In the worst 140+ schools alone, with some 80,000 children, students faced nearly 10,000 acts of violence in 2008-10, including robberies, rapes, riots, bomb threats and assaults. That’s a violent act every 17 minutes.

In the bottom 5 percent of schools in the 2010-11 school year, only 32 percent of students were proficient in reading and 38 percent proficient in math on the Pennsylvania System of School Assessment (PSSA).

The solution?  School choice saves. View the Full School Choice Toolkit to find out how.

For the grand sum of $13.70, Kyle was kept incarcerated, preventing him from rejoining his 4-year old daughter and the workforce that could help pay his fine.  Costing taxpayers more than 100 times what he owed this bureaucratic nightmare is but one symptom of an ailing system that begs to be cured by commonsense reform.

Over the past 30 years, Pennsylvania's incarceration rate exploded by more than 500 percent to more than 50,000 inmates, requiring the construction of 18 new prisons at a cost of $200 million and millions more annually to maintain.  As a result, spending on the Pennsylvania Department of Corrections grew 1,700 percent.  At a cost of $35,000 per inmate per year, it is not a stretch to say taxpayers have been ill served by a system that locks up more people for longer periods, but fails to deter future crimes.

Governor Leader	Matt Brouillette

Despite this substantial investment, research demonstrates that imprisonment in state prisons does not make offenders less likely to commit crimes after release, and may even make them more likely to do so.  In fact, nearly 45 percent of Pennsylvania parolees return to prison within three years, making for a "corrections" system that simply isn't correcting enough.

Ultimately, this unprecedented prison population growth was not caused by an increase in crime, but by a bureaucratic breakdown in our criminal justice system.  In contrast to Pennsylvania, several states with a variety of political leanings, including New York, Florida, Texas and Hawaii, have significantly reduced both their crime and imprisonment rate over the past decade.   

Some of these proven reforms require basic improvements in system efficiency.  Currently, a Pennsylvania offender already granted parole serves, on average, an additional 101 days in prison.  Based on average costs, taxpayers spend an extra $9,000 per inmate for this needless layover, while preventing parolees from rejoining their families and the workforce at untold costs.

Simple improvements would ensure these wasteful costs need not be borne by taxpayers and inmates in Pennsylvania. Tightening up the process of parole hearings to ensure inmates likely to be paroled are considered first, better managing drug and alcohol treatment waiting lists, and allowing inmates to pay minor fines when they can get a job outside of the prison walls would shorten these costly extra stays.

Moreover, policy changes through legislative reform need to keep low-risk cases out of prison and implement less expensive, more effective sentences.  By allowing risk assessment prior to sentencing, judges and prosecutors can identify cases that would be better managed in alternative options outside of prison.  

These alternative options, like electronic monitoring, have proven to be less expensive and more effective for nonviolent offenders.  A Florida study found offenders on GPS monitoring were 31 percent less likely to return to prison, a statistical shift that would save Pennsylvania millions over time.

Furthermore, drug, veteran and mental health courts allow intensive judicial oversight of offenders, thus identifying those who need prison time and those who are better served with treatment and regular supervision.  Several Pennsylvania counties already utilize drug and mental health courts, and expanding these problem-solving courts statewide would better remediate offenders and deter future crime.

Paramount to any successful reform, correction changes should reduce the number of individuals returning to prison after release.  Graduated sanctions, where technical probation violations (not new crimes) are met with a swift and certain response – such as stricter reporting requirements, a curfew, or even a night in jail – have reduced the number of positive drug screenings and new arrests according to research submitted to the National Institute of Justice.

In Hawaii's Opportunity Probation with Enforcement (HOPE) model, drug offenders must make a phone call to officials every morning to see if they have to report to the court to take a drug test.  If they fail, they are immediately jailed for a few days and can ultimately be imprisoned for multiple failures.  HOPE reduced positive drug screens by more than 70 percent and cut both revocations and new arrests in half.  

Reforming our state corrections system is not being soft on crime – it's being smart on crime.  By doing so, we can ensure those like Kyle are not only punished for their crimes, but are able to pay back society by being a productive, permanent part of it.

###

George M. Leader, the 38^th Governor of Pennsylvania and Matthew J. Brouillette, president & CEO of the Commonwealth Foundation, are two members of a trans-partisan coalition pushing for "Real Corrections Reform, Right Now."  Parolee name has been changed to respect individual privacy.  Learn more at CommonwealthFoundation.org/Justice. 

• Pennsylvania's per capita incarceration rate has exploded by more than 500% since 1980, requiring the construction of 18 new prisons—with more on the way, each costing $200 million to build—and has not decreased in recent years as many other states have.

• As a result, the Pennsylvania Department of Corrections' budget has skyrocketed since 1980 and is now the third largest of all state agencies.

• The best research to date indicates that while imprisonment keeps offenders from committing crimes while in prison, it does not make them less likely to commit crimes after release, and may even make them more likely to do so.

• Several states have been able to significantly reduce both their crime rate and imprisonment rate over the past decade, demonstrating that prison populations can be significantly reduced without compromising public safety and improving outcomes.

We therefore urge the Governor and General Assembly to adopt proven public policies that have worked in other states to reduce both crime and waste. Specifically, it is our goal to spearhead the adoption of policies that (a) will prove transformative and (b) are actually achievable in the near term. The situation is far too serious to focus on solutions that will not dramatically change the status quo or to expend effort on the unachievable.

List of Signatories

• Hon. George M. Leader, Former Governor
• Andrew Barnes, Director of Victim Services, Pennsylvania Office of the Victim Advocate
• Mark Bergstrom, Executive Director, Pennsylvania Commission on Sentencing
• Matthew J. Brouillette, President & CEO, Commonwealth Foundation
• Cynthia L. Daub, Deputy Executive Director, Office of Probation and Parole
• William DiMascio, Executive Director, The Prison Society
• Michael Geer, President, Pennsylvania Family Institute
• Rev. Dr. W. Wilson Goode, Sr., Former Mayor of Philadelphia
• Jane Leader Janeczek, Director of Special Projects, Country Meadows Retirement Communities
• G. Michael Leader III, President & CEO, Country Meadows Retirement Communities
• Dr. Doris MacKenzie, Director, Penn State Justice Center for Research and Prof. of Crime, Law and Justice and Sociology
• Dr. Kiminori Nakamura, Assistant Professor of Criminology and Criminal Justice, University of Maryland
• Brinda Carroll Penyak, Deputy Director, County Commissioners Association of Pennsylvania
• Hon. Ernest D. Preate, Jr., Former Attorney General
• Jonathan Z. Queen, Minister
• Reginald T. Shuford, Esq., Executive Director, ACLU of Pennsylvania
• Hon. Jack Wagner, Auditor General
• Hon. John Wetzel, Secretary of Corrections

Following Leader

In 1955, George M Leader, a former Democratic state senator from York County, was inaugurated as Pennsylvania's 38th Governor. This infographic tells the story of Pennsylvania's corrections experience from 1955 to the present day. Commonwealth Foundation is pleased to partner with Governor Leader and his family to offer a new 21st Century vision for criminal justice.

