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Jerry Shenk

PA's Union Quid Pro Quos

by Jerry Shenk

Pennsylvania Governor Tom Wolf faces the reality of governing, but, if Wolf has his way, Pennsylvania's reality will be more and higher taxes.

Here's why:

Wolf's campaign received endorsements, more than $3 million in direct contributions and millions more in indirect and in-kind contributions from public employee unions.

Despite driving up costs, discouraging productivity and impacting funding for other government programs, public unions such as the American Federation of State, County and Municipal Employees, the Service Employees International Union and the Pennsylvania State Education Associations (PSEA), among others, are woven into the Democratic Party's fabric. During campaigns, Democrats count on union money and manpower. In return, elected officials reward unions.

If enacted, Wolf's proposed budget would compensate unions for their generous campaign investments

The PSEA expects to benefit from increased "education" funding. Union contracts for about 80 percent of the state workforce are being renegotiated — in private -- this year.

For the next fiscal year, Wolf's budget includes a 16 percent spending increase -- a record $33.7 billion -- and about $5 billion in new taxes. Wolf would boost Pennsylvania's personal income tax by more than 20 percent, increase the sales tax rate by 10 percent and apply it to hundreds of formerly tax-free items.

Wolf promotes property tax "relief," but his proposal doesn't eliminate property taxes. Since there is no mechanism to prevent them from increasing again, the relief would be temporary — and increase they will, because unmentioned in Wolf's budget is the biggest cost driver: Pennsylvania's looming pension crisis.

For years, many jurisdictions, including Pennsylvania, have back-loaded a portion of public employee compensation into generous retirement plans, while underfunding them.

Without tax hikes, the soaring costs of public employee pension and health benefits crowd out other government expenditures such as infrastructure, public safety and benefits for the disadvantaged.

Wolf's taxes would begin immediately, but the "relief" delayed until late 2016.

Officeholders have commonly raised taxes to cover increasing costs and paper over their real problem: a combination of mismanagement, over-commitment and institutional and political self-interest. Wolf's budget is no different.

For decades, the nearly-uncontrolled growth of national and state governments has encouraged corruption and inefficiencies — while using tax increases to fund cronyism, management incompetence and malfeasance.

Pennsylvania taxpayers outnumber union members. Because unions resolutely advocate tax hikes to inflate member pay, benefits, head count and pensions, increasingly, over-burdened taxpayers, including many tax-paying Democrats, view public employee unions as the adversary.

The Bureau of Labor Statistics reported that, from 2003-13, employment in right-to-work states increased three percentage points more than the national average and more than double that of non-right-to-work states, while personal incomes grew 12% more.

Pennsylvania must pass genuine worker-friendly legislation such as paycheck and right-to-work protections, eliminate market-distorting prevailing wage laws and modify public employee pensions from defined benefits plans to 401k plans — just like their private-sector counterparts.

Allowing public employee unions to fund campaigns of politicians who, in turn, approve union contracts and benefits is, at minimum, unethical, at worst, sanctioned bribery. Such devil's bargains ensure that taxpayers lose.

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