Despite Name-Calling, Wolf's Tax Hike is the Largest

JANUARY 22, 2016  | by NATHAN BENEFIELD

The Wolf administration continues to deny basic facts about their original proposed tax hike. Instead of responding with facts, the governor's staff relies on name-calling and personal attacks. The Altoona Mirror published my response (paywall) to the administration's latest attack on CF.

In a recent story about the state budget, Jeff Sheridan, a spokesman for Gov. Tom Wolf, launched personal attacks against the Commonwealth Foundation, while calling factual information we produced “completely false.”

What is Mr. Sheridan disputing? According to the nonpartisan National Association of State Budget Officers (see Table 21 of their Spring 2015 survey of the states), Gov. Wolf’s original proposal for a $4.6 billion tax increase is the largest proposed tax increase in the country—eight times larger than the next-highest increase in Connecticut.

In fact, Wolf’s plan represented a larger tax hike than every other state’s tax increase combined.

Unfortunately for Pennsylvania, Wolf’s press office has a long history of attacking their critics, but a poor record of providing honest information about their harmful tax proposals.

After all, the $4.6 billion tax hike—which would have come to $1,400 per family of four—came straight from the governor’s original budget. All Pennsylvanians benefited when the General Assembly stood firmly against this record-breaking tax increase, which helped earn Wolf the title of most liberal governor in America.

For the governor’s spokesman to deny easily verifiable information and attack the messenger smacks of desperation. What Pennsylvania needs amidst this seven-month budget impasse is honest leadership, not partisanship and petty name-calling.


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Attack Ads Funded by Taxpayer-Collected Union Dues

JANUARY 22, 2016  | by GINA DIORIO

Seeing a political attack ad on TV is nothing new. You probably roll your eyes and change the channel. But what if you learned you unwittingly helped put that ad on the air? Most Pennsylvanians would be shocked—and for good reason.

Since the end of December, the union-backed political group America Works USA has spent more than 1.1 million to air misleading ads slamming the state budget as "garbage" and parroting the Wolf administration's false claim that the budget "cuts education."

America Works TV & Cable Ad Buy

12/29/15 to 1/19/16

Media Market

Total

Erie

$18,594

Harrisburg/Lancaster/York

$198,535

Johnstown/Altoona

$38,965

Philadelphia

$388,550

Pittsburgh

$346,123

Scranton/Wilkes-Barre

$93,108

Targeted by District

$17,252

Total

$1,101,127


In a fact that would surprise many, the ads are funded with union dues and collected by taxpayer resources. This political privilege is partly responsible for facilitating America Works’ deceptive messaging campaign. Here is what we know about the group’s funding sources thus far:

  • AFSCME Council 13, representing Pennsylvania state workers, gave $115,000 directly to America Works USA.
  • The National Education Association, the parent union of the Pennsylvania State Education Association, gave $1 million directly to America Works USA.
  • The Democratic Governors Association (DGA) funds America Works USA.Government unions gave nearly $6.5 million to the DGA, according to the latest annual reports filed with the U.S Department of Labor.
  • Last year, the American Federation of Teachers—the parent union of the Philadelphia Federation of Teachers and the Pittsburgh Federation of Teachers—sent just under $1.5 million to the DGA. AFSCME National Headquarters sent more than $4 million.
  • Unions finance these contributions from the mandatory dues (not voluntary PAC contributions) of teachers and other state workers using publicly funded payroll systems.

This America Works’ union-dues funded misinformation campaign is not its first. Back in July, the group ran ads targeting lawmakers who opposed the governor’s massive tax increases. Regrettably, the ads aren’t the only instance of dues being used for political purposes. This is a pattern, not an anomaly.

Taxpayers should not be required to help fund blatantly political activities. And union members should be given the ability to hold their unions accountable if they feel their dues money isn't being spent appropriately. Paycheck protection legislation, which passed the Senate last year, can achieve both goals.

It’s time Pennsylvania require unions to collect their own attack-ad money and stop using public resources to bankroll their politics.