"Using the TPA index is a tremendous step toward extinguishing the fiscal fires caused by years of overspending," said Matthew J. Brouillette, CF president and CEO.  "It is precisely the kind of prudent budgeting strategy that will get Pennsylvania families and job creators back on the road to prosperity."

However, the free-market think tank cautioned that the Senate's proposed budget would spend about $300 million more than forecast revenues (after refunds), based on official projections from the Independent Fiscal Office. 

"With Pennsylvania's ballooning welfare, corrections, pension, and debt costs, state government cannot continue spending more money than it is collecting," said Brouillette.

Due to these continuing threats, the group is calling on legislators to enact both the Taxpayer Protection Act and passage of a constitutional amendment version of the TPA to prevent future fiscal disasters.  The TPA would limit the growth of state government spending to inflation plus population growth. 

"It is an economic truth that you can grow the government or you can grow the economy, but you can't grow both," Brouillette said.  He noted that states that have limited the growth in government spending have better economies.

"After the damage inflicted by decades of government growth, even modest increases in spending will hinder our economic recovery," said Brouillette.  "With a four-alarm fiscal fire continuing to burn due to unsustainable growth in welfare and corrections spending, debt payments, and unfunded pension costs, lawmakers need to act now."

Policy analysts say the proposed TPA would ensure government lives within its means, provide tax relief for families and promote long-term economic growth.  If the TPA had been applied on all state funds between FY 2003-04 through FY 2010-11, a cumulative $31.5 billion or $10,000 per family of four would have remained in the hands of taxpayers rather than state government.

# # #

For more information, please contact Jay Ostrich at 717-649-6547. The Commonwealth Foundation (www.commonwealthfoundation.org) crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.

That's why CF has just released a new video featuring three Pennsylvania veterans explaining the right, and the responsibility, to vote.  Please watch it, and please share it with your friends who might need a reminder.

As I said, this isn't just about voting—it's about informed voting.  That's why CF has more than this video to offer you.  Check out our candidate survey and sign the primary pledge below.

The Pennsylvania Primary Pledge

Primary Pledge

Today, and this weekend, please make sure you, your family, and your friends don't squander the great opportunity we have on Tuesday, one for which many before us have bled.

Believe it or not, local governments, i.e., taxpayers, own 49 golf courses in Pennsylvania.  One of the poorest performers is Dauphin Highlands Golf Course, owned by Dauphin County taxpayers, which simply doesn't make enough money to cover the interest on its debt.  For years, the Dauphin County General Authority has been caddying for the course's bills to the tune of more than $3 million.  The golf course is for sale, but because its $11 million debt load exceeds its market value it has become a sand trap the county cannot escape.

Unfortunately, Dauphin County's golfing misadventures are becoming par for the course. Sadly, the handicap is no better in Middle Smithfield Township where officials are facing a major loss on the Country Club of the Poconos, costing local taxpayers nearly $1 million from 2010-11.  While true that not all municipal courses are failing so dramatically, few have proven to be the money makers local officials promised. 

Naturally, if private golf courses fly into a fiscal bunker, their only recourses would be to close down, adapt or change management.  Not so with government-run courses as they can always go to taxpayers for a subsidized sand wedge.  But with families struggling to make ends meet and local government looking at tax increases or program cuts, taxpayer golf is a budgetary double bogey we just can't afford.

In contrast, Dauphin County sold off its Donald Ross Golf Course in 2002 and avoided the massive debt that buried Dauphin Highlands.  For municipalities unable to sell their courses, managing them in partnership with private sector companies is the next best option. Public-private partnerships enable private sector firms to run all or part of a government-owned property, lowering costs, minimizing risk, and enhancing services.

Many municipal courses already lease on-site restaurants to local small businesses with great success.  Landscaping and building maintenance are other areas ideal for public-private partnerships.  Alternately, larger companies that specialize in golf course management can take over operations wholesale and increase revenue in ways city governments can't.

One such company, Billy Casper Golf, owns or operates more than 127 facilities in 27 states, including seven in Pennsylvania, and uses economies of scale to drive down costs.  The City of Tulsa, Oklahoma, partnered with them on two failing courses, and net operating income grew by more than $1 million in less than two years.  Tulsa's growing liability was converted to a budgetary birdie for the city while enhancing the golf experience for the average player.

Ultimately, private sector companies consistently perform more efficiently than their government-run counterparts.  Based on a review of more than 100 studies, the Reason Foundation conservatively estimates savings from privatization at 5 to 20 percent.  Under private management, golf courses boost the number of rounds played, purchase equipment in bulk, pay market rather than inflated government wages, and invest in and expand their offerings.  Municipalities tend to put off needed repairs and improvements during a budget crunch, alienating customers and creating a future crisis.

But let there be no doubt, the best way for municipalities to avoid risking another Dauphin Highlands debacle is to stop competing with the private sector for golfers' business in the first place.  Government intrusion is handicapping the golf business by forcing private golf club owners to fund their own competition via taxes. And for non-golfers everywhere, please ask yourself why your government is forcing you to subsidize a luxury game service used by less than 11 percent of the population.

Unfortunately, municipal golf courses are only one example of the many private industries governments compete with every day.  In these difficult economic times, if a business can be found in the yellow pages of a phone book, government shouldn't be the owner unfairly competing with private enterprise by using taxpayer dollars to hire and manage public employees.  Before local governments concede the hole they have created, it's time taxpayers get a monetary mulligan by ending subsidized golf.

EDITORS NOTE: An earlier version of this commentary implied that subsidies for the golf course were coming directly from tax revenue. While that is not the case, the Dauphin County General Authority is owned by the taxpayers and any revenue earned by the authority or the golf course could be used to lower taxes.

# # #

John Bouder is a research fellow with the Commonwealth Foundation, www.CommonwealthFoundation.org, Pennsylvania's free-market think tank.

• Total Pennsylvania state government spending has consistently outpaced the growth of personal income.
  • From 1970 to 2011, the state operating budget as a percent of Pennsylvanians' personal income grew from 8.8% to 12.0%.
  • Per family of four, total state spending grew by more than $12,000 in inflation-adjusted dollars since 1970.
    
• State and local taxes take more than 10% of Pennsylvanians' income—$4,400 per person. Pennsylvania has the 10^th highest state and local tax burden, up from 24^th in 1990.

