Harrisburg Vote On Pension Bill Considered Generational Theft

Taxpayers vs. Pennsylvania State Government And Its Employees

From the Commonwealth Foundation:

Pennsylvania's largest public pension plans—Public School Employees Retirement System (PSERS) and State Employees Retirement System (SERS)—are severely underfunded. But instead of reforming the defined-benefit pension system and paying down these liabilities, House Bill 2497 would defer pension payments and increase the unfunded liability by tens of billions of dollars in lost investments and interest. Simply put, HB 2497 is generational theft—forcing our children and grandchildren to pay for Harrisburg's fiscal irresponsibility and a union pension bailout.

Just How Large is the Pension Problem?

•Taxpayers paid $843 million in pension contributions to PSERS and SERS in Fiscal Year 2009-10. In Fiscal Year 2012-13 those contributions are scheduled to increase to $5.8 billion.
•This represents an effective $1,360 increase in state and local taxes per homeowner/household.
How Did We Get Into this Mess?

•Pennsylvania's generous public pensions are leveraged as political capital by politicians with powerful special interests, especially the state and school employee labor unions. Over time, these pensions have been financially manipulated to give the illusion of affordability and sustainability.
•Pensions for public school employees and state employees, including legislators and judges, will require higher taxpayer contributions beginning in 2012 due to:
◦Losses in the stock market in 2001-03 and 2008.
◦Reduced taxpayer contributions as a result of deferring pension payments into the future in 2003 (a mistake HB 2497 would repeat).
◦Generous benefit enhancements—a 50% increase for legislators and 25% for teachers—in 2001.
Why the Urgency to Pass this "Non-Reform"?

•Public employee unions helped craft HB 2497 and have spent millions in lobbying and campaign contributions to push this non-reform.
•HB 2497 offers some benefit changes that some may celebrate as "reform."
•HB 2497 offers short-term political benefits—lower pension payments—by allowing lawmakers to procrastinate making the necessary tough decisions about how to fund pensions.
•Those pushing the legislation hope to rush it through under lame-duck Gov. Ed Rendell, before a new administration—which would likely support real pension reform—takes office.
Key Facts about HB 2497

•HB 2497 retains the current defined-benefit pension system that is subject to political manipulation and deal making.
◦Politicians claim the bill would "save" money over the next 14 years—but these savings come from paying less into the fund. It is like "saving" money by not paying your monthly mortgage payment.
◦After 14 years of "savings," taxpayers will have to pay more from 2026-2042.
•HB 2497 dramatically increases the unfunded liability in the pension systems (as shown in the chart from PSERS).
•Taxpayer costs could be much higher because the estimated costs of HB 2497 are based on wishful thinking:
◦The plans will earn 8% per year on their assets (private sector pensions currently use assumptions in the range of 5-6%).
◦Policymakers will adhere to the schedule of increased future contributions, and not defer these once again.
◦There will be no benefit increases or Cost of Living Adjustments.
•HB 2497 would reduce the benefits under the existing pension plan for new hires.
◦While lower benefits reduce future costs, it retains the current system that is ripe for political manipulation. Policymakers can always retroactively improve benefits and defer liabilities.
•HB 2497 creates risk-sharing for new employees who will pay more into the funds with investment losses.
◦This would lower costs over time, but also opens up a dual benefit plan between existing and new employees that will be the focus of future union lobbying.


Pennsylvania's statewide pension plans for public school employees, state workers, legislators, judges and other government employees - the Public School Employee Retirement System (PSERS) and the State Employee Retirement System (SERS) - will require significantly higher taxpayer contributions in the 2012-13 fiscal year and beyond.

The following spreadsheets provide a breakdown of these increased pension costs, based on SERS and PSERS latest projections to make them more understandable and tangible for the taxpayer.

