Counting All Pennsylvania State Employees

A state lawmaker sent along a Patriot New article, in which Gov. Rendell cites the relatively low number of Pennsylvania state employees compared to other states, to find out where the numbers came from:

[Rendell]: I found it amusing when Governor Sanford was going through his problems, that he apologized to 65,000 state employees in South Carolina, a state half our size, and they have 65,000 employees and we have 77,000.

It is true that Pennsylvania ranks low among state in term of state and local government employees per capita - 478 per 10,000 residents, vs. U.S. average of 546 - but not so low as Rendell makes it out to be, as he is not using an apples-to-apples comparison.

The "77,000 employees" Rendell refers to is the current filled positions in the Pennsylvania state complement - but only positions under the Governor's control. According to the Census Bureau data on government employment, which has a nifty chart maker, Pennsylvania had 192,000 state employees as of 2007 (160,000 in full-time equivalent).  This is well more than twice South Carolina's total of 87,000.

Rendell's figure excludes the legislative and judicial branches, independent state agencies and authorities (like the Turnpike Commission), and employees in higher education institutions (85,000 according to the Census - I'm not sure if that includes the state-related schools like Penn State, or only the State System and Community Colleges).

Pennsylvania August Revenues Come in a Bit Short

The Pennsylvania Department of Revenue released the preliminary collections report for August - the state collected just over $1.6 billion, $19 million (or 1%) below estimate.

The consensus projection is 0-growth in revenue from last year, and it is still too early to evaluate this.  While both July and August were down slightly from last year, neither is a big collection month (September is), and the economy didn't really bottom out until last October. 

As mentioned here before, we probably can't make a good re-evaluation on revenue expectations until October or November - which may be about the time we actually get a state budget.

Rendell Retreats from Natural Gas Tax

Yesterday, Governor Rendell took another of his proposed taxes off the negotiating table. His announcement perfectly demonstrates the points made in my new commentary on Rendell's mixed energy policy.

Governor Rendell's retreat is a good sign as the budget battle continues, but the his statement, "We should have a severance tax, but not at the beginning" foreshadows a similar showdown next year and implies that industries do not grow when they are taxed . . . interesting observation Governor.

Meanwhile the left wing PennFuture defends the tax saying it will hit big (evil) corporations. But the left-wing Pennsylvania Budget and Policy Center defends the tax saying that it will not hit corporations subject to the 2^nd highest corporate income tax rate in the nation, but mostly small businesses.

In reality the natural gas severance tax would have crippled an emerging industry inhibiting thousands of potential jobs and income for rural families in northern PA.

Call to Action: Budget Must Keep PA Competitive

The Pennsylvania Prosperity Project has a new action alert on the Pennsylvania budget, with a form to contact your legislators and ask lawmakers to "focus on making Pennsylvania competitive again" with a a budget "holds the line on spending and taxes."

School District Makes Due Without Tax Hike

ABC 27 has a story about East Pennsboro School District - the first stop on Gov. Rendell's bus tour - using fiscal restraint, not higher taxes, to deal with their budget crunch.  Rendell and House Democrats continue to insist that not spending as much on education as they want would require higher property taxes - unless, of course, districts choose not to increase taxes.

Auditor General Finds More Waste and Fraud in Pennsylvania Welfare

A new report from Pennsylvania Auditor General Jack Wagner finds that the Special Allowances program in the Department of Public Welfare is "rife with mismanagement and potential for fraud."  The audit found that 45% of the cases examined had insufficient documentation to justify payment.

Applied over the entire program, this would represent tens of millions in wasteful spending/potential savings.

Combined with waste and fraud in Medicaid, LIHEAP, and other programs, it is easy to see why the Auditor General thinks Pennsylvania can balance the state budget without tax hikes.

Dramatic Government Spending Increases are Never Enough

The Patriot News has an AP story by Marc Levy, highlighting recipients of taxpayer funding that want more taxpayer funding.  It seems these groups are living in another world.  For instance take this quote about state social service funding:

"It seems like in good times there's never enough money and in bad times they're the first ones to get kicked out."

Yet under Gov. Rendell - mostly "good times" - Pennsylvania Public Welfare spending increased 62.6%, even using the numbers from the supposedly draconian PA Senate budget. I doubt many taxpayers have seen their incomes jump 63% (that would represent an increase from $50,000 to $81,500) since 2002.  And if they did get that kind of raise, I doubt they would complaining about that increase.

