Audio: Mary's Law Ends Unfair Political Privilege

JANUARY 14, 2015  | by JONATHAN REGINELLA

Government unions have the luxury of using taxpayers’ resources—which should never be used for politics—to collect their political dues money and direct campaign contributions. Simultaneously, these unions have been wrongly representing their own union members’ opinions by declaring that some, like Mary Trometter, support political candidates that they do not.

CF’s Bob Dick explains how Mary’s Law, named after Mary Trometter and also known as paycheck protection, would put an end to this unfairness.

Bob points out that it’s morally wrong for anyone to “be forced to subsidize political policy they disagree with.”

Mary’s Law would force union leaders to come face-to-face with the employees they represent, allowing members to ask why their union is spending their dues on candidates they might not support.

Listen below to hear Bob on WSBA 910's The Gary Sutton Show as he explains why Pennsylvania needs  Mary’s Law now.

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

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Union-Backed Political Group Not Accountable

JANUARY 14, 2015  | by BOB DICK

Here's your daily dose of irony: Pennsylvanians for Accountability, a union-backed political nonprofit, may have to pay a $50,000 fine for its lack of accountability. According to The Center for Public Integrity, the group failed to file a mandatory tax return critical to providing a look at its internal operations.

Back in 2013, we first pointed out that the group—which has run attack ads and mailers targeting Tom Corbett and House Republicans—received large contributions from government unions (using union dues) to fund their political ads. Well, here’s more evidence confirming what we already know:

As a social welfare nonprofit, Pennsylvanians for Accountability isn’t required to reveal the identities of its funders. Therefore, it wasn’t known during its advertising barrage who was bankrolling the group — or even who was leading it.

But Department of Labor records and tax documents reviewed by the Center for Public Integrity show three unions combined to give Pennsylvanians for Accountability $1.11 million — 90 percent of the money it raised between Sept. 1, 2012, and Aug. 31, 2013, the tax year covered by the return.

The largest donors to the group were the National Education Association (NEA), followed by the Service Employees International Union (SEIU) in Pennsylvania, and the SEIU national chapter. The group also received funding from another union-backed organization, America Votes, which itself received $334,500 from the NEA in 2013-2014.

Not only was the group funded by government unions, but it was staffed by union activists:

In state business filings, Pennsylvanians for Accountability lists three union-connected activists — Linda Cook, Kevin Kantz and Georgeanne Koehler— as the people who incorporated the group. The same three union activists, who are all Pennsylvania residents, are listed in the group’s new tax filing as its only officers.

Both Cook and Kantz have worked for the Pennsylvania State Education Association, where, tax records show, they both served as directors as recently as 2012. Koehler also has ties to organized labor: she's an SEIU member and healthcare activist.

When a reporter with Publicsource.org attempted to uncover more information about the left-leaning group, he had no such luck. In fact, when he interviewed one of the union activists associated with the group, she said "I'm not sure who started it or why it was started, other than they want to fight for a better life for our citizens" and "I don't know who’s in charge."

Public employees who believe their union dues should not be given to political organizations like Pennsylvanians for Accountability should support Mary's Law, which would allow union members to withhold the political portion of their dues if members feel their union is not spending their dues properly.

That’s real accountability. 


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Doing Business in Pennsylvania Can Be Taxing

JANUARY 12, 2015  | by BOB DICK

Tax policy may not be as exciting as discussing Golden Globe winners, but few topics rise to the level of its importance. Taxes directly impact your quality of life. The more the government collects from you, the fewer dollars you have to provide for yourself and your family.

The same principle applies to businesses. When government finances its profligate spending through excessive corporate taxes, entrepreneurs have fewer dollars to re-invest in those businesses. Less investment results in reduced job and wage growth.

The commonsense notion that higher taxes stunt economic growth is not without evidence. A Mercatus study determined higher taxes lead to a decline in gross state product (GSP), per-capita income, and the number of new businesses. Our own analysis (page 23) found better job growth in states with the lowest tax burdens when compared to states with the highest tax burdens.  

