We’ve already highlighted the national attention paycheck protection received from the Wall Street Journal and Investor’s Business Daily. Now local governments in Pennsylvania are pushing for an end to the unfair political privilege of government unions.
The Berks County Commissioners passed a resolution urging the General Assembly and Governor Corbett to pass paycheck protection, which would end the practice of using taxpayer resources to collect political money. Christian Leinbach, Chairman of the Berks County Commissioners, explained why he supported the resolution:
“The single biggest issue I have is that in any organization, you vote with your money,” Commissioner Chairman Christian Leinbach said. “That’s the accountability that occurs between a member organization and its members.”
“There is not opportunity for accountability between employees and the labor unions to which they belong [with automatic dues deductions],” he added.
Commissioner Leinbach is exactly right. Passing paycheck protection legislation would make unions more accountable, and it may actually move union bosses to talk with their members.
Fortunately, Berks isn’t the only county pushing for paycheck protection. Commissioners in Lehigh County approved a motion calling for an end to taxpayer collection of government unions’ political money, a reform they’ve pushed for in the past.
As state lawmakers continue to debate paycheck protection, local officials don’t have to wait for Harrisburg to bring fairness to the political process. They can act now, and pass legislation prohibiting the use of taxpayer resources for politics, thereby protecting both taxpayers and union members.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
Pennsylvanians are losing economic freedom according to the Fraser Institute’s annual report, Economic Freedom of North America 2013. The commonwealth is slowly losing ground ranking 33rd in 2009 and dropping to 40th in the latest study.
The index measures the limitations on economic freedom imposed by all levels of government in the 50 U.S. states and 10 Canadian provinces under three broad categories. Pennsylvania performs poorly in each category:
- Size of government: 48th
- Takings and discriminatory wealth redistribution: 34th
- Labor market freedom: 24th
There are several reasons for Pennsylvania’s abysmal performance. Chief among them is Pennsylvania's growing debt and spending, which has created $47 billion in unfunded pension debt and an estimated $1.2 to $1.4 billion budget deficit.
If policymakers want to improve the lives of Pennsylvanians, focus should be on increasing economic freedom and opportunity by enacting pension reform, slowing the growth of overall spending and reducing the size of government.
For more on how to accomplish these goals, check out our newest report: Blueprint for a Prosperous Pennsylvania.
RELATED : PENNSYLVANIA STATE BUDGET, GOVERNMENT DEBT, JOBS & ECONOMY, ECONOMY, STATE RANKINGS
Senator Richard Alloway sat down with host David Taylor and CF's Matt Brouillette on a recent Lincoln Radio Journal to discuss what paycheck protection would mean for Pennsylvania.
Senator Alloway explains how paycheck protection would end the practice of using taxpayer resources to collect union political money. It's a privilege no other political organization enjoys.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
The 2014-15 Pennsylvania State Budget proposal is more than 1000 pages, but we've boiled it down to five facts taxpayers you need to know
1. State Spending is at an All-Time High: The budget proposal increases total spending to $71.8 billion and General Fund $29.4 billion, both are all time highs. That's a 6 percent increase in total spending (which includes increases in transportation spending and federal funds) from 2013-14. The General Fund increase of 3.3 percent exceeds the rate of inflation plus population growth.
Despite union leaders' big lie of "$1 billion cut," education spending is at an all-time high. Governor Corbett's proposal would increase education funding by more than $360 million, with more than $10 billion going to public schools.
2. State Spending Exceeds Revenues. The state will begin next fiscal year with $217 million in the bank (so to speak) and end with $27 million—spending $190 million more than revenues. The budget is also predicated on one-time sources of funding, and “savings” from pension reform (which may not happen) and is contingent on federal approval of Healthy PA to spend federal taxpayer dollars rather than state taxpayer dollars for some Medicaid recipients.
This structural deficit is the result of years of spending beyond our means, and was made possible by the federal stimulus and draining reserve funds. Gov. Corbett has done well to balance the budget without raising the sales or income tax, but we haven’t dug out of that hole yet.
3. Pension Reform Cannot Wait: We agree with Gov. Corbett’s call to "pass pension reform this session." Pennsylvania’s exploding pension liability now stands at $47 billion and will drive up taxes both at the state level and in school property taxes (or require teacher layoffs) if not addressed.
Gov. Corbett proposed short-term relief by contributing less in 2014, but such a proposal will cost more overall if not must be accompanied by long-term pension reform. This should start with a defined benefit (401k) plan for future hires to take politics out of pensions. Refusing to act is, as Gov. Corbett said, “deeply unfair to children, communities, and our schools.”
