Category: Guest Authors

GOP Proclaim Budget Goals First Please

GOP Proclaim Budget Goals First Please

By Leo Knepper

In November, Pennsylvania voters handed Republicans in the General Assembly historic majorities. In the Senate, the Republicans have a veto-proof majority. Across the Capitol, the Republicans in the House have a 40-vote advantage. The coming New Year also portends an impending battle over the next budget. Governor Wolf has already demonstrated his willingness to use state employees as leverage in a public relations battle with the General Assembly; there is no indication that his approach will change. With a $1.7 billion revenue shortfall projected for next year, what should the General Assembly do? GOP Proclaim Budget Goals First Please

If Republicans in the General Assembly were smart, they would upend a long-standing budget tradition and go on offense. Typically, the budget season is kicked off by the Governor’s budget address to the General Assembly. In his first budget address, Governor Wolf laid out a laundry list of progressive/liberal policy goals he wanted in his first budget. In his second address, he scolded the General Assembly for not giving him any of what he asked for in his first budget. Keep in mind, the Governor’s policy priorities came with a hefty price tag and would have required a massive tax increase.

In the coming year, the General Assembly should ignore tradition and preempt the Governor’s budget address with a plan of their own. That isn’t to say they should release a statement with the usual platitudes about protecting taxpayers. Rather, the House and Senate Republicans should have an entire budget and revenue plan prepared and release it ahead of the Governor. A preemptive General Assembly budget would force the Governor to play defense rather than the usual offensive position granted to governors.

To be successful and fiscally responsible, the General Assembly must address the revenue side of the equation first. Although it sounds strange, and it does defy logic, the General Assembly typically decides how much they’re going to spend and then cobbles together a tax package to pay for it. By determining the revenue ceiling first, the General Assembly would force the Governor to give a detailed account of who he would tax to pay for his almost certainly higher number. Providing exact numbers for how the funds would be dispersed also forces Department Heads to justify any amount above the General Assemblies stated budget when hearings commence.

Republican leadership must also avoid the trap, which they frequently fall into, of crafting a package “that the Governor will sign.” No matter how generous the General Assembly is with tax dollars, the Governor will want more. Instead, leadership would do well to work with their caucus members and craft a plan that they are satisfied with otherwise, the entire effort will be for naught.

Voters gave Republicans historic majorities in the General Assembly in 2017. The question now is, what will Republicans do with it? Will they squander the opportunity, or will they make the hard choices that voters are trusting them to make?
Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.

GOP Proclaim Budget Goals First Please

Tom Wolf Shameless Politics

Tom Wolf Shameless Politics

By Leo Knepper

Tom Wolf Shameless Politics
Shameless and cruel

In mid-November, Governor Wolf announced that the Department of Labor and Industry would be laying off employees. According to the Governor, this was due to the intransigence of Senate Republicans in their refusal to pass legislation funding unemployment call centers. On the other hand, Senate Republicans argue that the problem was the Governor’s unwillingness to answer their questions about funding.

Who is in the wrong?

Senator Scott Wagner makes a convincing argument in a column published by the York Daily Record:

“This project [the call centers] was fed approximately $240 million over the last four years with zero accountability. Now the senate is being pressured into throwing another $57.5 million down a black hole without any questions being asked.

“In 2006, the Commonwealth of Pennsylvania signed a $106.9 million contract with IBM to be completed in 2009.

“IBM’s contract was to give the state a new computer system to track employee wages, employer taxes, handle unemployment claims, appeals, and payments.

“In July of 2013, the state terminated the contract with IBM because it was $60 million over budget. The $60 million was in addition to the $106.9 million initial contract, and it was 42 months late. What happened with this contract? Who was held accountable for the cancelled IBM contract?

“Later in 2013, the Legislature voted to allocate $60 million per year for four years, and that ends at the end of this year. This was for the same project that was contracted with IBM and then cancelled.

“So let’s recap for taxpayers – $106 million plus another $60 million for IBM.  Add the last four years of $60 million per year for a total of $240 million – all for a grand total of more than $400 million in taxpayer money.”