Government Growth has Hampered Pennsylvania's Economy

• Despite the dramatic growth in state government spending, Pennsylvania ranks among the worst states in the nation in key economic performance indicators.
  • From 1991-2011, Pennsylvania ranks 41^st in job growth, 46^th in population growth, and 48^th in personal income growth.
    
• From 2000 to 2010, Pennsylvania's private sector lost 103,700 jobs, while government employment grew by 33,400.
  • In 2011, government jobs declined by 17,100, but private sector employment grew by 80,500.
  • Over the last 20 years, the percentage growth of state government spending has a negative relationship with total job growth in Pennsylvania.
    
• According to IRS data, Pennsylvania lost a net 77,184 taxpayers to other states from 2000 to 2010.
  • This out-migration resulted in a net loss of $4.3 billion in household income.

The Solution: The Taxpayer Protection Act

The Taxpayer Protection Act would:

Limit future growth in state and local government spending.

• Government spending increases would be limited to the rate of inflation plus population growth.

Require the prioritization of spending by government.

• Funding for core government functions will be more than sufficient.

Ensure a prudent Rainy Day Fund.

• 25% of excess taxes collected would be placed into a Rainy Day Fund that can be used to balance the budget in times of recession.

Provide tax relief for families.

• 75% of all excess state tax revenues will be used to reduce Personal Income Tax rates. After the Rainy Day Fund reaches 5% of spending, all excess revenues will be used to reduce tax rates.

The Taxpayer Protection Act Prepares Pennsylvania for Recessions

• Prior to 2011-12, Pennsylvania's total operating budget had increased for at least 40 consecutive years.
  • Legislators spent every dollar available during economic growth, then raised taxes in recessions.
• The Taxpayer Protection Act (TPA) would force lawmakers to limit government spending during boom years, put money aside in a Rainy Day Fund, and prepare for periods of economic stagnation.

Spending Limits Should Encompass all Government Spending

• Often state budget discussions focus only on the General Fund, which represents less than half of all state spending. Pennsylvania's total state operating budget is more than $63 billion.
  • Since 1970, General Fund spending grew 83% in inflation-adjusted dollars. In contrast, spending from "Other State Funds" ballooned by 509%.
    
• Under the TPA index, total state spending could have increased by $16 billion since 2000. In actuality, state spending increased by $25 billion.

The TPA Allows for Reasonable Increases in Government Services

• A spending limit only slows the growth in spending, it does not mandate any cuts.
  • Under the TPA, spending from state funds in FY 2012-13 could increase by $963 million.
  • Government spending should be limited to core programs and services. Increases should be tied to the increase in the prices (inflation) and the number of people served (population growth).
    
• Spending limits will force policymakers to prioritize, rather than spend money without regard to taxpayers' ability to pay for it.

# # #

For more information on the Pennsylvania State Budget, visit www.CommonwealthFoundation.org/Budget

To help inform voters and hold elected officials accountable, the Commonwealth Foundation is surveying candidates for the state legislature.

View responses to the 2012 Candidate Survey here or print the PDF of all responses. (To lookup your legislative district numbers, click here).

To read the full length survey questions and see legislators additional comments, when available, click on the 'Full Survey PDF' links below.

If your candidate(s) for office have not responded, download the Candidate Survey 2012 here and ask them to complete and return it to the Commonwealth Foundation.

Perhaps the best known education spending canard is more dollars will produce more scholars. Yet since 1995, when Pennsylvania doubled taxpayer spending on K-12 education from $13 billion to more than $26 billion, SAT scores have been flat and state results on the U.S. Department of Education's Nation's Report Card haven't improved much since 2002.

Today, Pennsylvania school districts spend more than $14,000 per student—with some as high as $25,000—and studies show absolutely no connection between district spending and student achievement. Moreover, the achievement gap in some of our most failing and violent public schools continues to widen, like the Harrisburg School District where taxpayers invested more than $18,000 per pupil but 9 out of 10 students couldn't reach proficiency in math.

Because these facts get in the way, the public school industry resorts to rickety rhetoric, citing "draconian funding cuts" over the past two years. But the truth is these cuts occurred with the end of the federal stimulus, which was always intended to be temporary aid. Excluding federal funds, Gov. Corbett's proposed budget actually represents a two percent increase in spending on K-12 education since FY 2007-08, the year before the stimulus.

Public school advocates tirelessly demand more money for the classroom, but fail to support cost-saving prevailing wage law reform that would end the debilitating mandate that inflates school (and all government) construction costs by 10 to 20 percent. Whether it is willful neglect of the facts or myopic math, proponents of more spending refuse to recognize that prevailing wage mandates cost Pennsylvania taxpayers $1 billion to $2 billion a year, increasing costs for school districts.

Another fact many spending advocates conveniently ignore is that student enrollment since 2000 has dramatically decreased by 35,510, but the number of staff employed by public schools increased by 35,821. This begs an important question: Would anyone invest in an endeavor that doubles its spending and significantly increases its staff to serve a shrinking customer base, all while making a product that isn't improving?

Ultimately, these increases were enabled by failing to fully fund pensions for public school teachers. But like family budgets, the bill is now coming due like at Central Dauphin School District where officials announced the cut of more than 70 teaching jobs and a tax increase of more than three percent just to make ends meet.

But they are not alone as total taxpayer contributions for school and state worker pensions will increase from $1.7 billion in 2011-12 to more than $6.1 billion in 2016-17—a 257 percent increase. Next school year, the average homeowner will pay an additional $370 just for increases in required pension contributions.

Unfortunately, those with perpetual palms up are repeating the popular narrative that simply blames state lawmakers. This old yarn ignores how the Pennsylvania State Education Association was complicit in the crisis. The PSEA lobbied not only for increases in pension benefits, but also for the 2003 and 2010 legislation to delay pension payments.

Finally, many discussions on education spending ignore the most exciting part of the story: the great success of school choice. School choice programs such as charter schools, cyber charter schools and scholarships offered through business tax credits give Pennsylvania's children quality education with fewer tax dollars. Schools of choice—private, charter, and home school—save taxpayers $4.3 billion annually.

Moreover, school choice has shown to improve student learning, including higher graduation rates. Since graduating high school is tied to long-term success in life, improving performance via school choice will also save taxpayers in future welfare and corrections spending.

As parents and taxpayers, Pennsylvanians should hear all the facts on education spending. The next time education unions and other special interests bully and demand more money "for the kids," remember what they aren't telling you—the rest of the story.

# # #

Elizabeth Stelle is a policy analyst with the Commonwealth Foundation (www.CommonwealthFoundation.org), Pennsylvania's free-market think tank.

