The Rendell --- And Now Corbett--- Bailout: Build Ships With No Buyers

Freindly Fire Note:

On February 17, Governor Tom Corbett authorized the $42 million shipyard bailout.   Two ships will now be constructed --- even though there are no buyers, nor any in the foreseeable future --- and hundreds of union jobs will now be subsidized.  So much for the pledge of responsible government and fiscal restraint, especially in light of the $5 billion budget deficit.

The wildly successful model that Gov. Christie has given his colleagues --- popularity will rise if you stick to your campaign promises --- is, incomprehensibly, falling on deaf ears. It is bad enough Corbett is being labeled "Governor MIA" for scarce appearances during his first five weeks in office.  But when his first sign of life  is choosing a bailout associated with politically-connected powerbrokers over the taxpayers who just elected him, the idea that Pennsylvania is on the right track becomes a hard sell.

As of now, the status quo still rules the day...

Column originally published January 6, 2011:

Corbett Can Drop Anchor On Governor’s Taxpayer Boondoggle

In the movie Dave, Kevin Kline plays a presidential lookalike who finds himself running the country after the real President falls into a coma.  Convening a Cabinet meeting, this political novice uses common sense to expose the ludicrous mentality of the entrenched Business As Usual crowd.

Kline asks the Commerce Secretary about an ad campaign his Department has implemented to boost consumer confidence in the American auto industry.  “It’s designed to bolster individual confidence in a previous domestic automotive purchase,” the Secretary proudly explained.

Speechless at first, Kline fires back, “We're spending millions for somebody to feel good about a car they already bought? I don't want to tell an eight-year-old kid he's gotta sleep in the street because we want people to feel better about their car. Do you want to tell him that?”  The shocked Secretary (finally) sees the light, and the program is eliminated.

Incredibly, that mentality isn’t limited to fictional Hollywood scripts, but is a large part of the way our governmental leaders operate. Look at what Pennsylvania’s Ed Rendell is trying to pull off before he walks out of the Governor’s Mansion a few weeks from now.

Shortly before leaving office, Rendell authorized $42 million in taxpayer money to be sent to the Philadelphia Regional Port Authority (PRPA) to help bail out the sinking Aker Shipyard in Philadelphia.

The funding, we are told, would prevent Aker from going under, since it would be building two new tanker ships.

Of course, there’s one small problem.

There are no buyers for the ships.  And the prospect of that changing course anytime soon is virtually nonexistent.

Thousands of ships worldwide are lying at anchor because of the global recession, idled indefinitely because the demand for shipping is dismally low.  It’s gotten so bad that some ship owners are even scrapping their vessels to eliminate harbor costs, receiving pennies on the dollar. But the remaining glut of vessels is still huge, depressing prices for the foreseeable future.

So, let’s be “Dave” for a second and get this straight.

Rendell wants to spend money --- our money, since there’s no such thing as “state” money --- to build ships…that no one is going to buy, ostensibly so some 1,000 workers can keep receiving a subsidized paycheck. And since there aren’t any buyers, the ships obviously wouldn’t be built-to-order, further devaluing them and making their eventual purchase all the more difficult.

Rendell may not care, but I certainly wouldn’t want to tell a mother that her child died in a bridge collapse that resulted from a lack of maintenance --- because $42 million was spent on ghost ships instead of bridge repairs.

But what type of Rendell move would it be if he didn’t take care of his political pals and big-time fundraisers?

The Chairman of the PRPA is none other than John Estey, former Rendell Chief of Staff and a longtime partner at Ballard Spahr, the Guv’s old firm which has received the lion’s share of millions in no-bid legal contracts from the state.  And guess who the outside counsel of PRPA was?  Ballard Spahr.

This is the same John Estey who is also Chairman of the Delaware River Port Authority (DRPA), which is intricately linked to the PRPA, sending millions their way over the years.

The DRPA couldn’t dole out legal contracts fast enough to Ballard when it served as its outside counsel --- over $3.2 million since Rendell was elected in 2002, up from $480 the year prior. And when Chairman Estey voted to approve those legal bills, he was, in fact, approving funds that went directly to Ballard --- his own firm.

Ballard and its associated entities, by the way, have contributed $1.5 million to Rendell.

The Philadelphia Port Authority is nothing if not politically-connected, too: two Board members alone have donated over $350,000 to the Governor’s campaigns.

It must be nice (and lucrative) to represent both Authorities when all that “Other People’s Money,” to quote the legendary Vince Fumo, is flying around, but that’s another story.

