Gov. Wolf's So-Called Compromise


Gov. Wolf proposed a new "compromise" on pensions and the budget last week, according to news reports.

Here is what that compromise includes:

You can tell your lawmakers what you think of this compromise plan here.

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New Contract, Still no Transparency


PA State Union Contracts

The newest state contract with AFSCME—the union representing more than 30,000 state workers—was signed earlier this week.

The contract was agreed to in April, then ratified by union members in May. This new deal (along with a much smaller UFCW contract) will cost taxpayers a reported $23 million in new costs annually.

Yet citizens still cannot get copies of this contract online.

It is now 115 days since the first report of an agreement, and 87 days since union members voted on the deal.

So why aren’t the contracts being shared with taxpayers?

Because the new agreement is only for one year, Gov. Wolf and AFSCME leaders—who contributed more than $1.2 million to Wolf’s campaign—will continue negotiations on yet another deal. The negotiations will occur behind closed doors.

Thankfully, legislation that would shed a light on this process—and give taxpayers an estimate of the cost of union contracts before they are signed—sits before the state House now. It is critical that Pennsylvanians have more transparency in these secret union deals.

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Audio: Gov. Wolf's Budget Blindspot


CF’s Nate Benefield joins Dom Giordano on Talk Radio 1210 WPHT to discuss the budget impasse and Gov. Wolf’s misleading claims.

During their conversation, Nate shed light on Gov. Wolf’s disconnect with voters.

“Voters, they did elect Wolf but they also elected large Republican majorities in the House and Senate. It’s not just those Republicans that are against some of Tom Wolf’s proposals. When they actually held a vote on his $4.6 Billion tax increase, it got zero votes.”

Nate also clarifies that no money will be going out to groups and organizations that Pennsylvanians depend on–including non-profits and schools.

He points out that residents “are still going to have to pay their taxes [but] agencies are not going to paid, non-profits are not going to get their money, and schools eventually are going to be missing their payments from the state”.

Click here or listen below to hear more.

The Dom Giordano Show airs daily on WPHT in Philadelphia

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

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Entrepreneurs Speak Out Against the PLCB

AUGUST 10, 2015  | by BOB DICK

Pennsylvania Liquor Control Board (PLCB) partisans are quick to defend the agency as an asset for the state, but the PLCB’s finances—and the entrepreneurs who deal with the booze bureaucracy—tell a different story.

On the financial front, the board reported $117 million in net income this past fiscal year, representing a decline of 5.41 percent from 2013-2014. The decline coincided with the agency’s best sales year to date. Though, a monopoly reporting record sales isn’t exactly groundbreaking. No one would be particularly shocked if a private business was able to outlaw its competition and increase sales.

The decline in the liquor control board's "profitability" shouldn't come as a shock either. The agency forecasted the possibility in a July 30 memo last year, noting the decline was due to rising operational costs (driven mostly by pensions). The agency proposed increasing product prices by more than 16 percent to boost its profitability, but they quickly abandoned the idea.

Finances are only half the story. The board also causes constant headaches for entrepreneurs.

Ray Hottenstein, testifying in front of the House Liquor Control Committee on behalf of The Pennsylvania Restaurant & Lodging Association (PRLA), said the board's uncompetitive pricing structure is the biggest source of irritation for PRLA members:

It should be no surprise that pricing is the number one frustration of licensees in Pennsylvania. The five levels of mark-ups not only make Pennsylvania uncompetitive with other states but it makes it difficult and sometimes impossible for licensees to resell the product at a fair and reasonable profit. Licensees are not able to purchase wine and spirits from where we can get the best price, we are forced to pay whatever the state dictates with only a 10 percent discount.

Competitive pricing isn’t the only problem, according to Mr. Hottenstein:

The second largest complaint we have heard from our members is the lack of selection and poor customer service they receive at their local state store. Many of our members in less populated areas have said that their store is not regularly stocked and in some cases have to wait weeks for an order to be shipped from another store.