Senator Wagner is right to question the lack of results from $400 million in taxpayer spending and this line of inquiry is long overdue. You can bet that there will be more confrontations between the Governor and the General Assembly in the coming year. According to the Independent Fiscal Office, there will be a $1.7 billion deficit in the 2017-2018 budget year. The General Assembly must take a close look at past spending in terms of amount and efficacy. If they don’t, Pennsylvanians will face higher tax bills in the future.
Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.

Tom Wolf Shameless Politics

Governor Wolf Hits Ill Winds

Governor Wolf Hits Ill Winds

Governor Wolf Hits Ill Winds
Facing ill winds

By Lowman S. Henry

One of the many quirks of our political system is that each year there are winners and losers among politicians whose names are not actually on the ballot. This year is no exception. Neither Governor Tom Wolf nor State Senator Scott Wagner was up for election this year, but results of the balloting sent their career paths in opposite directions.

Governor Wolf has had a tough first two years in office dealing with a Republican-controlled legislature. His efforts to dramatically expand government spending, and to implement the historic tax hikes needed to pay for that agenda resulted in the longest budget stalemate in state history. The Republicans won.

On Nov. 8, voters rewarded the GOP with even larger legislative majorities in the Pennsylvania legilsator. Democrats in the state senate are now on life support. Two Democratic incumbents were defeated by challengers; a third Democrat seat went Republican after the incumbent gave up several months ago and resigned from the ballot. Combined the three seats give Republicans a 34-16 edge and something rarely if ever seen in state government: a veto proof majority.

Meanwhile, across the rotunda in the House of Representatives Republicans saw their already historically high majority expand by three seats as four incumbent Democrats and one incumbent Republican lost. The Republican pick-ups came in southwestern Pennsylvania which has been trending toward the GOP for several election cycles. In fact, the most endangered species in Penn’s Woods might well be the non-urban legislative Democrat, with only a handful of Democratic lawmakers representing districts outside of the state’s urban cores.

All of this matters because next year’s state budget battle is shaping up to be even tougher than the first. Republicans caved into Governor Wolf’s spending demands this year, but failed to fully fund the budget. That coupled with revenue sources that either never materialized or have failed to meet projections presages a major fiscal fight next year.

Not only have Republicans added to their numbers, but this year’s legislative elections moved both chambers further to the Right. Moderate state senators like Cumberland County’s Pat Vance and Lancaster’s Lloyd Smucker have been replaced by far more conservative legislators. The continued drift of the House GOP caucus from moderate southeastern dominance to conservative central and western Pennsylvania influence means tougher sailing for those wanting to raise either taxes or spending.

Governor Wolf also saw his agenda rejected in another race; that the battle for Pennsylvania’s U.S. Senate seat. The Democratic nominee, Katie McGinty, was Governor Wolf’s first chief of staff and architect of the tax and spend plan that triggered the epic budget battle. Incumbent U.S. Senator Pat Toomey made hay of that effectively painting McGinty as out of touch with the financial needs of average Pennsylvanians. He won, she lost.

How then do the fortunes of one state senator rise on all of this? Senator Scott Wagner was an establishment pariah when he ran for an open seat in York County in 2014. Shunned by his own party Wagner accomplished an historic first in Pennsylvania: He won a special election on a write-in defeating both party nominees.

The upstart senator has quickly gained clout and was tapped by his colleagues to lead the Senate Republican Campaign Committee. The SRCC as it is known is tasked with recruiting, funding and electing Republicans to the state senate. After playing a major role in helping to win several seats two years ago, Wagner effectively recruited candidates like Senator-elect John DiSanto of Dauphin County who upended Democratic incumbents last week. Much of the credit for the senate’s now veto-proof majority goes to Wagner.

This is important because Scott Wagner has made no secret of his desire to run for governor in 2018 and is widely expected to announce his candidacy within weeks. Having built a strong senate majority gives him a leg up both on the Republican nomination and on a grassroots organization for the battle against Tom Wolf who is expected to seek re-election.