Furthermore, these advocates maintain the mentality that if government doesn't fund it, it won't occur.  They imply that the only way to show that we "care" is to take money from others through taxes and fund programs that do the best job of lobbying. 

One of the programs they talk about is preschool. Not only do they tout academic gains that will likely disappear in a few years, but they ignore the sizable private preschool market, which will be crowded out by government programs.

Rendell Declares Autism Mandate a Failure

In 2008, the Pennsylvania General Assembly passed, and Gov. Rendell signed, a new mandate that private insurers would have to cover autism services. At the time, we said the new mandate would drive up insurance premiums, should be offered as an optional rider, and suggested vouchers for autistic children instead.

Gov. Rendell, however, suggested the mandate would actually save taxpayers, saying in his signing statement,

"By requiring private health insurers to shoulder their fair share of the cost of treatment, we’re taking steps to address the gap in the private insurance market and reduce reliance on government programs as the primary source of services and funding.” [emphasis added].

But now Rendell is saying we have to increase, not reduce state spending on autism services. He blasts the Senate Republicans for proposing to spend "only" $14.8 million on the line-item. In reality, the Senate budget would spend $19.1 million - using federal stimulus funds to supplement state funds - but don't expect Gov. Rendell to give the straight facts.

That total actual represents about the same as 2008-09 spending (after Rendell's freeze, which reduced the autism line item by $3.7 million, and later revision to the actual spending), and a whopping $9.2 million increase (92%) over 2007-08, when Rendell signed the autism mandate.

I guess it is pretty fair to say that if a 92% increase in autism spending in two years isn't enough, then we have not "reduced reliance on government programs"

Dwight Evan's Favorite WAM Recipient Has Plenty of Problems

The Philadelphia Inquirer exposes another nonprofit with ties to a state lawmaker - this time House Democrat Appropriations Chair Dwight Evans - whose use of tax dollars seems sketchy at best. (HT GrassrootsPA).

The story looks at a night club purchased by the group, Ogontz Avenue Revitalization Corp, to provide an economic boost:

So far, however, the only benefits seem to have gone to the club's former owners, a collection of prominent partners with past and present ties to the nonprofit group and its founder, State Rep. Dwight Evans (D., Phila.).

Evans is both the founder and chief patron of the group.

Evans, for instance, created OARC. Though he does not have a formal tie to the nonprofit group now, OARC counts on his continued patronage to secure state grants. Since 2000, it has received $23 million in state funding.

OARC's fealty in return was on display last year when it established the Dwight Evans Leadership Award.

Among the first honorees? Young, who once worked for OARC and who is widely viewed as a protege of Evans'.

Evans was one of Young's chief boosters when she was named to lead the Convention Center, a job that paid $245,000 in 2008. As president and CEO of the center, she supervises the region's premier convention facility. She is also overseeing its $700 million expansion, a project funded, in part, by Evans' efforts.

Not long after Young received the Evans award, OARC paid $47,000 to settle unpaid rent on her club. The money was ultimately part of the final purchase price of the business.

According to Investment Tracker, almost all of the state funding came from programs known as WAMs - discretionary funds controlled by legislative leaders. Former State Sen. Vince Fumo and former State Rep. Mike Veon had previously gotten in trouble for directing WAMs to nonprofits under their control.

Question: Is now the time to eliminate WAMs?

Ed Rendell Demands More Taxes

At a press conference yesterday, Gov. Rendell says he will "compromise" on the budget - so long as he gets $1.6 billion in new revenue.  That he, he needs some more taxes.  Also, Rendell continues to insist that the a Personal Income Tax increase is still on the table, even though House Democrat leaders and "blue dogs" declared it dead.  Of course, the next time House Democrat leaders and "blue dogs" stand up to Rendell will be the first. 

State of Pennsylvania has 5,000 Vacant Positions

In response to a recent question posed us - about how many actual workers vs. unfilled positions Gov. Rendell would have to eliminate when he talks about cutting state workers - we received (and quickly, I may add) a response to an Open Records request from the Office of Administration.

Their records, as of June 2009, indicate between 5,200 and 5,600 vacant positions.   (I’m not sure I understand the difference between “Actual Salary Total” and “Number of Positions Authorized”, but the numbers are pretty close)

Thus, the Governor could theoretically eliminate 5,000 “positions” without laying off an actual state worker (realizing that some vacancies will undoubtedly need to be filled, and positions are assigned to specific departments).

June 2009 PA state employes

What Do July Revenue Collections Mean?

