Port Authority’s budget could still change

Summary: The Port Authority (PAAC) board is set to vote on its operating and capital budgets for fiscal year 2019-20. An expiring labor contract and new hires are key drivers of operating expense increases for the mass transit authority. A lawsuit over Turnpike tolls is affecting the capital budget.

PAAC’s preliminary operating budget has $376.0 million in operating revenues and operating grants and $405.1 million in net expenses, resulting in a $29.1 million deficit. PAAC is required by state law to have a balanced budget, so some maneuvering will likely occur.

Operating revenues are budgeted at $105.6 million, with $78.5 million coming from passenger fares on bus, trolley and incline modes. That is down slightly from audited totals of recent years when fare revenue was just over $79 million. It is possible that the transition to a single zone from what used to be multiple zones with different fares may have had an effect. PAAC projects unlinked trips to total 64.5 million, a slight increase over this current fiscal year’s 64.3 million (0.3 percent).

The remainder of operating revenues include revenue from demand-response service, advertising, interest and other revenue. Overall the budget expects operating revenue to fall $108,179 (-0.1 percent) from the current fiscal year.

Expenses are budgeted to grow a whopping $23.2 million (6.1 percent) to the $405.1 million total. Not surprisingly, wages and salaries and pension and other benefits comprise the bulk of the expense category. Wages and salaries are to total $178.1 million, up $8.7 million (5.1 percent) over FY2018-19. The current four-year contract between PAAC and the Amalgamated Transit Union includes a 3 percent wage increase in 2020, the year the pact expires. Pensions and other benefits are expected to total $160.5 million, a $5.5 million increase (3.5 percent). A big wage or benefit increase in the next labor contract will certainly drive up these costs. The fact that transit strikes are still permitted by state law is hard to believe given the power imbalance it can create in negotiations.

PAAC plans on adding 37 new employees to bring headcount to 2,683. The budget points out that salaries and benefits for these new employees will total $3.7 million. That accounts for 26 percent of the $14.2 million growth in the two large expense categories and translates to $100,000 in salary and benefits per employee.

Of the 37 new hires a news article reported that 15 of the jobs are mid-level positions and include a manager for the bus rapid transit project that is waiting on federal approval for the bulk of its funding. In the past two fiscal years headcount will have grown by 76 employees if the proposed budget is approved.

Just about every other expense category, with the exception of materials and supplies and provision for injuries and damages, is expected to grow year-over-year. The 6.1 percent increase in expenses will far outpace the growth in unlinked trips.

The last piece of the operating budget is government operating grants. In the preliminary budget the commonwealth is expected to provide $234.3 million in operating assistance. Allegheny County has to provide a 15 percent match for that subsidy, and so $32.3 million generated from alcohol sales and vehicle rentals is budgeted. PAAC’s designation as a regional asset grants the final $3 million piece for the state money match. With the County Controller’s audit noting that the county’s transit support fund is overflowing with a surplus from drink and car rental taxes it is still a wonder why the Regional Asset District continues to provide money for the required operating match.

The capital budget of $58.1 million is much lower than projected in earlier years after the passage of Act 89 of 2013. Similar to the operating budget, the commonwealth is the largest provider of capital dollars for PAAC with $28.7 million of the total. The federal government capital contribution is $23.4 million and Allegheny County will contribute $6 million. The budget is allocated to vehicle replacement ($29.2 million), debt service ($22.1 million) and fixed guideway improvements ($6.8 million).

The lower than projected amount is due to a lawsuit over the use of Turnpike tolls to provide mass transit funding under the state’s transportation funding scheme from 2007 (Turnpike tolls for transit is to sunset in 2022). Though plaintiffs lost in federal court the case is now on appeal and it is not clear what will happen with the deferred capital projects ($64 million total) next year.

As we have noted before (Policy Brief Vol. 18, No. 13 and Vol. 19, No. 6) PAAC is very expensive compared to peer agencies on bus service, the primary service mode. It was 30 percent higher than a peer group put together by the Auditor General’s Office and our previous work found the same in comparisons to Boston, Washington, D.C., Columbus and Buffalo. Even PAAC’s 2018 service report shows the authority third highest out of 10 transit agencies on bus cost per passenger. That report cites “comparatively high operator and maintenance wages and benefits, as well as high maintenance costs” as the reasons.

