Well the budget is finally passed but don't expect much more to happen during the next election year. Politicians up for re-election in 2010, will be spending more of their precious time on getting re-elected then on any important matters in Harrisburg. They will be making sure that all of their PAC contributions and all their special interest lobbyist groups will be opening their wallets to influence the elections just like they helped influence the budget. If you don't think that money talks in Harrisburg you are sadly mistaken.
The three most powerful industries- gambling, natural-gas drillers, and tobacco - spent more than $4.5 million just this year alone on lobbying in Harrisburg. Tobacco interests spent $1.5 million through Sept. 30. Reynolds American Inc, whose subsidiary Conwood Co. is the second-largest producer of smokeless tobacco products spent over a half million dollars. Although new taxes were imposed on cigarettes, the state legislature dropped proposals to tax smokeless tobacco products and cigars. Pennsylvania remains the only state without a tax on smokeless products. When Gov. Rendall was proposing a severance tax on natural gas drillers, Lobbyist spent $1.6 million to address this. Leading the way was a Texas company, Range Resources Appalachia L.L.C. investing in drilling in the Marcellus Shale spending $605,817 last year in their lobbying efforts. Casino owners led by The Sands Casino Resort Bethlehem dolled out $307,000 this year to ensure table games. This was largely in part because legislative leaders in the House and Senate could not come to terms on the legislative details. Particularly how much the state would charge casinos in taxes and licensing fees.
Pay-to play is alive and well in Harrisburg.. Industries wouldn't spend six figures if it didn't work. Remember when we were without a budget and people were struggling through this recession, the tobacco industry led by one lobbyist Arthur Zaretsky was hosting receptions for legislators to plead his case. Nice..
Friday, November 20, 2009
Tuesday, August 4, 2009
The Budget
As we are entering our 5th week past the budget deadline of June 30, it is important to note that Gov. Rendell has not completed a budget on time in his 7 years as governor, and this impasse has gone on longer than any budget since 1991. It wasn't until July 16, 2009 that the Democratic majority in the House of Representatives allowed a budget bill to the floor to be debated.
The strategy of Rendell is nothing new. What he attempts to do is create a crisis among state employees and then use this as leverage to validate his spending increases and gain access to more of our hard earned money. These actions by Rendall and his counterparts are a total disregard for the people of Pennsylvania and do a huge disservice for the hard working state workers of our Commonwealth.
There have been three budget proposals considered in the Pennsylvania House of Representatives since July 16, 2009. The first proposal was a Republican amendment to House Bill 1416 that was defeated by the Democratic majority by a vote of 95-103. This amendment provided for a balanced budget and required no new tax increases. The second budget proposal considered was the Democratic budget proposal of HB 1416. This proposal would have to provide for tax increases due to the fact that this piece of legislation would remove over $1 billion of higher education spending from the general fund. To fill this void, this bill would propose to create a new fund for higher education. The Democratic Appropriations Chairman also presented a list of tax increase options to raise revenue for this newly created higher education fund. On July 17, this bill was passed from the House to the Senate by a vote of 104-95. The Senate Republican amendment to HB 1416 was the third proposal considered by the House on July 21, 2009. Again this proposal provided for a balanced budget and required no new tax increases but was rejected by a vote of 149-50.
When will our legislators stand up for what is right in this recession driven economy. All lawmakers, Democrats and Republicans, leaders and rank and file members, need to be focused on our state's future and put petty differences aside. We not only need a balanced budget for 2009-2010, but one that puts the state on the right track for our future.
The strategy of Rendell is nothing new. What he attempts to do is create a crisis among state employees and then use this as leverage to validate his spending increases and gain access to more of our hard earned money. These actions by Rendall and his counterparts are a total disregard for the people of Pennsylvania and do a huge disservice for the hard working state workers of our Commonwealth.
There have been three budget proposals considered in the Pennsylvania House of Representatives since July 16, 2009. The first proposal was a Republican amendment to House Bill 1416 that was defeated by the Democratic majority by a vote of 95-103. This amendment provided for a balanced budget and required no new tax increases. The second budget proposal considered was the Democratic budget proposal of HB 1416. This proposal would have to provide for tax increases due to the fact that this piece of legislation would remove over $1 billion of higher education spending from the general fund. To fill this void, this bill would propose to create a new fund for higher education. The Democratic Appropriations Chairman also presented a list of tax increase options to raise revenue for this newly created higher education fund. On July 17, this bill was passed from the House to the Senate by a vote of 104-95. The Senate Republican amendment to HB 1416 was the third proposal considered by the House on July 21, 2009. Again this proposal provided for a balanced budget and required no new tax increases but was rejected by a vote of 149-50.
When will our legislators stand up for what is right in this recession driven economy. All lawmakers, Democrats and Republicans, leaders and rank and file members, need to be focused on our state's future and put petty differences aside. We not only need a balanced budget for 2009-2010, but one that puts the state on the right track for our future.
