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Budget Battle Ends With Electoral Dud


The final pieces of legislation ending Pennsylvania’s longest budget stalemate fell into place just days before the April primary election. And the story that dominated state news for over nine months had no apparent impact on voters who meted out no electoral punishment for the fiscal fray that had school districts on the cusp of closing, nonprofits cutting services, and politicians at each other’s throats.

This budget stand-off was different from those that took place during the Rendell era notably due to the lack of public pressure placed on Governor Wolf and the legislature.  There were no daily protests on the capitol steps. State employees did not go without pay.  When the battle commenced last summer Governor Wolf’s first salvo was an attack ad campaign. It fell flat. Outside the halls of state government and the few remaining news media that cover it, the budget battle went largely unnoticed.

Despite Governor Wolf’s threats of electoral retribution, lawmakers did not pay a political price for engaging in the budget battle.  The first clue that the fiscal free-for-all was not impacting the electorate came in February when there was no wave of candidates filing to oppose incumbent legislators.  Looking at the primary election results it would be difficult if not impossible to point to a single lawmaker who lost his or her seat because of the sustained budget stand-off.

In fact few lawmakers lost for any reason.  And those that did lose were a result of local political divisions rather than anything that happened in Harrisburg.  In Philadelphia, for example, Democrats engaged in their biannual exercise of primary fratricide.  The state’s longest serving House member – State Representative Mark Cohen – was defeated by a challenger who claimed he had been in office too long and was out of touch with his constituents.

Another rare defeat of a House incumbent took place in Lackawanna County where State Representative Frank Farina lost to former legislator Kevin Haggerty.  The two former colleagues found their districts merged in redistricting a couple of years ago and have been battling over the seat ever since.

While voters were busy returning incumbents to office some lawmakers even got a promotion.  State Representative Mike Regan ran for and won the Republican nomination to replace outgoing state Senator Pat Vance in Cumberland County.  In what was a hard fought and nasty campaign the budget crisis did not register as a key issue.

For Republicans looking to hold onto historic majorities in both the Senate and the House the future looks bright.  Senate Republicans could actually achieve a veto proof majority as the fall battles will be fought over swing seats currently occupied by Democrats.  On the House side, the primary yielded solid GOP nominees for open seats like Dawn Keefer in Cumberland County and Frank Ryan in Lebanon County.  Conversely, Democratic retirements in western Pennsylvania provide the opportunity for additional Republican pick-ups in an area already trending toward the GOP.

Further evidence of the impotence of the state budget battle on the electoral process can be found in the race for the Democratic nomination for the U.S. Senate.  Governor Wolf’s first chief of staff, Katie McGinty, was one of the prime architects of the budget proposal that triggered the lengthy stand-off.  She resigned last summer to run for the U.S. Senate and prevailed against three opponents in the primary.

Why did the epic budget battle fall so flat with voters?  Chalk it up to a lack of attention being focused on state government.  Or the fact the absence of a state budget had little impact on the daily lives of Pennsylvanians.  Timing was also a factor.  With the nation transfixed by the presidential race scant coverage has been afforded other matters.

And so we find ourselves back to where we began.  Another budget season is underway in Harrisburg.  Governor Wolf is pushing for more spending and higher taxes, Republicans are adamant in their refusal.  The fight will continue, apparently without consequence for anyone involved.

(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.)

Permission to reprint is granted provided author and affiliation are cited.

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PA Business Leaders Reject Wolf Tax Plans


The Governor of Pennsylvania decided to use his perceived electoral mandate to take on one of the biggest issues that has confronted and confounded the commonwealth for decades: property tax reform.  So he advanced a plan that would raise sales and personal income taxes in exchange for a cut in property taxes.

Sound familiar?  The year was 1989 and the Governor was Robert P. Casey whose tax reform plan was put on a statewide ballot referendum and was soundly defeated by voters.  Fast forward to 2015 and Governor Tom Wolf has placed on the table a property tax reform plan that strongly resembles the doomed Casey proposal. Except the Wolf plan doesn’t even include the dollar for dollar reductions required of the Casey effort.

As despised as property taxes are, and polling consistently finds the levy to be the most disliked, finding an acceptable alternative remains elusive.  The Wolf plan appears to have little support in the General Assembly; in fact House Republicans have passed their own proposal.  But it too fails to totally eliminate school property taxes leaving the door open for millage rates to simply increase again over time.