As we've persistently pointed out, Pennsylvania is among the states with the highest tax burdens. Luckily, relief may be on the way. Senator Michelle Brooks and Representative Seth Grove will be sponsoring bills to cut the state's corporate tax rate, which is the 2nd highest in the U.S.

Last year, my colleague Elizabeth Stelle wrote about cutting the corporate tax rate by ending special subsidies. This idea is just as relevant in 2015. According to the most recent numbers, if lawmakers eliminated nearly $675 million in special subsidies (indentified below), the corporate tax rate could be lowered to 7.3 percent from 9.99 percent.

Corporate Welfare Grant & Loan Programs 2014-15 Budget (Thousands)
General and Special Funds
Agricultural Excellence $1,100
Agricultural Research $787
Agricultural Promotion, Education and Exports $250
Ben Franklin Tech Development Authority Transfer $14,500
Commonwealth Financing Authority Transfer $77,755
Council on the Arts $898
Discovered in PA Developed in PA $5,000
Food and Marketing Research $494
Grants to the Arts $8,590
Hardwoods Research and Promotion $350
Industry Partnerships $1,813
Infrastructure and Facilities Improvement Grants $19,000
Keystone Communities $6,150
Keystone Works $100
Livestock Show $177
Marketing to Attract Business $2,008
Marketing to Attract Tourists $7,264
Municipalities Financial Recovery Revolving Fund Transfer $4,000
New Choices/New Options $500
Open Dairy Show $177
Partnerships for Regional Economic Performance $11,880
Pennsylvania First $20,000
Pennsylvania Race Horse Development Fund $252,583
Tourism-Accredited Zoos $550
World Trade PA $5,824
Youth Shows $140
Total $441,890
Tax Credits
Film Tax Credit $60,000
Job Creation Tax Credit $10,100
Research and Development Tax Credit $55,000
Keystone Opportunity Zone $70,300
Keystone Innovation Zone $25,000
Resource Enhancement and Protection Tax Credit  $10,000
Alternative Energy Production Tax Credit $2,000
Total $232,400
Total $674,290

This 27 percent decrease in the corporate tax rate would rank Pennsylvania 22nd among the fifty states—a vast improvement over our current position.

What's more, these calculations are based on a purely static model. Given that businesses respond to lower taxes, a lower tax rate could result in more robust economic growth, creating an increase in state revenue and allowing the rate to be cut even further.

Historically, Pennsylvania's economy is slow to grow. A cut in the corporate tax rate may be just the jolt it needs to pick up steam. 


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Disappointed and Determined

JANUARY 12, 2015  | by MATTHEW BROUILLETTE

Today, I am both disappointed and determined.

I am disappointed that it is now a mathematical impossibility for any of the reforms you and countless other Pennsylvanians have demanded to reach Governor Corbett’s desk before he leaves office.  That includes not just paycheck protection, but also pension reform, liquor privatization, broader school choice, the Taxpayer Protection Act, and any number of long-overdue, common-sense policy priorities.  As you well know, CF has been making the case aggressively for these changes not just throughout the current administration, but since our founding in 1988.

I am also determined, because I believe with all my heart that our battle is not ending—it is only beginning.  When I moved to Pennsylvania 13 years ago, these ideas were laughed out of the room in our State Capitol.  Even two years ago, when CF took it upon itself to educate our state about the importance of ending the taxpayer collection of union political money, we were ridiculed by people who were supposed to be our friends.  Today, these issues are at the forefront of the debate, because we have gone on offense against the root of bad policy—namely the unfair political and financial advantages enjoyed by the most powerful advocates of big government.

Those forces marshal $175 million per year that we, the taxpayers, collect for them.  We haven’t beaten them just yet.  But I am totally convinced that if we stay on offense, we will!