Wednesday, January 28, 2009
Contact Representatives to OPPOSE the Employee Free Choice Act
I am writing with great concern regarding the Employee Free Choice Act (EFCA) or "card check" legislation. Effectively eliminating over 70 years of precedent established under the National Labor Relations Act(NLRA) of 1935, the EFCA would radically overhaul current labor law by replacing the use of secret ballots in union organizing efforts with a "card check" system.
Currently, workers decide to unionize by a private ballot election, allowing them to vote anonymously without fear of intimidation or retaliation. Under "card check," however, union organizers would only have to gather a majority of signed cards from workers to claim union representation, which would then be made public to the employer, union organizers and coworkers. "Card check" would not only undermine a worker's right to secret ballot elections, but also hinder economic growth and threaten our economy's ability to create jobs.
There would be no private ballot election and no freedom of choice.
This legislation contains equally concerning language that would force binding arbitration on employees and employers. This provision undermines the system of collective bargaining. Government imposed binding contracts on employees and employers would weaken a business's ability to effectively control their operation, while also eliminating an employee's ability to vote on or ratify their contract terms of employment.
All workers deserve the fundamental American right to a federally supervised private ballot election. This right is guaranteed when you vote in political elections and there is no reason why it should be surrendered in the workplace.
I urge you to VOTE NO on CARD CHECK, and instead focus on protecting and maintaining the existing standards of NLRA laws.
Currently, workers decide to unionize by a private ballot election, allowing them to vote anonymously without fear of intimidation or retaliation. Under "card check," however, union organizers would only have to gather a majority of signed cards from workers to claim union representation, which would then be made public to the employer, union organizers and coworkers. "Card check" would not only undermine a worker's right to secret ballot elections, but also hinder economic growth and threaten our economy's ability to create jobs.
There would be no private ballot election and no freedom of choice.
This legislation contains equally concerning language that would force binding arbitration on employees and employers. This provision undermines the system of collective bargaining. Government imposed binding contracts on employees and employers would weaken a business's ability to effectively control their operation, while also eliminating an employee's ability to vote on or ratify their contract terms of employment.
All workers deserve the fundamental American right to a federally supervised private ballot election. This right is guaranteed when you vote in political elections and there is no reason why it should be surrendered in the workplace.
I urge you to VOTE NO on CARD CHECK, and instead focus on protecting and maintaining the existing standards of NLRA laws.
Tuesday, January 20, 2009
Boscov's Bailout is Bad for Business
Boscov's Bailout is Bad for Business
Nathan A. Benefield
01.19.09
With bailout mania sweeping the nation, it is hardly a surprise to see the struggling Boscov's department store with its hand out. But the current proposal to give Boscov's $35 million in taxpayer backing for a loan is bad economic policy.
While county commissioners from a handful of counties have agreed to go along with this scheme, Snyder County officials have rejected it outright, and officials in Blair and Butler counties are still considering putting their taxpayers on the hook. Pennsylvania state officials are pressuring the counties to go along, arguing the loan would be "risk free" and guaranteed to revitalize Boscov's and the local economy.
However, if the loan is risk free, why doesn't the private sector put up the money? Investors are always looking for a no-risk, guaranteed return. However, state (along with federal and local) government officials might be assessing the level of risk a little differently—since they are "investing" other people's money.
In fact, an Allegheny County economic development official recently admitted to a WTAE reporter that taxpayer loans are frequently granted to businesses after private lenders reject their business plan. It should be noted that he made this statement explaining why so many government loans had never been repaid.
Boscov's must find a sustainable business model, using bankruptcy to restructure and develop a plan private lenders will support. This restructuring does not mean all employees, or every supplier of products, will lose their jobs. Even if Boscov's went out of business, Pennsylvania's economy would survive. Consumers will still shop, and other businesses will step in fill the void left by Boscov's.
Here in Pennsylvania, almost 52,000 businesses closed shop in 2007, but 54,000 new ones were created. Governor Rendell stated that these "start-ups" would never have received the loan Boscov's did—yet small businesses now employ over half of all workers in Pennsylvania. Furthermore, all of the job growth from 2002-05 occurred among small businesses; large employers lost workers. Our state economy is not dependent on Boscov's to survive.
Decisions such as whether to bail out Boscov's are almost always based on political, rather than economic grounds. That Mr. Boscov is a well-regarded figure in the Pennsylvania community (not to mention a major campaign donor) is a much greater factor for county officials than Boscov's restructuring model. The intense lobbying effort of Boscov's and the Rendell administration will likely weigh more heavily on this decision than a consideration of the economic effects of supporting—or rejecting—the loan.
Boscov's is hardly alone in this scheme. Many big businesses and sports teams often extort money from government, threatening to move or shut down if they don't get taxpayer funds. Yet these threats—along with news releases from Governor Rendell celebrating the "jobs created" from taxpayer gifts—are deceitful.
Mario Lemieux admitted last August that he never thought of moving the Pittsburgh Penguins (during a groundbreaking ceremony for the new $290 million hockey arena.) Yet his threats and ransom demand earned him and the Penguins a great deal in which state taxpayers pick up the bulk of the cost of his arena.