Taxpayer Funding for Higher Education in Pennsylvania

• Pennsylvania taxpayers subsidize higher education through appropriations to 14 state-owned universities (Pennsylvania State System of Higher Education, or PASSHE), four state-related universities (Penn State, Pittsburgh, Temple, and Lincoln), community colleges, and the Pennsylvania Higher Education Assistance Agency (PHEAA), which awards grants directly to students.
• The FY 2011-12 state budget reduced Penn State's subsidy by 31.8%, subsidies for other state-related institutions by 19%, and the PASSHE subsidy by 18%.
• Gov. Tom Corbett's FY 2012-13 budget proposal reduces state taxpayer subsidies to state-related and state-owned universities by 20% and 30%, respectively.
  • The subsidy reduction for state-owned schools represents, on average, 3.8% of their total budget.
  • The subsidy reduction for state-related schools represents between 1.5% and 2% of the operating budgets of Penn State, Pittsburgh and Temple.
  • Lincoln University's subsidy would remain unchanged from FY 2011-12.
• The vast majority of colleges and universities in Pennsylvania operate without direct state taxpayer support. More than 200 private colleges and universities in the Keystone State enroll more than 360,000 students.

Institutional Subsidies Don't Prevent Tuition Hikes

• Tuition at public universities has ballooned over the past decade even with significant taxpayer subsidies.
  • Penn State's tuition more than doubled over the past ten years, to $15,579, for in-state undergraduates.
  • Pittsburgh more than doubled tuition, to $16,132, for in-state undergraduates.

Private Schools Are Competitive with State Schools

• Despite receiving taxpayer subsidies, Penn State and Pittsburgh have the highest and second-highest tuitions of four-year public institutions in the nation, according to the U.S. Department of Education.
• Some advocates look at posted tuition prices to argue that state subsidies to public universities keep education affordable for middle-class families. However, students rarely pay the "sticker price" at private universities.
  • Nationally, less than 12% of students at private institutions paid the sticker price last year, according to the College Board.
  • Last summer, Duquesne University slashed tuition 50% for incoming education majors of high academic standing.
  • The actual tuition at state-related schools is higher than what students pay at Grove City College, a four-year private school that accepts no government funds, and the University of Phoenix, a for-profit university.

Taxpayer Subsidies Not Linked to Results

• Taxpayers subsidize universities regardless of their performance. On average, 60.3% of students enrolling in Pennsylvania's four-year public universities don't graduate in four years.
  • Almost 38% will not graduate in six years.
• Public universities in Pennsylvania spend, on average, $79,514 per student completion, compared to the national four-year public average of $68,617.

Alternatives to Tuition Hikes

• Reduce administrative and personnel costs:
  • Penn State increased administrative staff per student by 70.8% between 1993 and 2007. Pittsburgh increased staff by 54.7% in the same period, according to the Goldwater Institute.
  • Five small liberal arts colleges in Virginia and West Virginia hired joint faculty and utilized distance education platforms to increase teaching loads.
  • PASSHE formed partnerships between the 14 schools to reduce the cost of delivering classes for small majors, such as philosophy and foreign languages.
    
    
• Return to core mission:
  • Weekly student contact is declining while research hours increase. Undergraduate contact hours declined 27% at Penn State and 29% at Pittsburgh, while research hours increased 93% and 55% from 1972 through 2010 according to data provided to the Joint State Government Commission.
  • California University of Pennsylvania built a $52 million, 5,000 seat arena and spent $20 million in parking improvements. The university increased debt obligations five-fold over 10 years.
    
    
• Eliminate and consolidate unpopular programs:
  • Minnesota's system of public colleges and universities closed 345 programs and approved 191 new ones between 2007 and 2009.
  • Massachusetts raised admission requirements at public colleges to encourage students in need of remediation to begin at community colleges. The savings were used to reduce tuition for students who earn community college degrees and go on to finish their four-year degrees at public colleges.
    
    
• Higher education funding should go directly to students, which is more effective at reducing college costs than institutional support.
  • Research shows most of the increased state appropriations are not being devoted to lowering tuition. For every one dollar of added state appropriations per student, only a mere 30 cents is used to lower tuition at public universities.

# # #

For more information on the Pennsylvania State Budget, visit www.CommonwealthFoundation.org/Budget.

This week, the Patient Protection and Affordable Care Act celebrated its two-year anniversary before the U.S. Supreme Court. The controversial health care law finds itself in front of the highest court in the land after Pennsylvania and 25 other states joined together to challenge its constitutionality.

After ferocious public debate and two years of implementation, the legislation still faces an uncertain fate – and the Obama administration still finds itself working to convince a majority of Americans that its signature health care reform isn't a bad thing. Current Gallup polling shows about three-fourths of Americans believe the law is unconstitutional.

According to the White House, individual liberty matters less than the law's big benefits, which are supposedly just around the bend. The view from the states, however, is decidedly less optimistic. The problems with the law are so severe its harmful effects must be enumerated.

The act imposes new burdens on Pennsylvania in three dangerous and damaging ways. First, it costs our businesses with new taxes. Second, it costs our residents with higher premiums. Third, it costs our states, threatening to reduce the quality of care for Medicaid recipients on the losing end of strained budgets. Tallying these cumulative economic burdens explains and justifies today's stubborn public opposition. Far from controlling costs, the law controls lives – even to the point of worsening them.

Consider the costs to businesses, which are already holding down employment in anticipation of new legislation. The Joint Committee on Taxation finds that the law will be responsible for a total of $400 billion in new taxes and fees in the next seven years. Even the Obama administration's own Department of Health and Human Services (via the Centers for Medicare and Medicaid Services) admits the law will push health care expenditures higher. Though the Obama administration continues to deny it, the calculus is simple: more health care spending equals more expenses on already-strapped businesses.

What about the impact on our fellow citizens? The law has raised, not lowered, premiums. Consulting firm Aon Hewitt estimates that premiums in the individual market are some 5 percent higher this year because of the health care law.

More is to come.  In Wisconsin, a study by Gorman Actuarial and MIT's Jonathan Gruber – an adviser to the president on the Patient Protection and Affordable Care Act – sees an average premium increase of 30 percent. And last week, Pennsylvania Secretary of Public Welfare, Gary Alexander, noted one in four Pennsylvanians will be on Medicaid when the Patient Protection and Affordable Care Act is in full effect.

Finally, the law wreaks havoc on state budgets. In Pennsylvania, Medical Assistance spending has consistently grown faster than taxpayers' ability to pay. Medicaid now accounts for 31 percent of our $64 billion operating budget – consuming a larger share of any state's budget except New York.  And under the Patient Affordable Health Care Act, costs will continue to skyrocket as Medicaid enrollment is estimated to increase 17.6 percent in 2014. This is simply unsustainable. 