SERS costs are paid 100% by state taxpayers through taxes such as the personal income, sales, and corporate income taxes. PSERS costs are split with about 54% paid by state taxpayers and 46% paid by school district taxpayers. On average, school district property taxes fall 69% on residential property and 31% on commercial property taxpayers.

For illustration purposes, the local property tax increase is represented in a per-homeowner basis to present the impact of these costs to a community. The state costs are presented on a per-household basis. Although the increased costs will be paid through myriad taxes on myriad taxpaying entities, it is ultimately individuals and families-not businesses or corporations-that shoulder the burden of all taxes.

School Property Tax Increase for PSERS
Residential $381 Commercial $171 TOTAL $552

Per Homeowner State Tax Increase for PSERS & SERS, Per Household
PSERS $418 SERS $390 TOTAL $808

Total Average Homeowner/Household Increase $1,360

On Healthcare Hold The Applause

On health care, hold the applause
By NINA OWCHARENKO AND ROBERT E. MOFFIT - The Heritage Foundation



Last March, House Speaker Nancy Pelosi said the Obama administration's health-care bill had to become law "so you can find out what is in it." Six months later, we're finding out, all right. And its popularity is flat-lining.

Public opinion - fueled by daily revelations of higher costs, heftier premiums and disruptions in current and future health insurance coverage - is quickly hardening in favor of full-scale repeal. A closer look at how specific groups will be affected shows why:

Businesses: The White House heralds the small-business health-care tax credits, and the taxpayer bailout for retiree coverage, as business boosters. This might impress anyone who doesn't run a business. But business leaders know that disruptive employer mandates; a raft of new taxes on insurance, drugs, medical devices and investment; plus mounds of regulation and IRS paperwork, will hike costs considerably.


Meanwhile, the New York-based Mercer consulting firm reports that 47 percent of employers expect to lose the "grandfathered status" of their health plan next year under new federal rules. So much for that repeated presidential promise of "keeping" the plan you like.

Seniors: The White House team thinks that Andy Griffith can sell their Medicare changes to gullible seniors through television ads. But Medicare's Office of the Actuary projects that the record-breaking payment reductions due to hit hospitals, home health agencies, and nursing homes will make 15 percent of these providers unprofitable and possibly "jeopardize" seniors' access to care.

Payment cuts to Medicare Advantage plans will hit especially hard. These plans' projected 10-year senior enrollment is expected to drop from 14.8 to 7.4 million. By 2017, the average annual per capita cuts for Medicare Advantage enrollees will be about $3,700 - a 27 percent reduction from today's levels. Perhaps Griffith could cut another ad explaining to seniors why this is good news.

Doctors: They lose big time. The law doesn't fix the Medicare physician payment formula, meaning that doctors again face draconian payment cut of 23 percent this December. And with an estimated 18 million more persons enrolled in Medicaid, which pays doctors on average 56 percent of what they'd make in private practice, physicians will see their pay being set even more through government formulas.

Doctors will have to comply with new federal quality and reporting standards or face mandatory reductions in Medicare payments. They can expect more bureaucracy, more rules and regulations, more compliance and reporting requirements. Top it off with more emergency room overcrowding and a shortage of colleagues, and still no relief through medical liability reform. Doctors should sue their lobbyists for malpractice.

States: Washington's micro-management of health care is very unpopular in state capitols. Twenty states have filed suit against the imposition of an unconstitutional individual mandate to buy federally approved insurance, and 13 are suing over the mandatory Medicaid expansion. Already 44 states report that they have exceeded projected Medicaid enrollment and spending targets for this year, but Washington is ordering even higher state spending.

Under Section 1311, the cash-strapped states "shall" set up federally designed health insurance exchanges, and, in so doing, comply with numerous federal rules on their establishment and management. While the Congressional Budget office says the 10-year federal costs for "start up" and related expenses to establish these exchanges is $7 billion, additional costs to the states is unknown. Expect more court challenges.

