Public Remains Supportive of School Choice

AUGUST 30, 2016  | by JAMES PAUL

That’s the upshot of the 10th annual public opinion survey from Education Next, which covers a range of topics including school choice, school spending, personnel policy, testing, and accountability. The entire poll results are worth reading—check out the interactive results from 2016, as well as trends over the last decade—but here are a few key findings.

On the topic of school choice:

  • Tax credit scholarships are favored 53-29 by the general public, 64-17 by African Americans, and 60-25 by parents. Tax credit scholarships, including Pennsylvania’s Educational Improvement and Opportunity Scholarship Tax Credits, are the most popular school choice mechanism.
  • The general public supports charter schools by a 51-28 margin, including 45-33 among Democrats.
  • Support for both means-tested and universal vouchers is slightly greater among Democrats than Republicans. Hispanics support universal vouchers 57-24.

Regarding school spending:

  • The general public underestimates the average amount spent on children in public schools, which mirrors the experience in Pennsylvania. When asked to estimate the per-pupil cost, respondents guessed $8,500. The actual average is more than $12,000.
  • The general public estimates the average yearly teacher salary is roughly $40,000, which is 30 percent below the actual average teacher salary ($58,000) reported by the National Education Association. Even teacher respondents underestimate average teacher salaries—they guessed $46,000.

Finally, on personnel policy:

  • 62 percent of the public supports “basing part of the salaries of teachers on how much their students learn,” also known as merit pay. Only 20 percent of teachers are supportive of merit pay.
  • Support for teacher tenure has declined by 10 percentage points since 2013, with the general public opposing teacher tenure 54-28.
  • By a margin of 44-35, the public opposes agency fees—which require non-union members to nonetheless pay roughly 80 percent of full-member dues to the union.
  • The public is split, 33-32, on whether unions have a negative effect on public schools.

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Pittsburgh-Area Family Punished for Choosing Charter School

AUGUST 29, 2016  | by JAMES PAUL

Fauna Shaffer Butera, mother of two young boys just miles to the northwest of Pittsburgh, opted to enroll her sons in Young Scholars Charter School. She was shocked to learn of the transportation option afforded by her school district of residence.

Northgate School District offered Fauna bus passes for her five and seven year old, which would require the following route:

Her children would have to walk over a block in Avalon to get the PAT bus on California Avenue at 6:30 a.m. and take it to downtown Pittsburgh, where they would cross a busy intersection to the Wood Street T Station and get on the T.

Once the children get off at the Killarney Station, they first have to cross the T tracks and then navigate on a foot path through a tunnel, which cars come through one at a time because it's so narrow.

After the tunnel, the children have to walk nearly a mile up a hill in a neighborhood with no sidewalks until they reach Young Scholars Charter School at the top.

Here's the full story from WPXI news:


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Obamacare is Failing, But States can Bring Hope

AUGUST 29, 2016  | by ELIZABETH STELLE

Obamacare is struggling for survival. Despite victories in the courts, state exchanges are in trouble, and Medicaid expansion has been more costly than expected—with no evidence of improved health outcomes.

In 2015, the Congressional Budget Office (CBO) projected 21 million Americans would purchase insurance on the exchange. Currently, only 9.6 million (439,000 in PA) receive their insurance via state exchanges. Considering ever-increasing premiums, eye-popping deductibles and dwindling choices, underwhelming enrollment is no surprise. Are smaller and sicker than expected population combined with the end of reinsurance in 2017, one of three insurance bail-out provisions, convinced insurers like United HealthCare and Atena chose to exit Pennsylvania's exchange—leaving tens of thousands of consumers in the lurch.

Potential exchange customers in southeast Pennsylvania will have just one insurer from which to "shop". Several states, like Alabama and Wyoming, have only one insurer for their entire population.

Unsurprisingly, dwindling competition is bringing higher premiums. Pennsylvania insurers requested rate hikes up to 48% this year. In Tennessee, insurance companies secured in premium hikes of 62%.

