Posts Tagged tom corbett

Leave Us Alone


It was a simple, yet revealing summary of the problems plaguing Pennsylvania’s businesses.  “Please stop trying to ‘fix’ it,” the business owner begged. “Leave us alone.”  That plaintive plea came as three new studies show our state’s economy is sagging under the weight of new regulations, higher taxes, and unsustainable government spending.

Recovery from the Great Recession of 2008-2009 has been one of the slowest in history.  But, some states have bounced back faster and farther than others.  Pennsylvania is not one of those states.  The Fall 2016 Keystone Business Climate Survey conducted by the Lincoln Institute of Public Opinion Research found half of the business owners/chief executive officers surveyed saying the state’s business climate has gotten worse over the past six months, and only five percent reporting improving business conditions.

Like other states the people who actually run businesses reported a dramatic deterioration in economic conditions in Pennsylvania during the Great Recession. Optimism returned briefly during the Corbett Administration, but tanked less than three months into Governor Tom Wolf’s tenure.

Governor Wolf began his administration pushing for historic increases in both state spending and in taxes.  The Republican-controlled legislature successfully derailed that effort last year, but then caved into $1.4 billion in higher spending this year – earning the disapproval of 86% of the owners/CEOs.  All of this creates a climate of uncertainty leaving one owner to comment: “We expect another shoe to drop making it difficult to operate in Pennsylvania.”

The biggest shoe that hasn’t dropped is who will pay to bail out Pennsylvania’s massively underfunded public pension system.  Business owners fear a significant portion of that burden will fall upon them.  And the problem is, to use a currently popular word, huge.

The American Legislative Exchange Council (ALEC) recently released a study of state pension systems entitled Unaccountable and Unaffordable.  It pegged Pennsylvania’s unfunded pension liability at nearly $212 billion dollars.  The commonwealth has amassed the 44th largest unfunded pension liability among the fifty states.

Compounding the problem is Pennsylvania has little room in which to maneuver in finding new revenue streams (taxes) to fund the public pension system.  The Tax Foundation’s State Business and Tax Climate Index found we have the 24th highest state tax burden in the nation.  We already have the most damaging taxes on the books: the Personal Net Income tax, Corporate Net Income tax, and a broad-based state sales tax.  Already suffering from a poor tax climate, any move to expand, increase or create new taxes would further erode our competitiveness.

These factors weigh heavily on the minds of business owners/CEO as they consider locating or expanding in Pennsylvania.  Forty percent said Governor Wolf’s proposed tax hikes have caused them to not expand their businesses.  That factor was second only to the explosion of new federal regulations in impeding business growth.

Why should non-business owners care about all of this?  Business relocation into Pennsylvania and the expansion of existing businesses will result in the creation of new jobs.  Penn’s Woods has lagged the national average in job creation in large measure due to state taxes and regulations.  The 2016 Keystone Business Climate Survey found 21% of the responding businesses reduced their employee compliment over the past six months while only 11% added employees.

Thus Pennsylvania continues on a downward spiral.  And there is little optimism among those on the front lines of business activity in the state for improvement at any point in the near future.  Uncertainty is Kryptonite to business development.  At the state level uncertainty abounds.  Governor Wolf continues to press for increased spending and higher taxes at a time when the commonwealth already faces a structural budget deficit.  The recent record of legislative Republicans has shaken confidence in their ability to either deal with cost drivers like the pension crisis or to successfully oppose future tax hikes.

The bottom line is Pennsylvania’s business climate will not improve, and significant job creation resume, until and unless state government gets spending under control, addresses the looming pension crisis, cuts onerous regulations and provides some measure of tax relief to businesses ready to expand but which are being held back by the heavy hand of government.