Will the next decade bring action on how to correct them?

Wages, ignorance & hubris

“Progressives” are lamenting that there won’t be a massive hike in Pennsylvania’s minimum wage with the advent of the new state budget on July 1.

“I was incredibly disappointed that the increase in the minimum wage was taken out of the budget,” Rep. Patty Kim, the prime sponsor of the House bill to raise the wage, told The Patriot-News.

“This should have been a non-negotiable item (for the governor) and it is a terrible message we’re sending out to workers in Pennsylvania,” the Harrisburg Democrat said.

But in actuality, and in a most perverse dichotomy, Kim and fellow liberals are mourning that the cost of doing business for businesses across the commonwealth won’t be jacked up, that thousands of entry-level jobs won’t disappear and that the hours for some of those holding those jobs won’t be reduced.

Talk about “a terrible message.”

The Wolf administration sought to raise the state-set wage floor from $7.25 an hour to, first, $12 hourly and, later, to $15 an hour. Legislative Republicans, as they should have, balked, even at some reported (but unspecified) compromise deal.

Wages should rise, as House Majority Leader Bryan Cutler, R-Lancaster County, reminds, “organically.” That means wages should be based on worker productivity, not set by government fiat.

Many Pennsylvania liberals argued that raising the minimum wage would take an untold number of low-paid workers off the public assistance rolls. By eliminating jobs and putting workers with no pay on the state dole?

Others argued that raising the wage floor by state diktat would generate $50 million in annual tax revenues for state coffers. That, according to a May analysis by the state’s Independent Fiscal Office (IFO).

After all, it’s all about “The State,” isn’t it?

But never mind, as the Patriot-News also dutifully reported (and as Republicans highlighted), a projection from the same IFO that raising the minimum wage would result in a net loss of 34,000 jobs.

What’s “progressive” about denying 34,000 people the chance to step onto that first rung of the employment ladder, a critical step that enables people to learn how to work?

The Patriot-News reports there could be further negotiations later this year to raise the Keystone State’s minimum wage. But, it adds, if no middle ground is reached soon, “that could leave this issue back in the cauldron of partisan politics.”

But that pot would be stirred not by those who have the temerity to understand fundamental economics but by those imbued with the economics ignorance so indigenous to “social justice” hubris.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Woodland Hills shares neighbor’s budget woes

The Woodland Hills school board passed a final 2019-20 budget with a tax increase and employee furloughs  Property taxes will increase up to the 3 percent maximum permitted without an exception from the state or a referendum. That will take millage to 26.1105 mills, which is 17 percent higher than the 22.4 millage rate put into place following the last reassessment.

Based on the most recent count of full-time employees the district has a headcount of 486.  That is 14 percent lower than a decade earlier.  If the 60 furloughs in the coming year’s budget go through that one-year decline (12 percent) would come close to equaling the percentage change over the 10-year period.

Over the same time period average daily membership fell 9 percent and operating expenses rose 20 percent.  That resulted in the per-pupil cost rising 32 percent to $20,386. That’s greater than the state average.  Five years ago the district closed schools and realigned grades in an attempt to change the district’s direction.

If the tax increase and furloughs sound a lot like what is transpiring in the adjacent Penn Hills School District for this coming school year, they should. Woodland Hills is not in Act 141 financial watch or recovery, however, and it did not undertake new school construction and run up debt like its neighbor (the last school renovations were in 2001).  Is this budget a sign that Woodland Hills might find itself under state financial oversight in the near future?

 

‘Green jobs’ & private hotels

There’s a new report out claiming that “clean energy” is “driving Pennsylvania’s job growth.”

Sigh. We’ve been down this road before, from the reclassification of existing jobs to, suddenly, “new green jobs,” to the taxpayer subsidies for so many of these “green” positions.