An indication of how unpopular the Wolf tax reform plan is can be found in the recent Keystone Business Climate Survey of business owners and chief executive officers conducted by the Lincoln Institute of Public Opinion Research.  Nearly 70% of the business leaders said the Wolf property tax shift would result in only a temporary drop in property taxes which would then go back up.  Another 14% predicted his plan would actually lead to property tax increases; only 15% expect to see property taxes decline under the Wolf proposal.

Not only does the poll demonstrate disapproval of the Wolf property tax plan, but the survey found the biggest six month decline in business climate optimism since the onset of the Great Recession in 2008.  In fact, in the 20 year history of the poll only during that recession and in the aftermath of the 2001 terrorist attacks has business climate optimism dropped so far so fast.

Last September, for the first time since George W. Bush was re-elected in 2004, more business leaders said the state’s economic climate had improved that felt it had gotten worse.  The indicator rose into positive territory by just 1%, but it capped a steady move in a positive direction.  All of that has changed.  The number of owners/CEOs saying business conditions have improved over the past six months has fallen to just 13%, while the number saying business conditions have gotten worse has nearly doubled since last Fall.

The only variable to change during that six month period was the election of Governor Tom Wolf.  Governor Tom Corbett left office with a 52% job approval rating.  Governor Tom Wolf’s first job approval test yielded just 15% approval with 69% of the state’s business leaders saying they disapprove of the job he is doing.

Driving the dour mood among the people who actually run businesses – big and small – is a general disapproval of Governor Wolf’s budget proposals.  A total of 78% disapprove of his proposed budget.  Overall 80% say the governor’s proposed state budget will harm the state’s business climate.  As a side note, Pennsylvania’s high tax rates and stringent regulatory policies are viewed by the owners/CEOs as the biggest impediments to conducting business in the commonwealth.  They now fear that situation is about to get even worse so the state’s job creators are bracing themselves for higher taxes.

Overall the survey results represent a sound and complete repudiation of Governor Tom Wolf’s first proposed state budget along with the major revisions and tax hikes contained within the proposal.  Like Governor Casey before him, his ambitious tax reform plans are deeply unpopular and may be destined for the same fate.

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

Permission to reprint is granted provide author and affiliation are cited.

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As Montgomery County Turns


By: Albert Paschall

Some days in retirement I miss the soap opera “As The World Turns.”

Its cheesy plots, thin acting and poor attempts at humor were often a lunch time treat until the historic series ended just over a year ago.

But I no longer have to miss the drama.  Cheesy plots, bad acting and poor judgment are all alive and well.  All one has to do is follow the politics of Montgomery County.

Last week, County Commissioner Chairman Jim Matthews was indicted for perjury.  An 18 month grand jury investigation into a number of ‘irregularities’ resulted in him being charged, surrendering to county detectives in a convenience store then being perp walked, with handcuffs high on his chest, before a well briefed press corps to be the ‘big story’ that night on all of Philadelphia’s TV stations.

The irregularities have been well documented.  Just take a look at the archives of the Norristown Times Herald or The Philadelphia Inquirer.   Political payoffs for lucrative health care contracts, the squandering of the American Revolution Center Museum that Matthews called “a great move” and ultimately Matthews’ real sin: his unbridled ego since he was selected by Lynn Swann 5 years ago as the Republican candidate for Lieutenant Governor.   That ego notwithstanding the fact that Rendell and Matthews’s opponent, the aged Katherine Baker Knoll, massacred them with a 4 to 1 win.

That ego was his downfall.  Indicted at the end of his twelve year tenure for his real crime, at least in Republican circles, of doing a deal with Democrat Joe Hoeffel to be county chairman.   A job that has as much power as an earthworm in heat.  But Matthews was enthralled with rubbing elbows with what he considered the elite.  In his own words he was a ‘regional commissioner’ loving his time with the kind of Democrats that his brother Chris, the outspoken cable TV talking head, adores.

But is Jim Matthews guilty?  Did he need to be paraded and humiliated before the media?

No.  Jim Matthews is as guilty of perjury as Bill Clinton was guilty of having sex with that woman.   When asked by the prosecutor if he owned a title company that did business with the county his answer was no.  What would he have answered if he was asked did he own shares of that title company?   We’ll find out after Montgomery County taxpayers and Jim Matthews spend thousands of dollars on a worthless case.