While the U.S. Supreme Court will also focus on the key issue of whether the law's individual mandate is constitutional, the law's devastating economic consequences cannot be ignored.  Its intended reforms will ultimately raise taxes, increase premiums and balloon budgets while businesses, individuals and states struggle to gain the upper hand on their finances.

Whether the Supreme Court finds it constitutional or not, this is one law America can't afford.

# # #

Matthew J. Brouillette is the president and CEO of the Commonwealth Foundation(www.commonwealthfoundation.org), Pennsylvania's free-market think tank.

• This total represents debt in the form of government bonds, but excludes unfunded pension and healthcare liabilities for government workers, borrowing for unemployment compensation, and short-term tax anticipation notes, which add tens of billions more in obligations for Pennsylvania taxpayers.

State Debt

Since 2002, total outstanding state general obligation debt increased 54%, from $6.8 billion to $10.3 billion.

• Annual debt payments on general obligation bonds increased from $349 million in FY 2002-03 to $1.1 billion in the proposed FY 2012-13 budget, an increase of 198% in annual debt payments in nine years.

State Agencies' & Authorities' Debt

More than three-fourths of Pennsylvania's state-level borrowing is done by off-budget state agencies and authorities, like the Turnpike Commission and the Commonwealth Financing Authority, which issue their own debt to the extent authorized by the legislature.

• Debt held by state agencies and authorities increased from $16.8 billion in 2002 to nearly $34.7 billion in 2011—an increase of 106%.

• Total Pennsylvania state and state agencies' and authorities' debt increased from $23.7 billion to more than $45 billion in the last nine years—representing a total state-level increase of 90%.

School District Debt

Pennsylvania taxpayers are also experiencing an increase in debt at the school district level. 

• According to the Pennsylvania Department of Education, school district debt increased from $19.4 billion in 2002 to $26.6 billion in 2010—an increase of 38%.

County, Municipal, Township, & Special District Debt

Other local government debt—debt held by counties, cities, townships, boroughs, and special districts—represents more than 40% of all taxpayer debt in the Commonwealth.

• According to the U.S. Census Bureau's most recent data (2009), county, municipal, township, and special district debt increased from $45 billion in 2002 to $49 billion in 2009—an increase of 9%.

# # #

For more information on the Pennsylvania State Budget, visit www.CommonwealthFoundation.org/Budget.

Although the Pennsylvania School Boards Association and the Commonwealth Foundation are policy opponents in the debate over school choice, we strongly agree on the need to give elected school boards the ability to better manage their taxpayer resources.

Public school boards are responsible for large budgets; however, the hands of these boards are often tied because state law restricts them from managing taxpayer dollars effectively and efficiently. Mandates have a pervasive impact on school operations. Some are reasonable, many are not.

Take, for example, Pennsylvania's 50-year-old "prevailing wage" law, which forces school districts and every other state government entity to pay inflated wages on construction projects costing greater than $25,000.  The "prevailing wage," established in 1961 at double the cost of the average home, is not the local market rate for a carpenter, plumber or electrician, but the inflated wage rates established in labor union collective bargaining agreements.  On average, the prevailing wage is much higher than regular Pennsylvania construction wages for identical work on private projects.

Sadly, this isn't just theory or rhetoric as the taxpayers in York County's South Western School District recently found out.  When school roof repairs were needed, the initial contractor proposal came in at $84,504. However, since the total cost of the project exceeded the $25,000 threshold, the contractor was forced to revise the plan using prevailing wages.

The result? The total cost of the project increased from $84,504 to $126,825, an increase of 50 percent, for exactly the same product with the same skilled workers. The only difference is that the taxpayers in South Western School District got a $42,321 higher bill for absolutely no improvement in quality. 

Another example of tax-wasting mandates from Harrisburg is the inability of school districts to make personnel decisions.  Unlike private businesses and every other government entity, school districts are not permitted to reduce the size of their professional staff except under very limited circumstances.  Believe it or not, the inability to pay is not one of the reasons school boards are permitted to furlough employees.

No school board or administration enjoys cutting staff, but the grim reality today is that with scarce resources, many districts must downsize their operations.  Enacting legislation permitting furloughs for economic reasons should therefore be a high priority this spring for Gov. Tom Corbett and the General Assembly.

However, how this should happen, as are so many other public policy matters, is just as important as why.  If a school district is forced to eliminate teaching positions, it is important for the school leadership team to be able to decide which positions to retain.  Some argue the decision should be solely on the basis of seniority – that is, the last person hired should be the first person let go.  We strongly disagree.

No private enterprise would accept such a provision or survive under it.  If school staff must be reduced because the budget must be balanced, school boards must be able to make program and furlough decisions based on what's best for students.

Because public schools are being asked to do more with less money, Gov. Corbett and the General Assembly must give them the tools they need to meet the challenge.  By repealing the outdated and expensive "prevailing wage" law and giving school boards the ability to make important personnel decisions, school district are justly enabled to use taxpayer money more wisely and empower the very best resources for our children's education.

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Thomas J. Gentzel is executive director of the Pennsylvania School Boards Association (www.PSBA.org) and Matthew J. Brouillette is president and CEO of the Commonwealth Foundation (www.CommonwealthFoundation.org).

• Pennsylvania taxpayers fund two statewide pension plans for government employees—the State Employees' Retirement System (SERS) for state employees and the Public School Employees' Retirement System (PSERS) for school employees.
  • With taxpayer money, state government pays the entire employer contribution for SERS, and more than half of the PSERS costs.
  • PSERS and SERS project total taxpayer contributions for these two plans will increase from $1.7 billion in 2011-12 to more than $6.1 billion in 2016-17—a 257% increase.
  • The Independent Fiscal Office estimates pension payments in 2016-17 will represent 12% of the state General Fund budget, up from 4% this year.

Pension Funding and Investment Return

• Under current projections, SERS' funded ratio—the ratio of assets to accrued pension liabilities (how much the funds needed to make future payouts)—will dip to 60.1%. PSERS' funded ratio is expected to decline to 59.1%.
  • All projections assume 8% annual rate of return on investment for SERS' and 7.5% for PSERS' funds.
  • Any investment losses or earnings less than this rate, as happened during the last recession, will reduce the funded ratio and require additional taxpayer contributions.

• The dramatic increase in taxpayer pension contributions is due to three main factors:
  • Legislative increase in pension benefits in 2001, followed by a cost-of-living adjustment in 2002;
  • Pension fund investment losses during 2001-02 and 2008-09; and
  • Legislation in 2003 and 2010 to delay pension contributions, requiring higher future payments.
• In addition to SERS and PSERS, there are more than 3,200 local government pension funds.

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For more information on the Pennsylvania State Budget, visit CommonwealthFoundation.org/Budget.