Taxpayers: President Obama promised he wouldn't raise taxes on middle-class Americans. Supposedly, no family making less than $250,000 annually would be touched. Not so. Most of the new taxes, estimated to generate more than $500 billion in the coming decade, will fall on middle-class Americans.

The president now admits that the new law doesn't lower health-care costs. With more than $1 trillion in additional federal spending, plus the creation of two new entitlements - a program of taxpayer subsidies for insurance and a federal long-term care program - government spending will skyrocket in 2014, driving up costs for taxpayers.

With such strong economic incentives to drop workers' coverage, former Congressional Budget Office Director Doug Holtz-Eakin predicts 35 million people or more could be dumped out of their employer's plan. That would mean bigger taxpayer subsidies for the displaced workers to get their coverage through the state exchanges, much higher federal spending that would raise the deficit by an additional $554 billion in the first 10 years, and as much as $1.4 trillion over the next 10 years.

Some "reform" bill. No wonder so many Americans want to pull the plug.

The History Of The Number of Representatives In Pennsylvania Government

The next time a state representative or senator talks about the size of the legislature here are some facts for consideration from the state website.

GENERAL ASSEMBLY

In 1967, the Pennsylvania Constitution was amended to set the number of House members at 203.

When the House of Representatives first met in 1682, there were 42 members. By the early 1700s, that number dropped to 24 and then steadily increased to 76 by 1776.

In creating the Senate, the Pennsylvania Constitution of 1790 stipulated that this body should be no smaller than one-fourth of the House of Representatives and no larger than one-third, but it set no maximum for the House. When the House reached 100 members in 1855, a constitutional amendment in 1857 set that as the limit.

The Constitution of 1873 increased the Senate (then at 33 members) to 50 and set the House at a minimum of 200. Every county was guaranteed at least one member, regardless of its population.

The House peaked at 210 members for five sessions from 1955 until 1963. In order to adhere to the U.S. Supreme Court ruling of "one person, one vote," the Pennsylvania Constitution was amended to provide for 203 House members from districts "nearly equal in population." The first House to meet that standard convened in 1967.

Rep. Dwight Evans Wastes $1 Million Dollars Of Taxpayer Money On Jazz Festival

Beavers for Initiative Growth, Citizens Alliance for Better Neighborhoods, Ogontz Avenue Revitalization Corporation. What do they all have in common? All are non-profits tied to politicians from Harrisburg. In the case of the first two trials resulted from allegations of improprieties connected to mismanagement of their funds. Former Senator Vince Fumo and Representative Michael Veon were associated with those entities.

Ogontz Avenue Revitalization Corp, however is the tax-exempt, taxpayer-supported nonprofit group founded by State Rep. Dwight Evans, chairman of the all-powerful House Appropriations Committee.

Philly.com reported that the non-profit received $1 million dollars of Pennsylvania taxpayer money to host the West Oak Lane Jazz Festival. Claims were made that the crowd would rival Woodstock, "in excess of 500,000 festival attendees from around the world." In reality only a couple thousand made it to the event.

Today Karen Heller writes an op-ed that Pennsylvania taxpayers shouldn't foot the bill for the festival.

The three-day festival was free to the public.

And, then again, not.

Because you, dear reader, paid for the festival to the (free-form jazz) tune of $1 million through the Ogontz Avenue Revitalization Corp. (OARC), the tax-exempt, taxpayer-supported nonprofit group founded by State Rep. Dwight Evans, chairman of the all-powerful House Appropriations Committee.

This support is $1 million more than what the commonwealth gave to the July Fourth Welcome America festivities, which drew crowds Ogontz Avenue could only dream of.

Meanwhile, city parades, athletic competitions, heritage events, and even Mummers go scrambling for funding.

"I don't want to get into a debate about the numbers," Evans said about attendance, though he has no problem with numbers when it comes to securing state grants for OARC, scads in the past decade.

Consider this: $29.3 million in tax dollars went to his pet charity. That's an amount that would impress even Vince Fumo.