Unsurprisingly, the PLCB's inefficiency isn't confined to product availability. Jason Malumed, President of Chalkboard Wine + Spirits, gives his firsthand account of the state's disorganized liquor monopoly:

There have been many times when a several thousand dollar invoice of mine is at 120+ days past due (the PLCB also pays their invoices net 60, despite the industry standard being net 30), and we have not heard anything fiom the PLCB about why we have not been paid, only to go to the store ourselves, dig through piles of old, cancelled wine that has been sitting in a non-temperature controlled room, and discover an order of ours that was supposed to be returned back to us months ago.

The PLCB’s declining profitability along with its inability to provide true convenience, choice and competitive pricing to consumers and entrepreneurs make the agency a liability, not an asset, for Pennsylvanians.

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Listen: Telephone Townhall on PA Budget and More


Matt Brouillette and Rich Zeoli of Talk Radio 1210 WPHT answer questions about the Pennsylvania budget during a telephone town hall.

Matt explains how Gov. Wolf's tax plan that would smack Pennsylvanians with a tax increase "larger than the other 49 states' combined." Such a high burden for taxpayers is one of the many reasons Gov. Wolf's tax proposal received zero votes in the House. 

Other issues brought up by distressed callers include the harms of a natural gas severance tax and the myth of an underfunded education system

Click here or listen below to hear more of Matt and Rich's answers.

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Silly Talk with Gov. Wolf


Gov. Tom Wolf appeared on Radio Smart Talk yesterday morning. He mostly danced around host Scott LaMar's questions—claiming "You don't know what I’ve been supporting" on pension reform, and comparing legislation to allow private retailers to sell wine to robbing someone’s home.

But his answers about the size and impact of his tax proposals were particularly dishonest.

Asked if his tax increase was the highest in the nation, and higher than every other state combined, Wolf responded, “That’s not true.”

In fact, Wolf’s $4.6 billion increase next year is $4 billion more than any other state.

Wolf went on to imply that his plan calls for a dollar for dollar shift to reduce property taxes.

“I’m talking about a $3.8 billion tax decrease for property taxes…

I’m calling for—yes that’s right—a $3.8 billion increase in state taxes….

Those net out.”

I’m not sure Wolf has read his own budget!

In fact, he has proposed $4.6 billion in tax increases next year, and $8 billion the following year. His property tax reductions and renter relief—beginning in 2016—are only $3.6 billion.[1]

That’s more than $12 billion in tax increases for only $3.6 billion in property tax reductions. Only 30 cents of every dollar in new taxes goes towards tax relief. Even looking just at the full year, 2016-17, less than half of Wolf’s taxes goes towards tax relief.

A moment later, Wolf does acknowledge there’s more to his tax plan than a dollar for dollar property tax shift, but dismisses that as minimal.

“What I’m proposing to actually close the gap is not that big.”

Wrong! The net increase is larger than the proposed property tax relief. We’ve pegged it as a net increase of almost $1,400 per family of four, using Wolf’s own estimates.

The Independent Fiscal Office estimates are slightly different, but show the same trend—tax increases will be double property tax relief.

It's no wonder Wolf tried to dodge the question. His tax increase, especially his sales and income tax increases, would hit working families hard.

In fact, the the IFO projects that every income group would pay more in taxes, even after the property tax relief.

Estimated Revenue Change, Wolf's Budget Proposal in millions
  2015-16 2016-17 2017-18 2018-19 2019-20
Income Tax Increase $2,243 $2,396 $2,509 $2,631 $2,759
Sales Tax Increase $399 $991 $1,024 $1,058 $1,093
Sales Tax Expansion $1,172 $2,979 $3,207 $3,423 $3,599
Total Sales $1,571 $3,970 $4,231 $4,481 $4,692
Total Sales + Income $3,814 $6,366 $6,740 $7,112 $7,451
Other Tax Increases $816 $1,009 $867 $1,067 $1,281
Total Tax Increase $4,628 $7,375 $7,607 $8,179 $8,732
Property Tax Reductions $0 $2,732 $2,732 $2,732 $2,732
Rent Rebates $0 $369 $383 $396 $388
Philadelphia Reductions $0 $452 $452 $452 $452
Total Reductions $0 $3,553 $3,567 $3,580 $3,572
Net Tax Increases $4,628 $3,822 $4,041 $4,599 $5,159
Source Independent Fiscal Office


[1] Wolf’s “$3.8 billion in property tax relief” includes $600 million from current gaming money that goes towards reducing property taxes, but excludes $400 million from new taxes for renter relief.