The exchanges are failing, and that’s only half of the bad news.

The expansion of Medicaid is responsible for most of the drop in the uninsured rate since Obamacare's implementation. Yet there is little evidence Medicaid is improving health outcomes. And it’s proving more expensive than expected.

Brian Blaise from Mercatus explains in the Philadelphia Inquirer:

Taxpayers spent an average of $6,366 on Medicaid expansion enrollees in 2015. That's 49 percent more than the $4,281 amount that HHS projected in last year's report. With 9 million Medicaid expansion enrollees in 2015, this amounts to a $19 billion mistake and a substantial additional burden on federal taxpayers.

Earlier studies show Medicaid coverage leads to more consumption of health care, but there’s no evidence of improved health outcomes.

Thankfully, a recent article from Paul Howard in Real Clear Politics lays out key steps Pennsylvania can take to lower healthcare costs and actually improve health.

First, Howard identifies reference pricing. The California Public Employees Retirement System used reference pricing to save millions on hip and knee replacements. Here’s how it works: employers set a price for a procedure and provide employees with a list of providers who accept that price.

Another reform is direct primary care. Patients pay a monthly or yearly membership fee that includes preventative and primary care needs. Patients have predictable healthcare costs, and doctors can spend less time billing insurers and more time with their patients. Fourteen states have passed laws to protect this form of care from Obamacare regulations. Pennsylvania should do the same.

Finally, price transparency is essential to a well-functioning market that rewards quality. Today’s secret insurer contracts and inflated cash prices make it difficult for patients to make well-informed decisions. Creating a public, statewide database of the rates insurers pay for various procedures is one way to give patients the ability to shop. Other private websites, like Healthcare Bluebook, are already disseminating price information.

A future with lower health care costs and higher quality care is possible if we’re willing to learn from the failure of Obamacare and finally give patients more control of their health care decisions.


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Podcast: How Money Walks Out of Pennsylvania

AUGUST 24, 2016  | by DOUGLAS BAKER

Last year, nearly 42,000 Pennsylvanians left the state to pursue their dreams elsewhere—that's one person every 12 and a half minutes. Why is money walking out of Pennsylvania?

That’s the topic of the second episode of Commonwealth Insight, our new, bi-weekly podcast featuring state and national entrepreneurs, policy makers, and thought leaders tackling issues critical to Pennsylvania's economic future.

First, we talk with Travis Brown, Forbes contributor and author of How Money Walks, who says Pennsylvanians are “voting with their feet and taking their wallets” to states like Florida, North Carolina, and Arizona because of our state’s tax burden.

He explains that states compete with each other to attract investment and residents:

Just like the Steeler Nation would look competitively across state lines and do the scouting and reporting to see how we can be better and better next year against the New England Patriots, every competitor would look to the North and say: How can we attract these residents and how do we keep the residents we have?

Travis says there are three major policy areas Pennsylvania can change to be more competitive: regulation, taxation, and litigation.

To reverse out-migration and make Pennsylvania attractive to families and businesses, we must avoid higher taxes, more government spending, and greater regulation.

We also talk with Bob Dick, senior policy analyst for the Commonwealth Foundation, about how the Pennsylvania state budget works—and doesn’t work. Bob says state spending is growing beyond its citizens' ability to fund it, resulting in tax hikes that kill jobs and slow private sector growth. The politically unpopular, but fiscally responsible, solution is to control spending.

Click here or listen below, and stay tuned for more by subscribing on iTunes, SoundCloudGoogle PlayStitcher, or via RSS.


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Welfare to Work Helped Reduce Poverty

AUGUST 22, 2016  | by ELIZABETH STELLE

Ending the Cycle of Welfare

Twenty years ago President Clinton signed a law creating Temporary Aid to Needy Families (TANF), better known as sweeping welfare reform grounded in work requirements.

In 1996, 531,000 adults and children collected cash payments. Today the program enrolls just 167,018. That's proof work is our most powerful anti-poverty tool.