And one of the more absolutely ridiculous comments associated with this latest report is the founder and owner of one solar energy company noting that if only the state would mandate the use of more solar energy, why “that could easily double the amount (sic) of jobs with good, sound state policy.”

How deep the crony “greens” have sunk into the quicksand of malarkey mixed with nescience.

Never mind that government has no business mandating the use of one form of energy over another. Perverting the marketplace and propping up any energy source whose growth isn’t spawned by consumer demand is anathema to sound public policy.

The intellectual dishonesty and ignorance of fundamental economics in the “green energy” debate is a national tragedy.

Buried deep in the belly of a Post-Gazette story about the Rivers Casino being “ready to get rolling on (a) $60 million hotel” is this pertinent nugget, from the 19th paragraph:

“The development will be privately funded.”

It represents, refreshingly, the continuation of a plethora of new hotel rooms being built in Pittsburgh proper without public subsidies.

Perhaps taxpayers should print out a copy of the story, highlight the aforementioned line and send it to VisitPittsburgh. That’s the quasi-government tourism agency that keeps insisting a massive taxpayer subsidy is desperately needed to build a new hotel at the taxpayer-funded David L. Lawrence Convention Center. That, of course, to make it more attractive to those who likely will see their rent to use the facility deeply discounted or even waived.

All together now – AHEM.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Not seeing the forest for the greens

Here we go again – another politician again touting a government-created “free market” (don’t let the oxymoron escape you) in the name of combating “climate change.”

For what kind of rubes does Gov. Tom Wolf take Pennsylvanians? Very large ones, it appears, and having just fallen off the turnip truck, to boot.

As The Associated Press reports it:

Wolf “is asking Pennsylvania’s Republican-controlled Legislature to take the first steps to authorize the state to join a regional consortium of states that sets a price and caps on greenhouse gas emissions from fossil fuel-fired power plants.”

“The Democratic governor’s move is part of his effort to fight climate change in the nation’s No. 3 electric power state, while the price paid by power plant owners to emit carbon dioxide would net hundreds of millions of dollars each year for state government,” the AP reports.

The consortium, formally called the Regional Greenhouse Gas Initiative, is a cap-and-trade program among Northeastern and mid-Atlantic states.

Simply put, Wolf is looking for legislative cover to blunt any legal challenges claiming his administration lacks sole authority to enact an emissions cap.

“Winning legislative backing could give the Wolf administration additional legal protection to write regulations under its existing air pollution control authority to require power plants to buy credits for carbon dioxide emissions and to allow the credits to be traded in the consortium’s market,” the wire service reports.

But the base premise of cap and trade is, in a word, fallacious.

As noted economist Wayne Winegarden reminded a decade ago in succinct Townhall.com post, there are four primary fallacies with one of the ecocratic establishment’s favorite social re-engineering schemes.

The first is that cap and trade regulations are not a free market solution but just the opposite. Cap and trade gives government the right to determine the total amount of greenhouse gasses (GHGs) emitted by the economy.

“Giving the government the power to set total GHG emissions is giving the government the power to determine the economy’s use of energy,” Winegarden warns. “Since energy use is central to our entire free market economy, cap and trade takes a central aspect of our free market economy and brings it under direct control of the government.”

Then there’s the fallacy that cap and trade produces “incentives” to develop alternative energy technologies. Winegarden reminds that such incentives exist with or without cap and trade regulation.

“These incentives vary from the economic (profit) to the non-economic (values).  Cap and trade does not change the incentives.  But, it can distort the process, and due to the law of unintended consequences, may even make the situation worse.”

The economist cites ethanol as one example. Not only are ethanol’s supposed environmental benefits now seriously questioned, it has exacerbated an international food crisis.

A third fallacy of cap and trade is the very act of government intervention.

“In order to implement a cap and trade regulation, the rights to emit GHGs must be distributed,” Winegarden reminds. “These rights can be given away for free by the government, in which the beneficiaries receive a very valuable gift from the government.  Or, the rights can be sold to the GHG emitters, typically through auction.”

