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tony may


By Tony May


Give Pennsylvania state government some credit.  It has put the Commonwealth on the cutting edge in recent years of some important trends that have slowed the slow slide into Rust Belt decay.

The state authorized casino gaming which has created thousands of new jobs and generated billions in state revenue.  It aided and abetted the birth and growth of the “tight gas” industry making Pennsylvania one of the largest producers of natural gas in the nation.  It countered the national anti-tax trend and authorized an overhaul of the state’s funding strategy for transportation funding.  In a time when Congress has failed in its responsibilities to write a new national transportation policy and fund it, Pennsylvania has turned the corner on replacing and upgrading obsolete bridges and restoring and expanding highways.  And it about to join the growing number of states legalizing cannabis to heal the sick, create jobs and add needed state tax revenues.

Yet Pennsylvania still lags behind other states in population growth, average and median family income, economic development and other vital signs of a thriving economy. So what one, single thing can the General Assembly and the Governor do to get ahead of the curve and increase the rate of economic growth and restore actual population growth to keep Pennsylvania competitive among the states?

The answer is: be more like California – the good aspects of California.  The “Golden State” is unafraid to see itself as an outlier, a trend-setter and innovator.  Pennsylvania is more inclined to avoid sticking out like a sore thumb.  It doesn’t mean that we need threaten to secede from the union, ala California Gov. Jerry Brown.  It means that we need to work harder to chart our own future independent of the largesse of the federal government – something that looks like it might go the way of the dodo bird anyway.

A good place to start would be to evaluate Pennsylvania’s unused capacity and find ways to increase utilization on existing resources.  One of the reasons Pennsylvania faces bitter annual state budget fights is because the decay of our existing economic engine is throwing off less and less cash.  The first factor to address here is population stagnation.

Outside of a few key, mostly suburban counties, Pennsylvania’s population is not growing.  While an increasing population would add to demand for services, it is likely that new residents would generate more in economic demand than they would consume in state and local services.  This would be true even of immigrants from war torn countries.

Another sector that is under-utilized is higher education, particularly our state-owned universities.  Attracting out-pf-state students (perhaps even international students) would help our state-owned schools operate more efficiently.  Because they are operating, for the most part, under capacity, increasing the number of higher-revenue non-resident students would not be denying access to qualified in-state students.  The bottom line would be an economic boost in 14 Pennsylvania non-urban communities.

Third on the list would be a state approach to increase demand for home ownership aimed primarily at third class cities and boroughs.  Pennsylvania’s towns and cities are being hollowed out.  The state should investigate strategies to attract new residents to small  towns where thousands of dwellings stand vacant and decaying.

The best part is that most Pennsylvanians would relish the challenge.  Every Pennsylvania community has local pride; it would be easy to transfer that enthusiasm to support for a state growth effort.



By Tony May

It’s a non brainer that another budget debacle serves no one – not the beneficiaries of state programs, not school districts reliant on state funding or local governments who share in the Commonwealth’s tax collection and distribution functions.  And certainly not legislators up for re-election who need to be home campaigning and not the governor who has been feeling the heat from both friends and foes over last year’s budget mess.

So, at last, after more than a year of seemingly petty bickering and in-fighting, we seem to be agreed on something: getting out of town by June 30.  So how do we do it?

There are a number of ways this can go but here is the cleanest and the fairest:

  1. Gov. Tom Wolf agrees to accept a budget for 2016-17 that is funded without an increase in the personal income tax or major changes to the state sales tax in return for a pledge from at least some Republican leaders to work cooperatively on addressing broad-based tax and spending needs in a comprehensive package in 2017.
  2. The General Assembly finds a way to pump some additional funds into Pennsylvania public schools in 2016-2017 with the recognition that urban schools need special attention and funding.
  3. The leadership of both political parties in the legislature names delegates from the private sector and the community to sit with nominees to be named by the governor to a special blue ribbon panel on Pennsylvania’s future program and revenue needs (kudos to my colleague and friend, George Wolff, for proposing this initiative). The commission should be tasked with producing an interim report by December 2016 and a long-term blue print by summer 2017.

Normally, commissions and study panels are created to avoid confronting major areas of disagreement.  In this case, the panel would provide a new – and less partisan – perspective on where the state is and where it is heading.

The current problem with today’s General Assembly is a wide rift not between Democrats and Republicans but between Republicans who believe that government has a legitimate role in the lives of citizens and a growing element in the GOP that wants to kill government at most any cost short of insurrection.

