Rearranging the Titanic’s Deck Chairs
Pennsylvania’s "full-time" legislature is now off on a two month summer recess, essentially ending the productive phase of current session. Yes, the General Assembly will reconvene in mid-September, but with legislative elections looming in November it is unlikely any substantial; or even mildly controversial action will be taken during the pre-election period.
The reviews are mixed on the first two-year session under the governorship of Tom Corbett and with Republicans in complete control of the General Assembly. Chief among the accomplishments are two consecutive state budgets passed on time, with no tax hikes, and with spending held in check. Given the record of the preceding eight years, this actually represents something of a minor miracle – or at least a major change in direction for state government.
Praise is also merited for legislation expanding the Education Improvement Tax Credit to include a special program for the state’s failing school districts. Also, small decreases in certain job crushing business taxes and eliminating inheritance or "death" taxes for farming operations stand out as major pro-growth steps that will enhance the commonwealth’s business climate.
All of this, however, amounts to little more than rearranging the deck chairs on the Titanic. It looks better, but we are still about to hit an iceberg. That is because none of this gets to the structural problems which lie ominously submerged just beneath the surface of the state’s fiscal waters. And that is the stranglehold labor unions have on state government.
Noticeably absent from the above listing of accomplishments is the passage of school choice legislation, privatization of the state’s antiquated liquor store monopoly, or the indexing of the Prevailing Wage for inflation, all of which were hotly debated and died a slow death during the current legislative session. The common thread: all were opposed by organized labor which continues to control a bipartisan majority in the General Assembly.
Governor Tom Corbett has been noticeably absent from this fight. In fact, the governor’s spokesman, Kevin Harley, recently told the Pittsburgh Tribune-Review: "The Governor lives in the real world. That (confrontational approach to unions) may be nice in a think-tank white paper, but in reality, these are the people we work with every day."
Harley’s comments amount to little more than a white flag of surrender.
Apparently the "real world" Harley speaks of does not include states like Wisconsin, Indiana, Ohio, Virginia and New Jersey where Republican governors have taken on the labor unions and brought about significant structural change.
Indiana actually enacted a Right to Work law, and Wisconsin Governor Scott Walker reversed his state’s economic decline by enacting sweeping labor reforms.
Unions and their allies forced a recall election in Wisconsin, but were trounced by Governor Walker who easily retained his office. As a result of Walker’s leadership, Wisconsin is now reaping the benefits. The state budget has been balanced and the structural deficit reduced. School districts and counties have saved billions, giving relief to property taxpayers. The improved business climate has triggered something of a boom in job creation.
Meanwhile, here in Penn’s Woods, the Corbett Administration guaranteed three more years of fiscal insanity by caving into union demands during last year’s contract negotiations. That, coupled with the failure to enact even the most modest labor power reforms, means the state’s underlying structural problems remain unaltered. As a result, the pension crisis will continue to deepen, the unemployment compensation fund will go further in debt, and the state will not experience the type of economic growth that will help us steer clear of the approaching fiscal iceberg.
The reason why these problems are not confronted is that the solutions are controversial, difficult, and unpalatable. It is the nature of elected officials to avoid such decisions. Few have the intestinal fortitude to stand up for change the way Scott Walker did in Wisconsin, John Kasich has in Ohio, Mitch Daniels did in Indiana or Chris Christie has in New Jersey. So far, no one in Pennsylvania has proven himself or herself to be up to the challenge.
And so, while the chairs on the deck of Pennsylvania’s ship of state are arranged a bit better these days, we continue to travel full steam ahead with a gigantic fiscal iceberg directly in our path. It is too bad we can’t find a captain with the courage to risk a bit of confrontation to avert a catastrophe.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail is [email protected])
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