A Sign of Things to Come

Member Group : Citizens Alliance of Pennsylvania

In mid-November, Governor Wolf announced that the Department of Labor and Industry would be laying off employees. According to the Governor, this was due to the intransigence of Senate Republicans in their refusal to pass legislation funding unemployment call centers. On the other hand, Senate Republicans argue that the problem was the Governor’s unwillingness to answer their questions about funding.

Who is in the wrong?

Senator Scott Wagner makes a convincing argument in a column published by the York Daily Record:

"This project [the call centers] was fed approximately $240 million over the last four years with zero accountability. Now the senate is being pressured into throwing another $57.5 million down a black hole without any questions being asked.

"In 2006, the Commonwealth of Pennsylvania signed a $106.9 million contract with IBM to be completed in 2009.

"IBM’s contract was to give the state a new computer system to track employee wages, employer taxes, handle unemployment claims, appeals, and payments.

"In July of 2013, the state terminated the contract with IBM because it was $60 million over budget. The $60 million was in addition to the $106.9 million initial contract, and it was 42 months late. What happened with this contract? Who was held accountable for the cancelled IBM contract?

"Later in 2013, the Legislature voted to allocate $60 million per year for four years, and that ends at the end of this year. This was for the same project that was contracted with IBM and then cancelled.

"So let’s recap for taxpayers – $106 million plus another $60 million for IBM. Add the last four years of $60 million per year for a total of $240 million – all for a grand total of more than $400 million in taxpayer money."

Senator Wagner is right to question the lack of results from $400 million in taxpayer spending and this line of inquiry is long overdue. You can bet that there will be more confrontations between the Governor and the General Assembly in the coming year. According to the Independent Fiscal Office, there will be a $1.7 billion deficit in the 2017-2018 budget year. The General Assembly must take a close look at past spending in terms of amount and efficacy. If they don’t, Pennsylvanians will face higher tax bills in the future.