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JULY 13, 2010 | Commentary by NATHAN BENEFIELD
The Real Problem with the Specter Library
As part of the state budget deal, Gov. Rendell secured $600 million in new borrowing for pork-barrel projects, including $10 million for the "Arlen Specter Library" at Philadelphia University and another $10 million for the "John P. Murtha Center for Public Policy." These monuments to politicians have sparked outrage, but represen
MAY 11, 2010 | Policy Points by COMMONWEALTH FOUNDATION
Pennsylvania State & Local Taxpayer Debt
Gov. Ed Rendell frequently argues that Pennsylvania taxpayers can afford to incur more state debt. However, in order to justify the borrowing of billions of dollars, the governor conveniently ignores the debt burden placed on taxpayers by all levels of state and local government. Today, Pennsylvanians owe $120 billion
SEPTEMBER 9, 2009 | Commentary by NATHAN BENEFIELD
Whoops, We Were Wrong...
One of our goals at the Commonwealth Foundation is to predict the effect of proposed public policies. Most of the time, we are proven correct, and humbly announce, "We told you so!" But sometimes, our predictions miss the mark. Case in point: in a November 2008 commentary, we predicted "Obama's presidency will likely be less radica
Recent Blog Posts
AUGUST 2, 2010
Non-Competitive Contracts Don't Compute
The PA Revenue Department's main computer system was installed in 1975. The outdated system's technological language, COBOL, is not even taught in universities anymore, narrowing the number of applicants who can work with the Department's system. Some operations can't even be done by the current computers; employees have to manually calculate some tax figures! The Revenue Secretary, C. Daniel Hassel, actually believes the computers could crash at any time.
Certainly, we do not begrudge the Department of Revenue this desperately needed upgrade. The expected cost is reasonably high at $100 million. Additionally, accusations that the current contract was a no-bid one are cause for concern.
The Department issued a request for contract bids in April 2009 and selected Accenture six months later, but rescinded the selection to add a specific software requirement to the contract. Accenture agreed to add this requirement to the upgrade procedure, and the Department of General Services re-contracted the company. Another bidder, Fast Enterprises, is suing for the contract.
From the start, Fast Enterprises submitted an original bid of $53 million, much less than Accenture's original bid of $65.4 million. Some speculate the companies' locations influenced Pennsylvania decision-makers. Accenture has offices in Philadelphia and Pittsburgh, while Fast Enterprises is based in Colorado.
No-bid contracts help nobody. In this case, the commonwealth chose to overpay one local company at the expense of all Pennsylvania taxpayers. Competition is foundational to shrewd financial dealings, and Pennsylvania's fiscal shapeup is far overdue.
posted by LEAH ACHOR | 00:51 PM | 0 comment
JULY 26, 2010
Free Parking? Only in "Monopoly"
Privatization Watch, which warns against privatizing government services, alerts locals that if Pittsburgh parking garages are leased to a private company the per day parking cost would increase by $4.75 by the end of the year. The blog touts the fact that the city's downtown government-operated garages are 30% cheaper than private ones.
However, the blog neglects to mention that the city's Parking Authority has $100 million in outstanding bond debt to pay off. These parking garages are cheaper because they're subsidized by taxpayers, not because they're more efficiently run. In the end, government services aren't cheaper, as the debt incurred is passed on to residents through higher taxes or fees in other services.
Leasing the city's garages could be a tough sell as the mayor has set a $300 million price tag on them ($100 million for the parking debt and $200 million to keep afloat the city's pension fund). This would be enough to keep the city from bankrupting.
The reality is, government shouldn't be involved in yellow page services. Parking garages are just one of many government-operated businesses that should be leased or sold to the private sector. Pennsylvanians can expect to hear more about privatization efforts in the near future as the state tries to rein in its projected $5 billion budget deficit, along with its $3 billion Unemployment Compensation Fund deficit, and a $4 billion pension contribution hike looming in 2012.
posted by KATRINA CURRIE | 03:00 PM | 0 comment
JULY 13, 2010
Pet Projects Lap Up Funds
State Legislators awarding funds to pet projects flies in the faces of Pennsylvanians who want their state to eliminate a deficit before tapping revenue for pet projects.