I'm reminded of a quote that is frequently attributed to Gandhi: "First they ignore you, then they laugh at you, then they fight you, then you win." Keep fighting!


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Obamacare Failing Big Time

JANUARY 9, 2015  | by NATHAN BENEFIELD

According to John Micek's reading of a recent Gallup poll on health insurance, Obamacare is "working after all." In reality, though, Gallup’s findings indicate that the health care overhaul has failed miserably to provide affordable health care.

After the federal government mandated that every individual buy health insurance, and has already shoveled tens of billions of taxpayer subsidies to big insurance companies, 13 percent of Americans still do not have insurance. That's about as ineffective a government program as anyone could imagine.

Oddly, the uninsured rate (based on this Gallup poll) spiked in 2013—three years after Obamacare passed. The current Gallup poll finds the uninsured rate sits only marginally below where it was in 2008.

Most of the reduction in uninsured (as well as the prior rise in uninsured) is tied to employment. As unemployment drops, so too does the uninsured rate. When unemployment rises, as it did during the recession, there are more uninsured.

Most importantly, there is a difference between health insurance and health care. Loading more people into a government run program like Medicaid offers "coverage" but doesn’t insure quality care or that recipients even have access to a doctor. We've reported frequently on the problems in Medicaid, and even the NY Times has taken note that giving someone Medicaid doesn’t mean they can be actually seen by a doctor.

And as Elizabeth Stelle notes, Obamacare imposes new burdens on businesses and workers, resulting in fewer hours and cut wages to avoid or pay fines. Congress is currently working to make these mandates slightly less harmful to workers and our economy.


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Liquor Privatization Reduces Operating Costs

JANUARY 8, 2015  | by NATHAN BENEFIELD

Pennsylvania Liquor Privatization Testimony

Union leaders, copying from the same talking point memo, have repeated an identical falsehood about liquor store privatization.

In two recent letters to the editor, I correct the record of faulty claims by Wendell Young and David Fillman. They allege that a study of liquor privatization shows $1.4 billion in "transition costs".

But despite their claims, this is not an additional cost for transition. What the report actually suggest that the total cost of PLCB operations would be $1.4 billion during the five years it takes to transition to a private system.

The PLCB operations is currently around $500 million per year. Eliminating the state stores and wholesale operation, would not happen immediately, but during the transition period, annual operating costs would decline from that $500 million to less than $100 million per year (for enforcement and oversight).

That is, without any change, the PLCB's operating costs would be about $2.4 billion over the next five years. Privatization would save state taxpayers $1 billion in operating costs.

It is disappointing to see union leaders repeatedly distort facts. It is even more disappointing that they are using union dues—collected at taxpayer expense to spread that misinformation.


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Marcellus Shale Equals Economic Growth

JANUARY 6, 2015  | by NATHAN BENEFIELD

Where there is Marcellus shale drilling there is economic growth. Over the past six years, Pennsylvania counties with Marcellus shale drilling saw the largest gains in economic growth.

The most recent data from the Bureau of Labor Statistics shows that counties with more than 200 Marcellus shale wells experienced greater job and wage growth than the rest of the state from 2008 to 2014 (as of the second quarter).

  • Marcellus shale counties had, on average, 8.7 percent employment growth. Counties with no Marcellus shale activity had 0.6 percent job growth
  • Marcellus shale counties averaged 29.9 percent growth in total wages. Counties with no Marcellus shale activity had less than half that amount.
  • Average weekly wages among all jobs grew in Marcellus shale counties by an average of 20 percent, compared with 11 percent wage growth in non-Marcellus counties.

Susquehanna County led the state in both total wage growth and average weekly wage growth, while Sullivan County led in employment growth. Greene County ranked second in all three measures of economic growth.


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Former Pennsylvanians Voted with their Feet

JANUARY 5, 2015  | by NATHAN BENEFIELD

Moving out of Pennsylvania

Residents continued their exodus from Pennsylvania in 2014.