(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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An Alternate Universe


News Item: “A cosmologist from the California Institute of Technology (Caltech) believes he may just have found proof that an alternate and parallel universe does indeed exist.”  — Tech Times, November 5, 2015

The existence of an alternate or parallel universe has been the subject of scientific curiosity almost since the beginning of civilization.  But, the Caltech “proof” aside, recent statements by Left wing politicos does indeed prove that there is an alternate universe – because they are living in it.

Here in Penn’s Woods Philadelphia’s new progressive mayor, Jim Kenney made his first trip into the alternate universe within days of taking office.  City police officer Jesse Hartnett was shot point blank while sitting in his patrol car by one Edward Archer.  Archer was dressed in Muslim garb and said he shot the officer because “police bend laws that are contrary to the teachings of the Quran.”

Kenney immediately took to the podium to proclaim: “In no way shape or form does anyone in this room believe that Islam or the teaching of Islam has anything to do with what you’ve seen . . .”   Thus, Kenney continued the great tradition of the Left denying that radical Islam is at the heart of the terror assaults sweeping the globe.  Even when faced with an individual directly linking his actions to radical Islam, Kenney felt compelled to contradict the perpetrator’s own declaration of his motives.

In doing this Kenney takes his cue from President Barack Obama who refuses to even utter the words “Islamic extremism,” and as recently as his State of the Union message a couple of weeks ago continues to pretend the Islamic State of Iraq and Syria, commonly known as ISIS, does not pose a significant threat to our national security.  In fact, just days before the Paris terrorist attacks he emerged from the Left’s alternate universe to proclaim that ISIS had been “contained.” Since making that comment ISIS sympathizers have carried out numerous attacks including the massacre of 14 people in San Bernardino, California.

Also spending time in the alternate universe of the Left is Pennsylvania Governor Tom Wolf.  One of the biggest planets in that alternate universe is the one on which dwells the fiction of public education spending cuts under former governor Tom Corbett.  Governor Wolf has made reversing those non-existent cuts his number one priority.  But when Republicans in the state legislature passed a budget giving him $400 million more in education spending, Wolf applied Common Core math to proclaim it was a $95 million funding cut.

Lest I be accused of lacking diversity, female politicians also populate the Left’s alternate universe.  Commenting on the selection of South Carolina Governor Nikki Haley to deliver the Republican rebuttal to President Obama’s State of the Union Address Democratic National Committee Chair-human Debbie Wasserman Schultz said: “It’s pretty clear that Nikki Haley is being chosen because the Republican Party has a diversity problem.”  Of course you demonstrate a lack of diversity by having a female of Indian background represent your party.

Days later, the white Democratic presidential candidates – which are, well, all of them, debated.  The GOP field has included an African-American, two candidates of Cuban descent, an Indian-American, a woman, and one guy who is good at getting people off beaches in a storm.

That brings us to Hillary Rodham Clinton’s alternate universe in which she claims that GOP presidential front-runner Donald Trump has a “penchant for sexism.”  In making that statement Mrs. Clinton opened a black hole to that universe into which the outspoken billionaire poured the reality of former President Bill Clinton’s well-known dalliances with various women, one of which got him impeached.

And so, with all due respect to Caltech and the scientific community, the Left-wing of American politics has already pretty much proven the existence of an alternate and parallel universe.

(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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This Week on Lincoln Radio Journal: Nate Benfield Analyzes Corbett Budget Address


Radio Program Schedule for the week of February 8, 2014 – February 14, 2014

This week on American Radio Journal:

  • Lowman Henry talks with Morton Blackwell of the Leadership institute about proposed new IRS regulations designed to silence conservative groups
  • Andy Roth of the Club for Growth has the Real Story behind the Congressional Budget Office saying Obamacare will result in the loss of millions of jobs
  • Benjamin Yount and Mark Lisheron have a Watchdog Radio Report on mainstream media bias in covering the CBO’s Obamacare report
  • Colin Hanna of Let Freedom Ring, USA has an American Radio Journal commentary on why conservatives should talk more about American values

This week on Lincoln Radio Journal:

  • Eric Boehm and Maura Pennington have news headlines from www.paindependent.com
  • Lowman Henry gets analysis of Governor Tom Corbett’s budget address from Nathan Benefield of the Commonwealth Foundation
  • Eric Montarti talks with Dr. Jake Haulk about the recently enacted transportation bill on the Allegheny Institute Report
  • Jennifer Stefano has a Stefano Speaks! commentary on Paycheck Protection

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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Dereliction of Duty


By Lowman S. Henry

Imagine if you will that your boss had given you three tasks of significant importance to your place of employment and that you had failed to get those tasks done in a timely manner. Now, imagine that – having failed to complete your assignments – you told your boss you were leaving on vacation and that those jobs would have to wait until your return.

How long do you think you would remain employed?

That is exactly what the Pennsylvania General Assembly has done.

The legislature does deserve credit for having passed the 2013-2014 fiscal year budget on time. Although they should not pat themselves on the back too much for this is a constitutional requirement and the minimum taxpayers should expect. However, for eight years under former Governor Ed Rendell budgets weren’t done on time, so kudos to all involved for the timely approval of the budget and – more significantly – the passage of the third budget in a row that does not increase taxes.

That having been said, the budget was not and is not the big ticket item this year. For years we have been told Pennsylvania’s roads and bridges have deteriorated to crisis status and steps must be taken to address the problem before potholes gobble up small vehicles and bridges crash into rivers. A major transportation bill bogged down in the house, which has adjourned for “summer recess” without completing action on the legislation.

Privatizing Pennsylvania’s Soviet-era system of selling wine and spirits is a top priority of both Governor Tom Corbett and House Majority Leader Mike Turzai. The house got the job done, the legislation bogged down in the senate, which has adjourned for “summer recess” without completing action on the legislation.

Making matters even worse is the failure of the General Assembly to deal with the state’s pending pension crisis which threatens to swamp not only the state budget, but school district and municipal budgets throughout the land with billions of dollars in unfunded debt and obligations. Legislation to begin addressing the pension crisis bogged down and both houses have adjourned for “summer recess” without completing action on the legislation.

While the state constitution required the adoption of a new fiscal year budget by June 30th, nothing requires the General Assembly to recess on July 1st. The recess is an artificial construct. Most years, the lengthy recess does not matter. This year, however, with issues of great significance left unresolved, the recess is irresponsible.

As of right now, Pennsylvania’s supposedly “full time” legislature – one of the highest paid and most expensive legislative bodies in the nation – will “recess” until mid-to-late September. To be fair, it won’t be all fun-in-the sun for lawmakers. The more diligent will hold town meetings, meet with constituents and attend committee hearings. But, there will be no session in which actual laws are passed.

Some legislative leaders are already saying that there is plenty of time, that we are only a quarter of the way through a two year session. But such an argument omits political reality. The political reality is that when the legislature returns in September the 2014 election season will be getting underway. The entire house and half of the senate must stand for election in 2014. That means few lawmakers will be willing to cast tough votes just months before potential challengers begin circulating their nominating petitions.

There may be a short window of opportunity, perhaps until Thanksgiving. But when the General Assembly adjourns for its holiday recess the chance of any significant, groundbreaking legislation passing thereafter will go up the chimney with Santa Claus. The political reality is Pennsylvania’s legislative sessions have a six to eleven month lifespan and no longer.

The failure to act now is especially damaging to transportation. Even if more money is allocated to fixing roads and bridges the orange cones don’t go up immediately. Projects must be designed, bids must be let; time is required to get even “shovel ready” projects moving. By waiting until fall the legislature is essentially writing off the 2014 summer construction season.

Everybody deserves a break, but ten or more weeks out of session is a dereliction of duty. Many residents of Penn’s Woods have had to work longer hours or more jobs in order to make ends meet during the current Great Recession. Watching their lawmakers leave town without getting the job done further diminishes the standing of state government in the eyes of we the voters.