Capitolwire (subscription) reports Rep. Dwight Evans' response to why the legislature would not use protected grant monies to reduce the state's $5 billion dollar deficit:
"We are, we're trying to do it all, we're trying to get it all done, all at once."
However, Capitolwire reveals,"Evans and the House Democrats requested $55 million over two years. Amazingly, the Legislature's smallest caucus, Senate Democrats, requested the most from the governor's office, $59 million. House Republicans requested nearly $45 million."
Chairman of the Democratic Committee on Appropriations in the PA House, Rep. Evans has personally siphoned money from Pennsylvania taxpayers to his favorite Philadelphia nonprofit, Ogontz Avenue Revitalization Corporation (OARC).
According to OARC's 2008 Form 990 published on GuideStar (registration), it received 75% of its income from the government that year--over $3 million. $1 million was also given to OARC in the "Urban Development" program to fund its June West Oak Lane Jazz Festival. The nonprofit booked Esperanza Spalding and Al Jarreau but saw a small turnout to the "free" event. Of course we know that this was not simply sponsored by "the government"--our tax dollars in the form of WAMs paid for this flop.
The 2010-11 budget includes more WAMs for politicians' favorite organizations, (plus debt-financed RACP grants, including handouts for Specter Library and Murtha Center, which total $10 million each). Rendell, however, claims
"[The inclusion of WAMs] was insisted upon by the legislature. It was part of the arrangement...if I were king, they wouldn't be there, but I'm not."
The grants awarded to Rep. Evans' pet project in 2009-2010 totaled $29,314,273. Below are selected grants OARC received.
|
Pennsylvania Department of Community & Economic Development |
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|
|
|
Total Jobs |
|
|
|
|
Project |
Applicant/Company |
Program |
Existing |
Pledged |
Program Amount |
Multi FY Funded |
|
Street cleaning & miscellaneous projects |
Ogontz Avenue Revitalization Corporation (OARC) |
Community and Business Assistance |
N/A |
N/A |
$675,000 |
|
|
OARC Salaries/NORC-NAC Support |
Community and Business Assistance |
N/A |
N/A |
$300,000 |
|
|
|
Festival, marketing and special projects |
Community Business Assistance |
N/A |
N/A |
$1,500,000 |
|
|
|
OARC Salaries/Festival/Marketing |
CRP |
N/A |
N/A |
$1,500,000 |
|
|
|
Salaries/fringes FY2010 |
CRP |
N/A |
N/A |
$1,000,000 |
|
|
|
Festival marketing and project |
CRP |
N/A |
N/A |
$520,000 |
|
|
|
Operating costs of Welcome to West Oak Lane |
CRP |
N/A |
N/A |
$45,045 |
|
|
|
West Oak Lane Jazz and Arts Festival |
Cultural Activities NOC |
N/A |
N/A |
$1,000,000 |
|
|
|
West Oak Lane Jazz and Arts Festival & Summer Begins |
ECC |
N/A |
N/A |
$1,500,000 |
|
|
|
Corridor Stabilization & Compost Initiatives |
Minority Business Development Projects |
35 |
133 |
$2,000,000 |
Yes |
|
|
OARC Salaries/Benefits |
Minority Business Development Projects |
27 |
0 |
$1,000,000 |
|
|
|
OARC 2010-2011 operating costs |
Minority Business Development Projects |
27 |
0 |
$500,000 |
|
|
|
Philadelphia Center for Arts & Technology |
Urban Development |
N/A |
N/A |
$3,000,000 |
|
|
|
West Oak Lane Jazz/Arts Festival 2010 |
Urban Development |
N/A |
N/A |
$2,000,000 |
Yes |
|
|
Adapted from: http://www.dced.state.pa.us/investmenttracker/default.aspx |
TOTAL |
$29,314,273 |
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posted by LEAH ACHOR | 09:05 AM | 0 comment