Thus the 2016 election has set the stage for the beginning of the next big electoral battle in Pennsylvania. Political fortunes have risen and fallen. And the never ending cycle of campaigns has already begun anew offering no respite for weary voters.

Mr. Henry is Chairman and CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal

Governor Wolf Hits Ill Winds

Trump Voter Guided By Conscience

Trump Voter Guided By Conscience

By Joseph B. Dychala

There is only one God, Who gives and sustains my life. There is only one country that provides for my Liberty.

I am Blessed with family who love me unconditionally, friends who care for me, I am part of a community that affords me necessary labor as well as desired leisure.

I am the individual, a single yet significant member of the civil society, as such I take my responsibilities very seriously. I am an educated citizen, informed on the issues, knowledgeable of history and current events, I always vote my conscience. I believe in the virtue of the soap box, the ballot box, the jury box and the cartridge box.

I adhere to a Biblical worldview, embody a conservative lifestyle and subscribe to a capitalist philosophy. I make no apologies. I seek no recompense. I ask only for opportunity. I reject fully the perverse notion government can give to me that which I have not earned at the expense of taking away from someone else who has worked hard for it. I revere the Constitution and respect those who have established it. I obey laws that are just and practice civil disobedience when necessary.

I understand and sincerely appreciate the sacrifices that a relative few have made to allow so many to live in such a great, free and prosperous nation. I pray that whenever called upon I may be granted the wisdom to identify, the courage to face and the fortitude to challenge tyranny in any and all forms.

I desire, nay demand: a secured border, a universal language and a common culture.

Trump Voter Guided By ConscienceThere are tens of millions like me. We will not sit down, We will not shut up. We will not stand idle while the very roots and fabric of our culture and our heritage are being ripped up and torn apart. I am a patriot. I am an American.

I am supporting Trump/Pence on Nov. 8.

Mr. Dychala is a resident of Aston, Pa.

Trump Voter Guided By Conscience

Frankenpension Means Failure

Frankenpension Means Failure

By Leo Knepper

A House and Senate conference committee in the Pennsylvania Legislature is taking another shot at  pension reform. In keeping with the Halloween spirit, they have resurrected their hybrid pension proposal one more time in an attempt to achieve “pension reform” by decree.

Unfortunately, this over-engineered proposal with many exempted employee groups will likely offer insignificant savings when measured in today’s dollars and by itself will do nothing to address the ever-increasing unfunded liability. The “everything will be fine” 30-year scenario touted by some, should be tempered by others who reference the risk of plan insolvency occurring over the next 15 to 20 years.

Frankenpension Means FailureIn fact, CAP continues to seek a single example in the US private-sector where such a similar plan design arrangement exists.
As we’ve noted on multiple occasions, the hybrid plan does not offer any meaningful protection for taxpayers particularly since the defined-benefit plan can always be retroactively increased. The House has been trying to sell this bad plan design since 2014. Every iteration since that time has gotten progressively worse. The “new and improved” stacked hybrid plan is no exception.

In an attempt to placate conservatives, the conference committee proposal will likely include a defined contribution option for new employees. On the surface, the inclusion of a defined contribution plan would seem to be a positive development. However, it does create a problem. As Rep. John McGinnis noted to Capitolwire (paywall):

“With multiple plans, one will do better than the others and in the future the members in the plans that are not performing as well will pressure elected officials for redress and will likely get it.”

As noted, this proposal does not address the $60+ billion in unfunded pension liabilities that currently saddle taxpayers. Furthermore, it is unlikely that the “reforms” in the pension proposal will include changes to how funds are managed and the annual expected rate of return assumption. Pennsylvania’s pension plans assume a 7.5 percent annual rate of return (PSERS adjusted their expectations to 7.25 percent starting in July). In an attempt to meet this optimistic goal, the pension plans use active fund managers instead of investing in index funds or other passive management strategies. Using active fund managers costs taxpayers $750 million per year. Last year that cost resulted in a 0.4 percent return for PSERS and a 1.29 percent return for SERS.