(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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Jay Costa’s Big Government Agenda


In recent weeks Americans have seen the dark underbelly of big government: the IRS targeting conservative groups; the Department of Justice tapping the phone lines of journalists; stonewalling by the White House on Benghazi. It is not the best of times to be pushing a big government agenda. But here in Pennsylvania that is exactly what state Senate Minority Leader Jay Costa is doing.

Speaking before the Pennsylvania Press Club, Costa boldly proclaimed his caucus’ highest priorities over the coming months are raising taxes and expanding government programs. In essence he wants to double down on the failed policies that have gotten us into serious fiscal difficulty on a number of fronts.

Parroting national left-wing orthodoxy the Democratic leader of the state senate railed against Governor Tom Corbett for rejection of the Medicare health care exchanges being set up as part of the Affordable Health Care Act, commonly referred to as Obamacare. Pennsylvania would initially benefit from an infusion of federal cash, but according to the Heritage Foundation within five to six years massive state tax dollars would be required to sustain the program, quickly erasing the initial benefits. But that is part of the plan: ensnare the state in a massive new entitlement program; hook people on the benefits; run up a substantial deficit thereby creating a political climate that forces the enactment of new taxes.

Already Obamacare is showing signs of unraveling. So much so that veteran Democratic U.S. Senator Max Baucus of Montana several weeks ago termed the program a “train wreck.” And, with the current IRS scandal in full bloom, public confidence in that agency’s ability to fairly and efficiently monitor and enforce the program are, well, non-existent.

Costa also pressed hard for lifting the cap on the state’s oil franchise tax as a way of raising more revenue to fix roads and bridges. This would add over 20-cents per gallon to the cost of gasoline. There is bi-partisan agreement that the state’s aging network of roads and bridges need serious attention. But Costa also proposes diverting even more state dollars into public transportation – in particular the Southeastern Pennsylvania Transit Agency (SEPTA) and Port Authority Transit (PAT) in Pittsburgh. Both are legendary patronage havens sporting some of the highest labor rates in the nation.

Costa framed both the health care exchanges and spending on highway infrastructure as jobs programs. Yes, they would create jobs. But they would be jobs created by the transfer of private wealth to the government sector, not jobs created as a result of a growing economy. Some might say “jobs are jobs,” but the siphoning of money on the scale proposed by Costa from the private sector will result in further stifling a slow economic recovery. That will hinder the process of creating private sector jobs. In the end the real cost may be in net jobs lost.

At the same time as he trumpeted big government programs, Costa detailed senate Democrats’ opposition to reforms that would unleash the power of free markets to create real economic growth. Specifically, they are opposed to privatization of the state’s Soviet-era state store system. Credible polls show Pennsylvanians widely support the improved convenience and selection of wine and spirits should Penn’s Woods adopt a system currently employed by 48 other states. It would create an opportunity for thousands of small businesses, and add real jobs in the private sector.

Costa also called for a moratorium on the phase out of the Capitol Stock & Franchise Tax. This is an arcane tax, one with which most Pennsylvanians are unfamiliar.   It is levied on corporations in addition to Corporate Net Income taxes. Pennsylvania is the only state in the nation with both taxes. As a result, it contributes significantly to a poor overall state business climate giving other states a built-in advantage in competition for business creation and expansion.

Taken as a whole, the senate Democrat agenda is geared more to winning next year’s elections than in seriously addressing the problems and needs of Pennsylvanians. Costa employed populist rhetoric against Governor Corbett saying he is putting the needs of corporations over health care for people. But the opposite is true. The governor opposes putting state taxpayers on the hook for funding an already failing federal health care monstrosity, and pushes elimination of the Capitol Stock & Franchise tax as a way to spur real, private sector job creation.

