Governor Renews Efforts for Liquor Liberty

After a failed attempt during the prior session to privatize Pennsylvania’s state wine and liquor stores, Governor Corbett has unveiled his own plan to move government out of the booze business. Pennsylvania is one of only two remaining states to maintain a government monopoly over wholesale and retail sales of both wine and spirits. The Governor’s plan will transform this prohibition-era system into one of greater consumer choice and convenience while also providing a critical investment opportunity for public education.

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Private PA Lottery Means Multi-Billion Dollar Jackpot

As the General Assembly reconvenes for a new session, the Senate Finance Committee scheduled a hearing on the proposal to privatize the Pennsylvania Lottery.

A Legislative Budget and Finance Committee report released in February 2012 revealed that the state’s aging population will demand more in services than lottery revenue growth. Rather than cut critical programs or raise taxes on working Pennsylvanians, the administration has sought private experts as a means to boost essential revenues.  Continue reading

State Store System a Failure

Letter to the Editor: Lancaster New Era Newspaper

Union President Wendell Young IV wants the public to believe that government-run state liquor stores are working. Young asserts that the government monopoly represents a cash cow for state coffers. He argues that liquor privatization will cease to generate revenues for the treasury.
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Pennsylvania’s Fork in the Road on Transportation Spending

Motorists frustrated with high gas prices should be on the alert- your pain at the pump could get worse, and it has nothing to do with Middle East tensions or gas company profits.

Sadly, many in the transportation industry and some lawmakers in Pennsylvania believe the only way to fix our roads is to increase gasoline taxes and charge drivers more in vehicle fees. This low-octane loser is surely another wrong exit for taxpayers whose tank is already on empty.

To be certain, Pennsylvania’s roads and bridges need repair. But before taking one more dollar from working men and women through higher prices at the gas pump, lawmakers must do a better job spending the billions in taxes and fees they already get.

Gov. Corbett’s Transportation Funding Advisory Commission proposed uncapping the oil franchise tax- bumping up gas prices by an estimated 10 cents or more per gallon- while also increasing vehicle and license fees. Advocates for more transportation taxes and fees claim Pennsylvania, due to the lack of transportation funds, has the most structurally deficient bridges in the nation and some of the worst roads in the country.

While Pennsylvania’s roads and bridges may indeed be poor, there is simply no shortage of transportation dollars. U.S. Census and Federal Highway Administration data shows Pennsylvania spends more than $61,000 per highway mile, the seventh-highest road spending in the country. State highway spending exceeds $588 per person, more than 41 other states. And, state transportation spending has risen by more than 127 percent since 1995. The bottom line: Funds are available, but they’re not being spent well.

Pennsylvania’s fiscal house is already facing a four-alarm fire with the state’s spending crisis, and transportation must be considered in the context of all state spending. Fixing roads and bridges is a fundamental government responsibility, but many other state programs are not.

How can any legislator look taxpayers in the eye and demand they pay more at the pump each month to fix failing bridges, while state government hands out billions of dollars in subsidies for sport stadiums, corporate headquarters and “green jobs”? Redirecting state borrowing for corporate welfare to transportation would make better use of taxpayers’ dollars.

There are more ways to sure up funding for roads and bridges that won’t empty the wallets of Pennsylvania drivers. Currently, the cost of state-funded construction projects ballooned by tens of millions of dollars due to archaic mandates that force private employers to pay workers inflated wages, increasing labor costs upward of 30 percent for the same quality of work. Redefining prevailing wage rates on state-funded construction projects can free up funding that could be used on other badly needed projects.

Moreover, transportation projects, like all government appropriations, must be prioritized. Beautification, streetscaping, bike trails, parking garages, and new maintenance buildings might garner applause and photo ops for politicians, but they eat up funding that could be used for vital repairs. Every dollar spent on unnecessary aesthetics is one dollar that cannot be spent fixing our more than 5,000 deficient bridges.