But to make the story even more interesting, enter Manny Stamatakis, Chairman of the nonprofit Philadelphia Shipyard Development Corporation.  That is the entity which will receive the $42 million so it can buy Aker assets and lease them back to the company as part of the bailout.  Some might call that a shell game.

“If they don't build these next two ships, this yard is shutting down," Stamatakis was reported as saying.  Well then, let’s not mess around, Manny.  Let’s make it $420 million and employ 10,000 workers.  Or even $4.2 billion so that Aker can build 200 ships.  No one will buy them, either, but so what?  We’re keeping people employed and the political-elite will be happy.

Ironically, the entity that should be in the best position to throw money Aker’s way would be the DRPA with all the economic development money it controlled.  But it was under Manny’s watch as DRPA Chairman that much of the $500 million in such funds were blown --- pretty much on everything not related to bridges or ports.

And now Stamatakis is Chairman of the Shipyard Development Corporation.  Go figure.

Hope is not lost though.  Attorney General Tom Corbett must still approve the contract.

Sources have told Freindly Fire that the lobbying on Corbett to let this contract sail through before his January 18 gubernatorial inauguration by has been extremely intense.  Given the Rendell Administration’s track record with these types of contracts, that should be red flag enough to put the brakes on this deal until all questions are thoroughly answered.  And clearly, questions abound.

The Rendell legacy has been one of abject failure for all Pennsylvanians not linked at the hip to the Governor, and the attempted Aker bailout is a perfect illustration of how he achieved that dubious status.

Like two ships passing in the night, Corbett and Rendell could not be any more different in their direction. Here’s hoping Corbett drops anchor on Rendell’s last hurrah and charts a course for safer harbors.

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX.  He can be reached at CF@FreindlyFireZone.com

Rendell’s Legacy: High Taxes, Low Ratings And Clenched Teeth

It was a December night, late 90’s.  My entire family was in downtown Philadelphia taking in the Christmas attractions.  One of our traditions was marveling at the magnificently decorated, larger-than-life tree in the City Hall courtyard.  But when we arrived, the gates were locked.

Viewing the tree wasn’t going to happen.

Disappointed, we started walking away when none other than the Mayor himself came bounding out of City Hall right next to us, clearly in a hurry.  But he saw us, turned around, and shot the bull for several minutes.  Upon hearing our plight, he immediately summoned a police officer from his detail and instructed him to take us up to his office, which “has the best view of the tree,” for as long as we wanted.

That tree never looked so beautiful.

And through it all, that Mayor never asked us our names or where we lived.  Whether or not we were voting constituents had absolutely no bearing on him.  He instinctively did what he thought was right, in much the same way he operated while an Assistant District Attorney, and later, the City’s DA.  He was one of the good guys.

And after his two relatively successful terms as Mayor, hopes that he would lead Pennsylvania in the right direction were not unfounded.

But after eight disastrous years as Pennsylvania’s Governor, Ed Rendell being viewed as a “good guy” is as likely as the Eagles’ winning this year’s Super Bowl: nonexistent.

*****

Up to this point, his legacy was known for three things: the introduction of gambling, which did not live up to the promise of tax-relief; huge tax hikes, coupled with a 40 per cent increase in state spending; and a perception of widespread pay-to-play within his Administration. Of lesser note but still sore subjects were his signing an unconstitutional legislative pay raise and not getting a single budget passed on time --- budgets that were full of smoke and mirrors, such as imaginary revenue from the failed I-80 tolling plan.

But now, the image of Rendell that is etched in people’s minds is the Governor blowing his top during one of his final interviews. 

With teeth clenched in a menacing growl, he karate-chops the air and literally screams at 60 Minutes interviewer Lesley Stahl that … “You guys don't get that. You're simpletons. You're idiots if you don't get that."   He was defending his position that gaming was good for Pennsylvania, under the rationale that if gamblers are going to lose their paychecks anyway, it’s better for state coffers if they lose them in Pennsylvania.

Truth be told, Rendell’s anger wasn’t really directed at Stahl.  An intelligent man, the Governor is all too aware that, under his watch, the state earned points in all the wrong categories: some of the highest taxes in the country; the nation’s most hostile legal system, causing doctors and companies to flee; a failing educational product; the country’s worst roads, and a decimated manufacturing base.

Pennsylvania’s biggest export is its children, and that, more than anything, has extinguished the hope for a better tomorrow under Rendell.

But if there is ever to be a turnaround, the time is now. Republican Attorney General Tom Corbett will be the state’s new Governor, a leader who has promised to run Pennsylvania in the mold of New Jersey’s Chris Christie.  And he definitely has the horses to accomplish his agenda: the Senate is solidly Republican, and the State House saw a thirteen seat swing to give the GOP a double-digit majority.

