Posts Tagged united state
By Lowman S. Henry
As August melts into September the halls of the state capitol building are relatively quiet. This is a marked contrast to a year ago when state government was in what turned out to be the early phases of the longest budget stalemate in state history. This year the budget, or at least the spending part of it, was done reasonably close to the constitutionally-mandated June 30th deadline, the revenue component followed several weeks later.
But is this just the eye of the storm?
In capitulating to too many of Governor Tom Wolf’s spending demands the state legislature larded up the budget with nearly $1.4 billion in new expenditures. This despite claims of a $1.5 billion dollar “structural deficit” the governor claimed needed to be addressed. Even those using Common Core math can calculate that left the state nearly $3 billion in the hole.
To pay for this spending orgy some $650 million in new taxes were cobbled together, and accounting gimmicks employed, to produce a “balanced” budget. But the budget isn’t really balanced and even that $650 million contains projected revenue that will never actually materialize. For example, lawmakers planned to charge the state’s casinos $1 million each to purchase 24-hour liquor licenses. Apparently nobody thought to ask if the casinos wanted such licenses, as there now appears to be no takers.
The budget also includes revenue from on-line gambling. The problem is legislation has yet to be passed authorizing on-line gambling. After adopting the budget, the General Assembly adjourned for a two month recess delaying any possible revenue from that source deep into the fiscal year.
And, predictably, the taxes that were hiked on existing businesses are having a dramatic negative impact. A 40% tax imposed on vaping supplies is driving many vaping stores – almost all of which are small businesses – out of business. That means not only will projected revenue from the tax fall short, but the state will also lose out on sales tax revenue as the stores shutter their doors.
That Republicans in the legislature caved into $1.4 billion in new spending defied logic. The GOP had fought an epic budget battle with the governor the previous fiscal year and won. Not only did they win, but not a single lawmaker seeking re-election was denied by voters due to the budget fight. After posting a historic win, Republicans essentially forfeited the next game.
All of these elements are coming together to produce the perfect fiscal storm as budget talks begin for next year. Don’t forget that “structural deficit” of $1.4 billion hasn’t been addressed. A significant portion of the new taxes enacted this year will fail to materialize. And, Governor Wolf continues to demand a lengthy menu of spending hikes – and the taxes to pay for them.
Making matters worse the governor and the legislature have not been able to agree on how to deal with cost drivers, particularly the skyrocketing cost of public employee pensions. Pension costs are gobbling up the lion’s share of any new revenue produced by a still slow-growing state economy. Republicans have passed pension reform only to see it vetoed by Governor Wolf. There are new legislative proposals on the drawing board, but they fall woefully short of resolving the problem. Even if some reform is enacted it will likely have minimal impact on the upcoming 2017-18 state budget.
Given all of this, will Republicans stick to their pledge that without addressing cost drivers they will not enact broad-based tax hikes – such as raising the personal income tax, expanding and/or raising sales taxes – or will they again cave into the governor’s tax and spending demands? Much rides on the outcome of this looming budget fight, primarily the fiscal health of the commonwealth.
But, 2018 is a gubernatorial election year and this budget will be enacted as the campaign heats up. Governor Wolf, if he seeks re-election, will want to show his base voters that he delivered the goods of higher spending. Republican voters will judge the GOP-controlled legislature by their ability to resist higher spending and more taxes. Add these competing political imperatives to the state’s perilous fiscal circumstances and we should brace ourselves for the second wave of the hurricane.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is email@example.com.)
Permission to reprint is granted provided author and affiliation are cited.
With five statewide appellate court seats up for election – including three on the Supreme Court – an unusual political spotlight is focused this year on the judicial branch of government. Partisan control of the Supreme Court, yes there is such a thing, hangs in the balance as a wide range of future policy issues and ultimately congressional redistricting will end up before the justices elected this year.
This also presents a unique opportunity to pierce the mystique spun by the legal profession that the courts are somehow special, above the realm of politics and political maneuvering and of higher stature than the other two – supposedly co-equal – branches of government. The courts are not, and should not, be considered special. Different, indeed, as each branch of government has its own distinct and unique role. But special it is not.
Just as labor unions exert out-sized influence over the legislature, the legal profession via the Bar Association holds sway over the selection of judges, particularly at the state level. Through a secretive vetting process the Bar Association rates the candidates with an eye toward influencing the party endorsement and election processes.
Given the fact that lawyers are but one sub-set of the electorate with a stake in the judiciary, the degree of influence the Bar’s recommendations have had in the past jeopardizes the fairness of the courts. The carefully crafted illusion is that Bar Association recommendations are somehow the bestowing of superior wisdom on a clueless electorate. In fact, the Bar ratings are just the views of yet another special interest group. An important special interest group, yes, but an interest group nonetheless.
Voters should approach the Bar Association’s ratings in that light. Further, their ratings should be viewed with all the suspicion of a Brian Williams war story. Members of the evaluation commission are selected in the absence of any public input, their deliberations are secret and the factors weighing on their recommendations are kept from public view. This total lack of transparency is the exact opposite of the endorsement processes of the political parties where those doing the endorsement are themselves elected by voters, the endorsement meetings are open to the media, and the votes of state committee members recorded for all to see.
A controversy has arisen over the Bar’s ratings this year because they are refusing to recommend Commonwealth Court Judge Ann Covey for a seat on the state Supreme Court. Judge Covey was endorsed by the Republican State Committee pitting the party against the Bar. Covey, refusing to play by the Bar Association’s rules, has publicly criticized the recommendation process and questioned its fairness.
Further eroding the Bar Association’s credibility is the fact that the current Chief Justice of the Pennsylvania Supreme Court, Justice Tom Saylor, was not recommended by the group in his first run for a judicial post. Given the fact he has now become the top jurist in Penn’s Woods, the Bar is left with considerable egg on its face.
The current mess created by the Bar Association also adds one more argument to those who oppose the merit selection of judges. If the legal community conducts its recommendation process in secret, what kind of back room deals might we expect from merit selection? Further, the formerly staid recommendation process has now become embroiled in controversy as a result of its own failings.
It is time for voters to take charge. The state Supreme Court races will top the ballot this year meaning there is no presidential, senatorial or gubernatorial race to steal the spotlight. The state’s news media need to step up and cover the court races like they would other statewide races because the positions merit that level of debate and scrutiny. And voters need to educate themselves, both in the primary and general elections, about the candidates so they can make an informed decision when going to the polls.
This is an opportunity for We the People to have an impact on a vitally important and co-equal branch of state government. It is time to push aside the mystique of the judiciary. We must take this election with the same degree of seriousness we do in electing our governor and our legislators.
Because in the end judges matter.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is firstname.lastname@example.org.)
Permission to reprint is granted provided author and affiliation are cited.