Pennsylvania is spending $400 million to construct two new prisons at the SCI-Graterford site in Montgomery County after slashing nearly $1 billion in public education funding. The funds are in addition to the $1.8 billion corrections budget signed by Republican Governor Tom Corbett, an increase of $208,000 from last year (capital projects are counted separately).
Today, Decarcerate PA staged a protest outside the Philadelphia office of South Jersey-based Hill International, Inc., a major global construction management firm overseeing the "Phoenix East and Phoenix West" project at Graterford.
Following the death of two young children in a recent fire, members of the Olney neighborhood are speaking out against Mayor Michael Nutter's "brownout" policy.
On Feb. 22, a fire claimed the lives of two young boys, Peterson and Kevin Taing, who were 9 and 7 years old, respectively. It also destroyed the Taing family's house in Olney.
Several groups, including the Cambodian Association of Greater Philadelphia, Media Mobilizing Project, One Love Movement and Firefighters Union Local 22, claim that the city’s brownout policy might be to blame for the boys’ deaths, since the closest fire station was on its scheduled shut-down at the time. Last summer, Nutter put forth a policy of "rolling brownouts," in which rotating fire stations are shut down, in order to save the city more than $3.8 million.
In a press release today, the groups admit that there’s no way of knowing whether or not the local station, Engine 61, would’ve been able to better fight the fire had it been open. “What we can say is, maybe if they were there, they would have had a shot,” says Mike Kane of Local 22 in the release.
The groups will rally against the brownouts on May 9 at the former site of the Taings’ home.
"Should there be winners and losers?"
Less a question than a zen koan, such was the riddle Councilman Wilson Goode Jr. put to witness after witness in the marathon hearing that stretched from Tuesday to Wednesday on a proposal to change the way Philadelphia taxes businesses.
Councilmembers Bill Green and Maria Quinones-Sanchez want to shift the tax burden from the net income (profit) portion of the tax which only applies to businesses inside Philadelphia to "gross receipts" (sales), which applies to all business transacted in the city.
The idea is to get at large, out-of-state corporations Wal-Mart, for example, doesn't have to pay an income tax here, but a bodega owner does while letting small businesses of the hook. To that end, the bill would exempt the first $100,000 of sales, immediately exempting more than 30,000 local businesses from that portion of the tax altogether.
There's plenty of opposition to the bill, though many of the actual businesses testifying against it were large corporations based out of the state (Marriott, large construction firms based in Jersey).
Most of the testimony favoring the change came from small, Philly-based businesses (bodegas and small groceries, car dealerships, the Kensington & Allegheny Business Association).
But no one opposed the bill as vociferously as Goode, who used his time to question the witnesses largely for delivering a series of rhetorical riddles "Should there be winners and losers?" being his clear favorite.
Here's a snippet from the hearing, in which Goode interviews Anthony Tigano, a car dealer who favors the bill (read more in this week's A Million Stories):
Goode: Should there be winners and losers? In terms of business taxation?
Tigano: That's a very good question â I believe the way the system is set up is currently unfair. I think firms set outside the city â¦
Goode: My question is should there winners or losers?
Tigano: I'm answering your question: the present system is unfair â
Goode: I have a second question as well.
Tigano: Ok â¦ I was just trying to answer your first question.
Goode: I'm going to ask you my second question. Do you support the land value tax?
Tigano: Um, I'm not familiar with that question. . . I'm trying to answer a question on the [business privilege tax].
Goode: When we consider tax structure we do not do it in isolation.
Of course, as the testimony made quite clear, there are already winners and losers. Currently, big out-of-state corporations are the winners in the current tax structure, which lets them avoid one part of the tax that local businesses must pay.
And there's obviously room for healthy debate: Councilmembers Green and Quinones-Sanchez don't dispute that their bill will benefit some businesses more than others: They simply argue that the change is more fair than the current practice. The city, represented yesterday by Finance director Rob Dubow, disagrees. Economic consultant and former city finance director Stephen P. Mullin, on the other hand, thinks the bill's a good idea.
But of all the questions worth asking, "Should there be winners and losers?" seems a little ... existential.
Unemployment would be above 14 percent in Pennsylvania and approaching 16 percent nationally if not for the American Recovery and Reinvestment Act and other federal action taken in the wake of the recession, according to a new report released by the Keystone Research Center Thursday.