Both poor and non-poor Americans agree that welfare programs should be linked with work requirements. According to a recent survey from AEI:

Large majorities (81 percent of those in poverty and 91 percent of the non poor) favor a work requirement in return for welfare benefits.

Unfortunately, President Obama gave states the option to downplay work requirements in 2012. To its credit, Pennsylvania took the opposite approach and enacted a requirement that participants apply for three jobs each week to maintain benefits.

There's lots of room for improvement when it comes to the vast alphabet-soup of welfare programs, but the shift to work requirements was a dramatic step forward. Scott Winship from the Manhattan Institute puts it this way:

The question is what would have happened in the absence of the welfare reform that we actually implemented . . . Absent welfare reform, would single mothers have increased their employment rates and earnings? . . . policymakers should reject the increasingly conventional view that extreme poverty has dramatically increased and the view that welfare reform did more harm than good.

While work requirements have been a success for TANF, other major safety-net programs have dramatically expanded since 1996. Medicaid serves one in five Pennsylvanians, up from 12 percent in 2003 (the earliest data available). Food Stamps serve about 14 percent of Pennsylvanians compared to six percent in 2003.

Yet Pennsylvania is making progress. Last year, the state took another small step in the right direction by changing the structure of childcare subsidies. Now, families will gradually be responsible for higher co-pays as their earnings rise, instead of the subsidy cliff that could cause a co-pay to jump by $6,000 for earning $1 more.

Welfare reform showed government that a job is the greatest anti-poverty tool at one's disposal, and we should be quick to apply that principle to every welfare program.


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Understanding Your School District’s Labor Contract

AUGUST 17, 2016  | by JAMES PAUL, JESSICA BARNETT

CF reviewed labor contracts in each of Pennsylvania’s 500 school districts and uncovered several interesting findings. These contracts, known as collective bargaining agreements, are negotiated behind closed doors between local teachers’ unions and school boards. They include routine information about salaries and benefits, but the contracts also outline maintenance of membership clauses, fair share fees, and ghost teacher arrangements.

Click here for a searchable database of labor contract provisions for each district.

Most notably:

  • Teachers in 62 percent of districts are trapped in their unions by maintenance of membership clauses, which stipulate teachers may only exit a union during a specific time period—often just days—near the expiration of a contract.
  • Nearly 4 in 5 school districts require non-union members to pay fair share fees to the union. These teachers are forced to pay more than 80 percent of traditional dues to the union, even though they have chosen not to be members.
  • More than 9 in 10 labor contracts include release time language, allowing school employees to attend union conventions, serve as union delegates, or conduct union business. Release time also establishes the basis for ghost teachers, whereby school employees accrue seniority, receive taxpayer-funded salary, and amass pension benefits, all while conducting full-time work for the union, a private organization. Read more about ghost teachers.

These provisions tilt the playing field toward teachers’ unions at the expense of students, teachers, and taxpayers alike.

Read our policy brief for an overview of surprising provisions in collective bargaining agreements, and check out this searchable database to learn about your school district’s labor contract.


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The Power of Educational Choice

AUGUST 16, 2016  | by JAMES PAUL

The story of Malachi Kuhn is a moving example of how lives are changed by educational choice. Malachi’s education savings account (ESA) helped him to literally stand on his own.

Patrick Gibbons chronicles Malachi’s experience on RedefinED Online:

For nearly three years, starting before his third birthday, Malachi lived in an orphanage in Adama, in central Ethiopia. Born with spina bifida, a birth defect that causes leg weakness and limits mobility, he had to crawl across the orphanage’s concrete floors.

The orphans shared clothes from a communal closet and he rarely wore shoes causing his feet to become covered with callouses. At night he slept in a crib in a shared room with five other orphans. They ate communal meals prepared by their caretakers over a wood-burning fireplace. With his doctor more than an hour away in Addis Ababa, the capital, he rarely had access to much-needed medical attention.