So far polls indicate the Democrats’ political gambit is working. But that is little solace to Pennsylvanians who, if the Costa agenda is enacted, won’t be able to find work, will be saddled with a massive new state health care bureaucracy, will be paying more at the pump, along with higher taxes and smaller paychecks to fund a massive expansion of state government.

(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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Gas, Booze and Feral Swine


By Lowman S. Henry

State government is facing another difficult budget, a critical junction in the liquor privatization debate, a looming pension crisis along with crumbling roads and bridges. So it provided a bit of comic relief at a recent gathering of the Pennsylvania Press Club when Senate President Pro Tempore Joe Scarnati was asked to comment on state regulations regarding feral swine. This had nothing to do with the public’s apparent view of government, but rather the concerns of agri-business in the senator’s rural home district.

For his part, the top senate Republican sought to deflect attention from current pressing issues by talking about the past. In his prepared remarks Senator Scarnati lauded the success of the state’s approach to acquiring more revenue from drillers in the Marcellus Shale gas region. A new law requiring an impact fee (a euphemism for additional taxes) seems to have struck a delicate balance between obtaining that revenue while not making continued development of the resource unprofitable.

To some degree the senator is correct about the success of the legislation. Nobody is really happy about the law, but everyone can live with it. Energy companies are now paying a tax not required of other businesses in the state, but there is a general feeling within the industry that it could have been much worse. The spending interests got additional revenue, although they feel the energy companies should pay more. Townships got financial help in dealing with the impact on infrastructure of gas development, but ceded – perhaps unconstitutionally – some of their zoning power to the state.

Senator Scarnati told the assembled media that it took two years for the state to “get it right” on Marcellus Shale, and that it shouldn’t be expected to do the same on liquor privatization in just a few weeks. He was referring to Governor Tom Corbett’s desire to accomplish reform of the state’s Soviet-style liquor system by the end of June. The senator, however, was engaged in spin. The current liquor debate began years ago when House Republican Leader Mike Turzai assumed his leadership post and pronounced it his top goal. Incoming Governor Corbett stated the same. Thus, the senate has had two and a half years to gear up for a vote on the issue.

Turzai accomplished one of the greatest legislative feats in recent state history by getting a reasonable liquor reform bill through the House. It has landed in the lap of senate Republicans who view it as the political equivalent of Kryptonite. And they have good reason to be wary. Liquor privatization has overwhelming public support and is a top priority of a governor badly in need of a political win. If Senate Republicans kill the bill, they will – despite Senator Scarnati’s assertion to the contrary – seriously wound the governor politically, alienate House leaders who they need to pass their own legislative agenda, and – worst of all – offend a large section of the electorate.

Adding to the political significance of the situation is the fact Republicans lost three state senate seats in 2012 and now hold just 27 seats in a 50-seat chamber. With all southeastern Pennsylvania GOP senators except Majority Leader Dominic Pileggi up for re-election next year the long standing senate Republican majority is in jeopardy.

The counterweight to liquor reform is, of course, the public sector labor unions. Many of the senators up for re-election next year have been heavily supported by those unions. Thus, on this issue, they find themselves torn among their constituencies. Nobody is on the hot seat more than Senator Charles McIlhinney of Bucks County. He chairs the Law and Justice Committee which is holding hearings on the bill. As such, he wields considerable influence over the outcome of the liquor debate. Internal Bucks County politics, including the fact one of the senator’s biggest supporters owns a major beer distributorship, has complicated the situation further.

This much is clear: liquor privatization will be a career defining – perhaps career ending – vote for some Republican senators. A failure to pass a bill that tops the legislative agenda of both the Governor and the House Republican Leader could be the equivalent of pulling the bottom card out of a house of cards. Failure on liquor reform will hurt the governor’s re-election chances; poison the well for legislative cooperation on other issues; alienate voters and perhaps bring about a crushing GOP defeat at the polls next November.