Furthermore, Pennsylvania has the opportunity to bring private sector expertise and financing to transportation. Public-private partnerships, which the commission supported, are contractual agreements between a government agency and a private entity to build or manage a project. These partnerships minimize costs and maximize accountability as private contractors put their own capital on the line while government retains ownership and oversight.

Lawmakers should also stop sending turnpike toll money to mass transit systems in Philadelphia and Pittsburgh that most Pennsylvanians don’t even use. Mass transit must rely on user fees, not taxpayer subsidies, freeing up turnpike revenue to repair the roads motorists are paying to drive on.

Ultimately, gas prices have already taken a financial toll on Pennsylvania drivers. Before taking more out of the wallets of drivers and taxpayers, lawmakers must prioritize the billions of dollars we spend today and protect our investment in transportation. Otherwise, Pennsylvania taxpayers will be out of gas along with patience for business-as-usual overspending.

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Jonathan Humma is a research fellow and Nathan A. Benefield is director of policy analysis with the Commonwealth Foundation (, Pennsylvania’s free-market think tank.

Commentary also featured in the York Daily Record and Johnstown Tribune-Democrat newspapers.

Penn Turnpike Financial Woes Worsen

Like PennDOT, the Pennsylvania Turnpike is yet another government agency that is experiencing a worsening financial situation. The Turnpike Commission has been attributing their financial woes to declining revenues and increasing costs. Despite increased tolls, Moody’s credit rating agency foresees an ongoing struggle for the turnpike. A Republican representative is now advocating for the allocation of Marcellus Shale natural gas taxes to ease the toll road’s funding burden of nearly half a billion dollars in state transportation funding. While this may offer a short-term increase in funds, the underlying problems associated with the turnpike commission remain. A superior policy alternative would be to lease the turnpike.

Despite tolls being raised by 20 percent in 2009, the Pennsylvania Turnpike has still lost $2.4 billion. In 2012, the commission has ordered another 10 percent increase in an attempt to balance the budget. The turnpike’s debt has escalated by more than 180 percent, or $5 billion, since 2007. The additional debt will be accompanied by more than $11 billion in interest payments over the course of the next several decades. This will place a significant burden on taxpayers. The turnpike commission is exacerbating Pennsylvania’s state of fiscal instability. The history of the Pennsylvania Turnpike Commission has been rifled with deficits, toll hikes, labor strikes, and corruption.

Unfortunately for Pennsylvanians, lawmakers continue to support the Turnpike Commission and all of its failures. A Republican representative is calling for natural gas taxes to be utilized to alleviate the turnpike’s funding of statewide transportation. This proposal is a common big government maneuver in which one program or revenue stream is utilized to fund another program. While the turnpike tolls are designed at funding the state roadway, its tolls on motorists are being directed to state transportation and mass transit. This is similar to immense alcohol markups by the PLCB that supplement the general fund instead of strictly financing law enforcement and regulation of the industry. Directing natural gas taxes towards state transportation initiatives is a similar ploy. These revenues should be earmarked solely for environmental regulation of the industry.

There is an alternative to the billions of debt and makeshift attempts by politicians geared toward raising new revenues on industries to fund troubled programs. Leasing the turnpike will flush the state with cash while improving the roadway for Pennsylvania motorists. If the Commonwealth would have proceeded with the lease agreement suggested by the Rendell administration, Pennsylvania would have received nearly $12 billion upfront and accrued a billion dollars in interest annually. In the leasing contracts, the state would have the autonomy to control toll hikes, receive payment for state police coverage and no longer be responsible for maintenance costs.

The Pennsylvania Turnpike continues to be a burden to taxpayers. The government owned roadway accrues billions of dollars in debt for taxpayers while continually raising tolls on motorists. Siphoning of funds from Marcellus Shale to turnpike commitments is only a short-term fix that maintains the status-quo. The Republican majority must take the lead and release the turnpike in order to turn the roadway form a costly liability to a profitable asset.