Sadly, many in the transportation industry and some lawmakers in Pennsylvania believe the only way to fix our roads is to increase gasoline taxes and charge drivers more in vehicle fees.  This low-octane loser is surely another wrong exit for taxpayers whose tank is already on empty.

To be certain, Pennsylvania's roads and bridges need repair.  But before taking one more dollar from working men and women through higher prices at the gas pump, lawmakers must do a better job spending the billions in taxes and fees they already get.

Gov. Corbett's Transportation Funding Advisory Commission proposed uncapping the oil franchise tax—bumping up gas prices by an estimated 10 cents or more per gallon—while also increasing vehicle and license fees.  Advocates for more transportation taxes and fees claim Pennsylvania, due to the lack of transportation funds, has the most structurally deficient bridges in the nation and some of the worst roads in the country.

While Pennsylvania's roads and bridges may indeed be poor, there is simply no shortage of transportation dollars.  U.S. Census and Federal Highway Administration data shows Pennsylvania spends more than $61,000 per highway mile, the seventh-highest road spending in the country.  State highway spending exceeds $588 per person, more than 41 other states.  And, state transportation spending has risen by more than 127 percent since 1995.  The bottom line: Funds are available, but they're not being spent well.

Pennsylvania's fiscal house is already facing a four-alarm fire with the state's spending crisis, and transportation must be considered in the context of all state spending.  Fixing roads and bridges is a fundamental government responsibility, but many other state programs are not. 

How can any legislator look taxpayers in the eye and demand they pay more at the pump each month to fix failing bridges, while state government hands out billions of dollars in subsidies for sport stadiums, corporate headquarters, and "green jobs"?  Redirecting state borrowing for corporate welfare to transportation would make better use of taxpayers' dollars. 

There are more ways to sure up funding for roads and bridges that won't empty the wallets of Pennsylvania drivers.  Currently, the cost of state-funded construction projects ballooned by tens of millions of dollars due to archaic mandates that force private employers to pay workers inflated wages, increasing labor costs upward of 30 percent for the same quality of work.  Redefining prevailing wage rates on state-funded construction projects can free up funding that could be used on other badly needed projects.

Moreover, transportation projects, like all government appropriations, must be prioritized.  Beautification, streetscaping, bike trails, parking garages, and new maintenance buildings might garner applause and photo ops for politicians, but they eat up funding that could be used for vital repairs.  Every dollar spent on unnecessary aesthetics is one dollar that cannot be spent fixing our more than 5,000 deficient bridges.

Furthermore, Pennsylvania has the opportunity to bring private sector expertise and financing to transportation.   Public-private partnerships, which the commission supported, are contractual agreements between a government agency and a private entity to build or manage a project.  These partnerships minimize costs and maximize accountability as private contractors put their own capital on the line while government retains ownership and oversight.

Lawmakers should also stop sending turnpike toll money to mass transit systems in Philadelphia and Pittsburgh that most Pennsylvanians don't even use.  Mass transit must rely on user fees, not taxpayer subsidies, freeing up turnpike revenue to repair the roads motorists are paying to drive on.

Ultimately, gas prices have already taken a financial toll on Pennsylvania drivers.  Before taking more out of the wallets of drivers and taxpayers, lawmakers must prioritize the billions of dollars we spend today and protect our investment in transportation.  Otherwise, Pennsylvania taxpayers will be out of gas along with patience for business-as-usual overspending.

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Jonathan Humma is a research fellow and Nathan A. Benefield is director of policy analysis with the Commonwealth Foundation (www.commonwealthfoundation.org), Pennsylvania's free-market think tank.

Pennsylvania law also grants government unions the unique and special privilege to use government payroll and administrative systems to deduct dues and fair share fees automatically from workers' paychecks-money workers earn, but never see. Automatic deductions-at taxpayers' expense-help bankroll six-figure salaries for union bosses, political lobbying, and expensive conferences and junkets while employees have little or no say in how unions use their money.

Government employees were granted the legislative privilege to unionize in 1970, and since then, a number of Pennsylvania laws have increased union power while violating workers' freedom of association. Half of Pennsylvania's government workers are unionized, amounting to nearly 300,000 voluntary members and involuntary fee payers in the four largest government unions: the Pennsylvania State Education Association (PSEA), the American Federation of State, Council and Municipal Employees (AFSCME), United Food and Commercial Workers (UFCW), and the Service Employees International Union (SEIU).

Government unions often lobby for policies that work against the best interest of their members. The PSEA-the state affiliate of the National Education Association-advocates for policies that hurt both teachers and students. The "last in, first out" policy, for example, means teachers are furloughed or laid off on the basis of seniority rather than merit, shoving some of the best, most effective teachers out of the classroom.  The PSEA also opposes the expansion of proven programs that serve the individual learning needs of children and give families options beyond the traditional district-based public schools.

Last year, the PSEA spent $4.2 million on lobbying and political activity, an increase of about 60% from the prior year. Members' dues fund activities such as a $22,000 gubernatorial debate video, public surveys on education initiatives such as vouchers, and advertising campaigns on public education.

Current government collective bargaining laws have enabled government unions to drive up taxpayer costs in the form of unsustainable salary, benefit and pension increases at a time when state and local governments face significant budget shortfalls. In Gov. Tom Corbett's 2012-13 proposed budget, payment into state pension plans will increase to $1.6 billion, up from about $1 billion the previous year. By 2016, projected state and school district pension payments will balloon to $5.6 billion, an increase of more than 400% in just five years. The most recently negotiated state contract for AFSCME Council 13 and SEIU Local 668 adds further injury, giving workers an 11.2% pay increase over four years, and requiring minimal employee contributions to health care costs compared to what private sector workers pay.

For the benefit of taxpayers and children, Pennsylvania lawmakers should enact several proven reforms that respect employees' rights at work while empowering public officials to manage their workforce and budgets.  These reforms include ending use of taxpayer resources to collect dues and fees for lobbying organizations, requiring unions to receive permission from union members before using dues or fees for political activity, repealing laws that compel government workers to pay fees to a union as a condition of employment, and relieving unions of having to represent any non-dues or non-fee paying employees. 

Sen. John Eichelberger	Rep. Stephen Bloom

Ultimately, the government must stop burning taxpayer and employer dollars to fuel its bonfire of irresponsibility and the flames of crony capitalism must be squelched to once again allow the free market to determine winners and losers, thus rescuing and reviving the economic principles that create sustainable prosperity for our commonwealth and its citizens.

Make no mistake, this is no small kitchen flare-up, this is a four-alarm inferno. Spending caps will cool the heat, but to put the fire out, the mushrooming costs of welfare, corrections, debt and pensions all must be addressed.

