JANUARY 24, 2012 | Commentary by ELIZABETH STELLE, JAY OSTRICH

Welfare Reforms Protect Poor, Taxpayers

Regardless of where you stand on taxpayer-funded entitlements, few Americans argue against the maintenance of temporary safety nets or modifications aimed at ending welfare fraud, waste and abuse.

MAY 26, 2011 | Policy Report by LEONARD GILROY, HARRIS KENNY, KATRINA CURRIE, ELIZABETH STELLE

Privatizing "Yellow Pages" Government

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.

MAY 19, 2011 | Commentary by ANDREW GILLEN

Spending for Higher Education Doesn't Create Economic Growth

The Coleman Report, published in 1966, and subsequent experience and analysis has demolished the idea that inputs alone are very useful in explaining the output of K-12. As the college level, the college attainment rate is also quite stubborn in spite of dramatic increases in funding over the years. In other words, spending more does not au

JANUARY 31, 2012

Corporate Welfare Not Needed to Get a Cracker

The Pittsburgh Tribune-Review reports that Pennsylvania lawmakers are pushing a special tax deal to attract a "cracker" plant to the state. The proposed Shell cracker—which breaks down natural gas into ethylene, used in plastics—has been much talked about, with the Keystone State reportedly a finalist with Ohio and West Virginia. The plant would create thousands of jobs, at least by internal estimates.

The proposal would expand Keystone Opportunity Zones, exempting certain businesses from taxes (primarily targeted to the cracker). What's wrong with a KOZ? Well for one thing, tax breaks for a few require higher taxes, spending being equal, on all other businesses. Further, a Legislative Budget and Finance Committee report finds that the KOZ program has little accountability, and the promised jobs often failed to materialize. Most importantly, tax breaks and corporate welfare don't actually generate economic growth, they simply shift resources.

Rather than expanding corporate welfare, here is what lawmakers need to do to make Pennsylvania more attractive:

• Enact a natural gas policy that removes the political uncertainty stemming from the Frack Attack, and provides predictability for the gas industry.
  
• Improve Pennsylvania's business climate for all businesses. Indeed, lawmakers should take the lesson from the Keystone Opportunity Zones—that businesses are attracted to lower taxes—and apply it statewide.

posted by NATHAN BENEFIELD | 01:31 PM | 0 comment

JANUARY 31, 2012

The "Facts" on Food Stamps

City Paper contributor Daniel Denvir tries to diminish the impact of our Philadelphia Inquirer column on food stamps by offering "facts" in rebuttal. Unfortunately, most of these "facts" are merely matters of opinion or simply wrong.

The first "fact" claims that we shouldn't worry about food stamp growth because most of the money is "federal dollars." But federal funds are not free money, and yes, residents of Pennsylvania pay federal taxes. The high cost of federal spending on food stamps—and costs are growing rapidly—should worry taxpayers. In just eight fiscal years, total costs for food stamps (formally called SNAP) have more than doubled in Pennsylvania.  The national picture is even worse, with food stamp spending doubling since 2008.

Denvir then cites an Inquirer reporter citing advocates citing a federal report that the "fraud rate" (really referring to the error rate) is 0.1 percent. Except this isn't true—the reported error rate is at actually 40 times higher. According to the USDA, the latest SNAP payment error rate for Pennsylvania is 3.93 percent. Twenty-two states have better error rates, and Pennsylvania's rate is slightly above the national average of 3.81 percent.

Another "fact" cited is that there must not be errors, because the Inspector General has a unit to look at fraud and waste. But eliminating the asset test and other eligibility limits was a deliberate decision to reduce the official error rate-you can't make an eligibility error when everyone is eligible. On top of broadening eligibility, the Rendell administration cut in half the number of fraud referrals to the Inspector General. In 2002, approximately 47,000 cases of suspected welfare fraud were referred annually to the Inspector General. However, by 2010 the Inspector General received only 27,645 referrals, even though caseloads had dramatically increased. Is it any surprise the state won awards for low error rates when so few cases were investigated?

Finally, the City Paper claims there is only one known millionaire who collected food stamps, so this really is all unnecessary. This is a straw man argument. While the savings from an asset test may be small in the scope of government spending, and there may be only a few cases of millionaires receiving benefits, Pennsylvanians with adequate resources should not be allowed to abuse the system. Reinstating an asset test is not about punishing the poor, but protecting the truly needy at a time when taxpayers are stretched thin.

posted by ELIZABETH STELLE, NATHAN BENEFIELD | 11:10 AM | 0 comment