Never mind that, as the professor stressed, “Hobbling the private sector by transferring a substantial amount of resources to the public sector will not foster technological innovation.  Instead, it empowers the government to choose which prospective alternative energy technologies should be supported.”

Thus, our energy future is bet on the wisdom and knowledge of the “energy scientists” in government.

“The most assured means to obtain effective alternative energy technologies is to allow the private sector to continually experiment (and often fail) with different ideas,” Winegarden says.

Then there’s perhaps the worst fallacy of cap and trade – that it will generate economic growth.

Again, from Winegarden’s decade-ago post:

“Proponents claim, due to fallacies 1 through 3, that cap and trade will instantaneously create thousands of new green jobs.  Our economy will flourish as we invent ourselves out of the current energy dilemma.

“The belief that we can impose a mandate on our economy to use less energy and, somehow, that economic growth will accelerate as a result is a fantasy, pure and simple.”

Adds Winegarden:

“Capitalism is a process of creative destruction – Henry Ford put some small automobile manufacturers out of business while he was revolutionizing the automobile industry and creating millions of new jobs on net.  Unlike Henry Ford, cap and trade does not create anything.  The incentives to create the alternative technologies already exist – as do investors who will willingly risk their money if they believe the project is viable.

“What cap and trade adds is a prohibition to use our current energy resources while these new technologies are being tested.  Such a restriction is not growth enhancing.”

The bottom line is that cap and trade is bad public policy.

More’s certainly the pity that Gov. Wolf and his acolytes can’t see the forest for the greens.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Pennsylvania’s general fund revenues improve while job growth lags

Summary: The state Legislature will be debating the fiscal 2020 budget soon.  It is helpful to look at how general fund revenues, specifically the large tax revenue components, have fared thus far in fiscal 2019 and compare them to the last few fiscal years.  This Brief also looks at Pennsylvania’s performance in adding jobs and how it compares to the nation as a whole.

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Pennsylvania’s fiscal year runs from July 1 to June 30.  Data for fiscal 2019 is available only through April or 10 months into the fiscal year.  For these 10 months general fund revenues have reached $29.16 billion.  This amount is one-half of a percent higher than the first 10 months of the previous fiscal year.  However, it was 2.9 percent higher than was anticipated.

The state was anticipating a drop in non-tax revenues and, thus, estimated lower total general fund revenues to be collected in fiscal 2019.  This was due to a budget-expected drop in miscellaneous non-tax revenues as a result of the 2018 sale of revenue bonds of $1.5 billion backed by future payments from the tobacco settlement and an additional $300 million for a one-time lease of the farm show complex and various special fund transfers (Independent Fiscal Office: Official Revenue Estimate of Fiscal Year 2018-2019).  Combined, it was a temporary one-year hike of about $1.8 billion in non-tax revenue for fiscal 2018.

The largest recent annual bump to general fund revenues occurred from the 2017 fiscal year to the 2018 fiscal year when the amount collected through April rose from $25.82 billion to $29.03 billion—a jump of 12.4 percent.  In three prior fiscal years, 2015, 2016 and 2017, collections barely changed, going from $25.72 billion in fiscal 2015 to the above-mentioned $25.82 billion—an increase of just 0.4 percent over these years.

Keep in mind that the one-time jump in miscellaneous non-tax revenues of about $1.8 billion tends to skew the amount a bit and overstates the increase from fiscal 2017 to fiscal 2018 and understates the rise from fiscal 2018 to 2019.

The general fund revenue stream is comprised of tax revenues and non-tax revenues.  Due to the uncertainty in the non-tax revenue stream, this Brief will focus on the tax revenues of which there are many taxes that generate general fund revenue such as corporate taxes, including corporate net income, consumption taxes, including the sales and use tax, and the category of “other taxes”, which includes the personal income tax.

The largest source of general fund revenue is the personal income tax.  Through April of fiscal 2019, this tax produced $11.93 billion.  While the total was up 5.5 percent from the same time in fiscal 2018, it is 0.3 percent below projected year-to-date levels.  The fiscal 2018 total of $11.31 billion represented a 7.4 percent rise over fiscal 2017’s value of $10.53 billion.  From fiscal 2015 through fiscal 2017, revenue rose from $10.17 billion to $10.53 billion—an increase of 3.5 percent over three years.  Personal income collections picked up substantially after fiscal 2017.