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2012 Corrections Reform Still Paying Off

JANUARY 20, 2016  | by NATHAN BENEFIELD

Pennsylvania Corrections Spending

Yesterday, Gov. Wolf and Secretary of Corrections John Wetzel announced that Pennsylvania’s prison population declined last year by the largest amount since 1971. The number of imates declined by 850 in 2015, beating the previous record of 756 in 2014, which we wrote about last year.

And this success isn’t just the result of releasing criminals from prison. We’ve also seen a reduction in the recidivism rate—that is, fewer individuals are coming back to prison after being released.

This success story stems in no small part from corrections reform passed by the General Assembly in 2012. The Commonwealth Foundation worked closely with a transpartisan coalition, which included the late Democratic Gov. George Leader's family, the ACLU, former Gov. Tom Corbett, Secretary Wetzel (now serving in his second administration), and many others.


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Wolf's $3 Billion Education Cut

JANUARY 18, 2016  | by JAMES PAUL

Upon finally approving the majority of a state budget, Gov. Tom Wolf admonished the General Assembly for "cutting $95 million from public schools." Yet it is the governor himself who is responsible for vetoing $3.1 billion worth of education funding

In a recent op-ed, my colleague Nate Benefield explains Wolf's misleading budget math:

Wolf is propagating the bold-faced lie that the budget cuts education by $95 million.

In truth, the budget increases public school funding by $400 million. The only education line item reduced is school construction reimbursement. This is not being cut, however. Instead, it’s being funded with state bonds, and school districts will actually get more in construction reimbursements.

In spite of persistent hand wringing about education cuts—much of it blatantly false—Gov. Wolf is now the only person standing between local districts and more funding. 

This cynical negotiation ploy—intended to force House and Senate leaders to return to the bargaining table—shows Wolf's primary motivation is higher taxes, not higher education spending. By only releasing six months worth of school funding, the administration refuses to fully free the state's budget hostages.

The chart below illustrates Wolf's education cut and how much money he withheld from local districts. (All figures from the Department of Education.)


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Do Record-High Graduation Rates Matter?

JANUARY 18, 2016  | by JAMES PAUL, MARC PUGLIESE

In America’s high schools, test scores are stagnant while graduation rates are soaring. How can both be true? A December press release from the Department of Education may have the answer [emphasis mine]:

U.S. students are graduating from high school at a higher rate than ever before, according to data released today by the U.S. Department of Education's National Center for Education Statistics. The nation's high school graduation rate hit 82 percent in 2013-14, the highest level since states adopted a new uniform way of calculating graduation rates five years ago.

Sadly, rising graduation rates do not necessarily indicate improved academic achievement. They simply signal a lower threshold for graduation. This trend is evident in Pennsylvania, where statewide graduation rates are slightly higher than the national average despite poor performance on several measures of academic progress.

Robert Pondisco, a senior fellow at the Thomas B. Fordham Institute, weighed in on the disconnect between graduation and attainment:

Regarding the recent spike in graduation rates, good luck figuring out what it stands for. Not improved student proficiency, certainly. There has been no equally dramatic spike in SAT scores. Don’t look for a parallel uptick on seventeen-year-old NAEP, better performance on AP tests, or the ACT, either. You won’t find it. The only thing that appears to be rising is the number of students in need of remedial math and English in college. And the number of press releases bragging about huge increases in graduation rates.

There’s nothing inherently wrong with tracking graduation rates, but it would be foolish to ignore classroom outcomes and blindly conclude that public schools are moving in the right direction. Policymakers, school boards, and school administrators must dig deeper—especially in the commonwealth, where lawmakers are poised to delay more challenging graduation requirements.


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Fiscal Code Packed with Earmarks

JANUARY 12, 2016  | by JAMES PAUL

Pennsylvania's fiscal code is intended to provide lawmakers with instructions for spending funds appropriated in the state budget. But it is also ground-zero for a host of earmarks that funnel limited resources to the priorities of well-connected lobbyists. 

