Thousands of Philly Students Left on Waiting Lists

FEBRUARY 23, 2015  | by JAMES PAUL

The long, frustrating wait continues for Philadelphia families desperate for educational opportunity.

Last Wednesday, Philadelphia’s School Reform Commission (SRC) rejected 34 of 39 charter school applicants. Five charters were approved, albeit with substantial restrictions and conditions. Each approved school must enroll significantly fewer students than it requested, and each school received a three year charter instead of the customary five year agreement.

All of the approved applicants currently operate high performing charters in Philadelphia: Independence Charter School West, KIPP Dubois, MaST Community Roosevelt Campus, Mastery Gillespie Campus and TECH-Freire. Each operator runs a school with a School Performance Profile score exceeding 70 (the district average is 56.8) and substantial enrollment of low-income students. In other words, their students outperform Philadelphia's traditional public schools, even though they spend fewer dollars per-pupil.

These are exactly the type of innovative, successful models that district leaders should promote and encourage. Independence, KIPP, MaST and Mastery sought to open a combined nine new schools—yet only four were accepted, and each with strings attached. For example, MaST's Roosevelt application intended to enroll 1,575 students in the first year, but the SRC is limiting them to 400 seats. 

These approved schools will provide life-changing opportunity for approximately 2,600 students over the next four years. Sadly, though, tens of thousands of other Philadelphia students remain trapped in schools they’re seeking to leave.

Opponents of expanded choice in Philadelphia decry “fixed costs” as the main reason to block new charters, but the district is already revising down the projected charter school price tag—despite continuing to use the disputed $7,000 per-pupil stranded costs estimate.

Jerry Jordan, president of Philadelphia Federation of Teachers, criticized the SRC for approving any charters whatsoever. Jordan also thanked SRC member Marjorie Neff for voting against all 39 applicants.

What’s the next step for denied charter schools? Appeal. For the first time in 14 years denied applicants can petition the State Charter Appeal Board to reverse the SRC’s decision. According to Secretary of Education Pedro Rivera, the seven-member Board may not consider the financial impact a proposed charter will have on the district, which should allow each school to be evaluated on the merits of its application alone.

Given the strength of many Philadelphia applicants, perhaps there is reason to be optimistic about a favorable appellate ruling. In the short term, however, school choice remains out of reach for far too many Philadelphia families.


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Lawmakers Stand Up for Taxpayers

FEBRUARY 23, 2015  | by JOHN BOUDER, BOB DICK

Taxpayer Protection Act

Earlier today, Senators Camera Bartolotta and Mike Folmer and Rep. Tim Krieger announced their intentions to usher in an era of fiscal responsibility with the Taxpayer Protection Act (TPA) and Taxpayer Protection Amendment. 

The TPA would limit government spending to inflation and population growth. Any revenue above this cap would be used to pay down pension liabilities, replenish the "Rainy Day Fund," and provide tax relief to working Pennsylvanians. These reforms would shield families from out-of-control spending growth that hinders job creation, promotes "brain drain," and stymies personal income growth.

Since 1970, state government spending has risen nearly $14,000 per family, leaving residents with the tenth-highest tax burden in the country to pay for it all.

This gargantuan growth in government has not stimulated Pennsylvania's economy. Pennsylvania ranks a depressing 49th in job growth, a dubious 48th in population growth, and a dismal 45th in personal income growth since 1991.

Had TPA spending controls been in effect since 2003, taxpayers would have saved $28.7 billion over the past decade—or nearly $9,200 per family of four. The TPA is just one of many crucial steps that would move us toward a balanced budget and put Pennsylvania back on the road to prosperity.

CF's Nate Benefield commented

It's time to protect Pennsylvanians' ability to live, work, and prosper within the commonwealth with the Taxpayer Protection Act

If you're interested in reading more about the legislation, you can find the Taxpayer Protection Act here and the Taxpayer Protection Amendment here. 


