Tag archive for Pennsylvania

Pensions drive local taxes up, up and away in PA….

Pennsylvania Gov. Tom Corbett’s call for pension reform hasn’t resonated with the state’s residents, which is one big reason why Corbett hasn’t been able to persuade even his own Republican colleagues in the state legislature to enact changes to the state’s underfunded pensions. But now that municipal and school taxes are going up around the state in direct response to higher pension costs…

Philly schools “inadequate” at $12,000 per student

The Philadelphia school system last month projected spending about $2.4 billion next year to educate about 200,000 students. The state commission that runs the city’s schools, however, wants millions of dollars in additional spending just to offer what it claims would still be an “inadequate” education. How is it that a school district that spends more than the national average per student can’t manage ? One look at its personnel costs and perks, including exploding pensions and legal services for union members, gives you an idea why…

Is it time for Scranton to go bankrupt?

A 2011 Pennsylvania Supreme Court decision which forced the struggling city of Scranton to adhere to a $21 million arbitration ruling in favor of employees is now also helping drain the city’s deeply indebted pension system. The pension system, with $150 million in unfunded liabilities, has just learned that it must come up with somewhere between $7 million and $10.5 million in additional dollars because retirees are entitled to some of the raises ordered by the court. All of this is money the insolvent city, which famously cut worker pay to the minimum wage two years ago, doesn’t have..

An introduction to Act 47, Pennsylvania’s “roach motel” for distressed cities

Pennsylvania is home to 26 officially “distressed” municipalities (and Philadelphia). Nearly three quarters of a million people – approximately 6% of the state’s population – reside in these cities, towns and boroughs. Altogether, three of the six largest cities in Pennsylvania are struggling: Scranton, Reading and Pittsburgh. These are not good stats….

Philly schools’ pension nightmare

School District of Philadelphia’s financial woes became a national story last week when the New York Times featured a piece on the district’s efforts to borrow $50 million to make up a significant funding shortfall that actually threatened the start of the school year. In …

Capital is indeed mobile

My colleague Steve Malanga writes an excellent analysis on why “Businesses Should Fear States’ Big Pension Debts.” His story underscores the important point that capital is mobile. The fiscal environment of a given state or geographical region are important factors in the corporate decision-making process of …

Pennsylvania passes a budget, punts on pension reform

The Pennsylvania General Assembly has adjourned for the summer, having successfully completed work on a $28.4 billion new state budget while failing to adopt transportation, state liquor store and public pension reform.  They plan to resume consideration of these three areas in September (without the leverage of …

Defined benefit pension plans and politics: a toxic combination

David Crane criticizes the Manhattan Institute for advocating the curtailment of public sector defined benefit plans on several occasions. As mentioned in my recent paper, there is nothing fundamentally superior or inferior regarding defined benefit (DB) plans as such.
The fundamental point is that DB plans …

What does your governor earn?

In the item below we listed the states with the highest paid legislators. The Pew Center on the States has just released a list of governors’ salaries for this year and each year going back to 2007. Highest paid is Pennsylvania Gov. Tom Corbett, although Pew notes that Corbett …

Pennsylvania: So safe, or not?

We have perhaps become so used to our politics being dominated by misinformation that there seems to be no price to pay anymore for those who mislead us in the most egregious way. Take, for instance, the campaign that the United Food and Commercial Workers …