Rep. Dwight Evans and House Majority Leader Todd Eachus frequently appear together in photo ops especially around budget time. Harrisburg will not change it errant ways unless the voters change the way Harrisburg looks by voting out incumbents who fling their thumb off their nose to the public when it comes to spending our money wisely.

National Taxpayer's Union- Kanjorski Gets An "F"

See Tony Phryillas's post.

How Paul Kanjorski, Nancy Pelosi And Harry Reid Spent Our Money On TARP- $24 Trillion Dollars

From Judicial Watch-A Financial Comparison"

The government economic bailout altered the role of the Federal Reserve and the government's relationship with private enterprises. Schooled in the Great Depression, Fed Chairman Bernanke feared a repeat and wielded unchecked power. Many question Bernanke's fear of "contagion" (i.e. the spreading of bank disaster) and the long-term effects of unchecked Fed power. Paying the bill ultimately rests with the taxpayers. When trillions of dollars are pumped into institutions that would have otherwise gone bankrupt, the significance of not only the action, but its magnitude are hard to comprehend.

Judicial Watch's table puts into perspective the magnitude of bailout spending. To provide a scale of comparison, Judicial Watch presents numbers to connect expense with the perspectives of individual short-term, individual longer-term, and a nationwide short-term focus. How does one comprehend a trillion dollars? Much less $24 trillion? To note, the numbers are not transparent. Various sources provide different estimates. We have compiled numbers from a variety of sources including CNNMoney, the Federal Reserve, Department of Treasury, etc. The bailout is constantly evolving and so we focus on the money committed rather than spent. These commitments, however, can also change, and programs can be created instantaneously with unprecedented Fed power. The estimated worst case scenario is that the bailout will cost the American people nearly $24 trillion. Explore the table and you will find relevant news articles, links to Judicial Watch's investigations and lawsuits, and relevant comparisons.

No wonder Paul Kanjorski enjoys taking all that money from the banking industry and Freddie and Fannie.

To put a trillion dollars into perspective if one stacked one dollar bills one at a time on top of each other a trillion dollars would rise 68,000 miles into the air or one third of the distance from the Earth to the Moon. Just like Robin Williams in his history on golf "Do you do this one time? Heck no 24 trillion fn times!!! And they blasted Bush for $700 billion dollar deficit???

Pennsylvania's Legislature Needs To Go On A Diet

Back in October, 2009 SOP highlighted a petition drive to reduce the size of Pennsylvania's legislature. In February, 2009 SOP opined in this piece Can We Really Afford The Pennsylvania Legislature Staffing

With the May primary coming soon Robert Swift of the Standard Speaker Harrisburg Bureau filed this report today Pennsylvania near top of lists for largest, most costly legislatures. SOP used data from IssuesPa.com for its posts but the data was from 2005. Swift brings us closer to today's cost using 2008 data although some are more current.

The NCSL report shows that Pennsylvania, while sixth in population, has a legislative branch of 253 lawmakers and 2,918 support staff, dwarfing those of larger, more populous states.

No other state even comes close to the size of its legislative operation.

And the cost shows.

Only California outspent Pennsylvania on its legislature in 2008-09, said the NCSL, which used 2008 U.S. Census data for its report. Even then, it wasn't by much.

With 120 lawmakers and 2,067 legislative staffers, California spent $336 million on its legislative branch, compared to Pennsylvania's $319 million. But California, the most populous state in the nation, had 36.5 million people in 2008. Pennsylvania had 12.5 million.

And the drop-off in cost after Pennsylvania is dramatic.

The nation's third most expensive full-time legislature, New York, has 212 lawmakers and a support staff of 2,676. It spent $216 million in 2008-09, more than $100 million less than Pennsylvania, the NCSL reports.

The fourth, Florida, has only 160 lawmakers with a support staff of 1,457, the NCSL reports. It spent $175 million in 2008-09. Florida's population was 18.4 million in 2008, the NCSL noted. New York had 19.4 million people.