Many analysts postulated that Dan Onorato was defeated in the Governor’s race, and the Democrats lost control of the State House, because of the national Republican tidal wave, with Rendell playing little role in that result.

Nothing could be further from the truth.

In the off-year elections of 1994 and 2010, newly elected Democratic Presidents pushed unpopular policies: Clinton with national health care and gays in the military, and Obama with universal healthcare, cap-and-trade and the stimulus. In both cases, Republicans took advantage of the momentum and captured the U.S. House of Representatives and numerous Governorships, including the gubernatorial victories of Tom Ridge and Tom Corbett in Pennsylvania. 

The State House was a different story. In 1994, the outgoing Governor, Bob Casey, Sr., was a popular conservative Democrat, and his influence helped the Dems maintain their slim majority. But Rendell was an albatross around the neck of Onorato, his protégé, and Democratic incumbents statewide.  Given that Corbett made Rendell’s legacy the focal point of his campaign, the Governor bears the most responsibility for his Party’s shellacking.

It’s legacy time for the Governor, and his approval ratings are downright dismal: twenties throughout much of the state and only thirties in his home base of Southeastern Pennsylvania. Poll numbers don’t lie, so when the vast majority of people say that Rendell’s eight years at the helm were a disaster, the realization of failure sets in, and backlashes occur --- hence the uncontrolled outburst on 60 Minutes.

Perhaps the most surprising aspect of Rendell’s unpopularity is that it occurred despite the media’s cozy relationship with the Governor.  That free pass culminated when Brian Tierney, (former) publisher of the Philadelphia Inquirer and Daily News --- the state’s largest papers --- sought a taxpayer bailout from Rendell himself, who was primed and ready to comply.  Thankfully, this was eventually nixed.

But if you read the glowing editorial in the Inky this past Sunday, you’d have thought Rendell walked on water. Consider these beauties:

“…he is leaving office as one of the most effective and capable governors that Pennsylvania has ever had.”

Nothing like telling 70 percent of Pennsylvanians they are dead wrong. And who says the media is elitist?

“…Rendell has led the state to impressive gains in public education.”

How?  By throwing an endless supply of taxpayer money into the black hole we call Philadelphia’s deathtrap schools?  If more funding was the solution, we’d have the best and brightest students.  Instead, we have unacceptable dropout rates, functional illiterates, low SAT scores and unaccountable teachers’ unions. But God forbid we try the only solution proven to work --- school choice.  The unions wouldn’t like that, and far be it for the Governor to offend a big contributor.

Speaking of which, from the bailout of Boscov’s to the millions bestowed upon Ballard Spahr, the Governor’s former law firm, Rendell has, first and foremost, taken care of his political pals and big-dollar contributors.  That, of course, was completely lost on the Inquirer’s editorial board as it opined, “Rendell's push for tax breaks resulted in the construction of Comcast's new corporate headquarters in Center City...”

Tax breaks?  Come on!  Those were blatant cash giveaways of OPM --- Other People’s Money! The Comcast-Rendell High Speed Money Connection was nothing more than corporate welfare to a multi-billion giant whose employees, political action committee, and executives (and spouses) --- including Rendell confidant, former Ballard boss and Chairman of the Philadelphia Chamber of Commerce David Cohen --- just so happened to throw almost $750,000 Rendell’s way. 

 “…The gaming part of Rendell's legacy has yet to play out. The new casino industry is providing jobs, as well as revenue for significant property-tax relief.”

Property-tax relief? Where?  Uranus?

Introducing addictive gambling as the centerpiece of an Administration and thinking it will lead to an economic revival is naïve, at best. But to rabidly defend it despite its obvious failures is deserving of our pity.

“…Overall, this governor was a friend of citizens whose voices don't often get heard in the halls of power. Pennsylvania has benefited as a result.”

Wait.  When did politically-connected law firms, unions and big-time fundraisers stop having their voices heard?

Here’s the sad reality.  If Rendell kept his word by not vetoing the Fair Share Act (limiting liability in lawsuits), if he hadn’t taxed people and businesses to the brink, if he had acted with a even a shred of responsibility when it came to budget spending, if he demanded accountability in our schools instead of being beholden to union interests, and if he instituted transparency and reform in state government, then Pennsylvania wouldn’t be near the bottom in job creation, economic opportunity --- and hope.

That this is lost on the insulated media is not surprising. But it’s certainly not lost on the only ones who matter --- the people. Tom Corbett and his Party would do well to always remember that.