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Committees Vote on Paycheck Protection, Liquor Privatization

FEBRUARY 23, 2015  | by MATTHEW BROUILLETTE

Lawmakers took action in committees today on both liquor privatization and paycheck protection. Here's what's happened in Harrisburg:

Liquor privatization: This morning, the House Liquor Control Committee advanced HB 466, which would end the government monopoly on wine and liquor sales (wholesale and retail). This bill is sponsored by Speaker of the House Mike Turzai.

Paycheck protection: The Senate State Government Committee met today to discuss and vote on paycheck protection (SB 500, a constitutional amendment sponsored by Sen. Scott Wagner, and SB 501, sponsored by Sen. John Eichelberger). Both would end the use of taxpayer resources to collect government union political money. SB 500 advanced from committee.

These are critical first steps for both reforms in 2015 and we praise the bold champions in the House and Senate for making taxpayers their priority.

Government unions are deploying their forces to keep their political privileges, so please join me now in voicing your support for the legislators standing up for taxpayers. Whether liquor privatization, paycheck protection, pension reform or spending limits—the time is now to set the agenda for 2015 and let Gov. Wolf know what taxpayers want the future of Pennsylvania to look like.

Click here to send your message on liquor privatization.

Then click here to send your message on paycheck protection.


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Audio: Stepping Towards a Balanced Budget

FEBRUARY 12, 2015  | by JONATHAN REGINELLA

This year, Pennsylvania lawmakers have the formidable task of eliminating a projected $1.7 billion budget deficit. Bob Dick, a CF policy analyst, spoke with Gary Sutton about what can be done to step towards a balanced budget.

A crucial first step is protecting families and business from unfair tax increases. As Bob points out, the “tax burden on Pennsylvanians in general is the tenth highest in the country—adding more to that burden is just not fair, and it makes it harder for working families to make ends meet.”

Avoiding overspending—by cutting unnecessary burdens like corporate welfare—is another vital step in balancing the budget. Though it has proven to be an ineffective means to stimulate job growth, Pennsylvania tops the charts in corporate welfare.

Bob describes how eliminating this wasteful spending would save taxpayers around $675 million.

Listen to some of Bob’s interview with Gary Sutton on WSBA 910 AM as he describes balancing the budget in more detail:

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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Wolf Misleads on Need for More Taxes

FEBRUARY 11, 2015  | by NATHAN BENEFIELD, ELIZABETH STELLE

tax

Gov. Tom Wolf today proposed a new tax on natural gas, fulfilling one of his campaign promises. However, much of his rhetoric doesn't match reality.

Wolf's proposal calls for a 5 percent tax on the value of natural gas, with revenue (after replacing impact fee revenue) going largely to education, along with some environmental and energy programs.

Here are 5 facts Wolf got wrong or failed to address. 

1) Pennsylvania education spending is at an all time high.

Despite Gov. Wolf's refrain about Pennsylvania "disinvesting" in public education, state support for public schools is at an all-time high. In fact, total spending and revenues of school districts are also at record highs. So too are school districts' reserve funds—and school districts added to their reserves during this so-called "disinvestment."

2) Pennsylvania spends more than the national average on public education.

Pennsylvania's public schools spend $3,000 more per student than the national average. Like others, Gov. Wolf talked about Pennsylvania's "state share" of public education funding being low, as a percentage. But in reality, state funding for public schools per student is about the national average.

Yes, the funding formula for distributing dollars to schools is broken, and we look forward to working with Gov. Wolf to creating a fairer system of funding public schools. But the solution to what ails public schools isn't a lack of funding. Indeed, if Gov. Wolf really wants to see "schools that teach," he should advocate for more high performing charters schools in Philadelphia for students stuck on waiting lists or for much needed reforms in the York city school district.

3) Pennsylvania's business taxes are already uncompetitive.

Gov. Wolf resorted to the tired refrain that "other states do it" in regards to a severance tax. Yet states like Texas do not have a corporate income tax or personal income tax, dramatically lowering the effective tax burden on those drillers.

Even states like West Virginia have a lower overall tax burden and a lower corporate income tax rate than Pennsylvania—which already pays the highest effective corporate income tax in the industrialized world.