For the first time in history, Pennsylvania now spends more of its budget on public welfare than on educating our children.  The flames of public welfare spending have leaped past the firebreaks, rising by more than 50 percent in just 10 years.  And the heat is so intense that the so-called safety nets of public welfare programs are engulfing even those they were designed to save. Instead, public welfare should encourage personal responsibility and a swift return to independence.

We applaud state Auditor General Jack Wagner for uncovering welfare error rates of more than 15 percent in Pennsylvania's welfare programs.  If the error rate for Medicaid was lowered by just one-tenth, the state would save $439 million this year and $1.9 billion in the next four years. Curbing welfare abuse saves the taxpayers of Pennsylvania, but, just as important, ensures welfare resources go to the truly needy.

Meanwhile, in another persistent hotspot in the fiscal fire, Pennsylvania's incarceration rate has spiked by 500 percent since 1980.  It should be no surprise then that the state Department of Corrections' budget has increased 1,700 percent in the past 30 years. There are more than 50,000 inmates in Pennsylvania's prisons, and even though taxpayers have paid for 18 new prisons since 1980, the prison population today is 13 percent over capacity. 

Ignoring the financial smoke pouring from our prison system will do nothing to curb the dramatic increase in corrections spending or to reduce crime in Pennsylvania.  Reforms must protect citizens, reduce crime, and control spending.   The criminal justice system's goal shouldn't be to simply lock up as many people as possible, but also to ensure offenders are rehabilitated before reentering society.  Pennsylvania must replace ineffective correction policies with those that lower crime rates, reduce recidivism and control spending.

Cost-saving lessons can be learned from successful corrections reform measures in other states.   For example, a Florida study found offenders on GPS electronic monitoring were 95 percent less likely to return to prison than those not being monitored.  

And finally, amidst the red-hot flames of spending, welfare and corrections, our state pension costs and debt obligations threaten to blow Pennsylvania's entire fiscal house to smithereens.  Pennsylvania's public employee pension plans are severely underfunded, and pension contributions will be increasing by 40 percent per year.  True reform is needed to protect our children and grandchildren from paying for the consequences of our spending.

We support replacing public sector pensions with a 401(k) type program for newly hired state and public education employees.  This is an affordable option for Pennsylvanians and gives employees ownership and accountability in their retirement planning.

And despite recent moves toward more responsible levels of borrowing, the cost of carrying our existing state debt continues to consume more and more taxpayer dollars every year. We support aggressive measures to "stop, drop and roll" our public debt: stop borrowing money to spend, drop and cut debt-fueled give-aways like "RACP," and roll-over any existing debt that can't be paid down to take advantage of savings from historically low interest rates.

We love and believe in the potential of our commonwealth.  Our fiscal house is about to catch on fire, and while some lawmakers and special interest groups are shouting "burn, baby, burn," we refuse to stand by and let that happen. We're sounding the alarms, and we need your help. Pennsylvanians must call on their legislators and demand substantive solutions are implemented to put out the flames.

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Senator John Eichelberger represents the 30th District and Representative Stephen Bloom represents the 199th District.

Pennsylvania Public School Spending Continues to Grow

• Overall K-12 revenue and spending has dramatically increased in Pennsylvania over the last 15 years.
  • Pennsylvania's K-12 education revenue increased from $13 billion in 1995-96 to $26 billion in 2009-10. Adjusted for inflation, that represents a 44% increase in revenue per student.
  • Pennsylvania school districts spent more than $14,000 per student in the 2009-10 school year.
• School construction and debt spending has more than doubled in the last 15 years, increasing by 140% from $1.2 billion in 1996-97 to $2.9 billion in 2009-10.
  • Prevailing wage laws increase the average cost of construction by 20% or more; repealing this mandate would save $400 million a year in property taxes.

Public School Staffing has Increased while Student Enrollment has Declined

• Student enrollment has decreased by 35,510 since 2000 while schools have hired 35,821 more staff members.
  • Most of these new employees pay hundreds of dollars in dues and fees to the PSEA or PFT labor unions as a condition of employment.
  • In 2010-11, the PSEA spent $4.2 million in dues on political activities and lobbying against substantive education reforms, including school choice, teacher evaluations, and taxpayer control of tax increases.

K-12 Public Education Performance has Stagnated

• Despite these spending and staff increases, performance on the National Assessment of Educational Progress, the national exam used to compare state performance, has changed little.
• Academic studies have found little or no correlation between student achievement and class size, teacher salaries, or per-student expenditures.
  • A 2010 study by 21^st Century Partnership for Science, Technology, Engineering, and Mathematics Education (21PSTEM) comparing 11^th grade math, reading, and science scores on Pennsylvania state tests with district per-student spending found low-spending districts often outperform high-spending ones.
  • Another 21PSTEM study looked at the 30 Pennsylvania school districts that improved the most on 11^th grade reading and math performance and the 30 districts that declined the most from 2004 to 2010. Schools that declined in performance had higher increases in total per-student spending.
• Pennsylvania's average composite SAT score in reading and math has hovered around 995 for the last 15 years, despite doubling spending.

Public Schools have $2.8 Billion in Reserves

• At the end of the 2009-10 school year, public schools had $2.82 billion in fund reserves.
  • This includes $1.7 billion in undesignated funds, and $1.1 billion in funds designated for specific future use.
  • School reserve funds have grown by 140% (from $1.3 billion to $2.8 billion) since 1996-97.

School Choice Costs Taxpayer Less

• Private, charter and home schools educate more than 380,000 children at far less cost to taxpayers than the $14,000 per student spent by school districts.
  • Private, nonpublic schools serve more than 287,000 students with some receiving state support (including transportation costs going to school districts) of less than $1,000 per student.
  • Educational Improvement Tax Credit scholarships—which averaged about $1,000 per scholarship in 2009-10—served approximately 39,000 students with an average family income of less than $30,000.
  • Charter schools, including cyber charter schools, served 90,000 students in 2009-10 at about $2,400 less per student than school districts spent.
  • Homeschooled children, approximately 22,000 according to 2007-08 data from the Pennsylvania Department of Education, receive no direct taxpayer support.
• Parents choosing non-traditional public schools saved taxpayers more than $4 billion in the 2009-10 school year, based on school district spending per student.