To paraphrase a popular saying, a legacy is a terrible thing to waste.

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newsApapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX.  He can be reached at CF@FreindlyFireZone.com

Stop The DRPA “Takers”, And You Stop The Toll Hike

Throughout history, there have always been makers and takers.

Makers create things: jobs, products and wealth.  Takers produce nothing. Instead, they leech off the makers. 

And the biggest taker of all is government.

Oppressive, “taking” governments hold center stage in most foreign countries, where taxpayer rights and the rule of law are cocktail party jokes. But increasingly, the takers are also making their mark in America, squeezing the economic lifeblood out of business and zapping citizens’ creativity and hope.

Usually, the take comes in increments, with public officials saying it’s our duty to accept such small sacrifices. But once the takers set their hooks, they never let go. Consider:

-The tax we pay on every bottle of Pennsylvania liquor to rebuild Johnstown from the flood is “just” 18 cents per dollar.  Granted, reconstructing the mega-metropolis of Johnstown must have been a Herculean task, but the flood was…. in 1936.

-The recent city sales tax hike for Philadelphia is “only” a penny, and the city’s 10 percent property tax increase is “temporary.”  The truth: residents are leaving the city to make purchases because of the “small,” 100 percent hike; and no tax is ever temporary.

-And of course, we have the Delaware River Port Authority (DRPA) who, after mismanaging our toll dollars (READ: spending half-a-BILLION dollars on economic development projects having nothing to do with the bridges), now finds it fitting to raise tolls --- again --- on its four bridges and the PATCO train line. But hey, it’s just a dollar!  Take one for the team, we’re told.

So what’s a toll-payer to do?  Answer: Relax, you’ve already done it.  You elected Republican Attorney General Tom Corbett as Pennsylvania’s new Governor, and he gets to wipe the Rendell-slate clean and appoint a new DRPA Chairman and Board of Commissioners for Pennsylvania.

And make no mistake, with the no-nonsense law-and-order bookends of Corbett and New Jersey Governor Chris Christie now running the Authority, it’s a whole new ballgame, and the toll hike can, and should, be stopped before it goes into effect on July 1.

All it takes is political will.

*****

It is not enough to play the blame-game with Port Authority executives and former Governors Rendell and Corzine, all of whom presided over the unmitigated disaster that now defines the DRPA.

While it is important to remember how the Authority got us into this mess, and to hold accountable those who disregarded the toll-paying public (and possibly the law), only immediate, concrete solutions can halt the back-breaking hikes, and prevent future increases that the public simply can’t afford, and shouldn’t have to pay. 

To put into perspective how truly bad things have become, just look at the driving force behind the toll increase: Wall Street bondholders.  That’s right.  Those financiers are so concerned about their investment that they have been relentlessly pushing the Board to put the screws to commuters and jack up the rates.

The mind-blowing lesson from this past week’s Board meeting is that the DRPA isn't being run for the public anymore (not that it ever was). Instead, its reckless spending now has them dancing to Wall Street's tune.  The interest of bondholders trump the public because of the debt carried for economic development projects that A) don't help the economy, and B) develop only animosity for the DRPA.  With absolutely no revenue return to the DRPA, the projects were, and still are, a black hole of political patronage, funded by the public for the sole benefit of the DRPA insiders.

However, there is a silver lining to this mess.  For the first time, the public and honorable politicians are starting to look at how the DRPA can be dismantled.  Leasing it to a private entity, selling PATCO, and dissolving the governing compact are all options --- once unthinkable --- now on the table. 

Here are several actions that would allow to the DRPA to regain a solid financial footing while not raising the toll, and, most important, start down the long road of earning back the public’s trust:

1)      Gov. Christie should veto the Board’s actions, which approved $200 million in more spending for PATCO.  Whether that money must be spent is irrelevant; common sense dictates that the DRPA should wait 30 more days until Corbett and his appointees come to power and have their say.  This is exactly what the Board did last December when it rushed to pass patronage projects ahead of Christie’s inauguration (and his veto power).

2)      Gut the DRPA, starting at the top.  Fire all high-level executives, who would have been canned long ago had they worked in the private sector.  Their lack of even basic performance reminds us of the speech delivered to shareholders by Gordon Gekko in Wall Street, “…Teldar Paper has 33 different vice presidents, each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out…. in my book you either do it right or you get eliminated.”  The DRPA’s top brass are the toll-payers’ Teldar executives.

