Oct 29, 2010

Tough Times Down on the Farm: But PA agriculture has a positive outlook

Guest Column By Lowman S. Henry

Although Pennsylvania is often characterized as an "industrial state," agriculture is actually the state's number one business. A recent poll of farmers across Penn's Woods found that, although there are some problems unique to agriculture, many are suffering the same ill effects from the recession as are non-farm businesses.

The sheer size and scope of agri-business makes the health of the sector critical to Pennsylvania's economic recovery. Over one million Pennsylvanians are employed in farming operations and with 27% of the state's land mass dedicated to farming, the industry generates over $6 billion per year in sales.

Farming operations have been hit particularly hard by the economic recession. State Senator Michael Brubaker (R-Lancaster), chairman of the senate Agriculture Committee, says dairy producers in particular are in financial distress. He points out over half the farms in Pennsylvania produce dairy products, and they currently are unable to make a profit.

The fact dairy producers cannot even sell what they produce for enough money to cover costs has forced many farm families to seek outside employment in order to make ends meet. Brubaker said in some cases farms have been in a family for generations, so the current generation will do whatever is necessary to hold on to their farm business.

Effects of the economic recession on farming mirror those of the economy as a whole. The agri-business poll conducted by the Lincoln Institute of Public Opinion Research found that, relative to the rest of the economy, 42% of the farmers responding rate the current business climate for agriculture in Pennsylvania as average. Fifteen percent gave the state's agricultural business climate above average or excellent marks, while 43% rated it as below average to poor.

The fair to negative assessment carried over to the perceived trends in the state's agri-business climate. Half of the respondents said the agri-business climate has remained about the same over the past six months, while 30% say it has gotten worse and 21% feel it has gotten better. Looking ahead six months, 60% think the commonwealth's agri-business climate will remain about the same, with 21% expecting it to get worse and 18% expecting it will improve.

Senator Brubaker feels that those numbers are actually rather optimistic given the current state of agriculture in Pennsylvania. "When you have fifty percent of our farm economy not making money," he said, "but yet farmers have some level of optimism about the future, that makes me believe that we are going to have agriculture in Pennsylvania going forward."

Driving the positive feelings farmers have about their economic future is a love for the quality of life the occupation provides. When asked what they consider to be the state's biggest agricultural asset 45% cited quality of life followed by confidence in the agricultural infrastructure of the state and growth potential.

On the down side, the regulatory environment was cited by 35% as Pennsylvania's biggest liability, closely followed by the costs of land, and taxes. Senator Brubaker said the animus toward regulations is fueled by the fact the state and federal governments often implement new regulations with little advance notice and that it is unpredictable what will come next.

As you might expect, land and land use regulations are a top concern of Pennsylvania's agri-business community. Farmers gave a vote of confidence to local municipalities with over half saying land use and zoning decisions should remain in the hands of local government. Twenty-nine percent would like to see such decisions made at the county level, while only 12% wants the state to make zoning and land use decisions.

In dealing with the economic recession, farmers have had to take many of the same steps as those in non-farm businesses including reducing work hours, raising prices, laying-off employees and closing or consolidating facilities. Still, as a testament to the resilience of the farming community, more expect to see their revenue increase over the coming six months than anticipate a decline.

Although agri-business seldom gets much media coverage, it is clear that for Penn's Woods to emerge from the current economic recession this sector of the economy must be restored to economic health. With regulation and taxes among the industry's top concerns it is clear government is a big part of the problem. Lower taxes and less, or at least more predictable regulation will be the keys to the sector's recovery.

Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His email address is lhenry@lincolninstitute.org.

Oct 22, 2010

All Politics Is Local--Except When It Isn't

G. Terry Madonna & Michael L. Young

All politics is local, the late Tip O’Neill famously remarked. To which must be appended a necessary caveat: except when it isn’t. And it definitely isn’t in 2010. Case in point: Pennsylvania’s ongoing contest for governor and U.S. senator.

The election is certainly being held in Pennsylvania. Any citizen with a TV and a slow mute button can attest to that as both campaigns wage a furious battle of dueling television spots across the state. But while the campaigning is all in the state, little of it is about the state. Instead both races have been thoroughly nationalized with issues, rhetoric, and anger focused laser-like on Washington and Obama.