From the report itself:
First, the last 12 months of data on the Pennsylvania and U.S. economies make clear that the extraordinary interventions in the economy by the Federal Reserve, the Bush and Obama administrations, and Congress were effective in forestalling the free fall of the U.S. economy. For Pennsylvania, the simplest indicator of this is the monthly average change in jobs each month. Before the American Recovery and Reinvestment Act (ARRA), Pennsylvania was losing nearly 30,000 jobs per month and this number was growing rapidly. This year, Pennsylvania is gaining jobs each month, on average.
As in the early 1930s, many voices, including within Congress, urged policy makers to do nothing in the face of the collapsing economy. Had this point-of-view prevailed, current unemployment in the United States would be about 15% or 16%.
Remember that the next time one of the Republican dunderheads goes on the TV to tell you that the stimulus did nothing/made things worse/whatever bullshit wins elections. They're either lying or have no idea what they're talking about. Either option should disqualify them from power.
More from the report:
The jobs and wage deficits are far more immediate problems for Pennsylvania families than the accumulated debt or annual federal deficit of the U.S. government. Especially in an election year, voters should ask lawmakers at the federal and state level, âWhat are you going to do about the jobs deficit?â and âWhat are you going to do about the wage deficit?â
In the immediate future, the federal government needs to:
- Extend the federal program which provides resources to Pennsylvania's state-subsidized work programs, the "Way to Work" program. This recently implemented program will expire September 30 without Congressional action;
- Continue to extend unemployment insurance benefits as long as unemployment remains so high that it is impossible for many jobless workers to find jobs;
- Provide access to capital for small businesses so that they do not become victims of the recession and the credit crunch.
By the first part of next year, the federal government should allow the Bush tax breaks for the rich to expire and repurpose those funds to activities that have a bigger "bang for the buck" when it comes to creating jobs. Near the top of the list of alternative uses of money saved by not extending the Bush tax cuts for the rich should be:
- Additional revenue sharing with states and localities in the next 12-24 months; and
- A jobs bill that includes investment in infrastructure, renewable energy and energy efficiency, and clean manufacturing.
Longer term, policies also need to more directly address the "wage deficit" by lifting the wages and incomes of middle-class families.
Of course, none of this will have if the Republicans retake Congress this November. Food for thought.
Today's must-read comes from The Economist, which believes it owes Barack Obama an apology.
Once a symbol of American prosperity, GM collapsed into the government's arms last summer. Years of poor management and grabby unions had left it in wretched shape. Efforts to reform came too late. When the recession hit, demand for cars plummeted. GM was on the verge of running out of cash when Uncle Sam intervened, throwing the firm a lifeline of $50 billion in exchange for 61% of its shares.
Many people thought this bail-out (and a smaller one involving Chrysler, an even sicker firm) unwise. Governments have historically been lousy stewards of industry. Lovers of free markets (including The Economist) feared that Mr Obama might use GM as a political tool: perhaps favouring the unions who donate to Democrats or forcing the firm to build smaller, greener cars than consumers want to buy. The label âGovernment Motorsâ quickly stuck, evoking images of clunky committee-built cars that burned banknotes instead of petrolall run by what Sarah Palin might call the socialist-in-chief.
Yet the doomsayers were wrong.
That does not mean, however, that bail-outs are always or often justified. Straightforward bankruptcy is usually the most efficient way to allow floundering firms to restructure or fail. The state should step in only when a firm's collapse poses a systemic risk. Propping up the financial system in 2008 clearly qualified. Saving GM was a harder call, but, with the benefit of hindsight, the right one. The lesson for governments is that for a bail-out to work, it must be brutal and temporary. The lesson for American voters is that their president, for all his flaws, has no desire to own the commanding heights of industry. A gambler, yes. An interventionist, yes. A socialist, no.
Oh, and the Congressional Budget Office would like you to know, once again, that the stimulus saved us from the Great Depression Part 2. So, you know, shut up John Boehner.
On Monday, the Washington Post ran a glowing, page one profile of US Rep Paul Ryan, the Wisconsin Republican who has offered what he terms a "roadmap" to financial sustainability. It paints him as one of the few serious GOP voices on budget issues (since, let's face it, legitimate policy formulation is not exactly their forte of late).