3)      Slash employees, salaries and benefits. Why the need for 900 employees --- with lavish salaries and benefits --- to operate four bridges and a short rail line is still a mystery.  And to add insult to injury, many executives make more than the governors of both states.  For example, CEO John Matheussen betters them by $50,000 per year, and, up until recently, had a $17,000/year car allowance.  It is unfortunate when people get laid off, but many positions should never have been created in the first place.  The DRPA is a revolving jobs program for the politically connected, subsidized by hapless commuters, and that must end.

4)      Freeze all economic development money, period.  That goes for dollars still in the pot and monies allocated but unspent.  Rendell’s lack of legal knowledge in this area notwithstanding, the DRPA is not contractually obligated to spend the money already awarded for these projects.  And to those recipients who yell that they want “their” money, the toll-payers have news for them: it’s not “their” money, and they possess no God-given right to pig-out at the public trough.

5)      Perform a bend-over, proctologist-like forensic audit, top to bottom (no pun intended) of absolutely everything.  Here’s the key: it cannot be performed by the Pennsylvania Auditor General since he sits on the Board, and, no disrespect to Gov. Christie, but the New Jersey Comptroller is a political appointee.  The only way this type of audit bears any fruit is to have an outside firm --- way, way outside, with no political ties whatsoever --- come in and turn over every stone. Heck, maybe they’ll even find more interesting tidbits to pass along to the New Jersey Attorney General’s Office, currently investigating the Authority.

6)      Have only one cash lane per bridge, eliminating three shifts of toll-takers making $24/hour plus benefits.  Ideal?  No, but that’s the price for getting back to a bare bones operation without paying more tolls.

7)      Explore public-private partnership and leasing options. DRPA executives were never motivated to run the Authority like a business; in fact, the opposite was true.  The more money they spread around, from no-bid legal work (often where NJ and PA law firms would each generate billing for the same project) and insurance contracts, to engineering and economic development expenditures, the “return” was not Port Authority efficiencies, but personal gain and political profit.

If all management and operational aspects were turned over to a private, for-profit company skilled in streamlining techniques and maximizing efficiencies, the cost savings could be astronomical.  Such programs have been tried successfully with other toll roads, and a management company (with government oversight) could provide immediate and long-lasting savings.

It is time, once and for all, to see the DRPA return to its original mandate: collect toll dollars to operate and maintain safe bridges… bridgesthat have been paid for numerous times over.  Gov. Corbett has an historic opportunity to do just that by appointing reform-minded, accountable Commissioners --- former cop and current State Representative Mike Vereb, who continues to bulldog the DRPA into more reforms, comes to mind --- and immediately move to stop the toll hike. 

By instituting common sense cost-cutting measures and working closely with Gov. Christie to root out corruption and explore privatization options, Corbett may yet drive the DRPA back from the bridge to nowhere.

Who says you can’t fight City Hall?

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX.  He can be reached at CF@FreindlyFireZone.com

Gov. Rendell’s take on State’s Rights and Health Care

Written by Roberta Biros

Regardless of who wins the General Election in November, we can all look forward to Ed Rendell’s reign as Governor ending at the end of 2010. Can I hear an Amen!

Let’s be honest. Governor Rendell is nothing short of a Socialist. Please realize that “Socialist” isn’t a term that I’ve ever used in this blog to describe ANYONE. The term was only used once, and it was used by the Chairman of the Mercer County Democrat Committee (Bob Lark) to describe ME (for a good laugh and some insight on my political background on this topic read HERE), but I’ve never used it to describe anyone else. So understand that I don’t make this remark light-heartedly. I make the statement today in direct response to an interview that Governor Rendell had on Fox News this morning, March 29, 2010.

The topic of the interview on Fox and Friends was “Is it unconstitutional for the Federal Government to mandate that people buy insurance?” Governor Rendell’s response was as follows (and I quote):

“There is no legal question. These lawsuits are frivolous. There is no legal
merit. It’s just grandstanding by Attorney Generals. Why would you want to take
the immediate short-term benefits away from your citizens.”

Governor Rendell went on to explain that this is just a political game being played by the Attorney Generals across the country and in his own state.

If I could talk to Governor Rendell directly I would say . . . “No legal merit? What about the laws that are defined in the single most important document of law in the Country.” I would ask . . . “have you ever heard of the Constitution?” I would probably need to be more specific and expand on my question with . . . “have you ever heard of the 10th Amendment to the Constitution?” While you would think that the Governor would be familiar with the Bill of Rights, you really can’t “assume” anything in this case. If I could talk to Governor Rendell I would offer him a pocket edition of the Constitution for reference.