Natural gas drilling has created thousands of jobs, expanded opportunity for small businesses and enriched landowners. And families across Pennsylvania—including low-income families in areas far removed from drilling—have benefited from lower energy bills thanks to the shale tax boom.

Tom Wolf’s tax proposal threatens this opportunity. The gas industry is already pulling out of Pennsylvania because of low gas prices and better opportunity elsewhere; Tom Wolf would drive them out even further.

As an MIT graduate and student of economics, Gov. Wolf should realize Pennsylvania is already losing in the competition for energy jobs.

4) Natural gas drillers pay many other taxes and fees.

In his eagerness to levy an additional tax on one of the rare bright spots in Pennsylvania's economy, Gov. Wolf fails to mention what gas drillers already pay, almost pretending that they pay nothing. 

Drillers have paid more than $2 billion in sales, corporate and personal income taxes since 2008; spent $500 million per year in road repairs; and paid more than $400 million in impact fees. On top of this, landowners—both families and local governments—have received billions in royalty payments.

5) Overspending is the problem, not undertaxing.

Announcing this tax in a county which has no natural gas wells speaks to the governor's out-of-touch view on the issue. 

Wolf's proposal doesn't represent a fresh start but is simply the latest in a long line of failed tax and spend schemes of the past. Unless we limit the unconstrained growth in state government spending, there will never be enough taxes.


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Liquor Liberty On Tap Again

FEBRUARY 11, 2015  | by NATHAN BENEFIELD

Liquor Liberty

Pennsylvania voters have consistently said they want more convenience and choice by privatizing liquor sales. Not only would privatizing the state-run liquor store monopoly grant voters their wish, but it would also improve the state's finances.

The good news for consumers and taxpayers? Pennsylvania House Majority Leader Dave Reed announced the House would vote on a liquor privatization plan before the end of February. The House previously passed a privatization proposal in March 2013.

Some critics of the plan have wondered how the state will replace the "profit" that the government monopoly liquor stores bring in. But here are some facts:

1) Almost 85 percent of the revenue the PLCB brings into the state each year is from taxes on alcohol. Those would remain.

2) Everything the PLCB takes in beyond its costs and taxes is in markup—essentially overcharging consumers. As a government monopoly, this isn't a profit so much as an implicit tax. And what supporters of "modernization" really want is for the PLCB to bring in more money by charging consumers higher prices with their monopoly.

3) Under privatization, the state would actually take in more net annual revenue through taxes and license fees, according to a PFM group analysis. This is in addition to $1 to $2 billion in upfront revenue from privatization. The chart below details the numbers.

PLCB Annual Revenue and Expenditures (in thousands of dollars)
LCB Program Revenue Current (2014) Privatization
LCB Markup $556,000 $0
License Fees and Fines $13,000 $138,250
Misc Income $3,000 $0
Retail Regulatory Fee $0 $20,000
Total Program Revenue $572,000 $158,250
Expenses
LCB Operations $438,000 $35,000
State Police Enforcement $22,000 $27,000
Treatment and Prevention $2,000 $3,520
General Fund Transfer $80,000 $80,000
Total Expenses $542,000 $145,520
Net Revenue $30,000 $12,730
Taxes
Johnstown Flood Tax $323,000 $335,000
State Sales tax $127,000 $132,000
Corporate Income Tax $0 $1,900
Personal Income Tax (on S-Corps) $0 $500
Total Taxes $450,000 $469,400
Total Revenue for General Fund, State Police, and Treatment $584,000 $592,650
Liquor Modernization Analysis Based on Governor Corbett's 2013 Proposal, Pennsylvania Office of the Budget, Conducted by the PFM Group, January 2013, http://www.governor.state.pa.us/

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Beyond Medicaid Expansion: Helping the Poor

FEBRUARY 10, 2015  | by ELIZABETH STELLE

Yesterday's announcement that Healthy PA will be rolled back in favor of full-scale Medicaid expansion misses the point. Instead of unraveling the few positive reforms incoporated in the original Medicaid waiver, lawmakers should focus on fixing a program that reguarly provides subpar care for the most vulnerable.