CF has identified over $40 million in dozens of earmarks that may or may not serve the best interests of Pennsylvania taxpayers. Projects stealthily embedded in the fiscal code are not subject to a competitive grant process. Take a look at the earmarks listed below: 

  Earmarks1327 Final

 

The fiscal code (HB 1327) passed the House on Tuesday afternoon. It must be approved by the Senate before reaching Gov. Tom Wolf. 


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Fiscal Code Protects Kids and Jobs

JANUARY 12, 2016  | by NATHAN BENEFIELD, ELIZABETH STELLE

Today, the Pennsylvania House passed a revised fiscal code, HB 1327, to implement parts of the state budget. The fiscal code explains how revenues will be distributed, including transfers between funds.

Here's a look at the good parts of this year's fiscal code; provisions that will protect Pennsylvania jobs, improve how we distribute education dollars, and ensure kids won't have to change schools mid-year.

Reset on Natural Gas Regulations: This month DEP (Department of Environmental Protection) finalized new natural gas drilling regulations that are far more stringent. Cost estimates of the regulations range from an estimated $31 million to $2 billion in the first year. The fiscal code instructs DEP to start all over. It also instructs DEP to begin again with separate regulations for conventional drillers, those that have been drilling shallow wells in Pennsylvania for more than a century.

Legislative Input on Pennsylvania's Clean Power Plan: The fiscal code clarifies the legislature's ability to revise a Clean Power Plan written by the DEP for submission to the EPA (federal Environmental Protection Agency). Lawmakers can vote down the plan, giving DEP 60 days to make changes. The Clean Power Plan is fundamentally an effort to eradicate the use of coal—threatening thousands of Pennsylvania jobs—for a negligible reduction in carbon emissions.

Protecting Scholarships for Kids: The governor waited until Christmas Eve to release Educational Improvement Tax Credit authorization letters that allow businesses to donate scholarships. These scholarships allow thousands of low- and middle-income children to find a better or safer school.

The short time to donate could have dramatically reduced the availability of scholarship for students. Thankfully, the fiscal code allows donations to be retroactively applied, meaning kids won’t lose their scholarships because of Wolf’s delays.

New School Funding Formula: The fiscal code defines that the increase (yes, the increase) in basic education funding shall be distributed according to the new, student-based funding formula developed by a bipartisan committee. (“Hold harmless” would remain, guaranteeing school districts what they received in 2013-14, regardless of enrollment changes).

Likewise, the codes provide a student-based funding formula for the “Ready to Learn Block Grant,” which supports students in all public schools, including charter schools. These funding formulas override the arbitrary way Gov. Wolf planned to dole out the funding increases.

Funding Schools for Construction Costs: The code changes the way the state reimburses public schools for construction projects, through the PlanCon program. The legislation authorizes the Commonwealth Financing Authority to issue up to $2.5 billion in bonds (and more, if such a need is determined) to reimburse schools for construction projects.

This essentially moves PlanCon from the General Fund to a capital project (with interest on the bonds to be paid in future budgets). This shifts provides more funding to schools this year; which is why Gov. Wolf’s claim about “$95 million in cuts to public schools” is a complete lie.


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Pay Up or Get Fired

JANUARY 12, 2016  | by GINA DIORIO

Imagine being told you have a choice: Write a check for $450 to an organization you don’t support, or lose your job. For tens of thousands of teachers across Pennsylvania this ultimatum is reality. Every year, teachers across Pennsylvania are forced to fund the government teachers’ union just to escape a pink slip.

On Monday, the U.S. Supreme Court heard oral argument in a landmark case that could free these teachers—and thousands more public employees across the state and nation—from compulsory union support.

The case, Friedrichs v. California Teachers Association, challenges the requirement that public sector employees who are not union members financially support the union via “fair share” fees. The union claims these fees are for collective bargaining, but as The Fairness Center’s assistant general counsel Karin Sweigart, notes:

Unions regularly use these fees to influence how public money is spent—an inherently political activity. Every dollar devoted to funding troubled public pensions, excessive administrative overhead, or other misplaced union priorities is a dollar that could have been used for school supplies, social services, or countless other public priorities.