But in the end Matthews’ legacy will live on.   Those who prosecute him actually escape his real heritage.  In November, for the first time since the Civil War, the Democratic Party won a majority on the board of commissioners and will soon control Montgomery County.  Who knows now how it will go in the next episode of As Montgomery County Turns?

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Albert Paschall is a Senior Fellow at The Lincoln Institute of Public Opinion Research, a non-profit educational foundation based in Harrisburg, Pennsylvania.  He is a Director Emeritus of the Montgomery County Chamber of Commerce.

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Practical Conservatism: Toomey Bridges the Partisan Divide


By Lowman S. Henry

U.S. Senator Pat Toomey has been in office for less than a year, but in that short period of time he has emerged as something rare in present day Washington, D.C. – a principled officeholder who is willing to work with the other side of the aisle to arrive at solutions to the serious problems which confront our nation.

This is not easy to do, which is why so few members of congress are even trying. Two successive wave elections have sent to the national legislature groups of representatives who are polar opposites both in terms of party affiliation and ideology. This has gridlocked congress both rhetorically and legislatively.

The danger for any senator or congressman is that the slightest movement away from ideological orthodoxy results in immediate condemnation from their party’s base, seemingly making compromise impossible. But, for those willing to peel back the outer layers of the policy onion there are often obscure and archane details that provide opportunity for agreement and progress.

And so it was that Senator Toomey became the only member of the so-called “super committee” on deficit reduction to actually put on the table a new proposal that remained true to principle, but offered significant movement toward compromise. Unfortunately, no statesman emerged on the other side to reciprocate Toomey’s gesture, although apparently the freshman senator’s plan did cause other members to pause to consider.

The genius of Toomey’s plan was that it would have actually cut tax rates for a majority of taxpayers, while generating additional revenue through the closing of certain loopholes. As a former president of the Club for Growth, Toomey had a “Nixon goes to China” moment in that he is one of the few members of congress who could propose generating more tax revenue without getting totally ground up by conservatives, while giving Democrats some of the additional tax dollars they crave.

In the end, it wasn’t enough for the Democrats on the “super committee,” and even Toomey could go no further. But, given that Toomey was the only member of the committee to actually appear to be reasonable, thoughtful, and creative, it allowed him to emerge intact from what was otherwise a “super committee” train wreck.

In recent weeks Senator Toomey has further solidified his status as a bridge over the great partisan divide by teaming with Senator Claire McCaskill (D-MO) to introduce legislation aimed at banning congressional earmarks. The practice of earmarks – allowing members to insert pork barrel spending projects into legislation – has fueled the federal deficit. Ending earmarks is a vital first step toward fiscal restraint by congress, but is often seen as a conservative Republican issue. By joining forces with McCaskill, Toomey has transformed it into a good government issue.

There is no more highly partisan member of the United States Senate than Senator Charles Schumer (D-NY). Schumer is an unashamed liberal who is the driving force behind his party’s electoral machine. But, last week Schumer and Toomey introduced a bipartisan plan to remove barriers standing in the way of private firms seeking to go public. Such a material change in corporate structure has resulted in job growth at 90% of the private firms that have gone public.

In announcing the plan Senator Schumer said: “During difficult economic times, it is critical that we give growing innovators the breathing room they need to access public markets. This is a common sense set of reforms that can bridge the partisan divide and have a real impact on job creation.” An argument can be made that if you can bridge the partisan divide between Chuck Schumer and Pat Toomey you have built a very solid structure. The bill stands an excellent chance of becoming law, and will ultimately have a profound positive effect on job creation.

It has often been said that “the devil is in the details.” But what Pat Toomey has demonstrated in recent weeks is that the solution may also be in the details. Both his proposal to the “super committee” and his bill to allow companies easier access to the capital markets show that the way forward is to address the smaller, more technical issues upon which consensus can be built. Eventually, after taking care of enough of the smaller issues, a path will emerge to resolving the larger ones.

(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.)

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Uncertainty Stifling Job Creation


The Occupy Wall Street protestors are focused on the wealthiest one percent of Americans and President Barack Obama is engaging class warfare in an effort to raise taxes on the rich. These tactics might provide an outlet for the frustration of protestors, or a possible source of paying for the president’s big government programs. However, neither approach will do anything to stimulate the main engine of job creation in America – small and mid-sized businesses.