Ryan is running a campaign of a different sort, one his party has so far refused to adopt: He is determined to persuade colleagues to get serious about eliminating the national debt, even if it means openly broaching overhauls of Medicare and Social Security.
His ideas are provocative, to say the least. They include putting Medicare and Medicaid recipients in private insurance plans that could cost the government less but potentially offer fewer benefits; gradually raising the retirement age to 70; and reducing future Social Security benefits for wealthy retirees.
Ryan has not helped to make it easy for his leaders. He is a loyal Republican, but he is also perhaps the GOP's leading intellectual in Congress and occasionally seems to forget that he is a politician himself.
Wow. So the WaPo has drunk the Ryan Kool-Aid, huh? And hey, on the one hand, can you blame them? It's not like the modern GOP you know, the one currently debating the 14th Amendment and responding in Pavlovian form to whatever pops up on Glenn Beck's Chalkboard of Doom is packed with particularly bright lights these days. And the Congressional Budget Office has made the press's job easy: After all, Ryan's roadmap would, supposedly, cut the deficit in half in 10 years. That's something we can all get behind, no?
Sure. If you read the top lines. If, however, you're a Nobel Laureate economist, say, Paul Krugman, you're a bit more likely to poke around the fine print.
One thing that has been overwhelmingly obvious in the discussion of Paul Ryan's roadmap is that lots of people who should know better including, alas, reporters at the Washington Post don't know how to read a CBO report. They think you can just skim it and get the gist; and people like Mr. Ryan have taken advantage of that misconception.
As it turns out, those CBO numbers, like all CBO numbers, are based on the assumptions of the House representative who is requesting the CBO's analysis. So, the CBO, for all of the worthwhile stuff it does, can sometimes be a garbage-in-garbage-out kind of place, especially when the rep seeking data feeds in spectacularly misleading data. Ahem, Mr. Ryan.
Well, the Ryan plan as described is a combination of tax cuts and cuts in entitlement spending. So where does this show in the CBO estimate? On the tax side, we immediately see that the CBO finds no effect revenue with the Ryan plan is the same as without it.
In other words, Ryan plans a massive overhaul of US tax policy, with steep, across the board decreases in income tax rates, but wants CBO to assume that this would have, you know, absolutely no impact on incoming government revenues. The CBO obliged, because that's its job, although it did note, in its own way, the unlikelihood of Ryan's pipe dream coming true:
The proposal would make significant changes to the tax system. However, as specified by your staff, for this analysis total federal tax revenues are assumed to equal those under CBO's alternative fiscal scenario (which is one interpretation of what it would mean to continue current fiscal policy) until they reach 19 percent of gross domestic product (GDP) in 2030, and to remain at that share of GDP thereafter.
Even under those assumptions, which, you know, are either willfully ignorant or intentionally deceptive, the Ryan plan doesn't work unless there is an absolute freeze of non-defense discretionary spending at 2009 levels for at least the next decade. And, of course, this sounds nice and all, except it's insane. As Krugman points out:
OK, that's an old, familiar scam it was used to inflate surplus projections back in 2001 to justify the Bush tax cuts. Keeping nominal spending constant means deep cuts in real per capita terms about 25 percent over a decade. That's not going to happen: nondefense discretionary spending is already at a low point as a share of GDP, and unless someone can detail how such massive further cuts are possible, they're just blowing smoke.
If this is the GOP's âleading intellectual,â as the Post declares, then the opposition party may be more FUBAR than we could possibly imagine.
Breaking: Fire Engine Co. 38 to be disbanded for 18-24 months; Fire Commissioner to inform firefighters of city's new 'rolling brownouts' plan tonight
CP received a call today from a member of Fire Engine Company 38, who said that his company had been informed late last Friday that they were to be disbanded and sent to other stations.
"That's another station closed down, and nobody knows about it," the firefighter said.
Mayor Nutter recently announced a budget rebalancing that included cuts to the Police and Fire departments' overtime costs. This is the first we've heard of any companies actually closing.The last time engine companies were closed was during the 2008-2009 budget crunch, when Mayor Nutter authorized the deactivation of 5 engine and 7 ladder companies.
And just to put things in a bit of context: the administration and the firefighters' union have been going at it and pointing fingers at each other for years now.