The second largest category is the sales and use tax which has brought in $9.19 billion through the first 10 months of the current fiscal year—an increase of 7.6 percent over the same time in fiscal 2018 and 3.1 percent higher than the projected levels, year-to-date.

An increase in sales and use tax collections points to a willingness of consumers to spend based on their perception of the economy.  For example, in fiscal 2015 the 10-month collections were $7.82 billion and had risen to $8.19 billion through fiscal 2017—an increase of 4.7 percent or $369.1 million.  However, the one-year increase from fiscal 2017 to 2018 was $352.6 million or 4.3 percent and then another $645.4 million or 7.6 percent from fiscal 2018 to 2019.  The two-year increase of nearly $1 billion, or 12.2 percent, since fiscal 2017 shows that consumers are reacting to a strong economy as well as having more income to spend.

The final general fund revenue source examined is the corporate net income tax.  This revenue source had the largest rise from the first 10 months of fiscal 2019 over the same time period in fiscal 2018, surging from $2.05 billion to $2.51 billion (22.4 percent).  In fiscal 2015 the corporate income tax collections stood at $2.26 billion over the first 10 months before falling to $1.97 billion in fiscal 2017—a drop of 12.6 percent over those three fiscal years. The rebound in fiscal 2019 can be viewed as firms in Pennsylvania experiencing hefty profit gains reflecting the stronger U.S. economy.

Looking at the three major tax-revenue components, the April year-to-date combined increase of $1.72 billion is more than offset by the reduction in the miscellaneous non-tax revenue decrease of $1.8 billion.  Still, in light of these tax revenue gains, fiscal 2019 can be viewed as a positive for Pennsylvania’s general fund.

But do the tax revenue gains reflect corresponding employment growth?

In April 2019 the number of total nonfarm jobs (from the employer payroll survey) in Pennsylvania reached 6.062 million which is the fourth-highest monthly total since 2000 behind October (6.087 million), November (6.085 million) and December (6.075 million) of 2018.  However, it represents only a 0.89 percent growth rate over the April 2018 reading (6.008 million).  By contrast the growth at the national level was nearly double at 1.7 percent.

A big reason the national growth in total nonfarm jobs is so much better than the commonwealth’s can be seen in the manufacturing sector’s employee count.  In April 2000 the number of manufacturing jobs in Pennsylvania was 862,100 before bottoming out at 557,200 in April 2010—the recession’s low point.  By April 2019 that number managed to reach only 564,100—growth of just 1.2 percent over nine years.  More worrisome, the April 2019 level was 0.35 percent lower than the April 2018 count of 566,100.

On the other hand, manufacturing jobs growth nationally has been quite strong of late. In April 2000 there were 17.25 million manufacturing jobs before plunging to 11.43 million in April 2010.  By April 2019 that number has risen to 12.78 million—11.9 percent above the trough in the recession of 2010 and 1.6 percent higher than April 2018.

A supersector where Pennsylvania has typically fared well, education and health services, can be broken into its two industry sectors—educational services (all colleges and private schools) and health care and social assistance.

Since 2000, jobs in the educational services have increased across Pennsylvania with only a couple of interruptions.  Since 2010—the recession low point—education jobs rose 4.9 percent through April 2019.  However, there have been two setbacks.  There was a loss of 2,200 jobs from April 2012 to April 2013 (0.9 percent) and another loss of 4,500 jobs (4.7 percent) from April 2018 to April 2019.  This compares unfavorably to the national growth which lifted educational services employment 20 percent since 2010—four times the state’s growth.

Meanwhile, health care and social assistance employment has shown strength, rising 18.2 percent from April 2010 to April 2019 and with 2.7 percent over the last year.  Nationally the growth was a bit stronger.  From April 2010 to 2019 the national growth in health care and social assistance jobs climbed 21.3 percent with a 2.7 percent rise over the last year, the same as the commonwealth.