The real problem is not a lack of insurance, but access to care. One in three doctors do not currently accept new Medicaid patients, which leads to long wait times for patients who need treatment. It takes 49 days to see a dermatologist in Philadelphia, according to a Merritt Hawkins survey. No wonder ER visits dramatically increased in Oregon and California after Medicaid expansions.

Note that Governor Wolf's press release claims Medicaid expansion will increase access to insurance, not health care: "Today is the first step toward simplifying a complicated process and ensuring hundreds of thousands of Pennsylvanians have greater access to the health insurance." Adding more Pennsylvanians to Medicaid increases competition for a limited pool of doctors who are already paid well below market rates. This guarantees worse health care access for those who need it most. 

What should Governor Wolf do to fix Medicaid and improve health care options for low-income Pennsylvanians? First, he should seek a reprieve from federal regulations that hamstring the state. For instance, the commonwealth should have more freedom to offer unique benefit packages for different types of patients. Plus, Medicaid recipients should have the freedom to use vouchers to purchase their own care.

Secondly, Pennsylvania can take steps to chip away at the supply-side of the access problem. Lawmakers can allow advanced providers, such as experienced certified nurse practitioners, to open their own practices without the oversight of a doctor. The state could also empower charity clinics to serve more people who fall through the cracks by reforming liability coverage for volunteer doctors.

Removing cost-sharing, health screenings and other noteable reforms in Healthy PAwhile pressing forward with full-scale Medicaid expansion—will do nothing to ensure more Pennsylvanians gain access to the care they need.


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Marcellus Shale Successes Continue

FEBRUARY 10, 2015  | by GORDON TOMB

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 NorthJersey.com. 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. 


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Audio: School Choice is More than Just a Concept

FEBRUARY 9, 2015  | by JONATHAN REGINELLA

Every child deserves access to the best educational opportunity available to them, especially if quality education is hard to find in their local public school district. School choice is already more than just a concept for tens of thousands of students across the state and it is growing in popularity—Pennsylvania’s impressive 173 charter schools being one example.

James Paul, a CF senior policy analyst, outlines the state of school choice in Pennsylvania by describing Pennsylvania as a “pioneer of school choice.” But lawmakers still have work to do to expand educational opportunity and better allocate tax dollars to fund students’ education—rather than continuing to fund a broken system.

One of the best parts about school choice, as James points out in a recent radio interview, is that it supports accountability in the educational system.  James says that if a charter school, for instance, is “not providing good services or improving results in the classroom” it should not be permitted to continue operating. That level of customer accountability is rarely seen in traditional schools.

Listen to some of James’ interview with Gary Sutton on WSBA 910 AM:

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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No More Silent Treatment, Lehigh Commissioners Want Transparency

FEBRUARY 6, 2015  | by ELIZABETH STELLE

Government Transparency

Lehigh County commissioners are getting the silent treatment during labor contract negotiations, and they aren't happy about it

Reportedly, the current county executive, Tom Muller, refused leadership meetings with the commissioners chairman and vice-chairman, keeping silent on the progress of labor negotiations. How is this possible? In 1984, Lehigh County commissioners passed an ordinance directing the county executive to negotiate with county employee unions. Now, the comissioners are moving to take back responsibility for negotiation and bring more transparency to the process. 

Traditionally union negotiations throughout the state are anything but transparent. Taxpayers are left in the dark until a labor contract is approved.

At the state level, Gov. Tom Wolf will soon be negotiating with government union leaders over 16 expiring (or expired) contracts. These contracts cover almost 45,000 employees, with a total compensation of $3.37 billion. Given the enormous impact of these contracts on state spending and taxes, Gov. Wolf should fulfill his promise to give Pennsylvania a fresh start and ensure that these negotiations are as open and transparent as possible.

From Lehigh County to all of Pennsylvania, voters and taxpayers should have the opportunity to see contracts at every level of government before they are responsible for fulfilling them.


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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.