Underwhelming returns on investments and chronic underfunding of the pension plans and benefit improvements by politicians have created a mess for taxpayers in the form of massive unfunded liabilities. The pension reform proposals being bandied about do nothing to address those problems, nor do they adequately protect taxpayers. Instead, the conference committee’s Rube Goldberg reform proposal gives politicians the ability to tell voters that they “did something.” Pennsylvania’s current and future taxpayers who will be tasked with bailing out the system deserve real reform; not smoke and mirrors.

For those policymakers seeking a straightforward comprehensive solution to our ongoing pension woes, you should go no further than to read our recent blog post which highlights a recent op-ed authored by actuary Richard C. Dreyfuss.

Please take action now.

Frankenpension Means Failure

Happy Birthday William Penn

Happy Birthday William Penn

By Leo Knepper

On Oct. 14, 1644, Pennsylvania’s founder William Penn was born in London, England. Penn had a rebellious streak and was a man who was ahead of his time. Ivan Martin’s introduction to Penn’s book No Cross, No Crown provides a brief account of his life. By limiting himself to the highlights, Martin manages to condense Penn’s life to a mere seventeen pages.  Happy Birthday William Penn

Despite being born into an aristocratic family, Penn was kicked out of Oxford at the age of 17. At the age of 24, he was imprisoned in the Tower of London. Penn was imprisoned for his writings, which attacked the doctrines of the Church of England. The Bishop of London ordered Penn’s indefinite imprisonment until he recanted his previous statements in writing. Instead, he used the supply of paper and ink to write No Cross, No Crown. Penn spent eight months in the Tower before he was released; without recanting. Essentially, Penn spent eight months in an unheated cell in solitary confinement for his religious beliefs. One of his more famous quotes neatly encapsulates his personal philosophy, “Right is right, even if everyone is against it, and wrong is wrong, even if everyone is for it.”

Penn’s numerous encounters with the courts and persecution by English authorities inspired many of the innovations he included in Pennsylvania’s first Constitution. Penn used the Constitution to limit the power of government, a novel idea at the time. He was the progenitor for many of the liberties enumerated in the United States Constitution and Bill of Rights including a free press, trial by jury, religious tolerance, and the amendment process itself. Penn also insisted on low taxes. His focus on freedom and free enterprise led to an explosion of growth for Penn’s Woods.

William Penn’s guiding principles and dedication to his “Holy Experiment” paid dividends for Pennsylvania’s earliest settlers and American’s today.

Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.

Happy Birthday William Penn

Left Rigged Game With Strawman Labels

Left Rigged Game With Strawman Labels

By John Haenn

Does anyone even know what conservatism is anymore?  It’s this little idea that’s been grossly and probably purposely undersold to the American public since the days of Reagan.

Conservatism is the idea that given a strong country, strong economy and freedom, that people can fend for themselves.  This gets countered as conservatives wanting people to be poor and starve to death.  Thank goodness that we have all of these government programs to keep these people barely alive, barely eating, barely having shelter.

Conservatism is the idea that an intact country is a country that has a border.  It’s a country that has laws that allow people to immigrate in both directions legally through a process.  This gets countered as conservatives wanting America to be closed to the world, a racist and harsh America that looks down on peoples all over the world.

Conservatism is the idea that a smaller government is a better government.  This goes completely ignored, because while we are all holding onto our conservative values, the left is selling the idea that jobs, food, housing and happiness all come from the government.  They do a damn fine job selling this to the American public.

The American public is bought and paid for.  And it’s our fault.

For 20 years, we’ve done nothing to expand our base.  We don’t educate blacks and minorities about how better off they’d be living in a country that embraces conservative principles.  We don’t control the conversation at all.  We’re not doing any talking.  We’ve allowed ourselves to be demonized to the point where it will take a generation to undo the damage, and even that may not be enough.  We may simply be done.

A.  Did we feel we had safety in numbers?
B.  Did we feel that we’d win elections on principle, because the good guys always win?
C.  Did we think that since our ideas are good that people would just jump on board?
D.  Did we assume that blacks and minorities are unreachable?
E.  All of the above.

Answer, E.

