The $16 Billion Dollar Dump

Seemingly unnoticed in the new budget, is the incredibly giant leap in state spending on Public Welfare from $8.8B to $11.2B. This budget has obligated Pennsylvania taxpayers to permanently sustain a standard of living for welfare recipients that had been made 'temporarily' possible by one-time Federal stimulus dollars, and no one is batting an eye. It's a $2.4B increase in state spending, overnight. Just like that.

Last year, and the year before last, Pennsylvania received $2B per year in Federal stimulus grants for welfare, and $1.5B each year for K-12 Education. This year, with the Federal Government tightening its belt, Pennsylvania was not issued those previously enjoyed stimulus funds.

Governor Corbett's proposed budget created quite a stir when he allowed state spending on Education to return to pre-stimulus levels--even though he had executed exactly what was necessary and he encouraged school districts to do the same: operate within available means. Unfortunately, however, Governor Corbett did not apply the same principle he'd preached to the Education community when he laid out his proposal for spending on Public Welfare.

Last year, $25.2B was spent on Public Welfare in Pennsylvania, but most of that amount was funded by the Feds who gave roughly $16.4B. Pennsylvania taxpayers were obligated for the other $8.8 Billion. This year, however, rather than $16.4B from the Feds, Pennsylvania received only $14.4B because the Feds did not include the $2 Billion in stimulus funds as they had the previous two years. The lack of stimulus funds would have reduced spending on Public Welfare in Pennsylvania from $25.2B to $23.2B--that is if Governor Corbett had allowed spending to return to pre-stimulus levels as he did with Education, but he didn't. Instead, Governor Corbett made up for the lack of Federal stimulus dollars by allowing the PA taxpayer obligation to leap from $8.8B to $11.2B. That's a $2.4B spike. It's $2.4B added to the General Fund Budget. Without it, the General Fund budget would have come in at $24.7B rather than the $27.1 that passed on June 30.

To put the gravity of this $2.4B increase in perspective, it took former Governor Ed Rendell eight years to boost the taxpayer burden for Public Welfare by $2.4B. When Rendell took office, the taxpayer obligation to Public Welfare was $6.4 Billion. Eight years later, when he left, the taxpayer’s obligation had risen to $8.8 Billion. Governor Corbett and this Legislature have accomplished an increase of the same amount in less than one half of one year, of Corbett's first term. It's simply amazing.

Rather than return spending to the level that existed before the federal government’s one-time enticement, as he did with Education, when confronted with the choice, the Governor proposed to obligate the taxpayers to a gargantuan increase, for years and administrations to come--and the legislature voted to allow it.

With this budget now passed, as presented by the Governor, the taxpayers of the Commonwealth are now obligated to $2.4B in additional spending this year, next year, the year after and the year after that. Spread over Governor Corbett's four-year term, that's increased spending that adds up to more than $8B--and if Corbett secures a second term, the increase adds up to $16B assuming there is no increase. That’ll be $16 Billion not available for meeting known state debt. It's $16B Governor Corbett might have allowed us to keep in our pocket or put back into our businesses. It's $16B literally dumped on Pennsylvania taxpayers. Astounding.

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