States with populations closer to Pennsylvania, like Ohio at 11.5 million and Illinois at 12.8 million, spent far less on their legislatures. Illinois spent $71 million; Ohio, $48 million. Illinois has 177 lawmakers and 980 staffers. Ohio has 132 legislators and 465 staffers.

The difference between full-time and part-time legislatures is even more stark.

Texas, for instance, with a 2008 population of 24.3 million, has the largest of all part-time legislatures in the country with 181 lawmakers and a legislative staff of 2,090. It spent $126 million in 2008-09, according to the NCSL.

Officially, New Hampshire has the largest state assembly in the country with a delegation of 424 lawmakers. But it, too, is part-time. With a support staff of only 147 people, it spent only $14 million on its legislature in 2008-09.

Only 10 of the country's 50 legislatures are considered full time.

The NCSL defines a part-time legislature as one in which delegates spend 50 percent or less of a work week on their legislative duties. In Pennsylvania, lawmakers spend an average of 80 percent of their work week in Harrisburg or their home offices, it says.

Legislative leaders took the recommendation and, beginning in the 1970s, the public began electing candidates who promised to be full-time legislators. Part of the consequences is that the legislative bureaucracy swelled from 532 staffers in 1969, to 1,700 in 1984 and close to 3,000 in 2003 while the number of lawmakers remains fixed at 203 House members and 50 senators.

By 2008, the legislative expense involved translated into a cost of $25.40 a year for every man, woman and child in the state. It was the third highest per capita cost in the nation, behind Alaska at $57.72 and Rhode Island at $26.79.

New York's per capita cost, meanwhile, came to $11.11 in 2008 while California, by virtue of its large population, came to $9.19

The base salary for legislators in both houses of Pennsylvania's General Assembly is $78,314 a year, fourth highest in the nation, behind California at $95,291, Michigan at $79,650 and New York at $79,500.

Salaries, however, are only a part of the actual costs. Factoring in health and pension benefits and other expenses, the real cost of the average legislator climbs to $125,000 to $150,000, depending on how much a legislator claims in reimbursements

In 2006 the League of Women Voters testified before the House State Government Committee supporting a reduction in the size of the legislature. The Commonwealth Foundation testified before the same committee in 2008. Newstalk Radio 1240 discussed this issue on its airwaves. This editorial appeared in the Delco Times calling for a reduction in the size of the legislature.

The voters should share some blame for this out of control spending. When will the taxpayer backlash and anger reach a height like the pay raise scandal to toss out the incumbents and force reform to reduce the size of the legislture? If there was only a "Jenny Craig" for government. Maybe the "fat cats" living high off the hog will finally get the message.

Per Diems- The Hot Button This Election Season

One hot button issue this election season in Pennsylvania will most certainly be per diems paid to state legislators. The abuse starts with their House Rules. As you will read during the course of this post legislators get to play by different rules than the rest of the state employees.

When legislators passed their rules they made a choice. They most certainly could have chosen different wording when they wrote the rules. But just like parents talking to their children the taxpayers are trying to tell them what is not acceptable. But as you will see the legislators have the audacity to "tell us" what we don't understand. If you are a parent this post will resonate oh so ever loudly. In the next post the IRS will speak regarding their per diem payments. It may be time for legislators to rewrite the rules so they don't owe a slew of backtaxes.

The biggest audacity is a legislator who makes $78,314.00 per year as base pay but tells the taxpayers "If you want me to go to Harrisburg and represent this district (which is the reason I ran for this office) you need to pay me another $163.00 per day to do it, no questions allowed."

State lawmakers make most of per diems
By BORYS KRAWCZENIUK (Staff Writer)
Published: February 21, 2010

Most summers, when the Legislature is not in session, lawmakers still must cover their mortgage payments, she noted. Typically, the legislature is in session from January to June and September to November.