Social assistance jobs have shown a dramatic rise.  From April 2010 through April 2019 these jobs surged by 42.2 percent, significantly faster than the nation’s 32 percent.  While growth in any job sector is welcome these are typically not high-paying jobs that are likely to prop up the general fund revenues for any state.

Leisure and hospitality had enjoyed solid gains since 2010 moving 16.8 percent through April 2019.  Over the past year the sector added another 1.7 percent more jobs.  However, despite the good employment gains during the past decade, it still trailed the national jobs increase of 28.2 percent.  And its latest year-over-year gain was well behind the national rate of 2.7 percent.

And, of course, this is nothing new.  Previous Policy Briefs have been underscoring for years how the state’s economy and employment have not kept pace with the nation.  The only notable exception is with the recession years when the state’s economy bested the national largely because the state was not in the midst of the housing and real estate boom that was underway in many other states. A boom that collapsed when the subprime mortgage bubble burst leading to a serious national downturn.

The recent strong growth to tax revenues, corporate net income, personal income and sales and use taxes, shows that the Pennsylvania economy has picked up steam.  However, it is growth that is likely the result of a faster paced national economy. Pennsylvania is still bogged down by anti-business policies and regulations that keep it from reaching its potential.

Oh, for some public policy reason …

Summer doesn’t officially arrive until 11:54 a.m. on Friday but already some of those involved in or commenting on public policy are acting as if they are suffering from heat stroke.

Less than an hour away, where a gallon of regular gasoline can be pumped for 40 cents a gallon less than in Pittsburgh, administrators at Wheeling Park High School (WPHS) have joined the national effort to pump up the dumbing-down of life’s necessary rigors.

As the Sunday News-Register of Wheeling reports it:

“Administrators are seeking to eliminate ‘the game’ at WPHS that forces students to compete (with) each other for higher grade-point averages, class standing and valedictorian status.”

It seems students have been embracing the audacious concept of “taking honors classes that have more impact on the GPA,” the newspaper reports.

Not only will the school take care of that obviously deleterious valedictorian competition (ahem) by eliminating the honor, it will no longer, beginning with the freshmen class of 2020, calculate class rankings.

In a nutshell, according to the News-Register, the school wants to remedy what it calls a lack of “equity in the school’s GPA system.”

To wit, and as but one example, “those in performing arts do not receive honors credits for participation even if they are selected for an honors choir. Additionally, career and technical students don’t receive honors credits even when they excel and complete their program,” the newspaper reports, citing the high school principal.

By now, thinking people will have detected the obvious, if not delusive, sophism: The educratic establishment that devalued some curriculum now wants to devalue the accomplishment of those whom “the system” gave greater weight.

Thus, “the solution” is not to penalize those who “played the game” created by administrators who now want to turn “competition” into a four-letter word but to allow the previously devalued to – GASP! – compete.

A Post-Gazette editorial not only takes to task Insight Equity for the forthcoming closing of its Riverbend Foods canned soup business on Pittsburgh’s North Side but also Pittsburgh Mayor Bill Peduto and Allegheny County Chief Executive Rich Fitzgerald for “nary a peep” of counteraction.

The food factory site has been in continuous operation since H.J. Heinz Co. first opened it in 1888.

The P-G claims that Insight purchased the facility in 2017 “with the intention of stripping the company down and selling off every last piece, the employees be damned.”

Now, we don’t know if that’s the case or not. But the P-G offers no supporting evidence to buttress its allegation. And its skewering of Peduto and Fitzgerald is most curious.

Despite stipulating that “soup production is not the most profitable industry these days” and that “the fate of Riverbend’s employees has been clear for some time,” the newspaper chides the elected leaders for not having “tried to keep the Riverbend plant running.”

“Either man could have tried to protect the jobs of its employees,” the P-G opines.

How — by throwing more taxpayer money at the operation? Were not taxpayers shaken down enough 20 years ago to “save” and expand the facility in the Pittsburgh Wool Co. debacle?

