday was an emotional day for many. Hundreds of people from Pennsylvania’s vaping community traveled to Harrisburg to save their livelihoods and their way of life.
The rally to repeal a 40% wholesale tax on vaping products featured many speakers, including vape shop owners and consumers—all of who had one overarching message for anyone willing to listen: vaping changed their lives for the better.
Opinions on the health affects of vaping vary. But there should be no debate about every person’s right to choose to vape. Harrisburg’s fiscal irresponsibility threatens to take away this right, or, at the very least, make it harder to exercise.
The 40 percent vape tax scheduled to take effect on October 1 has already shut down at least 50 vape shops. Many more will close their doors if the General Assembly fails to replace the tax. Seeking to avoid further harm, Rep. Jeff Wheeland has introduced HB 2342, which passed the House Finance Committee today. Sen. Camera Bartolotta has also announced her intention to introduce a similar bill in the Senate.
Both lawmakers appeared at the rally yesterday and spoke passionately in favor of small business owners who are working hard to serve their communities. Rep. Kate Klunk also spoke on behalf of the vaping community. She specifically talked about Tony Myers, who is a vape shop owner in Hanover, PA. His shop employs adults with special needs. He also devotes some of his shop’s proceeds to autism and breast cancer support as well as epilepsy awareness.
For many owners like Tony Myers, the vaping industry isn’t about dollars and cents. It’s about improving the well-being of customers and providing people with an opportunity to live purposeful lives.
Saving this industry isn’t just about money or scoring political points. It’s about protecting Pennsylvanians freedom to pursue their happiness.
RELATED : SMOKING, TAXES & SPENDING, TAXATION
Americans finally got a raise! That's the gist of recent headlines hailing significant economic growth in 2015, but in Pennsylvania the economy is still struggling.
From 1991 to 2015, Pennsylvania ranked 46th in job growth, 45th in personal income growth, and 46th in population growth while the size and scope of state government grew dramatically.
Consider the state's unemployment problem:
- Pennsylvania’s unemployment rate rose again in August—the fourth time in the last six months.
- The unemployment rate now sits at 5.7 percent, which is nearly 1 percentage point above the national average.
- Of all 50 states, Pennsylvania experienced the second largest increase in the unemployment rate over the last year.
So what’s the solution to the state’s decades-long stagnation? Some have proposed government mandates like a minimum wage hike and raising taxes to pay for more government spending.
Neither will solve our economic challenges.
Let’s take the minimum wage first. In practice, it harms the very people it intends to help.
For example, Chicago restaurant owners Mark Robertson and Mike Sullivan recently closed their Mexican restaurant because of the city’s wage mandate. The owners stated,
Unfortunately, the rapidly changing labor market for the hospitality industry has resulted in immediate, substantial increases in payroll expenses that we could not absorb through price increases” … “In the last two years, we have seen a 27 percent increase in the base minimum wage, a 60 percent increase in kitchen wages, and a national shortage of skilled culinary workers.
Increasing government spending is another popular proposal that harms the economy. States with the highest tax rates experience slower income growth and job growth than states with the lowest tax rates.
The commonwealth must head in a new direction.
The first step is restraining government spending—starting with $800 million in corporate welfare—and lowering taxes to put more money in the pockets of working people.
Another critical step is improving the quality of education. Increasing school choice options—such as expanding tax credit scholarships is critical to creating a society where all Pennsylvanians can seize economic opportunities.
Together, these solutions will empower Pennsylvanians and reinvigorate the state's economy.
RELATED : SCHOOL CHOICE, JOBS & ECONOMY, ECONOMY, MINIMUM WAGE, TAXES & SPENDING, TAXATION
David Smith and Donald Lambrecht were up against a powerful foe: Gov. Wolf and an executive order that granted a sweetheart deal to a union at their expense. In a huge win, the Commonwealth Court today issued a ruling invalidating Wolf’s executive order unionizing home care workers.
Shortly after he took office, Wolf handed down an executive order that would have let the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees (AFSCME) unionize thousands of home health care workers in Pennsylvania—and take millions of dollars in union dues each year from their paychecks.
Most of these home health care workers are taking care of a family member or loved one. This order would have wreaked havoc on the relationships between recipients and providers—while padding union pockets.
We’ve shared the story before of Dave and his home care provider, Don. Homebound with muscular dystrophy, Dave has relied on Don for more than 25 years. Far beyond an employer-employee relationship, Dave and Don are like family. Wolf’s order would have forced Don to unionize against Dave, effectively stripping Dave of many of his rights as an employer.
