Facing immense fiscal and political pressures, many local governments are looking for ways to fund services without raising taxes. But officials need not curb their enthusiasm for fiscal responsibility if they simply put the brakes on being in the parking business. Pennsylvania has 41 special government parking authorities; the rest of the nation, combined, has five. Despite their abundance, few can explain exactly why Pennsylvania relies on government-run parking monopolies.
Earlier this month, Gov. Tom Corbett suggested the commonwealth consider leasing state park operations and services. Almost immediately and without thoughtful consideration, pundits launched political fire, claiming "privateers" would exploit or commercialize our natural resources beyond recognition.
This report surveys the scope of Yellow Pages Government in Pennsylvania, looks at examples of state and local privatization throughout the country, and outlines best practices to equip lawmakers to successfully transition government out of unnecessary services by implementing a variety of models.
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On Tuesday, a task force spearheaded by Auditor General Eugene DePasquale released its recommendation for municipal pension reform. The report recommends, among other things, more transparency and accountability in municipal pensions and taking pensions out of the collective bargaining process.
This report is the latest in a string of bipartisan efforts to tackle the municipal pension problem.
Last week, the Senate Finance Committee advanced SB 755, legislation that would indeed take pensions out of collective bargaining and put all new public safety employees into a defined contribution plan.
SB 755 has the support of the Commonwealth Foundation along with the Coalition for Sustainable Communities—a coalition of local officials and business leaders. But for the first time, the legislation received Democratic legislative support. Sen. Art Haywood, from Montgomery County and a former township commissioner, joined with Republicans to advance the bill.
Other Democratic Senators also indicated they might be open to supporting the final legislation.
The panel's ranking Democrat, Sen. John Blake, D-22, Archbald, voted against the bill as did other caucus members with one exception. But Mr. Blake said he’s keeping the option of eventually supporting the bill open, depending on what a pending report from Gov. Tom Wolf’s task force on municipal pensions recommends.
Mr. Blake said he’s concerned that switching to a defined-contribution plan could ultimately lead to more pension debt. He noted that Carbondale Mayor Justin Taylor supports the bill.
Sen. John Yudichak, D-14, Plymouth Twp., said he plans to keep an open mind about municipal pension changes if the bill reaches the Senate floor. He said pension changes are one reason why Nanticoke is ready to leave Act 47 distressed municipality status.
Of course, municipal pension reform has been a top priority for Democratic mayors from across the commonwealth for some time. As the Pittsburgh Post-Gazette reports:
[Pittsburgh] Mayor Bill Peduto has pushed hard this year for overhauling municipal pensions, joining nine other Democratic mayors in chastising Democratic legislators for what they called a failure to act, and has met with the governor and legislators on the issue.
"His message has been that pension reform is the number one priority for this city and every other one in the state," said Tim McNulty, Mr. Peduto’s spokesman.
Mr. Peduto and other proponents have said looming election cycles and the heavy political influence of public safety unions may make future efforts to overhaul the system difficult.
"It's going to be a hard reach to do state pension reform this year and municipal pension reform next year," said Lancaster Mayor J. Richard Gray.
While budget discussions continue under the Capitol dome, addressing municipal pensions is no less urgent. And given the bipartisan support behind this effort, the time is ripe.
"They are going to take away your pension!" is a common scare tactic used by Pennsylvania government union leaders to oppose pension reform (even though private school unions have agreed to pension reform).
Such a scenario is no longer fiction for workers in Detroit. Yesterday a federal bankruptcy court ruled the City of Detroit has the ability to renegotiate pension benefits, like any other contract with the city’s 100,000 plus creditors. The dramatic development has widespread implications across the country—including Pennsylvania, where unfunded local and state pension liabilities surpass $50 billion.
Ironically, union officials' refusal to consider reform has endangered the very pensions they claimed they were protecting.
We've noted before the desperate municipal situations in Scranton, Pittsburgh, Allentown and Harrisburg. Government union leaders' unwillingness to compromise and ignore fiscal reality have put these cities on Detroit’s destructive path—harming taxpayers, residents and government employees.
Only by depoliticizing government pensions with 401(k)-type plans will state and local workers be able to keep their pension and create a system that’s fair to new workers and taxpayers.
This morning, CF President & CEO Matthew Brouillette appeared on FOX Business's Varney & Co. to highlight the public pension crisis facing Pennsylvania and cities and states across the nation.
Matt's appearance follows his recent op-ed in Investor’s Business Daily which draws lessons from Detroit’s economic decline and bankruptcy. He warns that state and city public pension and health care costs together equal $60,000 per family of four.
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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.