Thursday, March 31, 2011

People disapprove of barebones budgeting, they support shared solutions

We've all been there. We've seen an advertisement on tv or the computer about a product that seemed too good to be true, but we bought it anyway because it sounded great. Then you get it home and get a good look at it, it fails to meet your expectations. But it's too late, you bought it. For better or worse it's yours.

Well last fall the residents of Pennsylvania were sold a bill of goods. Candidate Corbett made promises on the campaign trail about more jobs and less taxes. And it sounded pretty good to some people. However a few weeks ago the people (all 26% who supported him and the remaining 74% of us who didn't) saw what 'Governor Corporate' actually had to offer.

During his budget address we finally heard about what we bought. And turns out a lot of Pennsylvanians didn't like what they heard. Sure the budget address opened up with some great lines about "shared sacrifice" and "must-haves" and "nice-to-haves," but Pennsylvanians don't share the same definitions of these Corbett-isms.

We're not alone in our frustration. Turns out voters everywhere are not very fond of barebones budgeting. For example:

·       Gov. Chris Christie, R-NJ, experienced a 10 point drop in approval rating between December (56%) his budget address in February.
·       In Ohio, Republican Gov. John Kasich has seen the number of residents disapproving of his job performance double since January, from 22% to 46%.
·       With outcry over education cuts, a near equal amount of Floridians approve (28%) and disapprove (24%) of their new Republican Gov. Rick Scott's job performance.
·       Due to the labor standoff in Wisconsin last month, Gov. Scott Walker is unpopular with 51% of voters.

Back here at home, Gov. Corbett made national news following his budget address. A poll found that 78% of Pennsylvanians oppose cutting funding to local school districts and 67% dislike the idea of slashing funding in half for the state's public universities (a national record).

It's not that residents aren't willing to share in the sacrifice, or aren't willing to scale back on their "nice-to-haves." It's that Pennsylvanians genuinely believe multimillion dollar corporations with their tax breaks aren't sharing, and that their tax breaks aren't "must-haves."

Pennsylvanians have repeatedly come out in favor levying some sort of fee on the out-of-state drillers, bounding across our state forests and extracting our natural gas. Seventy percent of Pennsylvanians want to be more like Texas and Alaska and impose such a tax.

Pennsylvanians believe major corporations operating in the state shouldn't be able rent a post office box in Delaware and call it their headquarters to avoid paying their fair share, driving up the dependency on taxes levied on Pennsylvanian-owner companies. Pennsylvanians want to close the Delaware loophole... like Texas and Alaska.

Pennsylvanians don't understand why the Commonwealth is the only state in the nation that doesn't tax smokeless tobacco, when major producing states do. Pennsylvanians want to be more like Texas and Alaska and have a fair tax on all tobacco products.

The Commonwealth has solutions available and Pennsylvanians support them. Pennsylvanians can manage the scalpel approach to budget cuts, but they won't buy whatever it is the governor claims to be selling.

Tuesday, March 29, 2011

Liquor privatization, fact or fantasy....

The HDPC has been holding public hearings across the state on 2011's hot topics including liquor privatization. Here is some of what I've been hearing so far:

The Math

Privateers have speculated that the sale of 850 licenses would garner $2 billion or more. To generate that much, each would have to be sold for $2.3 million. No other state has experienced that windfall.
·       An audit in Virginia found that 1000 licenses would need to be sold to raise $200 million, an average of $200,000 per license
·       In West Virginia, 89 of 165 stores licenses sold for less than $200,000 in 2010, an additional 45 sold for less than $100,000

Pennsylvania's Wine and Spirits stores generate more than $500 million for the state annually.

Consumer Choice

Currently there is a wine and spirits store in each of Pennsylvania's 67 counties. West Virginia had a similar system, however when it was privatized 5 rural counties lost their liquor stores. Several others have licenses held by convenience or drug stores, which offer little shelf space for liquor and wine selections, thereby limiting consumer choice.


Not only will the roughly 4500 currently state store employees lose their jobs, but experience in other states demonstrates that licenses go to existing stores, which choose to use existing staff to stock their shelves.

Public Safety/Social Costs

Independent research by the Marin Institute has found that "increased availability of alcohol is generally associated with increases in consumption."[1]

Increased consumption due to privatization has proven harmful and costly, as higher instances of violence, burglary, vandalism, drunk driving, reckless sex, teen pregnancy and addiction occur.

These costs have a number associated: $3.6 billion annually, including increased medical costs, criminal justice and public program costs, property damage, lost work hours and quality of life costs.