Total Taxpayer Savings from Students Attending Schools of Choice
2009-10 School Year
	Savings Per Student*	Number of Students**	Total Savings
Private and Nonpublic	$13,279	287,092	$3,812,403,692
EITC Scholarship Students	$12,235	38,646	$472,848,486
Home School	$14,301	22,000	$314,622,000
Public Charter (Total)	$2,367	73,054	$172,903,936
Cyber Charter	$3,366	20,406	$68,685,860
Total		382,146	$4,299,929,628
* Includes All state funding for nonpublic schools plus tax credits for EITC scholarships as a cost. ** Homeschooling enrollment estimate based on 2007-08 PDE data.
Sources: PA Department of Education, Summaries of Annual Financial Report Data; Public School Enrollment Reports, http://www.portal.state.pa.us/portal/server.pt/community/data_and_statistics/7202

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For more information on the Pennsylvania State Budget, visit www.CommonwealthFoundation.org/Budget

Skyrocketing Welfare Costs

• For the first time in history, Pennsylvania spends more on Public Welfare than Education in the General Fund Budget.
• Public welfare spending is on a financially unsustainable path in Pennsylvania.
  • Since FY 2002-03, total Public Welfare spending, including federal funds to the state, rose 52%, from $17.9 billion to an estimated $27.2 billion for FY 2011-12.
  • State welfare spending has grown three times faster than the rest of the state budget since FY 2002-03, reaching $10.6 billion in FY 2011-12.
  • Medicaid alone consumes 31% of the total state operating budget-the second largest share of any state, according to the National Association of State Budget Officers.
  • Absent reform, welfare spending will grow faster than government revenues, threatening to crowd out education and every other government program.

     

    

Waste & Abuse Harm the Truly Needy

• Auditor General Wagner found welfare error rates of more than 15%. Reducing the error rate in Medicaid by just one-tenth would save the state $439 million this year and $1.9 billion in the next four years!
• In 2002, approximately 47,000 cases of suspected welfare fraud were referred to the Inspector General. Under the Rendell administration, the number of referrals for suspected fraud was cut in half even as caseloads increased.
• During FY 2010-2011, the Office of Inspector General saved and collected more than $66.5 million by investigating 27,373 applications for benefits and determining applicants did not qualify.
• The Office of Developmental Programs in Public Welfare was established to serve those with intellectual disabilities. Audits of ODP providers reveal tax dollars were used to lease luxury vehicles and purchase items such as a chandelier, landscaping, and a six-person hot tub.

Higher Spending has Failed to Serve the Poor

• Instead of promoting self-reliance, current welfare programs in Pennsylvania disserve the poor by promoting dependency and incentivizing perpetual poverty.
  • A myriad of programs discourage families from escaping the welfare trap, where a family's total income declines as their salary increases and their benefits are taken away.
• Pennsylvania's poverty rate has been climbing since 2000, regardless of economic conditions. In 10 years, the number of citizens in poverty increased nearly 50% from 8.8% in 2000 to 12.2% in 2010.
• Under Medicaid-government health insurance for the poor-patients receive worse care or have to wait longer to receive treatment than those with no insurance at all.
  • A study comparing cancer patients and different forms of health insurance found one-year cancer survival rates for prostate, breast, and lung cancers were higher among the uninsured than those with Medicaid.
  • A study of Ohio Medicaid patients diagnosed with cancer found that Medicaid enrollees were twice as likely as likely as non-enrollees to die from their disease within five years.

Principles for Welfare Reform

• Protect the safety net for the truly needy. Reform must ensure welfare programs are affordable and sustainable while reducing dependence on taxpayer-funded programs. This requires ensuring only those eligible for programs and in need of aid receive taxpayer funds.
  
• Policy Recommendations:
  • Reduce waste and abuse by enforcing eligibility standards, strengthening whistleblower protections, and enacting recovery audits (allowing private contractors to find fraud and keep a portion of what they recover).
  • Close eligibility loopholes in Long-Term Care to prevent wealthy households from benefiting from government-paid nursing care and encourage the purchase of private long-term care insurance
  • Demand Medicaid flexibility from the federal government. Federal rules are tying the hands of state officials, preventing any adjustments to eligibility, despite budget deficits or innovations that can improve the quality of services.
    


• Promote the dignity of work. Welfare programs should help able individuals transition to the workforce rather than promote dependency on taxpayers by discouraging efforts to find employment.
• Policy Recommendations:
  • Enhance work requirements and structure time limits to promote temporary assistance and prepare recipients for independence.
  • Restructure Medicaid as a voucher system where patients are given a subsidy based on income and health and have the ability to choose their own healthcare insurance.
    


• Foster true charity care. Government welfare is not the price of civil society, but the failure of society to be civilized. True charity does not come from tax dollars coerced from Pennsylvanians, but from individuals and organizations working to help needy individuals in their time of need while embracing the virtues of personal responsibility and independence.

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For more information on the Pennsylvania State Budget, visit www.CommonwealthFoundation.org/Budget

Policy analysts from the free-market think tank examined numerous documented cases of fraud, waste and abuse including service providers billing the Pennsylvania Department of Public Welfare for luxuries such as a chandelier, landscaping, a six-person hot tub and a bowling alley.

"Government welfare was once a helping hand to those in need, but has instead become a tangled bureaucracy of often abused programs that fall far short of the good intentions behind them," said Matthew J. Brouillette, president and CEO.  "While some say reforms unfairly hurt the poor, the reality is Pennsylvania is quickly reaching a point where the tax base cannot support the benefits lawmakers are promising."

Analysts also found DPW represents the largest department in the state's General Fund, encompassing nearly 40 percent of the budget.  Despite dramatic increases in welfare spending, they conclude measures have failed to free Pennsylvanians from a poverty rate that has been climbing since 2000. 

"The welfare system in Pennsylvania is expensive, ineffective, and largely unaccountable," said Brouillette.  "It should be no surprise then that ever-increasing welfare spending is simply failing to bring independence to citizens."

According to U.S. Census data, Pennsylvania is among the top-10 states in budget percentage spent on public welfare, surpassing neighboring states such as Maryland, New Jersey, and West Virginia.  Moreover, the number of Pennsylvanians receiving food stamps benefits is at an all-time high while increases in welfare spending outpace personal income and state tax revenue growth.

"The majority of welfare programs and their funding originate with the federal government, leaving states with little room for innovation and flexibility in their administration," said Brouillette.  The current federal funding system actually encourages states to spend more in order to draw down additional federal funds.

Among the foundation's recommendations are calls for state legislators to aggressively pursue waivers as other states have successfully done in order to overcome federal mandates and save taxpayers' money.  They also recommend DPW rapidly cuts waste and abuse by reducing error rates and enforcing eligibility standards. Additionally, legislators should utilize performance-based budgeting to expand programs that work and end programs that don't.

"If no action is taken, welfare spending will continue to crowd out other departments like education and transportation, depriving the truly needy from proper care and leading to future tax increases," said Brouillette.  "If that happens, lawmakers will be delivering decades of dependence instead of dignity."

For more information on welfare reform, visit www.commonwealthfoundation.org/welfare.

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For more information, please contact Jay Ostrich at 717-649-6547. The Commonwealth Foundation (www.commonwealthfoundation.org) crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.