Posts Tagged editorial

R.I.P. PA Constitution 1968-2016

Governor Tom Wolf has been in office for just over a year, but already we know historians will put the words “budget crisis” in their lead paragraph.  But a far more ominous phrase may get top billing: “constitutional crisis.”

Like his authoritarian counterpart in Washington, D.C., Governor Wolf is willing, in fact may prefer, to shred the constitutional separation of powers and enact by executive fiat that which the legislative branch is unwilling to do.  The commonwealth has entered its ninth month without a completed state budget and that has spawned a growing debate over the limits of gubernatorial power.

Days before Christmas the legislature again passed a state budget.  This time Governor Wolf signed off on most of the spending plan but “blue lined” or line item vetoed about a third of the items thus extending the budget crisis.  Three months later, there is no resolution, but the administration is spending money anyway.  This, many lawmakers argue, is a clear violation of the state constitution.

The Governor, and his appointed State Treasurer Timothy Reese argue there is a competing requirement for the state to keep certain agencies operating – especially those involved with ensuring public safety.  But Treasurer Reese has gone far beyond that even authorizing a “loan” from the state treasury to House Democrats to pay their staff during the ongoing budget crisis.

The public safety argument is nothing more than a distraction from the main issue which is can a governor spend taxpayer dollars without explicit authorization from the General Assembly?   It is a clear violation of the state constitution and one which will explode into a full blown crisis, especially if the governor’s illicit spending extends outside the realm of public safety.

The budget, however, is not the only area in which Governor Wolf is willing to trample on legislative powers.  He is trying to shutter the Public Employees Retirement Commission (PERC), an obscure state agency that earned his ire when it disagreed with his view of the pension crisis.  The agency was created by an act of the General Assembly and signed into law by a previous governor.  Lawmakers have sued in court to block executive dissolution of PERC pointing out it would take legislative action to do so.

This week Governor Wolf again by-passed the General Assembly on the issue of the state’s minimum wage. The governor has called for an increase in the state minimum wage, but the legislature has refused to go along.  So, he signed an executive order unilaterally raising the minimum wage paid to state employees to $10.15 per hour.  The action applies only to state workers, but will be extended to those companies doing business with the state.  The minimum wage hike does not extend to private business.

However, the impact on small businesses will be significant.  Neal Lesher, legislative director for the National Federation of Independent Business-Pennsylvania, points out that the governor’s executive order effectively prevents many small businesses from entering the bidding process for state contracts.  “Some small businesses simply cannot afford to pay inexperienced, entry level workers that much more per hour,” Lesher explained.  “This creates an unfair playing field that favors larger companies.”

Having fully bought into the Obama “pen and phone” style of governing there is no indication Governor Wolf plans to return to a constitutional model any time soon.  His “budget address” to the legislature last month was hostile and confrontational and had the effect of solidifying Republican opposition which at times had shown signs of wavering.

It is clear crisis government is now the new normal in Harrisburg.  With no resolution to the current budget impasse in sight, and the deadline for adopting a budget for the next fiscal year less than four months away, the governor is content to act as if the legislative branch of government does not exist.  But legislators will not sit idly by and be consigned to irrelevance.  If the governor continues on his current course the constitutional crisis will explode into the courts, and possibly even lead to impeachment proceedings.

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

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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

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