His caregivers did their best with what little resources they had, but Malachi was only surviving. It seemed impossible that he would one day stand on his own — much less walk, or go to school.

All of that changed last year, when Malachi arrived in Florida where he now lives with two adoptive parents, and, with the help of a revolutionary scholarship program, has begun pursuing an education.

After speaking to other parents with special needs children, Kamden and Mitchell Kuhn learned about Florida’s education savings account program, which helps parents customize a unique schooling experience for their child.

They applied for the Gardiner Scholarship and enrolled him in Ruskin Christian School. Kamden Kuhn said the nearby public school was good, but she didn’t want her son pulled out of class time for therapy. She wanted Malachi to have the same amount of class time as the other students. The Kuhns used funds left over after paying his tuition to purchase after-school physical, occupational and behavioral therapy.

His mother said the therapists provided instruction and therapy through play.

“I’m not the best educator for my son,” Kuhn said. “But this allows me to shop around for the best educators and best therapists. I can decide what is best, because I know him best.”

Malachi is thriving in an educational environment that is perfectly suited to his needs:

“He made so much progress in the first nine months,” Kuhn recalled. He quickly started to learn to speak English and to stand upright with the aid of a walker. Now stronger than ever, he uses a forearm cane to walk.

“Ms. Stacy helped me learn to walk, and Ms. Colleen helped me get in control,” Malachi said of his physical and occupational therapists. In a telephone interview, he said phonics is his favorite subject because he loves learning letters and how to put them together to make words.

Malachi’s story is inspiring. It also provides a call to action for Pennsylvania to move forward with ESA legislation. Every child in the commonwealth deserves educational opportunity, especially those with learning disabilities or special needs. Read more about ESAs here.  


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More Victims of Devastating New Tax Speak Out

AUGUST 15, 2016  | by ELIZABETH STELLE

Amy Crivella was addicted to cigarettes. She tried everything—gum, patches, going cold turkey—but nothing worked. Then, she tried e-cigarettes, or vaping, and she didn’t need a cigarette for the first time in 17 years.

The mom of two closed her bakery and took out a loan to open East Coast Vapes in Cranberry Township near Pittsburgh. Amy estimates her business has helped about 700 people reduce smoking or quit cigarettes altogether since she opened her doors almost a year ago.

“I didn’t choose to do this to make a buck,” she says. “If I can pay my bills, I’m happy. We’re helping the grandmas and the grandpas quit smoking. We’re not looking for a handout.”

But Amy’s business and her family’s livelihood are in danger. Tucked away in this year’s budget is a retroactive 40 percent wholesale tax on e-cigarettes that goes into effect on October 1. This means Amy will have to send Harrisburg a check for 40 percent of the wholesale value of her entire inventory—including the inventory she purchased well before this tax was even considered.

Not only will the tax force Amy to lay off all three of her employees, but it may financially ruin her.

I don’t know if I’m going to make it. I don’t even have the option to close. I signed a five-year lease, and I’m personally responsible for those payments. I’m going to lose everything. My parents helped me take out that loan. The bank will go after their house if I don’t make my payments. I don’t know what I’m going to do.

Unfortunately, Amy has learned how dangerous big government can be:

I didn’t know too much before, and the more I learn the more scared I get. I didn’t even know what a lobbyist was until about four months ago. I should never fear my government, and I fear them right now. We hired them to stand up for the little people, and I feel like a punching bag. They don’t care that we pay $16 million in other taxes every year.

This fall, lawmakers have a choice: They can shut down businesses across the state for a mere (in relation to the rest of the budget) $13 million in projected revenue from the tax, or they can spare people like Amy from losing their livelihoods.

For starters, lawmakers should support a move spearheaded by Rep. Jeff Wheeland (R- Williamsport) to replace the 40 percent tax with a 5-cents-per-milliliter tax, similar to what exists in North Carolina and Louisiana.