The Toomey-Sestak U.S. Senate race illustrates vividly just how thoroughly state issues have become an inconvenient afterthought in 2010. Toomey has relentlessly focused his campaign on Obama, repeatedly raising the specter of dreaded liberals taking the country off the cliff, while consistently condemning profligate spending and debt expansion.

He has artfully made Sestak a leading villain in the drama, citing Sestak’s 100 percent support of the Obama agenda, charging that Sestak is “more an Obama Democrat” than Obama himself, and criticizing Sestak’s health care policies and frequent calls for more stimulus spending.

Sestak, swimming against the enormous national tide engulfing him, has tried to make some lemonade from the lemons bequeathed to him. Unable or unwilling to distance himself from the unpopular Obama, he nevertheless clearly understands how toxic Obama has become. Rather than change his politics, however, he has tried to change the subject, styling himself as a populist outsider, more the battle tested former admiral and less the two-term congressman he has been.

But even Sestak, despite the risk, has had to accept the nationalization of the race. Accordingly, he has aimed his guns at Toomey’s Wall Street connections and his onetime advocacy of derivatives. Toomey, according to Sestak, represents the interests of Wall Street, not Main Street. Sestak has also pounded Toomey with still another national issue, arguing that he would privatize social security.

The ideological battle lines formed by this fight are sharply polarized. According to the most recent Franklin & Marshall College Poll, released on September 29th, fully half of Toomey’s voters choose him because they oppose Obama and Democrats in Congress, while slightly more than half of Sestak’s voters support him for precisely the opposite reason—because they support Obama and Democrats in Congress.

To a remarkable extent then, the Pennsylvania U.S. Senate election has become a referendum on Obama and his agenda, with the respective candidates acting as surrogates. Obama is the text, while Toomey and Sestak are very much the subtext.

In the gubernatorial race the nationalizing effect is similar. Gubernatorial races traditionally focus exclusively on state issues and local concerns. Only rarely are they significantly influenced by national trends. Not so this year. Instead the 2010 Pennsylvania governor’s race is playing out in a parallel universe to the U.S. Senate race, with the same hostile environment to spending and deficits as well as to Democrats in general and Obama in particular.

Consequently, both Democrat Dan Onorato and Republican Tom Corbett have staked out de minimis positions on the expansion of state government. Neither supports a general tax hike and both have pledged economies in state government.

Normally gubernatorial elections feature ambitious competing agendas crafted by both Democratic and Republican candidates. But this year nothing even close to big-ticket items is on the table. Big is out and small is in, clearly reflecting national trends and national issues.

Neither candidate is misreading the voter. The Franklin & Marshall College Poll cited earlier showed that a large plurality of voters are most concerned about rising taxes, cutting spending, and reducing outstanding debt. Sensing this mood, both candidates have run as reformers that will oppose tax increases and cut spending.

In this environment the Democrat Onorato struggles. Like U.S. Senate candidate Sestak, he finds the lurking presence of an unloved incumbent dragging down his own support. The job performance of once-popular Rendell rivals that of Obama. It’s an anemic 35 percent positive, a consequence of the recession, compounded by consecutive large budget deficits and Rendell’s persistent call to raise taxes.

Not surprisingly, gubernatorial GOP candidate Corbett has ripped a page right out of Toomey’s campaign plan. He is running against Rendell as much as he is running against Onorato, just as Toomey is running against Obama as much as he is running against Sestak.

Both Republicans are hitching their candidacies to the powerful national trends sweeping the nation.

By early October these trends have become increasing clear. Not so clear, however, are the implications beyond November. Little but gloom and doom appear to await the Democrats. Still, history counsels caution in too quickly consigning Obama and the Democrats to political oblivion.

In 1994, Clinton and his party faced challenges equal to or greater than now. In fact, Democrats endured an electoral carnage in 1994 that saw both houses of Congress swing to the Republicans. But Clinton reacted to that disaster by moving to the political center, sponsoring popular legislation and instituting bipartisan government in Washington. The result: he was reelected overwhelmingly in 1996.

No one is predicting that Obama can do the same. Nevertheless, Americans are wise to be mindful how rare such totally nationalized elections really are and how unpredictable the consequences can be.