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Could Coal’s Savior be PA’s Legislature?


180 workers in CONSOL Energy’s coal division recently lost their jobs. Now, Pennsylvania’s legislature may be the only thing standing between the Obama administration and complete destruction of the state’s coal industry.

This week, President Obama announced finalized regulations to cut carbon emissions to a level that would practically ban the burning of coal for electricity—spiking utility costs and eliminating the jobs many Pennsylvanians count on.To comply with the regulations, states must submit a Clean Power Plan to the U.S. Environmental Protection Agency. Last year, foreseeing the dangers in a draft version of the regulations, Pennsylvania’s Republican legislature and governor passed a law requiring legislative approval before the state sends any plan to the EPA.

Presumably, this law would prevent Democrat Governor Tom Wolf from unilaterally submitting a plan that would harm Pennsylvanians. To date, Pennsylvania’s leadership has inspired 14 other states to introduce similar legislative oversight proposals.

Unfortunately, Gov. Wolf’s response to Obama’s announcement ignores the dangers of regulations that will jeopardize the jobs of at least 13,000 Pennsylvanians:

Pennsylvania will use this as an opportunity to write a plan that could improve public health, address climate change, and improve our economy and power system.

If Wolf’s plan mirrors the EPA’s proposed rules, it will do none of these things.

In fact, a computer model estimates the regulations would reduce global temperature by a minuscule 0.018 degrees Celsius by 2100 — a reduction that would hardly influence climate and health.

And according to an Energy Ventures Analysis report, the regulations would increase combined annual gas and electricity bills in Pennsylvania by more than $1,000, or 46 percent, by 2020 compared to 2012. Industrial power rates alone would rise by 62 percent.

Nationally, the United Mine Workers of America estimates the regulations will suction $208 billion from coal communities over the next 20 years, while the North American Reliability Corporation predicts a dangerously less reliable power grid with “the potential for wide-scale, uncontrolled outages.”

As a Wall Street Journal op-ed notes, however, the regulations will fail without the cooperation of the states, and six governors have already decided cooperating is not in their citizens’ interests.

If Pennsylvania’s governor does not have the good sense to follow suit, the legislature must act. Sacrificing an industry that supplies 40 percent of the state’s electricity, contributes more than $4 billion to the economy and, most importantly, provides good paying job, is simply too high a price to pay.

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Discouraging Signs in York City

AUGUST 5, 2015  | by JAMES PAUL

The consequences of Gov. Tom Wolf’s lock-step fealty to public sector union interests are being felt across the state and particularly in York City—where one of Wolf’s first major decisions as governor is generating renewed skepticism among those seeking improvement for the failing school district.

In March, the Wolf administration forced out York City recovery officer David Meckley and withdrew the state’s petition to introduce transformative change to a school system known for financial distress, abysmal academic performance, and astounding rates of violence. Meckley, who sought to implement a charter school model, realized Wolf was wedded to the status quo and would not accept a solution that prioritized students and families over government unions.

In April, Wolf replaced Meckley with Carol Saylor, who opposes charter schools and hinted that her recovery plan could take up to ten years.

What has been happening in York City since the new recovery officer assumed her position?

If a recent editorial from the York Daily Record is any indication, not much. Saylor hired an outside firm to study the school district and provide recommendations. Highlights from the report include the following:

  • Teacher attendance dropped to 88 percent in 2014-15 (which is actually lower than student attendance, according to Saylor).
  • Barely half of district personnel believe the quality of education delivered by the district is good or excellent. Four percent of teachers believe that education quality is excellent.
  • 86 percent of school and central office personnel report that the district does not reward or retain excellent staff.
  • 75 percent of school staff do not believe individual schools have sufficient decision making authority over their budgets.