[1] Privatization of State-Run Alcohol Sales and Expensive Solution, Marin Institute May 2010

Friday, March 25, 2011

Does the Commonwealth have too many ABCDs...

a few more can't hurt....

Last week the Senate Intergovernmental Operations Committee held a hearing on what they call the ABCDs of state government. Many people contend that Pennsylvania has too many Agencies, Boards, Commissions and Departments. But why stop there, let's add committees and task forces and councils for good measure.

There is probably an argument to be made here. However I think the method that Gov. Corbett is using to attack the issue is amiss. The Scranton Times reported last week, that the governor thinks the best way to scale down the hundreds of groups appointed to consider everything from physical fitness and sports[1] to Asian American affairs[2], is to create another task force to review existing commissions, boards, etc.

Seriously, create another group to determine if Pennsylvania has too many groups already?

This is just the beginning, Leslie Gromis Baker, an advisor to the governor, spoke at a forum in January about Corbett's intention to create several commissions. One would look at the privatization of state assets, another transportation funding, and one to look at issues dealing with Marcellus Shale.

The governor isn't alone in his methodology. At the same Senate hearing, Nate Benefield of the Commonwealth Foundation advocated that the governor create a temporary commission of business leaders and others to make a plan for streamlining state government, and that this is the key to economic growth and prosperity.

Some may argue that creating a commission is a good way to look like progress is being made without actually doing anything. Further, there are rarely mandates to implement any of the suggestions made by the commission. Or the reverse, a commission can make recommendations and take the blame if those recommendations turn out to be unsuccessful or unpopular.

More than likely this is just another attempt by the administration (similar to their budget ploy) to convince the public that they are doing one thing (eliminating waste, fraud & abuse) while executing another agenda (decimating basic education, public higher education & rewarding corporate contributors with tax breaks).

No doubt, this ABCD consolidation has little to do with streamlining government, but more to do with cutting services for working Pennsylvanians while exonerating corporations from any social responsibility.

A listing of some of the state's ABCDs can be found here.

[1] Governor's Council on Physical Fitness and Sports
[2] Governor's Advisory Commission on Asian American Affairs

Wednesday, March 23, 2011

Graduation rates in Pa. versus the U.S. average (2007)

Higher education tuition hike will lead to increased college debt...

...and PHEAA grants were cut by over $7 million in the governor's budget proposal

Want to earn some college credit while in high school...
...dual enrollment funding eliminated

Maybe two years at a community college... college funding cut 10%

Tuesday, March 22, 2011

Corbett should treat higher education the same way he treats other industries

Among his budget "must-haves" Gov. Corbett found room for tax breaks and hand outs to big business, but can't find adequate and fair funding for higher education, which in my opinion should be considered one of the state's most favorable industries.

Pennsylvania has a higher education infrastructure that is the envy of other states, would take billions of dollars to replicate, and generates billions in economic impact annually.

Beyond producing the qualified workforce of the next generation (which in turn leads companies to locate here), it promotes tourism ($83 million worth of visits from moms, dads & siblings and events like alumni weekends), and it drives the economies of towns surrounding the schools as a major employer, not just in on-campus jobs, but the small businesses catering to the needs of the students and faculty in towns surrounding universities.

Corbett's massive cut is an embarrassment to all Pennsylvanians and effect the state system, state-related and even in independent colleges and universities. The Associated Press reported that the funding slash is the considered the highest proposed cut to state-supported colleges and universities is the nation this year.

Tuition increases can only make up for so much. Increases at the SSHE schools have been in the neighborhood of 4% for the last decade, but cuts of the magnitude Corbett is proposing would increase that tuition hike to 20%.

Millersville and other schools have indicated that the reduction of this magnitude will force them to offer fewer courses, which would prohibit students from completing college in four years, or even in five or six years.

Today 13 of 14 universities in Pennsylvania's state system held student rallies protesting the governor's proposed 50% cut to higher education funding. I welcome those who are adding their voices to the list of outraged citizens across the state.

Cuts this drastic are pennywise and pound foolish. When the economy does improve, and economic indicators point in that direction, Pennsylvania won't be able to offer the highly-trained workforce that we've been working toward, or conversely, graduates will be saddled with unwieldy college debt.

I invite students and anyone opposed to the cuts to stay informed about the higher education budget through the "Pennsylvania College Coalition" page on both Facebook:; and Twitter:

I've been exploring the notion of higher ed as an industry for years with the Democratic Policy Committee, even before the proposed cuts, and I am convinced that it is an industry worth investing, and that Corbett’s cuts would be detrimental to the Commonwealth’s economy.

Wednesday, March 16, 2011

Pouring salt in the wound.