What the Governor fails to understand is that it is the RESPONSIBILITY of our state lawmakers to defend the rights of their constituents in our state. Failure to do so would be a breach of their “contract” with us as our elected officials. His only argument against the constitution is a reference to “short-term benefits”. “Short-term benefits” is the only carrot he could find for his stick. In an attempt to lure people away from the Constitution, Governor Rendell is offering “short-term benefits”.

I am hopeful that after this storm blows through, the Constitution survives . . . intact. Not for the “short-term benefits”, but for the long-term freedom of the people of the United States.

.

Spend, Spend, Spend: PA Budget Passed in the House

Written by Roberta Biros

Governor Rendell is in a hurry to pass a budget before the June 30th deadline (for the first time in his career as Governor I might add). That is a GOOD THING.

Unfortunately, the piece of garbage that passed the House today is a mess. I don’t usually allow legislators to put words in my mouth, but in this case I’ll make an exception. I’d like to quote Representative Michele Brooks (R-17th District), whose official email announcement stated that “this spending plan is a fiscal train wreck”.

Wow! I wish I had written it myself! In a way, I guess I just did. It was absolute plagiarism . . . plain and simple but I digress. Regardless of WHO said it first . . .

Calling the budget a "fiscal train wreck" is some strikingly straight talk from a Harrisburg insider. In response, I say “It’s about time”.

I received numerous email messages from Pennsylvania legislators today. Each one explained that the idea of passing a budget quickly (and well before the deadline) is a great idea. Every legislator hopes to have a budget passed before the end of June this year . . . especially those legislators that have opponents in the General Election. However, the obvious fiscal irresponsibility of House Bill 2279 is poor policy. We can all tiptoe around the fiscal quagmire that IS the Commonwealth of Pennsylvania, but all of the icing in the world can’t sweeten this poison pill that they call a State budget.

Here are a few excerpts from the legislator email messages that were received in my “In Box”:

Representative Dick Stevenson (R-8th)

“At a time when state revenues have not yet rebounded, Pennsylvania needs to look to other states and follow their lead to reduce spending, not increase the state budget by $1.2 billion or 4 percent,” said Stevenson, a member of the House Appropriations Committee. “Neighboring states like Maryland, New Jersey and New York have all taken steps to decrease expenses. They face the same financial obstacles we do, but they realize their taxpayers cannot afford a penny more in increased taxes and fees.”

Representative Brad Roae (R-6th)

“I voted ‘no’ because there is too much spending in the budget bill. Spending has increased by more than $8 billion since Governor Ed Rendell took office. We cannot afford to spend more than a billion dollars more than last year’s budget.

Representative Karen Boback (R-117th)

“I am greatly concerned about the overall spending number of this budget. The 2009-10 budget used all of Pennsylvania’s reserve accounts, and we are facing another deficit at the end of the year. To increase spending by $1.2 billion, which is 4 percent growth, is not wise. We should continue to look for ways to allocate our resources prudently, and we should remain cognizant that federal stimulus funds we have received for the past two years will soon run out. This is just not the time to increase state spending. “

Representative Sam Rohrer (R-128th)

“The current administration has led Pennsylvania down the path to fiscal insolvency,” Rohrer said. “The budget approved today by the House is simply a continuation of the fiscally irresponsible practices of the last eight years. It spends too much, disregards financial reality and ignores the wishes of Pennsylvanians.”

Representative William Adolf (R-165th)

“While I am pleased to see us debating the budget this early in the process, I believe the spending plan that was passed today is taking us in the wrong direction,” Adolph said. “This budget spends far more than we can afford, and it sets us up for some major financial problems in the near future.”

Representative Michele Brooks (R-17th)

“I agree that government should be listening to the people it serves and address the numerous calls to live within its means. This spending plan is a fiscal train wreck that does not reflect the priorities of the people who are paying the bills and who have told us government must operate more efficiently and effectively.

In Closing . . .

HERE is a link to the budget document, and HERE is a link to the House Vote (which ended at 107 to 89 . . . pretty much along party lines).

My father used a saying when I was a kid. I never had a purpose for it until today. He would say “You can’t make a silk purse out of a sows ear”. I find that analogy to be perfect in this situation. House Bill 2279 is a sows ear. It will be the job of the State Senate to transform it into a silk purse before June 30th.

Unfortunately, my faith in the ability of the Senate to bend and twist this sows ear into something attractive is limited. Our State Senators are concerned about having their names tethered to another delayed budget. That concern will make them hold their nose and vote FOR this “train wreck” with hopes of not drawing attention to themselves. They are crossing their fingers, closing their eyes, and praying for this election year to blow over without incident.

Time will soon tell.

