It's Not Enough Just to Say No...

MAY 11, 2015  | by NATHAN BENEFIELD

"It's not good enough to just say no and continue with the same old same old." So said Gov. Tom Wolf during his budget address, making clear his administration is committed to finding solutions, compromising, and working with both Republicans and Democrats to improve Pennsylvania. 

Unfortunately, the governor isn't practicing what he's preaching. 

Angela Coloumbis of the Inquirer reports that Wolf's spokesman Jeff Sheridan has emphatically repeated Wolf's opposition to Senate pension reform legislation and other Republican ideas to end business as usual in Harrisburg. 

As I point out in a recent letter to the editor, Gov. Wolf needs to stop blocking transformative reforms—like liquor store privatization, pension reform, and the Taxpayer Protection Act—critical to achieving prosperity for all Pennsylvanians.

I’m disappointed to see Gov. Wolf’s spokesman Jeff Sheridan accuse Sen. Bartolotta (Governor wants to reinvest in higher education, April 29) of having a “profound misunderstanding” of middle class families, while at the same time misleading readers about how Gov. Wolf’s proposal harms those same middle class families.

Sheridan conveniently fails to mention that Wolf proposed taxing university fees, textbooks, and meal plans—to the tune of $150 million per year.

Middle class students will pay the brunt of that burden—as will middle class families paying more for nursing home care, day care, diapers or utility bills. A recent study by the Independent Fiscal Office notes that every income group will pay more under Wolf’s tax increases.

While Sheridan repeats campaign slogans about changing the status quo and blames the previous administration, Wolf’s budget calls for more of the same. Following decades of spending increases and tax hikes, Pennsylvania’s tax burden rose to the 10th highest in the nation. As a result, Pennsylvania has ranked among the worst states in job, income and population growth for 40 years.

Ironically, it is Gov. Wolf who is saying “no” to needed reforms to get our state on the right track. He has already threatened to veto liquor store privatization and has indicated opposition to pension reform. Wolf has also been silent on Sen. Bartolotta’s own Taxpayer Protection Act—which would limit the growth of state spending and unleash the private sector.

Higher taxes and spending won’t fix Pennsylvania’s economy, and it’s time for Gov. Wolf to stop blocking reforms that will offer prosperity for all Pennsylvanians.


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State Health Care Exchange: A Dangerous Contingency Plan

MAY 8, 2015  | by ELIZABETH STELLE

A week ago Governor Wolf announced his plan to create a state-based health care exchange if the U.S. Supreme Court nixes taxpayer subsidies to insurance companies through the federal exchange.

Creating a state exchange would harm Pennsylvanians in several ways. A state exchange could cost state taxpayers millions, discourage real health care reform and expose Pennsylvanians to additional tax penalties. Here are five reasons lawmakers should object to the governor's dangerous contingency plan.

1. Creating a state exchange—or even a hybrid exchange—would be costly. Annual operating budgets for state exchanges, according to The Washington Post, are $28 to $32 million, not including start-up costs which the federal government may not provide.

2. State exchanges have a high rate of failure. Nearly half of the state-exchanges are struggling to remain self-sufficient. Although Governor Wolf is "pretty confident" creating a PA exchange will succeed, no amount of confidence can compare to the reality that many state exchanges have been outright disasters. For example, the state of Oregon received $303 million to establish a state-based exchange, but failed to enroll a single person online. Massachusetts temporarily enrolled exchange applicants in Medicaid when it's state-based exchange failed—costing the state $10 million per month.

3. We need meaningful health care reform. If the Supreme Court strikes down insurance subsidies provided through healthcare.gov, Congress will have a golden opportunity to change the ACA and eliminate many of the rules and regulations that have increased the cost of insurance and, by extension, the need for subsidies.

4. No federal subsidies also means no penalties. Without a state exchange, the IRS would no longer be able to impose penalties on Pennsylvania employers of that don’t offer “qualified” and “affordable” coverage.

5. A state-based exchange provides little state control. The reality is the federal government will retain full control over key insurance regulation decisions that were previously under the purview of the Insurance Commissioner and legislature. For instance, insurance plans will still be required to meet federally-set minimum essential benefits and abide by community rating and guaranteed issue regulations.

Instead of a state exchange, lawmakers can pursue a more reasonable contingency plan. They can shield Pennsylvanians from the individual and employer mandate taxes through the Health Care Freedom Act and create cost-effective alternative insurance plans by allowing insurance companies to offer plans that do not meet the essential benefits package requirements of the Affordable Care Act.


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The Jury is In: Corrections Reform is Working

MAY 8, 2015  | by TOM BAKO

Remember the time lawmakers from both parties came together in Harrisburg and unanimously passed important, groundbreaking reform legislation?

It's not a joke. It happened in 2012.

As a result of research and advocacy efforts by a transpartisan coalition including the Commonwealth Foundation, the late Democratic Gov. George Leader's family, the ACLU, and many others, the Pennsylvania General Assembly passed a landmark corrections reform package.