Nowhere is the chasm between the two wings of the GOP more evident than in the current debate over the operation of bricks and mortar and cyber charter schools.

The most basic tenets of Republican fiscal responsibility have been thrown out the window in favor of ideological purity – the blind acceptance  of the belief that any private school is preferable to a public (or :”government”) school.  Charters – both cyber and traditional – are given the same state funding as public schools without regards to actual costs.  It’s a more flawed policy than the federal government’s cost-plus contracts with defense contractors.  In the case of charter schools, you can spend your per student allocation any way you want and make as much of a profit as you’re able.  There’s not much academic oversight and even less fiscal oversight.

The result is charter schools that perform all over the lot – some better than their public counterparts and many that do not.

Looking for a place to find waste, fraud and abuse?  The charter movement may be the biggest source of waste and abuse in state government today.  Notice, I didn’t say “fraud” because the charters do what is required of them.  We’re just not calling them to account the way that we should.

Charters do provide parents – at least in some parts of the state – with choices.  The fair question to ask is it worth the cost?

Maybe it’s an issue that requires its own blue ribbon panel but at least if could be addressed in a general way by the ways and means panel proposed above.


By Tony May


In pre-Eisenhower America, every school kid was aware of Popeye, the cartoon character’s spendthrift friend, J. Wellington Wimpy, whose signature gag line was, “I will gladly pay you Tuesday for a hamburger today.”  But, the roly poly Mr. Wimpy never paid – although he always got his hamburger.

It’s not nearly so hilarious when J. Wellington Wimpy turns out to be your state government and “I will gladly pay you Tuesday” is a basic tenet of what has passed for budgeting over the past decade or more.

The current state budget crisis isn’t Gov. Tom Wolf’s fault.  It’s not even the fault of the current Republican-controlled state legislature.  It’s been caused by application, again and again, over years and years of the “Wimpy Principal” of budgeting.  It works out like this:  If you can eat the hamburger, do it, and pretend to pay for it by shifting funds around between one state account or another to conceal the fact that the bill has been passed off down the road.

The result? What the state’s non-partisan Independent Fiscal Office has defined as a $1.9 billion “structural deficit.”

What’s that?  According to the Financial Times, it’s a “budget deficit that results from a fundamental imbalance in government receipts and expenditures, as opposed to one based on one-off or short-term factors.

In other words, it doesn’t cover new programs or policies like increasing aid to education or hiring new inspectors in the Department of Environmental Protection,  It means state government continuing existing state programs – what some call “the cost to carry” through day to day business.

Why are we talking about $1.9 billion instead of the $2.4 billion Governor Wolf says we need to balance the budget AND increase aid to education?  Because it means that even if legislators figure out some way to thwart the Governor’s goal of getting more money to urban and struggling school districts, it means there’s still an elephant lurking in the corner of the room that’s left a big, steaming pile of bills that cannot be paid without increasing some taxes or other.

Policy-makers in Harrisburg have done a disservice to taxpayers  by suggesting these bills don’t have to be paid – or don’t exist.

Yes, doing nothing is an option – one that seems to have been chosen as the least painful of the choices available.  By stretching the boundaries each time the state faces a budget stalemate, we’ve changed public policy from a hard and fast “no budget/no government” to “maybe we can pay public safety employees” to “we can pay to keep critical services going” to today’s climate where money is flowing in dribs and drabs to any wheel of government that squeaks enough.

It’s more or less the flip side of the mantra “we should budget just like a family does – if you don’t have the money, don’t spend it.”

The new government approach seems to be how most families really budget – you pay the bills you have to pay; then you pay the bills you can pay; and, if you have any money left over, you take the kids out for ice cream.

Last year, the Governor proposed the budgetary equivalent of buying a 40 foot Winnebago and taking the family on a six week vacation to Disneyland.  And the legislature said no.  This year, he’s proposed a two week camping trip involving sleeping out under the stars and roto-tilling the back yard and planting truck crops.

But there is still the reality of taxes.  Wolf says we can have the Winnebago AND the truck garden if we would just raise the personal income tax one-third of one percent (to 3.4%) and expand the sales tax to include basic cable TV, movie theater admissions and digital downloads plus enact the natural gas extraction tax and increase a couple of business taxes.  We can fill the structural deficit with just the income tax hike and the visual entertainment tax.

Or, we can gladly eat a hamburger today and pay on Tuesday.  Or not.