Archive: July, 2010
Finally, there may be some good news for Pennsylvania's budget woes. As we've written (many) times before, the state is facing an $850 million budget shortfall if the federal government doesn't extend higher funding for Medicaid. Gov. Rendell has repeatedly warned that he'll have to layoff 20,000 state workers if the money doesn't materialize.
It hasn't been looking good. The biggest problem up to this point is that there wasn't even a legislative vehicle for the funding -- no specific piece of legislation for supporters of increased funding, like the National Governors Association and the U.S. Conference of Mayors, to rally around. That appears to have changed. An amendment to legislation pending before the U.S. Senate would provide about $16 billion in funding.
From the Washington Independent:
On Tuesday, we noted Ralph Cipriano's quest to get the Nutter administration to release a study it had commissioned on the controversial DROP program. Later that day, the administration announced the study would be released next week. Now, Jeff Shields has found a preliminary version of the report, which was presented by one of the authors at an academic conference in the Netherlands six months ago (side note: A study on Philadelphia's pension system was conducted by researchers in Boston and unveiled at a conference in the Netherlands). Here's the crux:
Citing data provided by the city for 48,029 employees between 1990 and 2008, the draft says DROP both increased the retirement age and was used by employees in a way that "results in a substantial increase in pension cost."
That's not a good deal for taxpayers! Of course it needs to be reiterated that these findings were preliminary, but one hopes that, if the report the administration releases next week is substantially different from this, there will be a (persuasive) accompanying explanation of what changed.
The Daily News follows up on Phil Goldsmith's district-administrators-are-paid-too-much column with two pieces today. First, a story by Dafney Tales making the observation that administrator raises are not the only fiscal change the district is making:
During a budget presentation to the School Reform Commission in May, district officials warned that drastic cuts that will harm students would be made if enough funding from the state didn't come through.
They weren't bluffing.
- The Pittsburgh regional planning authority has released a short-term transportation plan that slashes spending on roads and bridges. Philadelphia’s counterpart did the same thing a few weeks ago. (PG)
- It looks like the feds might want in on the gambling business. Bills are wending their way through Congress that would legalize Internet gambling. (Planet Money)
- SEPTA is trying to get the feds to pick up part of the tab for implementing a new smart card fare collection system. (PlanPhilly)
There has been a lot of attention paid to guys like former State Rep. Mike Veon, who was the first elected official to be convicted in Attorney General Tom Corbett's ongoing investigation into state corruption. However, not everyone who went to trial was found guilty. Now, one of the acquitted defendants is suing the state for more than $2 million in damages and back pay.
Steve Keefer had been the director of information technology for House Democrats, until he was fired in 2007. Keefer was charged with being a major part of an effort by Democrats to use tax dollars to fund political activities. He was found not guilty at trial and is now suing to get lost wages from the state. He also wants to be compensated for the damage done to his professional reputation.
Filed Wednesday in U.S. District Court for the Middle District, the suit names Attorney General Tom Corbett, whose office prosecuted Mr. Keefer; state Rep. Bill DeWeese, D-Waynesburg, who fired him; House Majority Leader Todd Eachus, D-Luzerne; Speaker Keith McCall, D-Carbon; caucus counsel Bill Sloane and Bill Chadwick; attorney Matthew Haverstick, who represented several witnesses in the criminal case; and several named and unnamed caucus employees.
That’s 500,000 lost jobs. Conservatives have largely convinced themselves that public servants are such vile and overpaid monsters that anything that forces layoffs is a good thing and the moderates in Congress seem scared of their own shadows so nothing will be done. But economically speaking, the time for local governments to try to trim the fat is when unemployment is low and your laid-off librarian, ambulance driver, or guy who keeps the park clean can get a new job where his or her skills will plausibly be more optimally allocated. But guess what produces less social welfare than driving a bus? Sitting at home being unemployed. And so it goes down the line. Dumping people into a depressed labor market all-but-guarantees an increase in idleness along with a drop in revenue for local retailers that will lead to more idleness and waste.
Of course it's true that local governments don't tend to trim when times are good, but that doesn't make it smart to do it when times are bad. There are ideas for ways the federal government can save jobs while incentivizing local governments to enact things like pension reform.
From the Boston Herald, on July 6th:
[Superintendent Carol] Johnson told the Herald she won’t take any pay hikes or bonuses during the rest of her contract in Boston.
“I don’t think in a period where schools are cutting resources for children, any of us can expect to take raises,” Johnson said.