Sweigart, who addressed a crowd gathered outside the Supreme Court yesterday, added that teachers are simply asking the Court for something most Americans take for granted: “freedom from being forced to support someone else’s political agenda as a condition of employment.”

In Pennsylvania alone, teachers in approximately 70 percent of school districts must pay the teachers’ union or lose their job—whether or not they are members. For a full-time teacher who opts out of union membership, the “fair share” fee totals $448 for 2015-16. That’s nearly $450 just to stay employed.

No American should be forced to fund a private organization simply to keep their job. It’s time to restore true freedom to teachers and all public employees.


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Charting Pennsylvania's Budget Future

JANUARY 11, 2016  | by BOB DICK

Believe it or not, the state is approaching the unofficial start of a new budget cycle. Gov. Wolf plans to roll out his proposal for the 2016-17 budget on February 9, leaving Pennsylvanians to debate two budget proposals for two different fiscal years simultaneously.

If the governor's past budget proposals are any indication, tax hikes on working people will be a central piece of both budget debates. Preventing any tax increases in this year’s budget and doing the same in next year’s budget will be a challenge.

According to an Independent Fiscal Office (IFO) report, Pennsylvania’s projected deficit will grow in the next five years absent any spending restraint. As the chart below indicates, revenues will continue to rise, but at a slower pace than spending growth, which is driven primarily by welfare spending and pension payments.

Human Services' budget needs (welfare) will quickly overwhelm taxpayers unless significant reforms are adopted. For the first time in recent history, Human Services' expenditures will make up the largest portion of the General Fund Budget, surpassing education as the most expensive item.

Although spending on Human Services is projected to exceed education expenditures, Pennsylvania's public school system is still in no way affordable for taxpayers. Pension payments—the driver of education expenditures—will continue to rise. However, by 2018-19, the growth in pension payments begins to stabilize.

Demographic shifts are another notable trend. Pennsylvania is home to a large number of seniors, and if IFO projections hold true, the state will collectively age in the coming decade, adding to the senior population.

This will put immense pressure on government services. As people age, they drop out of the work force and tend to rely on government assistance more than young people. Couple this with the fact that more people are leaving, rather than moving to Pennsylvania, and you have the makings of a fiscal nightmare.

CF has consistently urged structural spending reforms to address the most expensive items in the budget. The IFO report demonstrates why we can't procrastinate any longer.

The coming fiscal and demographic crisis is both predictable and avoidable. No one can say we weren't warned.


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Top Blog Posts of 2015

JANUARY 7, 2016  | by MARC PUGLIESE

We wrote 303 blog posts last year, but which were the most popular? We’ve taken the five most-read blogs by our readers and counted them down.

5.) Wolf’s Unfair Tax Shift

The governor revealed his proposed budget at the beginning of year. In it he called for property tax relief for all Pennsylvanians, but who were the real winners?

4.) Wolf’s Tax Plan: Three Things Every Family Needs to Know

Gov. Wolf’s proposed budget would have had a devstating financial impact on families. We went through the proposal top-to-bottom and found the three most important changes for our readers to know.

3.) Wolf Misleads on Need for More Taxes

Many of Gov. Wolf's talking points on tax hikes were based on myths. We debunked the five most talked about “facts” from Gov. Wolf.

2.) Marcellus Shale Equals Economic Growth

It’s no secret that the expansion of Marcellus Shale drilling has stimulated massive economic growth for Pennsylvania over the last few years. What are the hard numbers when it comes to the perks of living in a county that drills? Read here to find out.

1.) Wolf Signs Stop-Gap Budget with Punitive Line-Item Vetoes

Gov. Wolf finally agreed to sign into law much of a budget while exercising his line-item veto on the rest. Given the unprecedently long standoff--and the schools and human service agencies held as financial hostages by Gov. Wolf--it’s no surprise this was 2015’s most popular blog post.


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