Pennsylvania Tax Revenues Falling Short Of What State Lawmakers Projected

THE KEYSTONE COPS BUDGET SAGA CONTINUES!!!!!!

Pennsylvania is on course for another fiscal train wreck this year according to the latest Department Of Revenue figures. Last year Governor Ed Rendell and state legislative leaders in both the House and Senate were not able to pass a budget until the end of October. Even then the budget that was passed was packed full of projected revenue numbers and voodoo mathematics. Just imagine how this year's budget negotiations are going to play out with these figures.

From The Department Of Revenue Press Release:

Acting Secretary of Revenue C. Daniel Hassell today reported that Pennsylvania collected $1.5 billion in General Fund revenue in February, which was $102.3 million, or 6.4 percent, less than anticipated. Fiscal year-to-date General Fund collections total $16 billion, which is $476.7 million, or 2.9 percent, below estimate.

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I just don't understand how our state lawmakers don't do something to cut spending when they know state tax revenues are coming int 2.8 percent below estimates. Commonsense tells you not to just set back and do nothing. That isn't leadership. Neither is Governor Ed Rendell's budget proposal that wants to once again increase state government spending. Again where does the madness stop?

PA Teacher Pensions Out Of Control

Guest Column Submitted By Ed Inghrim

Recently New Jersey Gov. Chris Christie announced a freeze on spending and said pensions and benefits are the major driver of spending increases at all levels of government. He cited two examples of retired public employees. A 49-year-old retiree, who paid $124,000 toward retirement pension and health benefits, will get $3.3 million in pension payments and nearly $500,000 for health care benefits -- $3.8 million on a $120,000 investment. A retired teacher who paid $62,000 toward her pension and nothing for full family medical, dental and vision coverage, will collect $1.4 million in pension and $215,000 in health care benefit premiums over her lifetime.

I decided to check his math using the Saucon Valley School District teacher contract as a model. I assumed a teacher hired at age 24 at $40,000 would work 30 years and get an average pay increase of 4 percent a year (quite conservative) and contribute 7.5 percent of salary to the state retirement system. Retiring at 54, the teacher's total pension contribution would be $168,255. Assuming the teacher lived to 85 and got health benefits until Medicare eligible, he or she would collect about $3.4 million after retiring. Not a bad return. If the annual raise were 5 percent, the teacher would get a return of $4.2 million on an investment of $199,317.

Like New Jersey, Pennsylvania faces out-of-control spending and a seriously underfunded public pension system. Unfortunately, our elected representatives committed their taxing authority to correct any bad decisions they or the pension fund managers made to guarantee benefits. Perhaps Gov. Ed Rendell and our legislators should get a copy of Christie's budget speech and read it.

Ed Inghrim is the Director of Saucon Valley School Board in Lower Saucon Township

Rendell Approval Ratings Hit New Low

snip...Governor Ed Rendell (43%) and President Barack Obama (44%) similarly struggle with low approval ratings in Pennsylvania although Rasmussen has consistently tracked both lower than in other polls. Seven in ten (71%) claim anger over the current policies of the federal government and similar to national polling a significant majority (58%) in Pennsylvania also believe neither Democratic nor Republican leaders in Congress know what the country needs to do in order to get back on the right track. The anti-incumbent sentiment for 2010 is reflected by the nearly two-thirds (66%) of Keystone State voters who believe the country would be better off if the current status quo was defeated. By a margin of 44-34% more voters also believe their own local representative should be defeated for reelection.
Source: http://www.examiner.com/x-13600-Philadelphia-Opinion-Polls-Examiner~y2010m2d17-Poll-Little-change-in-Pennsylvania-as-Republicans-continue-to-hold-lead-in-races$

Endorsement

Why endorse? These are the answers I got from the State Committee and the County chairmen:
If we do not endorse, why bother having a state committee?
I worked hard, and deserve to choose the candidate.
These committee folks were elected by the local citizens.
The citizens of the Commonwealth are not smart enough to make the decision. We need to help them.

True, we did elect them. True, in the past, we were too trusting, allowing them to give us such foxes as Gov Spendell and Sen Specter.

I think we could have done better if we had randomly chosen from the phone book. The Republican/Democrat habit of endorsement has given us the mess we are in. If you like the way your elected employees are running the government, vote for another candidate endorsed by the Republocrat Machine.

If not, look at the Rohrer for Governor, and Luksik for Senator. Two God fearing leaders who have been fighting the Machine (in both the Democrat and Republican flavors) for the last two decades.

You own a business, called government. Your children need you to manage it. If you lack understanding, ask God to lead you, and visit the www.pfa-pa.org web site.