Less than a month after adultBasic was terminated funding that would have gone to help pay for the health care program for working Pennsylvanians, instead was diverted to another fund, one run by the governor to dole out loans to business friends.
The governor and Republican legislators who support his budget call it good for job creation, those of us who don’t, call it good news for their friends in big business.

Let me explain. For the past decade adultBasic was partially funded through a portion of the Commonwealth’s tobacco settlement monies, which the state receives as an annual payment from the big tobacco companies. At the time, the Legislature decided that most of those funds should be directed to health-related programs including smoking cessation and health insurance. From 2005 through Feb. 28th of this year, the state’s Blues health care systems were partners in this program as part of their charitable mission (and since they have a $5.5 billion surplus).
The yearly tobacco payment is an estimated $350 million. This year $220 million of that has been earmarked for the Liberty Loan Fund, which by the way combines funds from 5 other pre-existing loan programs, all controlled by the governor and maybe his supreme decider, DCED Secretary Walker.
The governor and those who support his proposal will argue that a portion of the tobacco settlement funds are still going to health care… yeah less than 25%.
Some argue this diversion may not even be legal, as the Tobacco Settlement Act of 2001 mandated that payments be distributed in specific portions:
·         8 percent deposited to an endowment account for the future
·         30 percent for adultBasic and Medicaid for workers with disabilities
·         18 percent for health research
·         13 percent for home- and community-based services for the elderly
·         12 percent for tobacco prevention and cessation programs
·         10 percent to reimburse hospitals for uncompensated care
·         8 percent to expand the PACENET prescription drug program
·         1 percent for cancer research
Nowhere in the list is a percentage for the “Liberty Loan Fund.”
In the past there have been diversions of tobacco monies to cover budget obligations, but not to create a slush fund for the governor’s friends in the business community and not at the expense of 42,000 working Pennsylvanians. This is reprehensible for people who lost their affordable health care this month, and is another example of a gimmick in the budget that was supposedly gimmick-free.
Here is one more glimpse at the governor’s idea of a “must have” Liberty slush fund, versus a “nice-to-have” health care for working Pennsylvanians.

Corbett appoints a supreme decider

Who is overseeing DEP... or other state agencies tasked with protecting Pennsylvania's interests?

On January 18th along with being sworn-in as governor, Tom Corbett also found the time between speeches and his $3.5 million in inaugural festivities, to nominate Michael Krancer to head the state Department of Environmental Protection. This is a pretty significant appointment seeing as this Krancer is tasked with overseeing the health of Pennsylvania's environment to include its water, air and energy. It is especially important given the mounting role Marcellus Shale drilling is playing in all three of these areas.

But Corbett must not think Krancer is up to the challenge and must not have much confidence in the other people he nominated to head state agencies, because tucked away in his budget proposal is a provision for the Department of Community and Economic Development chief, C. Alan Walker, to be able to "expedite any permit or action pending in any agency where creation of jobs may be impacted."

Some environmental groups have expressed their concern because of the power the clause gives Walker over energy permits. I echo their concerns, but not merely for the enormous red flags it raises in regards to possible conflicts of interest (Walker is owner or has financial interests in 13 companies, many related to energy production; and is a longtime Corbett campaign contributor, $184K in the past 7 years).

No, I'm more concerned that this clause cedes unprecedented power to one man over many, many state agencies, with many, many missions. Some of which Secretary Walker may have no familiarity with.

Here's a quick look at a few of the state agencies tasked with doing some kind of permit issuing, which under the loose definitions adopted by the administration could relate to job creation:
  • Department of Labor and Industry
  • Department of General Services
  • Department of Transportation
  • Department of Public Welfare
  • Department of Health

Just these 5 agencies equal nearly $12 billion of the state's total proposed $27.3 billion spending. Obviously these agencies are responsible for much more than strictly granting permits, but why tie their leaders’ hands at all?

And why should the secretary of DCED have so much say in permitting issues, aren’t those tasked with overseeing those agencies capable and better able to determine the merits of permit seekers in their given field, even if it relates to some type of job creation?

Regardless of who holds the position of DCED secretary, this kind of unparalleled control makes little sense. Michael Krancer was selected to head DEP, because he has the credentials to run that agency, ceding any of those responsibilities to another cabinet secretary is not only unheard of but disconcerting to many environmental advocates and should be to the public as well.

Monday, March 14, 2011

If you wannabe like Texas, you gotta (en)act like Taxes

Call me a proud Pennsylvanian, but I've never been a huge fan of New Jersey, even with such esteemed citizens as Boardwalk Empire real life criminal kingpin Nucky Johnson or Snookie of Jersey Shore fame... my personal favorite: current governor célèbre, Chris Christie.