And how would government “protect” these jobs? Perhaps by passing yet another patently illegal ordinance attempting to compel Riverbend to stay in business, pay a certain base wage and offer benefits to cover this, that and any other thing?

But, alas, as Thomas Jefferson noted in his March 4, 1801, inaugural: “Error of opinion may be tolerated where reason is left to combat it.”

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Heed the words of Diogenes

Mark A. Thomas has been chosen as the next president of the Pittsburgh Regional Alliance (PRA), effective July 15.

He’ll come to Pittsburgh from New York, where he served as senior vice president of partnerships at the New York City Economic Development Corp.

But all you really need to know about Thomas is that, according to a news release, “he played a pivotal role in Amazon’s selection of New York for HQ2 … .”

Bad publicity over a very bad deal for taxpayers — that cost pegged at anywhere from $1.53 billion to $3 billion, depending on who’s calculating it — later forced Amazon to scuttle consummating it.

The point is, if one of your touted attributes is having helped to draft a plan that gives away the proverbial taxpayer store, well, you catch our drift.

That June 11 news release from the PRA, an arm of the Allegheny Conference on Community Development, further states:

“We’re excited to bring Mark aboard to lead the PRA and contribute to our shared regional vitality goals of a strong economy, thriving people and a high quality of place.

“With nearly two decades of experience driving economic growth, Mark is uniquely suited to advance the Pittsburgh region’s strategic economic development objectives – supercharging business attraction, including international marketing of the region, and doubling down on making sure that companies already located here have the best possible environment in which to grow and prosper.”

But at what public cost, Mr. Thomas?

More public subsidies for airlines that flee when the freebies end?

More poison pills to kill the more efficient private-sector delivery of public services?

More edifices to corporate wealthfare?

More policies that defy (if not defile) fundamental economics?

As the late, great economics journalist Henry Hazlitt reminded in the 1990s:

“In brief, the main problem we face today is not economic but political. Sound economists are in substantial agreement concerning what ought to be done.

“Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment.

“It is the proper sphere of government to create and enforce a framework of law that prohibits force and fraud. But it must refrain from specific economic interventions. Government’s main economic function is to encourage and preserve a free market.”

Hazlitt reminded that when Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: “Yes, stand a little less between me and the sun.”

In both Hazlitt’s and Alexander the Great’s day and now, and with government and the myriad shadow governments such as the Allegheny Conference and the Pittsburgh Regional Alliance, the sage advice of Diogenes must be heeded.

Unheeded, the proverbial new boss is going to be much the same as the old boss. And taxpayers and sound public policy cannot afford to be fooled again.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Some weekend cud on which to chew

Government, cajoled by animal rights activists, has killed the annual Shrine Circus in Pittsburgh.

Never mind that there’s no proof of actual abuses, Pittsburgh City Council last year passed a broad ordinance that, by nefarious design, would make it impossible for circus animal handlers to safely maintain control over those animals.

So, for the first time in 60 years, Pittsburgh’s Syria Shriners will not host a circus. And because of ignorant government, it now has to scramble to find a new way to raise money to help fund 22 Shriners Hospitals for Children, including two in Pennsylvania.

The actions of Pittsburgh City Council will cost the Shriners up to $200,000 that the annual circus raised. If alternate fund-raising methods cannot be found, children will suffer.

For-the-children “progressives” call this “sound public policy.” Thinking people call such intemperate “governance” what it is – idiotic.

The Tribune-Review reports that several members of the administration of Gov. Tom Wolf say there is a “groundswell” of support for a severance, or extraction, tax on shale natural gas.

Proceeds of the tax would support Wolf’s “Restore Pennsylvania” initiative, characterized previously herein as, given it has had prior iterations, the latest in a long line of proposed taxes looking for a use.

Never mind that the shale industry already pays an impact fee. And never mind that state government would use new tax receipts – estimated at $300 million annually – to pay off $4.5 billion in borrowed money over five years.

What could go wrong, right?

And in the hoot of all hoots, an administration official insists that any new severance tax, stacked on top of the impact fee which would be retained, does not amount to double-taxation.