The Pennsylvania Department of Revenue released the July 2009 revenue collections yesterday.  The state collected $1.65 billion in General Fund revenue in July.

Normally, this report would include how far off the collections were "to estimates", but being as there is no state budget, there is no estimate to compare it to.  Gov. Rendell and lawmakers are working with an assumption that there will be a 0% growth (absent tax increases), and revenues were down $95 million from last year. (Note: income and sales taxes were down, corporate taxes were up, surprisingly, and cigarette and liquor taxes were also up--good thing folks are smoking and drinking more)

However, the economy hadn't bottomed out by last July (in fact, last July's collections were right on target with estimates), so this doesn't tell us much.  A Senate Republican spokesman suggests we are looking to be on track for collecting $25.5 billion, but we probably won't be able to start drawing any conclusions until October or November.

PA Senate Democrats Still Playing Games

Yesterday, the Senate rejected a bill to fund the University of Pittsburgh by a 30-20 vote.  (It was actually 30 'yes' votes, but the bill needed 2/3 majority to pass.  It it is one of several "non-prefered" bills - for state-related universities, museums, and so forth - that are funding outside the general appropriations act).

But the no votes were not the result of the belief the bill spent too much, or even too little, but on the grounds that it is "unconstitutional and unwise" to vote on funding for state universities until after the budget is completed.

Of course, Senate Democrats didn't have a problem when they voted on "non-prefereds" before they voted on  the general appropriation bill in 2008, or in 2007, or in 2006, or before the budget was finalized in 2005. 

Were all those acts unconstitutional?  Can we force state-related universities and museums to pay back the money they were awarded then?  Or are Senate Democrats just playing a political game and throwing around the term "unconstitutional" to make themselves seem relevant in the budget debate?

Post-Gazette's Nonsense on Pennsylvania Budget

The Pittsburgh Post Gazette editorial board cribs Gov. Rendell's talking points on the state budget, and pastes it into an editorial.  They state that lawmakers should not "balance the budget with temporary funds", and somehow use that to endorse Rendell's plan to spend more (and raise taxes) and criticize House and Senate Republicans' proposals.

Here is the glaring flaw - both Gov. Rendell and the House Democrats propose using more one-time revenue sources to balance the budget than do Republicans. 

Here is the 2nd glaring flaw - both Republicans and Democrats use federal stimulus funding for education.  When the Post-Gazette claims "The trouble with that is two years from now, when the stimulus funds run out, Pennsylvania's education funding will be back at 2006 levels rather than 2009," they fail to consider what happens under Rendell's plan. 

That is, the stimulus runs out in two years under either plan.  How does Rendell's budget fill the gap?  He would basically force the next governor to cut education spending, or raise taxes again. (In his initial budget proposal he outlines 10% revenue growth in 2010, but close to 0% spending growth in both 2010 and 2011 - i.e. he expects his replacement to practice the fiscal restraint he won't.)

The Republican proposals would provide school districts with a 12% increase in funding support next year, preserve some of the Rainy Day to fill the gap in two years.

Unfortunately, none of the proposals addresses the looming crisis in state pensions (something else Gov. Rendell will leave to his replacement), or the unsustainable growth in Medicaid spending.

Pennsylvania Budget Proposals Compared

Here are some resources for comparing the various Pennsylvania state budget proposals.

• Pennsylvania House Democrats Budget, By the Numbers
• PA House GOP Budget by the Numbers
• PA Senate Budget by the Numbers (with revised line items here; revised balance sheet here).
  
• Pennsylvania Deficit Watch, June 2009; with Gov. Rendell's proposed budget 

• Excel file of proposed line items (not updated with either the House Republicans', House Democrats', or revised Senate Republicans' plan)
• How Much Did Pennsylvania Spend Last Year?
• Pennsylvania State Budget on Sunshine Review

Pennsylvania Budget Facts 2009:

• Pennsylvania State Budget Overview
• Spending Increases by Department
• State Education Spending
• Personal Income Tax
• Natural Gas Severance Tax
• Cigarette Taxes

Is Rendell Violating the Federal Minimum Wage Act?

Here's a note from a state worker that asks us an interesting question: Is Rendell violating the federal Minimum Wage Act (which goes up again this week) by failing to pay state workers?

It sure would be interesting (and expensive) if employees start filing complaints!