Rendell Leaves Behind A Fiscal Mess

Look up the word "chutzpah" in the dictionary and you’ll find a picture of Gov. Ed Rendell next to it. Chutzpah, which means "unmitigated gall, audacity or nerve," is the perfect description of Rendell, who has run up massive deficits during his two terms as governor and now is warning his fellow Pennsylvanians that we have to deal with the fiscal crisis.

In this case, "we" means you and I — the beleaguered taxpayers of Pennsylvania — not Rendell, who will leave the governor's mansion after eight years of fiscal mismanagement to collect a huge taxpayer pension as his reward for screwing up the state’s finances.

It was classic Ed Rendell Tuesday as the governor delivered his eighth — and thank God, his final — budget to the Pennsylvania Legislature. Having run out of things to tax, Rendell proposed expanding the state sales tax to cover more items. Rendell and his lockstep Democrats in the Legislature have repeatedly opposed expansion of the sales tax to cover services when it was attached to a plan to eliminate property taxes. That's what Republican state Rep. Sam Rohrer has been pushing for years.

But now that Rendell has run out of opportunities to raise other taxes, he needs the expanded sales tax to fund his proposed $29 billion spending plan — and pay for years of deficit spending.

Despite running up huge deficits in the past two budgets, Rendell wants to increase state spending by another $1.1 billion for the 2010-11 fiscal year, which begins July 1. The first rule of holes is when you're in one, stop digging. Rendell plans to dig so deep that the next governor will never get out from the fiscal abyss "Fast Eddie" has created.

Rendell wants to pay for the new spending by using $1.1 billion in federal stimulus funds, which may or may not be approved by Congress. (Just imagine what will happen to "stimulus" handouts when Republicans take back control of Congress in November.)

And Rendell is leaving with a final "up yours" to the taxpayers of Pennsylvania. Having presided over a massive expansion of state spending over the past eight years — $9 billion and counting — Rendell warned lawmakers that Pennsylvania is facing a "fiscal tsunami" — a potential $5.6 billion deficit from the 2011 expiration of federal stimulus money and the ticking time bomb of public pension obligations.

For eight years, Rendell has ignored the growing pension crisis, which will result in massive property tax increases for Pennsylvania residents in 2012. That wallop will come after the 2011 deregulation of electricity rates, which will raise most residential bills by at least 30 percent.

You can't spend what you don't have, but Rendell and most legislators flunked Economics 101. Rendell, with the Legislature in tow, has been spending money the state doesn't have for years. The chickens will come home to roost. Unfortunately for Pennsylvania taxpayers, Rendell will have flown the coop.

Rendell wants to reduce the state sales tax rate from 6 percent to 4 percent, but expand it to more than 70 services currently exempt (lawyer and accountant fees, dry cleaning, for example) and items such as firewood, candy, gum, bottled water, magazines and personal hygiene products. (Groceries, clothing and prescription drugs would remain exempt from the sales tax under Rendell's plan).

Rep. Rohrer has proposed a similar plan, but it would lead to the elimination of the state's onerous school property taxes. Most taxpayers, especially senior citizens on fixed incomes, would come out ahead under Rohrer's plan. Rendell simply wants more money from taxpayers to cover his deficit spending.

The state finished with a $3.25 billion deficit for the 2008-09 fiscal year, which led to a 101-day budget impasse over Rendell's 2009-10 spending plan. And what did Rendell and the most expensive legislature in the country come up with for the current fiscal year? A budget that was in the red from Day 1. The state is looking at a minimum $500 million deficit for the 2009-10 fiscal year.

In addition to expanding the sales tax, Rendell wants to extend the tobacco tax to include cigars and smokeless tobacco products and enact a new severance tax on natural gas extraction. Both proposals were rejected by the Legislature last year.

Will any of these taxes pass? Rendell is prohibited by the state constitution from seeking a third term as governor. He's a lame duck. He can propose all the tax hikes he wants, but the Legislature will have the final say. All 203 members of the state House and half of the 50 members in the state Senate face the voters in 2010. How many of them are going to vote for one of the largest tax increases in Pennsylvania history?

Pennsylvania voters are already in a foul mood. A recent Franklin & Marshall College poll found only 16 percent of registered voters say the Legislature is doing a good job. How much lower will that number go if the Legislature goes along with Rendell's tax hikes? How many lawmakers will sacrifice their careers for Ed Rendell?

Tony Phyrillas writes about politics for The Mercury in Pottstown, Pa. Check out his daily blog here. You can also e-mail him at tphyrillas@gmail.com