You Get What You Pay For

by Bob Poole on March 11, 2011

When I was growing up I often heard adults say, “You get what you pay for.” I’ve found that to be true more often than not. No place is it more true than in Pennsylvania politics and government.

I recently wrote about our new Republican Governor, Tom Corbett’s anticipated budget. He finally revealed it this week and it demonstrates that the gas and oil companies got what they paid for when they donated over $1million to Corbett.

Gov. Corbett presented his budget on Tuesday, and it included big-time cuts – nearly $2.6 billion – from vital areas like education and social services. It would slash about $1.5 billion from state aid to school districts and higher education. Gov. Corbett’s plan to cut higher education funding by half would inevitably mean tuition hikes, staff reductions, and even fewer students, administrators at Pennsylvania’s colleges and universities said Tuesday.

Corbett says he wants Pennsylvania to look more like Texas where he went to law school. So he cut spending for education and refuses to tax the gas business. YeeHaw!

He states, Big Gas will “make Pennsylvania the Texas of the natural gas boom,” as long as “we don’t scare off these industries with new taxes.”

You can rest assured nothing is going to scare them away. As a friend of mine who owns a great deal of acreage in the Marcellus shale area says, “People are acting like it is the California Gold Rush all over again.”

According to the Washington County Observer-Reporter, State Rep. Bill DeWeese, D-Waynesburg, said several potential sources of revenue were ignored by Corbett. “I think it’s outlandish that hundreds and hundreds of millions of dollars are left on the budget table while big Pennsylvania corporations escape their tax obligations through a complicated dynamic called the Delaware loophole,” DeWeese said.

He explained that a corporation that does most of its work in Pennsylvania but maintains a “small corporate headquarters” in Delaware pays virtually no Pennsylvania corporate taxes. “In addition, Corbett cowardly decided to have Pennsylvania be the only state among the 21 big, natural gas-producing states in America to not have a small severance tax on Marcellus Shale, even one that would approximate the reasonable levy of our sister state West Virginia,” he said.

“Between the Delaware loophole and a Marcellus Shale tax, he (Corbett) could have raised over a half a billion dollars,” DeWeese said. “Now, it will probably be incumbent for the 501 school districts to raise their property taxes through the roof in order to make ends meet.”

Right now school districts in PA can pretty much raise taxes as they deem necessary. Corbett says he will push to require pubic approval by vote before school districts can raise property taxes above the rate of inflation. They aren’t supposed to be able to hike property taxes above the rate of inflation but there are at least ten exceptions to that law and the school districts use them all the time. The fact is that by cutting this much from education school districts will raise taxes. The governor may say he’s keeping his promise to not enact any new taxes but he’s just playing a con game and switching the burden to local municipalities and school districts.

Corbett also announced a Marcellus Shale Advisory Commission led by Lt. Gov. Jim Cawley to oversee this new industry. He then added 75 percent more money to Cawley’s budget for a total of $867,000 a year. I guess he’ll need it for travel, lodging and entertaining as he visits the gas and oil companies. Actually Cawley claims the last Lt. Gov. didn’t do anything and so he only needed $490,000 a year. Cawley is going to be busy keeping those oil and gas people from Texas in line so I can see why he’d need a 75% increase.

Additionally, Corbett proposes eliminating 1,500 states jobs with most of them coming from the Department of Public Welfare and Mental Health Services.

There is a lot more if you’re interested. For example, Ben Waxman reports for “It’s Our Money,” a joint project between the Philadephia Daily News and WHYY, funded by the William Penn Foundation. He writes about the Three Big Lies in Corbett’s budget address.

So, if the governor is slashing is he adding anything to the budget? Well, yes he is! He wants to hire 230 more state troopers and 55 additional probation and parole agents. He also wants to raise the Department of Corrections budget by about $13 million.

Yes, the new budget cuts education to the bone while increasing money for prisons!

The cost of keeping someone in the prison system is tremendously higher than education. It costs an average $29,000 a year to incarcerate an inmate while a high school student’s education has an average cost of $9,000.

You can give all the tax breaks you want to business but where are these businesses going to get their leaders and managers if we don’t place a higher value on education for our young people who are the drivers of economic development?

We already have an average high school dropout rate of 30% in this country. Many of these people go on to be long-term unemployed which leads to social disaster. They feel like they have been excluded from our society which leads to simmering anger that turns into crime and violence which then feeds our prison system.

H. G. Well said it best, “Civilization is in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.”

{ 6 comments… read them below or add one }

Jodi Kaplan March 11, 2011 at 2:30 pm

Don’t know if this is still true, but back in early 80s, even Montana had a coal severance tax (for one thing, it helped/forced the industry to ‘restore’ the land after they finished pulling out the coal. And Montana is not exactly a hotbed of left-wing types.

Bob Poole March 11, 2011 at 2:44 pm

Even Texas has a tax on the shale gas. PA is the only state not to tax it. And, meanwhile the nincompoops are cutting the heart out of education. Most corrupt state political system in the country.

Gail Bower March 11, 2011 at 11:04 pm

Actually, Bob, Gov. Corbett’s budget proposal proposes exactly the opposite of what Texas did originally. In 1839 Congress there set aside land in West Texas where they eventually found oil that endowed the state university system as well as elementary and secondary public schools. Read more here by scrolling down to “Oil Benefits to Texas Higher Education”: http://www.texasalmanac.com/topics/business/oil-and-texas-cultural-history

Bob Poole March 12, 2011 at 2:03 pm

I wonder if the current Texas legislature would have the foresight to do the same thing. These days it seems that government and big business both don’t think into the future further than the next quarterly financial report. Thanks Gail!

Lionel Cartwright May 25, 2011 at 4:04 pm

Really enjoyed your entry in Seth Godin’s recent “No Idling.” (that was you, right?) Just want to say thanks for the inspiration.

Bob Poole May 25, 2011 at 6:28 pm

That was indeed me, Lionel. Thank you very much for your kind words.

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