______

Mr. Brouillette,

I have not yet seen any information regarding this anywhere from any news network, but am a loyal follower of the Commonwealth Foundation and wanted to share this with you. All I ask is that you keep my name out of the story as I am a state worker and work within an agency whose executives are close to the Governor.

Basically - the non-timely payment of hours worked by state employees could violate the federal Minimum Wage Act. This means that as of this Friday, July 24, 2009, which happens to be the next pay cycle for some state employees, their paychecks will show that they have worked 75 hours in the past two weeks but will receive $0, which if it is determined that this is a violation of the Federal Minimum Wage Act, the state could face a $1,000 fine for every employee who submits a substantiated claim. (At least that is how I interpreted the Minimum Wage Act wording which is found on the Federal Department of Labor's website.)

I have talked with a regional Federal Department of Labor representative and she had recommended that state employees who do not receive a pay check on the day that their pay is normally deposited, or receives a check which does not compensate them for the hours worked should call her office and file a complaint. All employees will need is their current pay statement, as well as some basic personal information to submit the complaint at which point the federal government will open an investigation against the employer, which in this case is the state of Pennsylvania. She did not say that it is a definite violation but she also did not say that it was not. She was supportive of our submitting the claim and having it investigated by their office.

...

Fortunately my wife and I were approved for loans to cover our missed pay but not all employees were approved for these loans and will have no income. I feel that the reporting of this potential violation may help to nudge the legislators and governor into coming to a solution a little quicker.

Best regards,

XXXX XXXXXXX

How Much Did Pennsylvania Spend Last Year?

Here is a simple question: Given we have closed the books on last year's state budget for three weeks, how much did  Pennsylvania spend last year?  Unfortunately, the answer isn't so clear.

Over at Capitolwire (subscription), Pete DeCoursey notes that the Senate, and the Rendell administration, increased the previous year's spending total to $28.1 billion. (It has previously been pegged at $27.8 billion, following a $28.3 billion enacted budget and $500 million in spending "freezes"). The change was based on counting welfare spending which was incurred and due in 2008-09 to the 2008-09 budget.  While that seems like a good accounting standard, in reverses the Rendell administration's policy of the past several years, of counting June welfare spending in the following fiscal year.

We noticed this change too when looking at the spreadsheets, and explanation was certainly needed.  (Sidenote: while we have put together an Excel spreadsheet of the previous budget proposals, we have not updated with either the House Republicans', House Democrats', or revised Senate Republicans' plan, because these plans are in flux, all three budget handouts were in different formats with different ways of accounting for stimulus funds, and that's a lot of work.  If there is high demand for that, we could do so).

As Capitolwire also notes, some were concerned about his accounting change, because the Senate GOP has said one of their goals with the new budget is "to spend less than last year".  But Sen. Corman says that won't matter,

because it would take more revenue than we [Senate Republicans] will approve to pay for that level of spending.

Good Pennsylvania State Budget Questions I Can't Answer

A reader sent us this, which is an excellent question about how many state worker will really have to be laid off:

I have heard a lot of speculation about what the dramatic impact of the spending cuts would be (according to Rendellian budget analysis). One of the items cited is a huge loss of State jobs. I think they cited something like 800 jobs. I would like to understand if anybody has gotten a hard analysis of those jobs that would be lost from the Governor? How many are current active employees? How many are openings that won't be filled? How many are rank and file vs managerial? How many will be lost to attrition in the next fiscal year?

Additionally, I would love to know how many consulting firms are engaged, how many consultants for each firm, expenditures to consultants, what role are these consultants playing, is it mission critical?

This is all routine stuff we look at in the private sector so I figure the information must be available..I just can't seem to find it. THANKS!

While one might think this information is readily available, it is not. I have not seem any supporting evidence for the “800 jobs” (sometimes "2,000") figure, and certainly not how those positions break out. House and Senate Republicans argue that many of those “jobs” are currently vacant positions which still get funding in the state budget, but there is no way to verify.

The Auditor General thinks we can achieve $50 million or so by offering early retirement incentives, and getting about 2,000 workers to retire (and not fill those positions, or hire within) and reducing the state payroll by 3-4%.

As for consultants, I don’t know of a listing statewide. The Treasurer’s new database would have all the contracts by department, but unfortunately it would take a Herculean effort to add them all up.

If anyone has, or has seen, documentation of this, it would be a great help. I will of course be filing an Open Records request to determine the current number of vacant positions, though I think this is information that should be readily available. Again, another example of why transparency is needed in the current budget debate.

Who's Telling Half-Truths on Pennsylvania Budget?