During the campaign and while planning his budget, Gov. Corbett first tried to emulate the Garden State, but when he did his research it turns out Gov. Christie's budget experiment has largely failed to produce jobs, lower taxes or keep its citizens safe. So now the Commonwealth's governor has focused his 'sights' on another state, a rather dramatic shift to...Texas.


Despite being the home of great Americans: Ken Lay and the deceptive energy giant Enron, Anna Nicole Smith and her inflated personality, and criminal outlaws Bonnie and Clyde, Texas does have a few things worth embracing.

Texas has a Natural Gas Production tax... you know comparable to what a majority of Pennsylvanians support on Marcellus Shale, but Gov. Corbett and his Republican majorities in the state House and Senate refuse to endorse.

Along with its extraction tax, there is a local property tax on the owner of a property’s mineral rights, which means if a property has oil, gas, or another mineral under the ground, those commodities are assessed for property tax purposes. Not so in Pennsylvania.

There's more: unlike the Keystone State, Texas levies a tax on cigars and smokeless tobacco. Maybe they're onto something since cigar smoking multiplies the chances of dying from a range of cancers as well as leading to other health problems.

Hey Governor, how about this: if you really want to realign your priorities and help the working people with your proposed budget, why don’t you lower our personal income tax? Texas doesn't collect a personal income tax. Sure you may not be able to cut taxes to your corporate friends as easily, but Pennsylvania's working families sure would appreciate the boost.

And in case the examples so far aren't enough to have you packing your bags for the Lone Star State, Texas also has combined reporting which closes the "Delaware loophole." So all those big businesses that escape paying their fair share in Pennsylvania, do pay what they ought to in Texas.

Texas isn’t perfect, they have a huge budget deficit too, but at least their leaders had the sense to tax the things that people believe ought to be taxed (i.e.-Big Gas, Big Oil, Big Tobacco).

If you wannabe like Texas, you gotta (en)act like Taxes.

Friday, March 11, 2011

All education cuts are not created equal

Per/pupil funding cuts vary by up to 1800%

By now you've probably heard about the draconian cuts to education in Gov. Corbett's proposed spending plan.

While basic education is tragically reduced by nearly $1 billion overall, the reductions in spending per student are even more appalling. Some neighboring school districts have dramatic differences in the amount their allocation per student would drop under the Corbett plan. Sometimes the difference in reduction between districts can vary by hundreds of dollars.

Where you live really does make a difference...

Here is a look at a few of the striking discrepancies:

School District
REDUCTION in BEF* per student
Conestoga Valley

Fox Chapel Area

Wyomissing Area

Bristol Borough
New Hope-Solebury

Harrisburg City
Derry Township

York City
York Suburban

This is all very surprising, seeing as the Department of Education's website indicates that school districts actually got increases... And I was told there were no gimmicks in this budget, ha! That's as accurate as saying it is tax free.

*basic education funding

Wednesday, March 9, 2011

Sorting the 'must-haves' from the 'nice-to-haves'

In his 2011/12 budget address Tom Corbett broke his promise of no tax increases. Sure, he didn't raise them at the state level and doesn't plan to implement a drilling tax despite being a fair and incredibly popular idea among the state's residents. Nope, the governor decided to pass the burden of slashing and taxing to local governments. So your local school, county and municipal taxes WILL rise dramatically instead.

While he decimated funding for education and social services, he made sure to include plenty of tax credits and rewards for big business.

Here are a few examples:
·        Resuming the phase-out of the capital stock and franchise tax – which had been put on hold
·        Adopting federal bonus depreciation rules that reduce revenue by $200 million to $400 million
·        An increase in other business tax credits totaling over $200 million

These and no mention of implementing a drilling tax on the multimillion dollar energy companies currently tapping the state's natural gas resources in the Marcellus Shale region, and closing a loophole which allows out of state corporations that do business here to purchase a post office box in Delaware and pretend that is where their profits are headquartered.

In his speech the governor said his budget "sorts the must-haves from the nice-to-haves." I agree with this kind of distinction. What I don't agree with is that education, human services, and protecting our environment are "nice-to-have," but the handouts for colossal corporations qualify as "must-haves."

Tuesday, March 8, 2011

Corbett embraces a failed budgetary experiment

Today, Gov. Corbett presented his first budget proposal. Even with nearly no advanced details of the plan, the actual content of his address came as no surprise. The speech itself was long on ideological rhetoric and lean on the details of the cuts he actually plans on inflicting.