Left Rigged Game With Strawman LabelsBut while we’ve slept, the left has undone everything that we accomplished under Reagan.  And they’ve done more.  They’ve infiltrated our party with left leaning Republicans who on some issues will side with the big government liberals every time.  Think of it like a casino.  We win some battles, but the game is rigged towards the Democrats.  This holds true regardless of who controls which chamber or both chambers.  In reality, we have 1 political party; The Elite.

Our Elite Overlords.
The elite whom decide our Freedoms.
The elite whom decide our Success.
The elite whom decide our very Survival.

From cradle to grave, this Elite Party controls every part of our lives, from birth, education, family, health and death.

What do we do?  As I said, we may simply be done.  Welcome to Rock Bottom, nation.  The national debt is unthinkable.  Total unemployment is 30 percent and probably higher.  There’s no manufacturing.  No innovation.  No invention and no drive.  We’ve run out of time.  Reagan’s City On A Hill is going dark.

If we have any hope of saving the country, we must begin first with honestly admitting where we currently are as a people.  The picture is not good.  The outlook is worse.  The kind of urgency needed in the righting of the ship is not often seen in human history, but we have no choice.  This land was chosen as the last best hope of mankind, and as Ronald Reagan once said, “How can we do any less; we’re Americans.”

A young nation turned to George Washington in their darkest hour.  Who will step up this time?  Who will be the voice to mend a torn nation?

Mr. Haenn is a resident of Collingdale, Pa.

Left Rigged Game With Strawman Labels

Pennsylvania Spends, Gets Bad Roads

Pennsylvania Spends, Gets Bad Roads

By Leo Knepper

Lowman Henry, last week, discussed the slow-motion fiscal train wreck that the Pennsylvania Turnpike faces. At the end of August, we noted that Montgomery County Commissioner Joe Gale was pushing back against his colleagues who were trying to enact a new tax on County drivers. In both instances, readers noted that it was only natural for Pennsylvania to spend so much on road work due to the volume of roadways the state maintained.

It is reasonable to argue that there is a direct relationship between the miles of road and the funds required to maintain those same roads. However, that argument ignores the issue of whether or not the money is spent efficiently. In the case of the Turnpike, some of the funds it sends to PennDOT are used to subsidize mass transit, which are some of the most inefficiently operated systems in the state. Furthermore, people should pay for the services they use. If someone uses mass transit, the ticket price should cover the cost. Likewise, tolls from the Turnpike should fund the Turnpike.

Returning to the original issue of whether or not the taxes being collected to spend on roadwork are being spent efficiently by PennDOT, one way to determine the answer to this question is to look at spending on a per mile basis. According to the Reason Foundation’s Annual Highway Report, Pennsylvania spends more per mile than 27 other states, $160,477. Regarding overall efficiency, the Report calculated that Pennsylvania’s overall rank was 39th when road conditions and other measures were taken into account.

Taxpayers and drivers shouldn’t expect an improvement in Pennsylvania’s standing next year. The Report relied on 2013 data, meaning it was before the gas tax increase enacted by Governor Corbett. As we noted in 2013, the General Assembly’s failure to reform how transportation dollars were spent would result in even more waste. We fully expect that prediction to be born out in the future.

Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.

Pennsylvania Spends, Gets Bad Roads

Pennsylvania Spends, Gets Bad Roads

PennDOT Killing Pennsylvania Turnpike

PennDOT Killing Pennsylvania Turnpike

By Lowman S. Henry

The Pennsylvania Turnpike is America’s first superhighway. It also has become one of the most expensive roads in the country to travel. If you are in a passenger car driving the entire length of the turnpike from the Delaware River Bridge in the east to Gateway in the west it will cost you $42.30 if you pay cash, $30.32 if you have an E-Z Pass.PennDOT Killing Pennsylvania Turnpike

Traversing the Pennsylvania Turnpike gets more expensive for truck traffic, significantly more expensive. That same east-west trip for the heaviest and largest of trucks costs $1,634.35. As if that isn’t bad enough, recent annual fare hikes are projected to continue into the foreseeable future.