Copyright © 2010 Terry Madonna and Michael Young. Politically Uncorrected™ is published twice monthly, and previous columns can be viewed at http://politics.fandm.edu.

Oct 12, 2010

In the mirror

Guest Column By Albert Paschall

What's the distinction between trial lawyers? Mine's a shark and yours is a blowfish waiting to get eaten.

Any discussion of the civil justice system automatically turns to the practices of trial lawyers, their tactics, motives and earnings.

Reviled by consumers, author John Grisham and of course, chambers of commerce, trial lawyers are painted as a bunch of bottom fishers out to gouge Americans down to their last dollars.

Until they want to sue somebody.

What is the value of the father of two young children who lost the use of his legs because some teenage moron was texting at 70 MPH when he hit him? How much compensation do you get when you are unconscious, electrocuted while picking out some green beans in a supermarket? If you are taken to the emergency room with a reaction to a medication that urges in its TV commercials to get there quick if it works for more than 4 hours and you undergo a painful operation, what is it worth?

In Pennsylvania it is whatever a jury gives you. Chances are your trial lawyer is going to get a big chunk of that settlement and if you choose the right one you might not have to put any front money.

But the bad rap goes to the 800-number attorneys. The ones on TV who exploit generational suffering trying to rack up the multi-million dollar settlements. The legends about their limos and Gulf Stream travels don't help. The pennies on the dollar settlements that their victims often get after fees, ancillary charges and travel expenses are sometimes disgraceful. While the Pennsylvania Association for Justice (formerly known as the Pennsylvania Trial Lawyers Association) boasts about the size of its political action committee and that between 2000-2003 only 25 cases in this state resulted in awards of over a million dollars, it does not talk about the insurance companies that simply swam away from the sharks and settled out of court.

Nowhere is this truer in Pennsylvania than in the medical professions. Physicians have been tortured for years by the triple debacles of frivolous suits, potentially damaging publicity and outrageous costs for medical malpractice insurance. It's reached a point where physicians are moving practices out of the state and trying to recruit young ones is like trying to offer them a diving trip into a tank full of hungry sharks.

The cycle of confusion that is liability law in this state is not going away. There might be solutions out there but before we can get them someday we're all going to have to take a hard look: in the mirror.

Albert Paschall is Senior Fellow at the Lincoln Institute of Public Opinion Research, a non-profit educational foundation with offices in Harrisburg and King Of Prussia. Somedays is syndicated to leading newspapers and radio stations through out Pennsylvania. lincolnpa@aol.com

Oct 11, 2010

November 2? No, Liberty Needs You Today!

Guest Column By Matthew J. Brouillette

Many people I meet think November 2 is the be-all and end-all of their 2010 calendar. And don’t get me wrong; Election Day is critical. But I can think of two days that are just as important. The first, as I’ve said many times, is November 3—because that’s when we have to start making sure whoever gets elected the day before actually does what’s right.

The second, though, will probably surprise you: It’s this Friday. That’s why the Commonwealth Foundation is working hard at this very moment. And it’s why I want to tell you very clearly that liberty needs you today. You can’t take a vacation, you can’t leave the task to us, and you can’t wait until November 2.

The reason liberty needs you today is that tomorrow, our State Senate is coming back to town—and the rumor is that later in the week, the House of Representatives will follow suit. And they’re not coming back to play patty cake. Rather, we are hearing that the Senate is planning to resurrect a $27 billion so-called “pension reform” bill that was rightfully shelved this summer.

The Senate is also supposed to debate a new tax on the Marcellus Shale—the natural-gas reserve in Northern PA that’s the only place we are seeing job growth outside of government. This comes after the House passed the nation’s highest severance tax, a true job killer.

And amidst everything, on Wednesday a Senate committee is taking up the crucial issue of school choice. This comes just after former Democratic House Speaker Bob O’Donnell joined CF as a senior fellow working on school choice—and, sadly, after the state Auditor General launched an attack on cyber and charter schools, claiming funding disparities between them and “traditional” public schools. I will be testifying.