Decision makers in those businesses are not creating new jobs, at least not at the pace necessary to fuel a robust rebound from the economic recession. The primary reason why these businesses are not growing can be summed up in one word: uncertainty. In order for the owner or manager of a business to risk creation of a new job he or she must have confidence that the new payroll commitment can be met. Absent that confidence, most business leaders will sit tight, wait for the cloud of uncertainty to be resolved, and then move forward.

Right now uncertainty abounds. At the federal level, confusion reigns over the ultimate financial impact of the nation’s new health care regulations. Health care costs have been rising steadily and remain outside the control of most business managers. The only predictable action is to not hire, thus avoid incurring the expense entirely. Add to that the temporary nature of the Bush era tax rates, the potential of tax hikes to help lower the national debt, and the regulatory fervor of the Obama Administration; the nation’s job creators face uncertainty at every turn.

Twice each year the Lincoln Institute conducts the Keystone Business Climate Survey. The poll surveys the actual owner, top manager, or chief financial officer of businesses throughout the state. These are the people working where the rubber meets the road of the nation’s economy. The most recent poll asked the question: In your opinion what is the main reason job creation continues to remain stagnant? It was an open-ended question with no suggested answers, just a blank for participants to write in their own answer. Uncertainty, a lack of confidence in the federal government, and over-regulation came back as the clear reasons.

Those concerns explain why employment levels dropped at 27% of the companies surveyed, while it rose at 25% of the businesses – essentially leaving hiring in the commonwealth stagnant. With unemployment in the 9% range, stagnant is not a good place to be. Further, 36% of the respondents said business conditions in Pennsylvania had gotten worse over the past six months while just 12% thought the economy had improved; a marked decrease in confidence since last spring’s survey. And, looking ahead 29% expect business conditions to continue deteriorating over the coming six months with just 22% expecting the economy to improve.

Against this backdrop of government-created uncertainty and lack of confidence the president has proposed spending another $447 billion on a so-called jobs bill. His proposals would add to the number of government jobs, those paid for by taxpayer dollars. But, the Keystone Business Climate Survey found it would do little to spur the creation of private sector jobs. Seventy-three percent of those polled by the Lincoln Institute said they do not expect the Obama plan to actually lower the nation’s unemployment rate. Seventy-six percent said the proposed $4,000 per job tax credit would not cause them to add to their payrolls; 71% said cutting the employer’s share of FICA taxes in half would not result in their creating new jobs.

That is because the Obama jobs bill not only fails to address the core underlying causes of the nation’s unemployment ills, but it actually adds to those concerns by increasing federal spending making future tax hikes – some to be paid by businesses – more likely. In other words, the policies of the Obama Administration have dug our economy into a very deep hole and the president is now proposing to dig deeper faster.

Employers in Penn’s Woods are like entrepreneurs all across America. They want to grow their businesses. They want to expand, to add new jobs, to do their part to fuel a robust recovery from the economic recession. The reason they are not is government-induced uncertainty. Add in all the class warfare rhetoric and upheaval in the streets, and that uncertainty grows by the day. What also grows is the certainty that the economy will not rebound until the federal government changes course.

(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.)

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This Week on American Radio Journal: Governor James Gilmore


September 17, 2011 – September 23, 2011

This week on American Radio Journal:

Lowman Henry talks with former Virginia Governor James Gilmore now head of the Free Congress Foundation about the President’s jobs proposals

Andy Roth of the Club for Growth has the Real Story on GOP wins in two special Congressional elections

Adam Tragone of Human Events has an Off the Cuff interview with Jeff Lord about his American Spectator article on the political philosophy of Ron Paul

Dr. Paul Kengor from the Center for Vision & Values at Grove City College has an American Radio Journal commentary on why the rich are paying their fair share of taxes.

This week on Lincoln Radio Journal:

Kevin Shivers from the PA Chapter of the National Federation of Independent Business and Matt Brouillette of the Commonwealth Foundation discuss President Obama’s jobs proposals and the impact of union power on the state economy

Lowman Henry has a Town Hall Commentary on why unemployment is Barack Obama’s Iranian hostage crisis.

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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