Pennsylvania is known as the Keystone state and for good reason. Geographically we are centrally located for both north-south and east-west traffic destined for some of the nation’s most populous cities. For decades the turnpike has been a key traffic route, but now both freight haulers and passenger cars are seeking out other routes – such as Interstate 81 that, while a bit out of the way for some, charge no tolls.

These facts have not escaped the attention of state Auditor General Eugene DePasquale who recently sounded alarm bells over the turnpike’s fragile fiscal situation. In his audit of turnpike practices DePasquale said: “The plan for the turnpike’s financial future relies on projection calling for a 215 percent increase in toll revenue between 2015 and 2035 and a 44 percent increase in traffic volume through 2044. However, traffic volume has remained relatively flat over the last decade.”

These two projections are inherently contradictory as basic economics dictates that consumers use less of a product as prices rise – especially if prices rise at a much faster rate than the income of the purchaser. Thus, we can expect the past decade’s “relatively flat” traffic volumes to either remain so, or perhaps even decline as such significant toll hikes continue to be implemented.

It would be easy to blame mismanagement and the turnpike commissions’ often criticized hiring and contracting practices for these annual rate hikes. But, in this case the problem has been caused by the state legislature, not by turnpike administration. Act 44 of 2007 requires the Pennsylvania Turnpike Commission to make payments of $450 million per year to the Pennsylvania Department of Transportation (PennDOT). PennDOT which spends the money on highway maintenance and on subsidizing mass transit operations. Since the passage of Act 44, $5.2 billion in fare revenue has been diverted from turnpike operations to PennDOT.

Act 44 was passed with the unrealistic expectation that Interstate 80 would be converted to a toll road operated by the Pennsylvania Turnpike Commission. That revenue would offset the mandated subsidy to PennDOT. State officials appealed to both the Bush and Obama administrations for approval of the scheme, but were rejected. As a result the turnpike has been saddled with making annual payments to PennDOT and no source to fund those transfers except annual fare hikes.

The legislative mandate is also having another impact: the turnpike is reducing planned spending on maintenance, improvements and expansion.

An ambitious rebuilding plan that includes expansion of the turnpike to six lanes in many areas has already been reduced by $1 billion over the next ten years. DePasquale pointed out the folly of the situation stating: “You can’t cut back on construction and increase traffic 44 percent, especially while jacking up the toll rates.”

The subsidies to PennDOT are scheduled to end in 2022, but by then the turnpike’s financial situation will dire. Worse, legislators will then have to determine how to fund the insatiable appetite for subsidies required by the state’s money-losing mass transit systems.

This problem should have been addressed two years ago when the legislature passed and Governor Tom Corbett signed into law a defacto 30-cent per gallon increase in gasoline taxes. That would have been the time to end “haphazard funding gimmicks” such as Act 44 and placed both the Pennsylvania Turnpike and PennDOT on solid financial footing.

It didn’t happen then. But it needs to happen now before, as Auditor General DePasquale concluded, the system collapses “and leaves the turnpike and people who rely on public transit systems across the state in a world of hurt.”

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is lhenry@lincolninstitute.org.)

PennDOT Killing Pennsylvania Turnpike

Wallet Guarding Time Looms

Wallet Guarding Time Looms

By Leo Knepper
In early August we mentioned that the “balanced” budget passed by the General Assembly was falling apart. At present, not one casino applied for the $1 million liquor license authorizing them to sell liquor twenty-four hours a day. Also, the tax that General Assembly levied on electronic cigarettes is going to bankrupt small businesses.

Wallet Guarding Time LoomsWhen the General Assembly returns later this month, the House and Senate will be looking for ways to fill the holes. The smart thing to do would be to cut spending and trim back corporate welfare. For example, does Pennsylvania really need a $4 million tax credit to attract big name performers to second tier cities? Or, $250 million for a race horse development fund?

The taxpayer friendly answer is no.

The average Pennsylvanian does not benefit from the various flavors of crony capitalism baked into state spending. Unfortunately, that doesn’t stop the General Assembly from adding new items “economic development” programs without concern for the people paying the bill.

As we learn more about the tax options being considered by the House and Senate, the Citizens Alliance of Pennsylvania will pass that information along to you.
Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.