Policymakers made significant strides over the past legislative session to increase school choice, save taxpayers from waste and abuse in unemployment compensation, and protect students. While critical reforms remain, it’s worth celebrating these policy victories from the past legislative session.
Six Policy Victories in the 2013-2014 Legislative Session
1. Banned the practice of “passing the trash.” Act 168 of 2014 prevents teachers accused of abuse from quietly resigning and relocating to a new school without having to inform that new school of their alleged misconduct. The law also strengthens the background check process and prohibits school districts from entering into “confidentiality agreements” that suppress abuse allegations. Commonwealth Foundation supported ending this disturbing practice while government unions took a neutral position.
2. Reduced the state debt ceiling. In 2013, lawmakers reduced the total amount of debt allowed under RACP (Redevelopment Assistance Capital Program) by $600 million. Act 77 of 2013 also provides greater accountability, oversight and transparency regarding how RACP grants are awarded.
RACP uses borrowed money—paid back by taxpayers with interest—for “economic development” projects, or corporate welfare. We’ve regularly exposed the most controversial uses of RACP funds, such as the Arlen Specter Library, Tastykake’s corporate headquarters, numerous sports stadiums, and a $3 million grant to the Second Mile, the charity founded by convicted child molester Jerry Sandusky. An effort to further reduce the RACP debt limit to $2.95 billion passed the state House in 2014, but stalled in the Senate.
3. Strengthened school choice for children and their parents. Lawmakers consolidated the Education Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) into one statute, while simplifying and streamlining the application process. This also allows unused credits to be shifted from one scholarship program to another. Thanks to Act 194 of 2014, more credits will be utilized and thousands more scholarships can serve as a lifeline to students trapped in failing schools. Commonwealth Foundation has consistently pushed for greater school choice options, including the creation of the OSTC.
4. Reformed taxes for small businesses and more. Lawmakers enacted some tax reform last session with Act 52 of 2013. Lawmakers increased the Net Operating Loss (NOL) Cap, created a new deduction for small start-up businesses, and exempted family-owned businesses from the inheritance tax. While Commonwealth Foundation has advocated for broad-based tax reform, these measures are a step in the right direction towards lessening the tax burden on job creators.
5. Protected jobs for Pennsylvanians in the energy field. New EPA regulations require expensive, unproven technologies that would kill jobs and bankrupt companies. Commonwealth Foundation has documented how destructive these new regulations are to existing PA jobs. Act 175 of 2014 preserves state control of the energy industry by allowing the state legislature to publicly reject a state carbon emissions plan.
6. Ended “triple-dipping” for government employees. Act 75 of 2013 stops former state employees from receiving both retirement and unemployment benefits. The law ends “triple-dipping,” where an individual retires and collects a public pension or private retirement benefit and then temporarily returns to work, only to collect unemployment compensation when leaving the job. This one change will reap an estimated million dollars in savings this fiscal year.
Milestones of Note
Liquor Privatization Progress. Three Pennsylvania governors have attempted to privatize the liquor store system. In 2013, for the first time in state history, the PA House passed a bill that would end the government liquor store monopoly. Commonwealth Foundation has pushed for full liquor privatization by exposing the contradictory mission and gross carelessness of the PLCB. Lawmakers can build upon this historic accomplishment in the new session.
Awareness and Advocacy for Paycheck Protection. In 2014, thanks to lawmakers and teachers speaking out through CF’s Free to Teach project, a version of paycheck protection passed committees in both the House and Senate. In the new session, lawmakers have a golden opportunity to finish what they started and pass paycheck protection, now known as Mary’s law.
Pension Reform Progress. Legislation to put new state employees and school teachers into a defined-contribution retirement plan (like a 401k) passed committees in both the state House and Senate. Government union leaders, defending the status quo, prevented these bills from coming up for a vote. For years the Commonwealth Foundation touted the merits of defined contribution retirement plans and warned about the impending crisis in public pensions—that crisis is now reality.