CF has been fighting these bad ideas—pension non-reform, a huge natural-gas tax designed to fund the overspending problem in Harrisburg, and picking on cyber and charter schools—for months and even years. Just recently, we’ve put out a video and a memo showing what real pension reform looks like, a video on the severance tax, and launched openPAgov.org, our new website that tracks school spending and achievement and shows that lack of funding is not the problem with any of the schools in the Commonwealth. And we’ll keep fighting this week. But you need to weigh in, too, because at the end of the day, your State Senator is responsible to you, not me.

So please: If you love liberty, don’t be tricked into thinking you can wait until November 2 to fight for it. The General Assembly is flirting with policies that constitute generational theft, killing jobs, and denying opportunities to kids this week. If you make your voice heard, this Friday will be a day to raise a toast. But if not, Friday will be payday for unions and a day for the rest of us to mourn yet more lost freedom. I’m looking forward to hearing you weigh in as we’re…

Fighting for Your Freedom,

Matthew J. Brouillette is the President & CEO of the Commonwealth Foundation

Oct 1, 2010

Fiscal folly. Proposed legislative budget office more useless bureaucracy

Guest Column By Lowman S. Henry

The compromise that resulted in the state budget agreement last summer included promised action on two major issues by October: enactment of a severance tax on gas in the Marcellus Shale Reserve, and creation of an independent legislative fiscal office. Amazingly, Republicans - particularly in the state senate - appear poised to both approve a job-crushing tax and to create yet another needless state bureaucracy.

The deal gives off the appearance that the GOP sold-out on the severance tax in exchange for getting a legislative fiscal office. It may or may not have been a quid pro quo, but in politics appearances are what matters. This appears to be a cave-in on piling additional taxes on the one industry in Pennsylvania that is actually growing so the legislature can expand its bureaucratic empire. Both actions are antithetical to the Republican Party's supposed free market, less government philosophy and serves to further alienate voters who are already distrustful of both political parties.

Lawmakers pushing for establishment of a legislative fiscal office claim that it is needed because the Budget Office, which is under the governor's control, has failed to accurately project state revenues over the past few years. The recession, of course, had a lot to do with the faulty revenue forecasts. But, Senate Republicans in particular were eager to accept the numbers last year in order to bring an end to the state's budget stalemate. Thus their claims of concern over inaccuracy ring hollow.

What is actually at play here is legislative ego. Since the governor has a fiscal office, so too must the General Assembly have such an office. And, to satisfy their egos, leaders of both political parties are willing to spend millions of our tax dollars. At a time when the state faces a budget deficit that could approach $5 billion, legislators are willing to spend more on indulging themselves. The proposed legislative fiscal office is projected to cost $4 million in start-up money, and then take a minimum annual appropriation of $3.6 million. You can bet the mortgage that the final costs will be significantly higher.

All of this will merely duplicate tasks that are already performed by multiple state agencies. First of all, there are already two legislative committees dealing with fiscal matters. Both the senate and the house have appropriations committees. Each committee is flush with staff, all paid for by our tax dollars. Then of course there is the state Budget Office in the executive branch. Add in the independently elected state fiscal offices: state treasurer and auditor general, and you have literally thousands of state employees paid millions to monitor the financial affairs of the commonwealth.

The real issue here is not one of getting accurate budget numbers, or even streamlining the legislative budget-making process. It is a matter of the legislature wanting to be on an "equal" footing with the governor. This is why the four legislative caucuses have escrowed hundreds of millions of dollars into operating reserve accounts rather than release the money to pay for essential state services. The legislature is empire building. And you can bet that if, and likely when, the legislative fiscal office is created it will quickly grow in size and scope.

Further, the creation of a legislative fiscal office will do nothing to address the core cause of Pennsylvania's fiscal woes. The core problem is that the legislature, prodded on by Governor Ed Rendell has spent well beyond our means. Senate Republicans caved into the spending last year, and this year leaders of all four caucuses backed a fiscally irresponsible budget. The problem is not a lack of information, the problem is a lack of political courage to stand up and make the tough decisions needed to get Pennsylvania's finances back on track.

The creation of a legislative fiscal office is a boondoggle of the highest order. It will be just another useless bureaucracy churning out more numbers for legislators to hide behind. Worse, millions that could be spent on fixing roads and bridges, funding education, or a wide range of other core government services will instead go to legislative ego feeding. And with elections looming voters should hold their legislators accountable.

Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His email address is lhenry@lincolninstitute.org.