There could hardly be more riding on the outcome of this debate. Not just for senate Republicans, but for Governor Tom Corbett, the Republican Party and for the people of Pennsylvania who would like to see their prohibition-era system of wine & spirits sales finally brought into the 21st Century.

 

(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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Rearranging the Titanic’s Deck Chairs


titanicPennsylvania’s “full-time” legislature is now off on a two month summer recess, essentially ending the productive phase of current session. Yes, the General Assembly will reconvene in mid-September, but with legislative elections looming in November it is unlikely any substantial or even mildly controversial action will be taken during the pre-election period.

The reviews are mixed on the first two-year session under the governorship of Tom Corbett and with Republicans in complete control of the General Assembly. Chief among the accomplishments are two consecutive state budgets passed on time, with no tax hikes, and with spending held in check. Given the record of the preceding eight years, this actually represents something of a minor miracle – or at least a major change in direction for state government.

Praise is also merited for legislation expanding the Education Improvement Tax Credit to include a special program for the state’s failing school districts. Also, small decreases in certain job crushing business taxes and eliminating inheritance or “death” taxes for farming operations stand out as major pro-growth steps that will enhance the commonwealth’s business climate.

All of this, however, amounts to little more than rearranging the deck chairs on the Titanic. It looks better, but we are still about to hit an iceberg. That is because none of this gets to the structural problems which lie ominously submerged just beneath the surface of the state’s fiscal waters. And that is the stranglehold labor unions have on state government.

Noticeably absent from the above listing of accomplishments is the passage of school choice legislation, privatization of the state’s antiquated liquor store monopoly, or the indexing of the Prevailing Wage for inflation, all of which were hotly debated and died a slow death during the current legislative session. The common thread: all were opposed by organized labor which continues to control a bipartisan majority in the General Assembly.

Governor Tom Corbett has been noticeably absent from this fight. In fact, the governor’s spokesman, Kevin Harley, recently told the Pittsburgh Tribune-Review, “The Governor lives in the real world. That (confrontational approach to unions) may be nice in a think-tank white paper, but in reality, these are the people we work with every day.”

Harley’s comments amount to little more than a white flag of surrender.

Apparently the “real world” Harley speaks of does not include states like Wisconsin, Indiana, Ohio, Virginia and New Jersey where Republican governors have taken on the labor unions and brought about significant structural change. Indiana actually enacted a Right to Work law, and Wisconsin Governor Scott Walker reversed his state’s economic decline by enacting sweeping labor reforms.

Unions and their allies forced a recall election in Wisconsin, but were trounced by Governor Walker who easily retained his office. As a result of Walker’s leadership, Wisconsin is now reaping the benefits. The state budget has been balanced and the structural deficit reduced. School districts and counties have saved billions, giving relief to property taxpayers. The improved business climate has triggered something of a boom in job creation.

Meanwhile, here in Penn’s Woods, the Corbett Administration guaranteed three more years of fiscal insanity by caving into union demands during last year’s contract negotiations. That, coupled with the failure to enact even the most modest labor power reforms, means the state’s underlying structural problems remain unaltered. As a result, the pension crisis will continue to deepen, the unemployment compensation fund will go further in debt, and the state will not experience the type of economic growth that will help us steer clear of the approaching fiscal iceberg.

The reason why these problems are not confronted is that the solutions are controversial, difficult, and unpalatable. It is the nature of elected officials to avoid such decisions. Few have the intestinal fortitude to stand up for change the way Scott Walker did in Wisconsin, John Kasich has in Ohio, Mitch Daniels did in Indiana or Chris Christie has in New Jersey. So far, no one in Pennsylvania has proven himself or herself to be up to the challenge.

And so, while the chairs on the deck of Pennsylvania’s ship of state are arranged a bit better these days, we continue to travel full steam ahead with a gigantic fiscal iceberg directly in our path. It is too bad we can’t find a captain with the courage to risk a bit of confrontation to avert a catastrophe.

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

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