Corbett's budget is packed with pain for Pennsylvania's working families and seniors on fixed incomes, and rife with rewards for big business.

It will take time to determine the full extent of the negative impact his spending plan will have on the Commonwealth's communities. But one thing is clear many municipalities, counties and school districts will be burdened with slashing services and hiking taxes.

All we have to do to see the results of this tax shift experiment is look across the Delaware River to neighboring New Jersey.

In 2010, New Jersey guv and superstar among conservative pundits, Chris Christie introduced a budget with colossal cuts that had devastating effects on:
·       Local taxpayers: the average local tax hike statewide was 7%, 100 municipalities saw double digit increases;
·       School districts: $820 million cut forced larger class sizes, reversing a decades-old national trend of declining sizes;
·       Job seekers: in 2010 NJ had the lowest job growth of all 50 states
·       Public safety: cuts to municipalities have caused police and fire fighter layoffs, Camden's aggravated assaults with a gun are up 259% over last year

The budget plan presented today promises much of the same for the Commonwealth. Pennsylvania's future under this proposal will include: higher property taxes, more people in our emergency rooms for treatment, higher college debt, more personal bankruptcies due to medical expenses, bigger class sizes in our schools, and a shrunken middle class.

The governor has made his priorities clear the previous two months by allowing adultBasic to end and approving a perk for corporate cronies with $200 million bonus depreciation. These same misguided priorities are evident in the budget he delivered today.

I don't believe that Pennsylvania's seniors, taxpaying families and the Commonwealth's kids should bear the brunt of an unreasonable and likely, failed budget.

Friday, March 4, 2011

Another bad Republican idea being fast tracked through the state House

…is there an echo in here?

In the past week, I've received emails from constituents asking me to oppose H.R. 89, which could threaten the meaningful changes to the state's Dog Law approved in 2008.

It bears repeating that, prior to passing the law, Pennsylvania had a dreadful reputation of being the puppy mill capital of the east. As a Lancaster Countian, it was disappointing to have my home featured as the subject of an Oprah investigation.  Also worth mentioning is that many legitimate dog breeders in Lancaster County were already meeting or exceeding the standards in the 2008 law and were hurt more by the negative press caused by the abusers in the industry than they are by the new law.

While the premise of this resolution claims to be innocuous and not an attempt to kill the 2008 law (after all the law was approved with overwhelming support just 2 ½ years ago), it couldn't be worse timing. With the Commonwealth's current fiscal situation, is a study of the effects of this law really where we want to direct our state’s limited resources?

Additionally, the PA Dutch Convention and Visitors Bureau, which is likely to see a drop in their state subsidy for tourism promotion again this year, will have more bad press to contend with and lost business when groups didn't want to patronize our properties for conventions and other gatherings…again.

It's also perplexing that the Republican House majority is in a rush to consider this resolution just days after being introduced and hours before their Governor is likely to deliver the news that there is no money left to spend on things like educating our children or promoting tourism in our state.

What's the rush? Portions of the 2008 law haven't even been implemented yet. What would Oprah say?

This is evidence of a larger issue affecting the state House this session. Some bills are fast tracked, with little to no time to garner any substantive feedback; and when the minority party attempts to improve a bill, with you know an amendment or two, they are found to be not germane.

I’m a big fan of public discourse and airing out an issue, that’s why the Policy Committee is dedicating time to hear from residents across the state on issues that affect real Pennsylvanians. Fast-tracking bills for the sake of a small constituency, especially when that constituency is held in disregard around the country as animal abusers just doesn't make sense.

Thursday, March 3, 2011

More perspective on adultBasic and health care in PA from today's HDPC hearing:

Testimony from the Lutheran Advocacy Ministry of PA:

It makes no economic sense to end adultBasic. At a recent event, Mr. Bob Rundle, the CEO of Lutheran Social Services for South-Central Pennsylvania, noted the economic cost of not continuing adultBasic through the end of the fiscal year. He calculated it would cost $52 million to continue adultBasic for all 42,000 people through June, which translates into roughly $1,250 per participant. Based on 2008 data, he said, it costs $1,265 per emergency room visit. He said, “We’re telling people to leave a health insurance program that gives them both care as well as the comfort they need to move forward and, in return, go to our community hospitals, go to our emergency rooms and drive our costs up."

Testimony from SEIU Healthcare PA:

According to a Harvard Medical School study half of all bankruptcies in the United States are due to medical bills.

Testimony from United Methodist Advocacy in PA:

We believe this is a moral obligation. To not do everything possible to find a way to continue insurance for those 42000 persons, and to help those on the waiting list borders on immoral.