Likewise, filmmakers have recently benefited from the corporate welfare mentality, partaking in both a grant program and a tax credit. Yet some of the filmmakers admitted they would film in Pennsylvania even if they hadn't received state aid. In other words, no new jobs were "created" by taxpayer subsidies, but wealthy team owners and businessmen profited heavily from the lobbying efforts.
Even when government grants and loans do attract new businesses, they do so at a cost (i.e. higher taxes) to existing businesses and residents. At the end of the day, the process of rewarding politically selected firms is bad long-term economic policy. There is little to no evidence of its benefits.
Bailouts—along with all corporate welfare—harm successful businesses. Stores competing with Boscov's have operated successfully, but Boscov's failure gets rewarded with taxpayer-backed loans. If policymakers continue to offer perverse incentives like this, there will be little reward for running an effective business, but a payoff for lobbying for taxpayer subsidies.
"Economic development" spending like the Boscov's bailout doesn't grow the economy. It is based on political merit rather than economic merit and represents a perverse incentive—redistributing funds from successful business to failing enterprises. When government tries to picks winners, it is taxpayers and the economy who lose.
# # #
Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.
Nathan A. Benefield
01.19.09
With bailout mania sweeping the nation, it is hardly a surprise to see the struggling Boscov's department store with its hand out. But the current proposal to give Boscov's $35 million in taxpayer backing for a loan is bad economic policy.
While county commissioners from a handful of counties have agreed to go along with this scheme, Snyder County officials have rejected it outright, and officials in Blair and Butler counties are still considering putting their taxpayers on the hook. Pennsylvania state officials are pressuring the counties to go along, arguing the loan would be "risk free" and guaranteed to revitalize Boscov's and the local economy.
However, if the loan is risk free, why doesn't the private sector put up the money? Investors are always looking for a no-risk, guaranteed return. However, state (along with federal and local) government officials might be assessing the level of risk a little differently—since they are "investing" other people's money.
In fact, an Allegheny County economic development official recently admitted to a WTAE reporter that taxpayer loans are frequently granted to businesses after private lenders reject their business plan. It should be noted that he made this statement explaining why so many government loans had never been repaid.
Boscov's must find a sustainable business model, using bankruptcy to restructure and develop a plan private lenders will support. This restructuring does not mean all employees, or every supplier of products, will lose their jobs. Even if Boscov's went out of business, Pennsylvania's economy would survive. Consumers will still shop, and other businesses will step in fill the void left by Boscov's.
Here in Pennsylvania, almost 52,000 businesses closed shop in 2007, but 54,000 new ones were created. Governor Rendell stated that these "start-ups" would never have received the loan Boscov's did—yet small businesses now employ over half of all workers in Pennsylvania. Furthermore, all of the job growth from 2002-05 occurred among small businesses; large employers lost workers. Our state economy is not dependent on Boscov's to survive.
Decisions such as whether to bail out Boscov's are almost always based on political, rather than economic grounds. That Mr. Boscov is a well-regarded figure in the Pennsylvania community (not to mention a major campaign donor) is a much greater factor for county officials than Boscov's restructuring model. The intense lobbying effort of Boscov's and the Rendell administration will likely weigh more heavily on this decision than a consideration of the economic effects of supporting—or rejecting—the loan.
Boscov's is hardly alone in this scheme. Many big businesses and sports teams often extort money from government, threatening to move or shut down if they don't get taxpayer funds. Yet these threats—along with news releases from Governor Rendell celebrating the "jobs created" from taxpayer gifts—are deceitful.
Mario Lemieux admitted last August that he never thought of moving the Pittsburgh Penguins (during a groundbreaking ceremony for the new $290 million hockey arena.) Yet his threats and ransom demand earned him and the Penguins a great deal in which state taxpayers pick up the bulk of the cost of his arena.
Likewise, filmmakers have recently benefited from the corporate welfare mentality, partaking in both a grant program and a tax credit. Yet some of the filmmakers admitted they would film in Pennsylvania even if they hadn't received state aid. In other words, no new jobs were "created" by taxpayer subsidies, but wealthy team owners and businessmen profited heavily from the lobbying efforts.
Even when government grants and loans do attract new businesses, they do so at a cost (i.e. higher taxes) to existing businesses and residents. At the end of the day, the process of rewarding politically selected firms is bad long-term economic policy. There is little to no evidence of its benefits.
Bailouts—along with all corporate welfare—harm successful businesses. Stores competing with Boscov's have operated successfully, but Boscov's failure gets rewarded with taxpayer-backed loans. If policymakers continue to offer perverse incentives like this, there will be little reward for running an effective business, but a payoff for lobbying for taxpayer subsidies.
"Economic development" spending like the Boscov's bailout doesn't grow the economy. It is based on political merit rather than economic merit and represents a perverse incentive—redistributing funds from successful business to failing enterprises. When government tries to picks winners, it is taxpayers and the economy who lose.
# # #
Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation (www.CommonwealthFoundation.org), an independent, nonprofit public policy research and educational institute based in Harrisburg.
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