If additional savings are needed, lawmakers should cut hundreds of millions in corporate welfare tax credits and optimize state health care spending. Pennsylvania could save $153 million a year if state workers contributed to their health care at the same rate as private sector workers. Common sense solutions to savings and revenue exist that don't unfairly punish businesses like Amy's.

Like other vape entrepreneurs, Amy plans to empty her inventory to avoid the 40 percent floor tax. In the meantime, she hopes lawmakers will act quickly to repeal or replace the tax instead of sending families like hers to financial ruin.


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Making the Most of Education Dollars

AUGUST 11, 2016  | by JAMES PAUL

Auditor General Eugene DePasquale recently uncovered $2.5 million improperly paid to nine public charter schools. At issue is whether buildings owned by charter schools are eligible for the state's lease reimbursement program. 

But in the scrutiny rightly given to these payments, are we missing an even bigger issue?

According to DePasquale:

The Pennsylvania Department of Education’s [PDE] own guidelines for the lease reimbursement are clear that buildings owned by the charter school are not eligible. The problem is that PDE makes no effort to verify ownership of the buildings or look for conflicts of interest between the school and related parties. They simply write a check for whatever amount the charter school submits. That is a disservice to Pennsylvania students and taxpayers.

Jan Murphy of PennLive adds:

Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said he believes this dispute comes down to a difference of interpretation of the state's lease reimbursement guidelines.

"The auditor general takes the position if the building is owned by a charter school then it's not reimbursable and PDE says ownership is irrelevant to reimbursement," he said. "I'm sure charters are working based on the recommendation from their legal counsel plus direction from PDE."

DePasquale acknowledged that charter schools were not at fault for applying for reimbursement but he said the education department was wrong in making those payments.

To correct the mistake, the Department of Education could claw-back improper payments. State lawmakers could also pass legislation clarifying the state’s reimbursement guidelines.

But DePasquale’s audit should raise a more important question: Is state government doing everything it can to maximize the value of each dollar spent on public education?

After all, this is not the first time the Auditor General has uncovered examples of wasteful education spending. In May, for example, DePasquale estimated districts could save nearly $55 million if they made use of competitive bidding for transportation services.

There are numerous other ways for districts to save money. CF has long championed prevailing wage reform (and other mandate relief), pension reform, and collective bargaining transparency to ensure taxpayer funds are directed to the classroom, where they belong.

These, too, must be top priorities for lawmakers and public officials who seek to maximize the value of each education dollar.


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Introducing Commonwealth Insight, a Biweekly Podcast

AUGUST 10, 2016  | by DOUGLAS BAKER

We're excited to announce the launch of Commonwealth Insight, a biweekly podcast where we'll bring you conversations with thought leaders and influencers from around our state and the country.

In our first episode, I interview Evan Baehr, president & co-founder of Able Lending which helps small businesses find the capital they need to survive and thrive. Evan is also the author of best-selling fundraising guide for startups, Get Backed.

I talk with Evan about the challenges facing entrepreneurs, why regulatory uncertainty keeps small business owners up at night, and the importance of entrepreneurialism.

Evan says, “The number one thing that troubles small business owners is uncertainty about the future of government regulation.” Look no further than the struggles Pennsylvania vape shops owners are going through for real-world affirmation of this truth.

I also talk with Matt Brouillette, president & CEO of the Commonwealth Partners Chamber of Entrepreneurs, about the greatest challenges he sees in Pennsylvania. Matt is the former, long-time president & CEO of Commonwealth Foundation. He explains how "impatient patience" is needed to change the course of our state.

Matt notes, “The policy problems we face today weren’t created overnight.” Reformers, he says, “must be willing to take incremental improvements while impatiently pushing for even bigger ones.”

We hope you enjoy the first episode of Commonwealth Insight. Stay tuned for more by subscribing on iTunes, SoundCloud, Google Play, Stitcher, or via RSS.

Let us know what you think and keep an eye out for our next episode in two weeks!


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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.