4. Liquor Choice is Still on Tap: The governor repeated his call from last years’ budget to end the state liquor store monopoly. A majority of Pennsylvanians from all political persuasions agree that the government in the booze business is a lose business. Legislation has already passed the state House, and the Senate should act this year.
5. Obamacare Isn't Free: The budget includes $219 million for Affordable Care Act benefits and more than $39 million to implement the ACA in Pennsylvania. Taxpayers will also shell out more than $109 million in 2013 and 2014 in Obamacare taxes on health coverage for state workers.
Gov. Corbett's budget assumes $125 million in state savings next year if the federal government approves Healthy PA—his application for a waiver to use federal Medicaid expansion money to put newly-eligible recipients into the federal exchange. But he also projects more than $2 billion in new federal funds spent on Healthy PA.
RELATED : TAXES & SPENDING, PENNSYLVANIA STATE BUDGET
Opponents of "paycheck protection" are desperate to preserve their exclusive legal and political privilege, which is evident by their use of specious arguments designed to confuse and distract.
For example, government unions argue that paycheck deductions for union fees, dues and political action committee (PAC) campaign contributions are no different than deductions for health insurance premiums and charitable contributions.
But this is comparing apples to oranges. Unlike voluntary deductions, union dues and PAC contributions are inherently political, partisan and, in the case of union fees, involuntary.
Let's start with the deduction of PAC campaign contributions. PAC money deducted from workers' paychecks is blatantly political and used for partisan purposes. Under the current system, taxpayer resources are used to collect PAC money, bundle it, and then remit it to union bank accounts. Of course, union bosses then dole that money out directly to candidates for public office who commit to helping maintain the government union power cycle.
In contrast, health insurance premiums and charitable contributions are not inherently political. Indeed, it is illegal for insurance companies and charitable organizations to use these monies to make any contributions to candidates for public office.
As for the deduction of union dues, union apologists contend dues "cannot be used for politics." Therefore, they are no different than other deductions. But there are two problems with this claim.
First, it is a gigantic union lie that union dues can’t be used for politics. Union dues, collected by the taxpayers, are spent on lobbying, candidate endorsements, get-out-the-vote efforts, candidate and issue advocacy, contributions to "independent" third-party political and partisan organizations, as well as fundraising for campaign contributions to union political action committees (PACs).
Further, taxpayer-collected dues and PAC collections open the door to public corruption during the collective bargaining process. Government union leaders can bargain for taxpayer-funded collection of their political money from the same politicians to whom they contribute money and support with political mailers funded by dues.
It makes sense to take taxpayer collection of political money completely off the negotiating table to avoid any possibility of a quid pro quo. Indeed, this is why an increasing number of local government officials are joining the call to end the collection of union fees, dues and campaign contributions at taxpayers' expense.
Finally, because most public employees are forced to pay, at a minimum, union fees to keep their jobs, union bosses have little incentive to serve their needs. This disconnect between union bosses and members (see the NEA's own admission of this) is only further exacerbated when union monies are automatically withheld from employees' paychecks.
If government union leaders were required to collect their own fees, dues and campaign contributions directly from their members, workers would be able to hold union bosses more accountable for their political decisions. In contrast, union members can hold insurance companies and charities accountable because arrangements with those entities is strictly voluntary.
If union workers are not happy with their health insurance company or a charity, they’re free to take their money elsewhere. Workers don’t have that option when it comes to unions' political spending.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
The bipartisan education reform group, StudentsFirst, released its annual State Policy Report Card grading each state's education policies and demonstrating the need for more student-centered reforms.
How did Pennsylvania fare? Well, we got a D+.
However, other states didn't fare much better as “D+” was the national average. StudentsFirst assessed each state’s education policies on three criteria: elevating the teaching profession, empowering parents, and whether or not a state spends wisely and governs well. Pennsylvania did not score above a “C” in any of these categories.
Why did Pennsylvania score so low, and how can it improve?
Elevate the Teaching Profession (C-): Pennsylvania made progress in this pillar by instituting a new teacher evaluation system, called the Teacher Effectiveness System. The profile is designed to effectively identify teachers who are excelling, while providing support to those teachers who need improvement. To improve, StudentsFirst suggests ending the practice of making employment decisions based only on seniority, which harms both teachers and students.