The report also noted that York City’s per pupil funding is on par with the state average. Accordingly, the district may need to “revisit its spending strategy to ensure practices are centered on student learning needs.” However, in June, the teacher’s union voted to accept a new collective bargaining contract that increases pay over the next two years.

And just this week, York City announced it has hired a new “information specialist’’ to create “positive publicity with the outside community.” Editors at the Daily Record describe the hire as unnecessary and an unwise use of limited resources:

Ms. Saylor and other district officials ought to be able to speak for themselves to the media and the community. And they certainly ought to be able to perform effective internal communications—or perhaps they shouldn't be in their current positions.

While he may not be involved the district’s day to day operations, the governor’s fingerprints are all over the situation in York City. The decision to force out Meckley—and, in so doing, jettison meaningful education reform—will have lasting repercussions for families who deserve better than a ten year plan and an information specialist.

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Union Politicking Shows Need for Mary's Law

AUGUST 4, 2015  | by GINA DIORIO

Political mailers supporting candidates are par for the course during elections—unless those mailers are sent by government unions and funded with members’ dues. Then, they’re illegal.

But that didn’t stop the Pennsylvania State Education Association (PSEA) from sending them—or the Pennsylvania Labor Relations Board from punting on its authority to enforce the law.

Last fall, Assistant Professor and PSEA member Mary Trometter opened a letter from the PSEA addressed to her husband, asking him to “join Mary in voting for Tom Wolf for Governor on November 4.” 

Appalled not only at the partisan mailer but that her name was used—without her permission—to endorse Wolf, Mary decided to hold the union accountable. She and The Fairness Center filed a charge with the PLRB. Recently, though, the PLRB announced its function was not to enforce the law and sent the case to Attorney General Kathleen Kane’s office for enforcement.

The question isn’t whether PSEA used members’ dues for politicking—they admitted to this. The question is whether those charged with enforcing the law will turn a blind eye and continue to let the union exploit members for political gain.

Mary plans to appeal the PLRB’s decision and is also calling on AG Kane to enforce the law.

Legislation introduced in the House and Senate would also protect teachers like Mary from being used as ATMs to fund union campaigning. “Mary’s Law,” also known as paycheck protection, would require union leaders to go directly to members to collect money for politicking, instead of relying on taxpayer-funded collections to advance the union’s political agenda.

It’s indefensible that the PSEA thinks it can take Mary’s dues money and hijack her name for political gain.

You can stand with Mary by urging your lawmakers to support Mary’s Law

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The Elephant in Gov. Wolf's Reception Room


A few recent articles and editorials have directed attention to political contributions by gas drillers, while ignoring a far larger and more powerful interest group—government unions. The fact is, political spending by government unions dwarfs that of energy interests.

We can’t keep ignoring the elephant in the room.

From 2007-2014, political action committees of 11 unions that represent public sector employees spent $24.8 million, including $10.5 just last cycle. These unions spent an additional $46.5 million in union dues on “political activities and lobbying.”

That’s $70 million in reported political spending from an incomplete list of Pennsylvania’s government unions.

According to Follow the Money data, in 2013-14, campaign contributions to candidates from “Labor” went overwhelmingly to Democrats over Republicans—by a near 8 to 1 ratio, or $15.6 million to $2 million.

Labor campaign contributions in PA 2014

Of course, the biggest recipient of union campaign contributions was Gov. Tom Wolf himself, getting more than $3.4 million in political contributions directly from union PACs—plus millions in additional support through union “independent expenditures.”

Earlier this year, Matt sent Gov. Wolf a letter noting how the governor’s positions on many issues (pension reform, school choice, liquor privatization, severance tax, education spending) are in lock step with union leaders and called on him to put Pennsylvania taxpayers above special interests.

Instead, the governor’s vetoes have followed union wishes at the expense of hardworking Pennsylvanians. 

There’s an elephant in Gov. Wolf’s reception room, and it’s time we start talking about it.

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