Company 38 is based in Tacony, but the construction of a highway off ramp caused the company's building to be closed; About a year ago, Engine 38 firemen moved into the facilities already occupied by Engine 33 Company, at Richmond & Kirkbride streets.
Fire Commissioner Lloyd Ayers confirmed today that Engine 38 will now be "temporarily out of service," but emphasized that the city is building a new facility, in Tacony, which will house Engine 38 Company when it's completed â in somewhere between 18 and 24 months, he thinks.
Mayor Spokesman Doug Oliver added in an email that the new station would include a "community room," and that "This is good news in light of budget challenges."
"Poor Tacony," was the first response I got from IAFF Local 22 President Billy Galt, who added that many of the firefighters' runs are medical and that "the further we are away, the longer it takes fro us to get there, and the worse it is for that patient."
The firefighter who called, meanwhile, expressed another concern â smaller, maybe, but heartfelt: the dissolution of his and his colleagues' working relationship.
"When we get off duty, we all do the same thigns together â we hang out, we play horseshoes toether, our wives know each other . . .I'm sure we'll all fit in wherever they send us," he concluded, "but in firefighting, you have a personal relationship with each other.
As we told you earlier today, the city was considering cutting all $2.4 million in funds to the Pennsylvania Horticultural Society's vacant land program. It didn't; instead, it cut $840,000 that's 35 percent of the program's total funds.
"Over the next few days and weeks, PHS will plan how it will best use the funds we will receive," says PHS spokesman Alan Jaffe. "For now, we know there will be no new land stabilization, and the maintenance schedule of the stabilized lots will be reduced. There will be also be an impact on the more than 200 green jobs the program has created."
This comes along with today's announcement of $47 million in cuts to this year's city budget that's $27 million more than Mayor Nutter originally announced in May. You can check out how these cuts affected other agencies and programs by downloading the city's five-year plan here.
|Courtesy of PHS|
|Before PHS's vacant land program.|
|Courtesy of PHS|
|After PHS's vacant land program.|
For the last two weeks, the Pennsylvania Horticultural Society (PHS) has stopped maintaining most of its 5,000 vacant lots. "There's basically been no work on them," says Alan Jaffe, PHS's public relations manager. "People have started to dump on the lots again." That's because, although the fiscal year ended on June 30, the city still hasn't determined how many funds PHS's vacant land management program will receive this year.
PHS says it needs $2.4 million from the city to keep up the program, which employs workers to clean, mow and plant trees on abandoned lots. The city is considering cutting all of that funding. Jaffe says that without the money, 200 to 250 related jobs would be lost and 5,000 lots would soon become blighted. This could have real, tangible effects: According to PHS, real estate values have increased as a result of the program, and studies have shown that crime increases when the number of abandoned lots and properties in a neighborhood goes up.
The city says it will make a final decision about the funding by the end of the day. We'll keep you posted.
|Courtesy of justice.gov|
|The city owes a $68 million bill due by the end of the year.|
Add this to the list of things that may turn the state's recently passed budget upside down (right next to the millions of dollars Pennsylvania is expecting to get from the federal government in increased reimbursements for Medicaid): According to the Washington Post, the city of Harrisburg will have to pay up a $68 million debt before the end of the year. That's bigger than its entire annual budget.
Harrisburg's crisis has been precipitated by a malfunctioning municipal incinerator, whose ill-fated expansion was promoted as a potential moneymaker. But after seven years of cost overruns, construction delays, design problems, financings, refinancings and more refinancings, the city is on the hook. The $68 million bill is part of $288 million in outstanding debt related to the project.
The debacle is pushing the 150-year-old state capital toward default. The fiscal crisis has shaken the city, which over the past decade has spruced up its riverfront downtown and created tourist attractions in large part through low-cost financing afforded by municipal bond sales. In one notorious example, former mayor Stephen R. Reed spent nearly $8 million from the public authority that owns the incinerator to buy wagon wheels, rifles and other memorabilia for a Wild West museum that never opened. And like a homeowner who binged on cheap financing, this city is underwater financially.
The question is: If the city defaults, will the state bail out Harrisburg? Probably not, says the Washington Post, simply because Pennsylvania is so screwed itself. It's not impossible, though. The state, after all, bailed out Philly not so long ago.
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