Chuck Ardo, the Governor’s spokesman, became incensed (as reported by John Micek) when Sen. Piccola made a strong comment against the governor. During last night’s Senate debate on a new budget plan, Piccola accused, Gov. Ed of having been "despicable in the way he's handled this budget impasse" concerning payment for state workers.

When asked for a comment Ardo replied, "Nothing that comes out of these guys' mouths is a surprise. They have resorted to misinformation, disinformation and half-truths in an attempt to sell their budgets."

Maybe Ardo forgot that he and the Governor have repeatedly reported lies and half-truths to scare the public into accepting their budget plan"

• The Governor said that school districts would be forced to raise property taxes if they did not receive the amount of funding he called for. He forgot to inform the public that schools are to receive an average of 12% more in funding than last year.
• Rendell has claimed half of all Pennsylvanians don't pay state income taxes.  This appears to be a fabricated statistic.
  
• The Governor said that 800 state police would have to be laid off if the Senate’s budget was passed. Even the head of the Pennsylvania State Troopers Association called Rendell’s claim a deliberate scare tactic.  Later, in testimony, state police admitted that Rendell's office gave the talking points, and the Governor himself has control over the funding formula. 
• Rendell has repeatedly claimed Pennsylvania has one of the lowest top personal income tax rates, but Rendell's tax rhetoric ignores states with no rate, that Pennsylvania has a flat rate with few deductions, and has local income taxes.  All total, Pennsylvanians pay 16th most per capita in state and local income taxes, and have the 11th highest tax burden.
  

Even Ardo himself admitted the Governor does not always tell the whole truth:

"The governor uses numbers to make a point," he said. "His numbers are not inaccurate, although sometimes they do not tell the whole story."

Furthermore, Ardo suggests that Piccola went "beyond the line" by calling the Governor’s behavior despicable.

Of course, it was Ardo who called  Matt Brouillette a "flaming a$$hole." And it was Ardo's boss, Gov. Rendell who calls the Commonwealth Foundation "imbeciles."  But apparently that doesn't "cross the line."  Or when Rendell called a group of Republicans a "cavemen caucus," and when the Governor says that Mike Folmer is certifiable, or compares Eric Epstein to Hannibal Lecter, that's all in good taste.

In terms of both truth telling and name-calling, Rendell seems to hold himself—or perhaps just those demi-gods deserving of a statue on every mantle—to a different standard than everyone else.

Both Barrels Boscola: Senate Dem Opposes Raising Taxes, Supports GOP Budget

Floor Remarks from Senator Lisa M. Boscola (July 20, 2009)
___________

To pass a state budget that spends more money than we have in our state Treasury is lying to the same people who sent us here to be frugal with their tax dollars!

It’s lying to the people who have always been forced to pay the freight for every government program that comes down the pike! People can deal with the truth . . . trust me. They’ve been dealing with it in their own lives – cutting back and changing their own spending habits . . . doing MORE with LESS.

That’s called “reality.”

Spending a BILLION – or 2 BILLION dollars more than what we have available is called “fantasy.” It really is that simple.

So let’s stop playing games and stop pretending that we can make everything “good again” if we just had a few billion more dollars to spend. People’s paychecks are really stressed right now.

They wish they had more money to spend, too! The recession has taken a huge toll on everyone. And we all know that it will take more than just one budget cycle before our Commonwealth’s finances are going to return to anything resembling normal.

So, Mr. President, let’s put an end to the violence of uncertainty over this state budget. And that’s really what some people are doing by dragging this process out . . . by forcing state employees to go without paychecks.

Stop dangling the threat of higher taxes over taxpayers’ heads! No matter how some people in this building try to minimize it or downplay it – it’s wrong.

I’m tired of hearing that it’s ONLY 50 dollars more . . . and hearing that our state income tax is 1 of the lowest in the country . . . It’s 1-point-5 billion dollars that you want to take out of people’s pockets . . . period! It’s 1-point-5 billion dollars working families won’t have to spend on their own needs as they see fit . . . based on their own circumstances.

Don’t insult people by telling them that it’s only “pennies a day” . . . Just be honest and admit that you want to steal more of their money because you want government to spend more!

That’s reality . . . you don’t have to sugar-coat it. Because I’m not going to sugar-coat it, either.
Now is the time to cut . . . and cut . . . and cut some more. Cut spending to the bone – and leave taxpayers’ paychecks alone!

Click here for the full remarks.