Only a bureaucrat could make such a claim.

As the Trib reported, Republican House Speaker Mike Turzai has called the proposal what it is: a “4.5 billion, debt-financed slush fund to be allocated at the whim of a new government board and paid for by yet another job-killing tax on the natural gas production industry.”

With all due apologies to Steely Dan’s “Reelin’ in the Years,” what passes today for sound public policy, even reasonably educated people can’t understand.

Sometimes it’s the most innocuous things, buried in a news story, that further expose public policy makers for their erroneous ways.

To wit, the federal EPA Wednesday last granted Allegheny County a second temporary exemption, until July 1, from the summer-blend gasoline program.

But, supposedly, all the local and federal bureaucrats will have all their bureaucratic ducks in a bureaucratic row by the end of June that will permanently shelve the obsolete program.

Gasoline already costs more per gallon in Allegheny County than in surrounding counties – around 4 cents more – and 20 cents or more than in neighboring West Virginia and Ohio. (At one point this spring, gasoline could be had across state lines by as much as 45 cents a gallon cheaper).

If, for some continuing bureaucratic reason, the regulation isn’t scuttled and Allegheny County service stations are required to sell the summer-blend fuel, Allegheny County prices could, by one estimate, be 50 cents a gallon higher.

All that said, the EPA says it keeps granting reprieves not necessarily because of the bureaucratic slog but because of damage to the major pipeline used to deliver the summer blend.

But as part of the waiver, the Post-Gazette reports the government is allowing Allegheny County stations to, during the disruption, buy regular gasoline from Ohio and Altoona.

You may recall that the Pennsylvania Public Utility Commission recently denied a request from the owners of that very same pipeline – the Buckeye Laurel Pipeline – to allow it to carry into Western Pennsylvania cheaper gasoline from the Midwest, including Ohio.

It was a hardly veiled sop to East Coast refineries struggling to compete.

One can only wonder what the local gasoline marketplace would be like had the PUC not propped up one supplier — most likely at the expense of the consumer and, without question, at the expense of the free marketplace.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

Would state police fee break local budgets?

Over a decade ago we wrote a Brief on a legislative proposal to charge a $100 per resident fee for municipalities with 10,000 or more residents that relied on the state police for local service.  With 2,500 municipalities in the state, about half had no local police force and did not pay another local/regional force for service.  Instead they utilized the state police for free coverage.

That situation has not changed, and that has led to the introduction of two pieces of legislation that propose a sliding fee scale (from $8 to $166 per resident) that municipalities with full-time state police coverage (about 1,279 municipalities–another 420 get part-time coverage) would have to pay.  If the proposal becomes law, the fee would be adjusted in the future based on the Consumer Price Index.  Municipalities in Act 47 distressed status would not be subject to the fee.

There are three municipalities in Allegheny County that receive police service from the state–Haysville, Glenfield and East Pittsburgh.  All three communities are in the lowest range of population proposed by the legislation (1 to 2,000 people based on the 2010 Census) and would be subject to a fee of $8 per resident.  Haysville (70 people) and Glenfield (205 people) would see bills of $560 and $1,640, respectively.  East Pittsburgh just dissolved its municipal force in December and switched to state police coverage.  With 1,882 residents the tab would come to $15,056.

Compared to total expenditures reported by the municipalities to the Department of Community and Economic Development in 2017, the proposed fee would represent a fraction of spending. In Haysville it would be less than 1 percent.  In East Pittsburgh it would amount to 10 percent of spending.  In 2017 that municipality reported spending $409,737 on police services in-house, or about $217 per resident, considerably higher than the $8 proposed under the legislation.

One municipality that it will be interesting to hear from will be Hempfield Township in Westmoreland County.  It has 43,000 residents but no municipal force.  It would be subject to the highest fee level of $166 per resident (for municipalities of 20,000 or more people), which would total $7.1 million annually (its general fund budget for 2019 is $13 million).

An alternative for municipalities paying a state police fee would be to look for savings from contracting with other municipalities for police coverage.