The goals of this bipartisan legislation were many: to better differentiate between violent and nonviolent offenders, and treat them accordingly; to reduce prison population and recidivism rates while keeping the public safe; and to save taxpayers millions of dollars by investing in a smarter, safer, more humane corrections system.

Now, nearly three years later, the reforms appear to be working: The latest data show historic lows in recidivism in Pennsylvania and real taxpayer savings.

According to the Department of Corrections, the most recent six-month and three-year recidivism rates are the lowest the department has ever recorded, while one-year rates are second-lowest in Department history. These rates are the result of smarter and more humane corrections policies, which improve lives and lead to savings for taxpayers, as my colleague Elizabeth Stelle has previously pointed out.


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Audio: The Need for the Taxpayer Protection Act

MAY 7, 2015  | by JONATHAN REGINELLA

The Taxpayer Protection Act is a simple idea that achieves four goals: limiting the future growth of state government spending, forcing the state government to prioritize future spending, helping to balance the budget during economic recessions, and providing tax relief for working families.

CF's Matt Brouillette was recently on WSBA with Gary Sutton to discuss the TPA and the need to restrain reckless spending or a financial burden too big to bear will continue to hinder Pennsylvania’s already suffering economy.

As Matt explains, the TPA would put up "guard rails" on government spending to protect taxpayers’ wallets and family budgets. The construction of these “guardrails” are currently underway with the Senate Finance Committee advancing two versions of TPA legislation.

Both pieces of legislation provide a promising path to economic prosperity—in contrast to Gov. Wolf’s proposed budget of historical tax increases—by returning excess tax revenue to the private sector and providing tax relief to families already facing one of the highest tax rates in the country.

Listen below to learn more about the Taxpayer Protection Act from Matt's interview with Gary Sutton.

The Gary Sutton Show airs daily on WSBA 910AM in the York area.

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

And for mobile listening, get the SoundCloud iPhone and Android apps.


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A Transparent Win for Taxpayers

MAY 6, 2015  | by BOB DICK

Today the Senate took a significant step to make state government more transparent and accountable by approving SB 644 and SB 645. Here’s a brief description of the bills now heading to the House:

  • SB 644, sponsored by Sen. Mike Folmer, empowers the Independent Fiscal Office to provide the public with cost estimates on state public sector union contracts prior to ratification.
  • SB 645, sponsored by Sen. Patrick Stefano, requires public sector collective bargaining agreements to be posted on state, school district, or local government websites two weeks prior to signing.

Please click here to send an email to thank the following Senators for voting yes: Alloway, Argall, Aument, Baker, Bartolotta, Brooks, Corman, Eichelberger, Folmer, Gordner, Greenleaf, Hutchinson, McGarrigle, McIlhinney, Mensch, Pileggi, Rafferty, Scarnati, Scavello, Smucker, Stefano, Tomlinson, Vance, Vogel, Vulakovich, Wagner, Ward, White, and Yaw.

The current collective bargaining process permits the governor to negotiate billions of dollars in contracts with public sector unions behind closed doors. In Governor Wolf’s case, he’s negotiating contracts with some of his largest campaign contributors—an immense conflict of interest.

Moreover, taxpayers are barred from reviewing and weighing in on these union contracts they’re required to pay for. Acknowledging this unfairness, the Senate voted to give taxpayers a seat at the table.

The quest for transparency now moves to the House. If the House approves, the governor’s spokesman has indicated Gov. Wolf may sign both pieces of legislation, a move consistent with his promise to augment government transparency.


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Natural Gas Severance Tax: An Economy Killer

MAY 6, 2015  | by GORDON TOMB

From labor unions to local chambers of commerce, community leaders are expressing a lot of anxiety over Governor Wolf's natural gas severance tax proposal.

The proposed tax “is a Wyoming County economy killer,” says Gina Severcool Suydam, executive director of the county’s chamber of commerce, in a letter to the Scranton Times Tribune.

Ms. Suydam attributes to the gas industry impressive economic gains in the county between 2007-2012:

  • 29 percent in average weekly wages — from $700 to $904.
  • 148 percent in average weekly wages in the natural resources and mining industry — from $642 to $1,594.
  • 134 percent in annual payroll — from $273 million to $639 million.

The biggest threat to the industry now is the proposed severance tax, says Ms. Suydam. It would be a serious additional cost burden in maintaining the competitiveness of Pennsylvania gas, consuming any advantage our producers currently have over gas from other areas.

Then there is Dennis Martire, vice president and Mid-Atlantic regional manager of the 40,000-member Laborers’ International Union of North America, who is quoted in a recent news release:

We already have seen a reduction in pipeline man-hours over the past two years related to falling gas prices,” reports Mr. Martire. If you excessively tax the shale industry, you risk hurting employers, workers and communities across the state.

The economic depression of the gas industry noted by Mr. Martire continues to be manifested in cutbacks in southwestern Pennsylvania: 220 jobs lost at Noble Energy and 170 jobs at Consol Energy.