Empower Parents (D-): Pennsylvania has not done enough to empower parents to make informed educational choices for their children. The state should implement an A-F grading system, building on the Pennsylvania School Performance Profile, to provide parents with an easy-to-understand way to assess each school, and hold schools more accountable. Supporting the growth of high-performing public charter schools would also go a long way in empowering parents.
If policymakers are looking for the most effective way to empower parents, they should consider expanding educational tax credits and scholarships, which would rescue children from violent and failing schools. Not only would an expansion empower parents, but it would save taxpayers money and improve educational outcomes.
Spend Wisely and Govern Well (C): While Pennsylvania spends more than $14,000 per student, we have not seen the kind of positive results expected from such a large investment. According to the National Assessment of Education Progress (NAEP), more than half of 4th and 8th grade students are not proficient in reading and math. In order to make more effective use of taxpayer resources, StudentsFirst suggests linking spending to student outcomes, creating a statewide recovery district for low-performing schools and providing teachers with a portable retirement plan.
Despite the nation's "D+" grade, progress is being made, as StudentFirst notes:
The second takeaway is that change is still happening much too slowly. Instead of passing a comprehensive set of education policies, far too many states are taking a piecemeal approach. Other states appear to employ an on-again, off-again approach to education, focusing heavily on education reform one year, then taking a pass on putting any complementary policies into place the next year.
Any progress is welcome, but states need to pick up the pace on reform. The longer reform is put off, the more children will suffer from sub-par education in failing schools. Their future depends on education reform.
RELATED : SCHOOL CHOICE, EDUCATION SPENDING, EDUCATION
Liquor privatization has been a promise, a priority and even passed the House last year. And in the roughly 11 months since that historic vote, progress remains stalled.
But it's a new year. January 17 marked 94 years since the beginning of Prohibition, and the optimistic among us are asking, “Could 2014 be the year it finally ends in Pennsylvania?” Earlier this month, Senate Majority Leader Dominic Pileggi expressed hope to get privatization legislation to the Governor’s desk this spring, but reports indicate that privatization plans being considered would only go halfway.
What does halfway privatization mean? In short, the government will still have control over wine and liquor sales, but consumers may have a few new options in terms of where they can purchase some types of government-selected booze.
David Ozgo, chief economist of the Distilled Spirits Council, warns that "Like most halfway measures, privatizing only wine is a phenomenally bad idea that would do great financial harm to the state and consumers."
According to the Distilled Spirits Council, a half-step which keeps the PLCB in control of the wholesale side of alcohol sales—responsible for selecting what can be sold in the state, warehousing and delivering wine and spirits, and setting prices—will be worse than the status quo for consumers. It would likely result in reduced tax revenues, operating losses, higher prices, less convenience, and increased border bleed.
Not only is halfway privatization a bad idea economically, but it flies in the face of what Pennsylvanians actually want. Survey after survey shows that voters and consumers on both sides of the political aisle want full privatization, not "modernization" or halfway measures.
Consumers have patiently waited to get the choice and convenience they deserve and demand—and only full privatization will satisfy those demands. Send a reminder to your lawmakers today.
RELATED : PRIVATIZATION, LIQUOR STORE PRIVATIZATION
Earlier this week, we spotlighted editorials from the Wall Street Journal and Investor’s Business Daily urging Pennsylvania to pass paycheck protection legislation. While national attention raises awareness of this crucial issue, it’s the opinions of those within the state that we value most, and from Pittsburgh to Philadelphia editorial boards are speaking up for worker freedom and taxpayer fairness.
In a December 13 editorial, Bloomsburg’s Press-Enterprise warned of a “Government Union Power Cycle” which, “works so well that, in the past year, the PSEA has been able to pour $3.8 million of its member’s dues into ‘political activities and lobby.’”
They’re right: In Pennsylvania, public resources are used to collect government union dues and PAC money that can legally be spent on politics.
The Pittsburgh Tribune Review’s editorial board calls government unions’ special legal privilege, “not only unfair to public employees who disagree with what these unions do with their hard-earned money but to taxpayers who foot the bill for processing those paycheck deductions.”
The Williamsport Sun-Gazette hails, “a proposal called ‘paycheck protection’ that would free teachers and other government employees from the unfair practice of having their dues automatically deducted from their paychecks and used for political purposes they don't agree with.”
Countering “straw man” accusations of anti-worker union-busting, the Bucks County Courier Times emphasized that paycheck protection would actually improve government unions by making them more accountable in how they spend members’ money—unlike the current system which takes members for granted:
“What’s more, since the dues are a sure thing, union leaders don’t have to worry about explaining their activities to members or seeking their support, either philosophically or financially.