The latest Census population estimates, released last month, show that Pennsylvania gained 5,913 in total population between July 2013 and July 2014. This increase was driven by natural causes—13,400 more births than deaths—and international migration (a net of 29,000).

However, on the negative side, the state lost 31,400 residents to other states in net domestic migration. Only New York, Illinois, New Jersey and California lost more.

United Van Lines data supports this, putting Pennsylvania among the top 10 "outbound states" (again, New York, New Jersey, and Illinois top the list).

This is the continuation of a long-term trend: Pennsylvania lost 89,000 to other states since 2010, more than 40,000 from 2000-2009 and more than 250,000 during the 1990s in net state-to-state moves.

But it's part of a larger trend as well. State residents have been fleeing from high tax states to lower tax states. Indeed, while a net loser on the whole, Pennsylvania has gained population from residents fleeing higher-taxed New York, New Jersey, and Maryland.

That residents "vote with their feet" must be considered in any discussion of increasing Pennsylvania's tax burden.


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Top 5 Articles of 2014

JANUARY 2, 2015  | by DAWN MELING

The votes (well, views) are in! Below we list the top 5 most popular articles on commonwealthfoundation.org in 2014.

5. Answering the Critics on Paycheck Protection

There are plenty of myths circulated by opponents of paycheck protection. We address their claims with the facts.

4. Union Dues Exploit Teachers, Taxpayers

What if I told you that regardless of your political beliefs, several hundred dollars will be deducted from your paycheck each year to support politicians you disagree with and political issues you oppose? Matt Brouillette explains how this practice exploits Pennsylvanians.

3. Survey: Union Members Overwhelmingly SUPPORT Paycheck Protection!

In February, a statewide survey showed that union members don't want taxpayer resources misused for political gain.

2. Government Union Bosses Fight For Control Over Workers’ Paychecks

In January, a coalition of government union leaders marshaled their forces to defend their unique political privilege. Pennsylvania teachers spoke out against the unions' grip on their paychecks.

1. Pennsylvania State Budget Toolkit

Your one-stop shop for all of CF's research and analysis on Gov. Corbett's state budget proposal, our recommendations for improvements, and links to state budget data and legislative resources.


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The Best Numbers of 2014

DECEMBER 30, 2014  | by MATTHEW BROUILLETTE

It will come as no shock to you that we love numbers. As I look back at 2014, heading into our 27th year in operation, there are some numbers I especially enjoy analyzing. Let me share them with you.

A major highlight of our year was seeing even more opportunities extended to children in the commonwealth. In October, legislation passed that will allow thousands more kids to attend a school of choice. And in Philadelphia, for the first time in seven years, new charter school applications—40 of them!—are under review, giving hope to students languishing on waiting lists.

We also exposed important numbers this year, like $7.6 million—the amount that seven Pennsylvania government union PACs gave to candidates in 2013-14 (an increase of 53 percent in just two years). As you know, taxpayers paid to collect that purely political money, in addition to the millions in dues that government unions spend on politics.

That's why the fight for paycheck protection was so important this year. This leads me to one of my favorite numbers: 11,049. That's the number of emails that you sent lawmakers through our website alone, most of them about paycheck protection. Because of your tireless advocacy and the work of bold lawmakers, paycheck protection legislation passed out of two critical committees in the House and Senate and earned the vote of 20 senators when a paycheck protection amendment was introduced this fall.

As the year comes to an end, I'd like to focus on just two more numbers: 16 and 1. The CF team consists of 16 full-time staff members passionate about Pennsylvania's future. I'm proud to fight for freedom with them every day. And the number one represents you, who fight along with us. Many know that a favorite quote of mine comes from Henry David Thoreau, who said, "There are a thousand hacking at the branches of evil to one who is striking at the root."

Thanks to each one of you striking at the root with us.


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