Adding a tax to the current economic struggles of a promising industry would be ill advised. Or as Speaker of the House Mike Turzai (R-Allegheny) says:

The governor’s approach on a severance tax is punitive in nature and threatens to severely hurt hard-working Pennsylvania laborers, negatively impact family-sustaining jobs and shut down production and downstream benefits for all Pennsylvanians.


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30,000 Jobs that Won't Pay

MAY 5, 2015  | by NATHAN BENEFIELD

Gov. Wolf's tax plan would result in 30,000 jobs not created next year, according to a new analysis we released yesterday. Using the STAMP model, developed by economists at the Beacon Hill Institute at Suffolk University, we estimated the impact of Gov. Wolf's proposed tax increases over the next few years.

The model projects 29,408 fewer jobs in Pennsylvania next year, versus the baseline estimates, and 38,313 fewer the following year, after all tax changes take effect. The projections are more dire when you exclude government employment and look solely at the private sector: 39,209 fewer private sector jobs created next year, and 40,399 the following year.

This marks a sharp contrast to Gov. Wolf's "jobs that pay" sound bite.

Total Employment 

 

Without Wolf Taxes

With Wolf Taxes

Jobs Not Created

2015-16

5,764,652

5,735,243

29,408

2016-17

5,815,360

5,777,047

38,313

2017-18

5,866,631

5,829,821

36,810

2018-19

5,918,471

5,882,391

36,080

2019-20

5,970,885

5,935,404

35,481 

Private Sector Employment 

Without Wolf Taxes

With Wolf Taxes

Jobs Not Created

2015-16

5,063,968

5,024,759

39,209

2016-17

5,116,985

5,076,586

40,399

2017-18

5,170,557

5,132,299

38,258

2018-19

5,224,691

5,186,636

38,055

2019-20

5,279,391

5,241,433

37,957

This analysis comes on the heels of an IFO study showing every income group would pay more under Wolf's tax plan. 

You can view the full results of our analysis, including an FAQ of how the STAMP program works here.


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Important Education Bills Advance in House

MAY 4, 2015  | by JAMES PAUL

In a promising move for Pennsylvania students, the House Education Committee passed two important bills today that will keep effective teachers in the classroom and expand educational options. 

HB 805, sponsored by Rep. Stephen Bloom, passed with a 14-10 vote. This legislation would end seniority-based layoffs in Pennsylvania public schools. Rep. Bloom’s Protecting Excellent Teachers Act ensures that in the unfortunate event of furloughs, teachers are evaluated based on their effectiveness in the classroom—not simply the date they were hired.

HB 752, sponsored by Rep. Jim Christiana, also passed committee by a vote of 18-8. This legislation would increase the Educational Improvement Tax Credit cap by $70 million ($100 million to $170 million) and the the Opportunity Scholarship Tax Credit cap by $30 million ($50 million to $80 million). Increasing these caps will create more scholarships for students in need.

Pennsylvania’s scholarship tax credit programs allow tens of thousands of low and middle income families to attend schools that are more rigorous, safer, and better-tailored to each student’s unique circumstances. The programs result in great savings to taxpayers, too, since the average scholarship amounts to a fraction of the cost of educating a student in a traditional public school. And these programs allow businesses to ensure that their tax dollars are efficiently spent on a quality private education instead of being funneled into the state government General Fund.


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Wolf's Education Agenda Discourages Choice

MAY 1, 2015  | by JAMES PAUL

Gov. Tom Wolf has wasted little time staking out his vision for public education, and it doesn’t appear to have much room for school choice.

In a recent opinion piece for The Sentinel, I explain how Pennsylvania’s new governor is hostile to innovative schools and wedded to the educational status quo.

First, the Wolf administration catered to anti-reform interests in the troubled School District of Philadelphia. After the city’s School Reform Commission (SRC) approved just a handful of new charter schools, Wolf stripped SRC Chairman Bill Green of his leadership position.

The governor’s message was unmistakable: even tepid support for charter schools will not be tolerated. It’s not as though charters secured a decisive victory in Philadelphia—34 of 39 charter applicants were rejected, leaving tens of thousands on waiting lists.

Still, this meager charter expansion was justification for Wolf to shuffle deck chairs at the SRC. Who was tapped to replace Green as chairman? Marjorie Neff, the only SRC member who voted against all 39 Philadelphia charter applicants.

The Wolf Doctrine on education is particularly detrimental to students who attend public cyber charter schools:

Wolf’s budget is even more punitive to cyber charter students, who disproportionately come from low-income families. For them, Wolf would slash current funding levels by one-third. While the state currently spends an average of $14,600 dollars per public school student, the governor would spend only $5,950 per cyber student.

To better understand how Wolf’s cyber charter cuts would harm families across Pennsylvania, take a look at this video from Commonwealth Connections Academy.


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The Next 1,360 Days

APRIL 30, 2015  | by ELIZABETH STELLE

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


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