Because the funding is automatic and assured, members really get no voice. Who cares what they have to say or even what they think if you don’t have to worry about losing their financial support.”
The principle is simple: Public resources should never be used for political purposes. And the consensus is growing that government unions should be held to this standard—just like everyone else.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
The reality of Obamacare hit home for the employees of Simonetta's Collision Repair Center in McKeesport. WTAE news captured the reaction of six employees who were told their copays, deductibles, and (in most cases) premiums would increase dramatically under Obamacare.
Judy saw her premiums increase 42% and her deductible increase to $4,000. When asked how she was going to do this she said, "I don't know. . . . I don't know how the President Obama thinks he is helping us. . . because we can't afford this."
Co-worker Jeff agreed. "I can't afford it. This is not acceptable."
And Christy, a mom of two was told she will pay $895 a month for health insurance, she noted, "That's a house payment for most people."
This sad story is happening to workers and families across Pennsylvania and the county. Instead of the promises of "Affordable Care Act," the reality is that Americans are finding health insurance more expensive while an estimated 5 million Americans had their plans canceled.
It's time to start over and go back to the drawing board, with real solutions to make health care more affordable for all.
RELATED : JOBS & ECONOMY, HEALTH CARE
Government union leaders are quick to argue that their endless lobbying, political spending and strong arm tactics are all designed to "protect the middle class." But many of the policies they support harm middle-class Pennsylvanians, and even their own members.
Because government union leaders don't have to ask members for contributions directly—instead having government collect their political money for them—they frequently ignore the wishes of their members, if they talk to them at all. Here are a few examples:
Government Liquor Monopoly: While union leaders oppose choice and convenience for Pennsylvanians, 55 percent of union households support liquor privatization. Nevertheless, UCFW 1776 spent $1 million on dishonest ads to protect the state liquor monopoly.
Higher Health Care Costs and Few Jobs: Government unions such as the NEA and SEIU lobbied for passage of the Affordable Care Act (ACA), which will raise the cost of health care through various mandates and 20 different taxes, taking more than $500 billion from taxpayers between 2012-2022 or $6,363 per family of four.
And Obamacare's new mandates and taxes have caused almost 500 Pennsylvania school employees to lose their jobs or have their hours reduced.
Yet in 2012 and 2013, the National Education Association gave $250,000 from teachers' dues to Health Care for America Now!—a group lobbying for Obamacare. The Service Employees International Union spent a whopping $12 million in television ads supporting the law.
Teacher Layoffs and Higher Property Taxes: Due to Pennsylvania's unsustainable pension system, property taxes are estimated to increase by about $900 per household each year or districts will be forced to lay off one third of Pennsylvania’s teachers, absent any pension reform. This on top of the significant increases in taxes and more than 6,000 teachers being laid off as a result of the pension crisis.
Yet government union leaders refuse to even contemplate reform, arguing there is no immediate crisis and frightening their members by falsely claiming workers will outright lose their pensions. Ironically, private sector union leaders (representing Catholic school teachers), have embraced pension reform, recognizing the benefits for school employees.
Violent and Failing Schools: It's National School Choice Week and educators across the country are celebrating parent's ability to choose the best school for their children, but not Pennsylvania teacher unions. Here they are fighting to keep at-risk children in violent and failing schools.
School choice has proven to raise test scores and graduation rates, but unions are fighting to keep at-risk children in dangerous environments. The PSEA spent $575,000 and the American Federation of Teachers spent $400,000 on the "Pennsylvanians Opposed to Vouchers" campaign. The campaign didn't even disclose it was about union opposition to school choice, but instead the group ran ads pretending to be a Tea Party group claiming school choice would raise taxes.
Moreover, union leaders are trying to undermine reforms to identify and keep the best teachers. Union leaders are suing the Philadelphia school district for hiring back teachers based on merit rather than seniority. And the Pittsburgh Federation of Teachers has placed a $40 million grant from the Gates Foundation in jeopardy after revoking their support of a teacher evaluation system.
The fact is that union leaders are lobbying against the interest of the middle class, and even against the interests and wishes of union members.
This is why paycheck protection—requiring union leaders to actually collect dues and political directly money from members and get their opinion on how that money should be spent—would benefit teachers and state workers.
RELATED : UNIONS & LABOR POLICY, UNION DUES AND POLITICS
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