With the help of the Fairness Center, Dave and Don challenged Wolf’s order in court. Today’s ruling, which is in a similar case challenging the same executive order, is a victory for Dave, Don, and thousands of other home care providers and recipients across the commonwealth.
Beyond the overreach of the order, the deal was particularly suspicious considering the cozy relationship between Wolf and the SEIU. As we noted in a previous blog:
Michael Brunelle, the former executive director of SEIU's PA State Council, is now special assistant to the governor and regularly collaborates with his former employer. Emails between Mr. Brunelle and union officials show the administration sharing news releases, talking points, and other documents before they are published.
…Most worrisome is the collusion over a controversial executive order.
SEIU officials helped draft an executive order that enabled SEIU and AFSCME (American Federation of State, County & Municipal Employees) to rapidly unionize tens of thousands of home health care workers—and deduct union dues from their paychecks. These dues can be spent on political activity and lobbying to push the governor's agenda.
What’s more, AFSME and SEIU were two of Governor Wolf’s largest campaign contributors during the 2014 election cycle.
Wolf’s executive order was a stealth attempt to help the unions collect millions of dollars. Now, we can add one more court-approved word to describe the order: illegal.
RELATED : UNIONS & LABOR POLICY, HOMECARE WORKER UNIONIZATION
As I pointed out earlier this week, Pennsylvania public school spending is at an all-time high. In fact, the state's per student spending is significantly above the national average.
James’ analysis adds that the latest state budget represents yet another increase in state funding for public schools, building on the all-time high established during the 2015-16 fiscal year.
Even the Secretary of Education recognized the commonwealth's education spending is high—relative to other states—and represents increases rather than cuts to funding levels. Detractors normally concede this point, but they respond with “it’s not the amount of funding, it is the inequality.”
They cite data showing a large gap in spending between wealthy (low-poverty) and poor (high-poverty) districts. Here’s the rub: That data shows Pennsylvania spends more per student in every category of districts. That is, even Pennsylvania’s high-poverty districts spend more than high-poverty districts nationally.
What does this mean? If greater “equality” is the goal, we could cut spending by wealthy districts (caps on local school property taxes would be a way to do this) and spend at the national average. These two changes would produce greater equality between districts.
Ironically, government unions, the school boards association, and their allies have lobbied against efforts to control property tax increases.
These statistics aren't meant to downplay or ignore the equity in education funding. As we've made clear in the past, Pennsylvania’s practice of “hold harmless” has created a vast disparity in state funding per student. Hold harmless is the practice of guaranteeing each school district at least the amount of state funding they received in the prior year—regardless of enrollment changes.
The result—over decades—is that districts with declining enrollments receive far more aid per student. Meanwhile, areas with growing student populations have not gotten increases to match their enrollment.
Phasing out the “hold harmless” formula so all state aid is distributed using the new student-based funding formula would fix this problem—without requiring a multibillion dollar tax increase.
RELATED : EDUCATION, EDUCATION SPENDING
In Pennsylvania, 130,000 kids attend public charter schools—about 5 percent of the state’s schoolchildren.
For many of these kids and parents, charter schools are a lifeline to a safer, better education. Unfortunately, demand for charters continues to far exceed supply, resulting in thousands of students languishing on waiting lists—subject to the whims of a lottery to determine their future.
In this week's episode of Commonwealth Insight, we talk with Nina Rees, president & CEO of the National Alliance for Public Charter Schools, about why charter schools matter, what to do about failing charter schools, and the elements that bring success to a charter school.
Regarding charter school oversight, Nina says charters are, “given a degree of autonomy and freedom in exchange for accountability.” What level of accountability? “A charter can be closed if it doesn’t live up to expectations in its contract or attract enough students.”
The truth is, no one is forced to attend a charter school—they truly are schools of choice. The fact that thousands are lining up to choose them speaks volumes about the value parents see in these alternatives to local school districts.
Later in the podcast, James Paul, CF’s senior policy analyst and education expert, joins to discuss school choice in Pennsylvania—and addresses claims that choice drains resources from school districts.
“If you believe, as I do, that these funds belong to children and families, then any objections to draining funding simply don’t pass muster,” James says.
Indeed, the first goal of public education funding should be to serve the next generation of Pennsylvanians, not to simply maintain the status quo in an educational system or institution. When funds follow families, everyone wins.
RELATED : EDUCATION, EDUCATION SPENDING, SCHOOL CHOICE
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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.