- Eachus, D-116, and his wife, Ellen, own a two-story brick townhouse listed as commercial property with apartments at 225 South St., near the Capitol building.

They bought it for $125,000 on Aug. 30, 2005, and have a $100,000, 30-year mortgage on it. The previous owner paid $82,000 for it at a 1996 sheriff's sale. The property is also listed as a source of income on Eachus' 2008 financial interest statement.

Efforts to reach Eachus were unsuccessful, but his spokesman, Brett Marcy, said House rules do not distinguish among types of lodging.

"He incurs food and lodging expenses so he deserves to be reimbursed for those expenses," he said.

"What you are getting at is whether this is permissible," he added. "The next question is whether it's right. We meet the threshold of whether it is permissible. He's following the rules."

Complete per diem records for 2009 were not immediately available. The latest records cover the period from July 1 to Oct. 9, 2009, which includes the Legislature's 101-day budget standoff, which resulted in unusual summer sessions.

During the standoff, Eachus collected $10,611 in 67 per diems, all at the full rates for lodging and meals.

So the first argument to the taxpayers is that they followed their rules. Its easy to do that when you slant them in your favor. The real question here is not whether the rules were followed. The real question is why did you think that slanting the rules in your favor would not go unnoticed or be tolerated by taxpayers, especially in this dire economic time.

As for the flat rate payment read about the IRS guidelines in the next post.

Brad Bumsted STATE CAPITOL REPORTER
Wednesday, September 30, 2009

The taxpayers' costs for per diems would not be incurred if a budget was completed by June 30, as required by law. In the past, the Legislature recessed for 2 1/2 months, starting on or about July 1. They have approved budgets late for the seven years under Gov. Ed Rendell, resulting in some July per diems. But the costs during this budget impasse are the highest since at least the 1970s.

The payments to legislators during the budget impasse "make me sick," said Judy Kandel, 67, a Canonsburg retiree.

"I think since they are getting their pay, they don't give a hoot. They're looking out for themselves, not the people," she said.

The House records cover per diems submitted as of Sept. 8; the Senate records, through Aug. 31. Not all legislators claimed their per diems for the two-month period.

Brett Marcy, a spokesman for Eachus, defended the payments as a cost of getting the budget done.

"These have been difficult times for all Pennsylvanians, but Rep. Eachus and House Democrats refuse to give up until the commonwealth has a fiscally responsible budget that remembers those who need help the most," Marcy said. "We're happy to report that we're very close to finalizing that budget. The per diems were reimbursements for expenses incurred during the course of that work."

Now we are being told the per diems are the cost of getting legislation
finished. Excuse me for a second. I thought getting legislation passed was in your job description. Where does it say that it can't happen unless a per diem is paid? The difficult times mentioned obviously isn't with our legislators. Their base salary is $78,314.00.

BY ROBERT SWIFT (HARRISBURG BUREAU CHIEF rswift@timesshamrock.com)
Published: November 22, 2009

The payments, called per diems, are collected in addition to a state lawmaker's annual base salary of $78,314. The purpose of per diems is to reimburse lawmakers for lodging, meals and other expenses incurred while being away from home at the Capitol or attending a committee meeting in other parts of the state.

Twenty-five of the region's 30 senators and House members collected per diems from July 1, when the budget was due for the new state fiscal year, until Oct. 9, when the $27.8 billion budget was enacted, according to records provided by the House and Senate chief clerk's offices in response to a Times-Shamrock request under the state's Right-to-Know Law.

The total of per diems claimed is still rising because not all per diem payments for lawmakers have been processed.

If legislators had passed a budget by the June 30 deadline and gone on their traditional summer recess until mid-September, they would have had no or fewer opportunities to collect per diems.

Instead, lawmakers were able to claim a per diem up to $158 per day without needing receipts for much of the stalemate.

On Oct. 1, the Internal Revenue Service established a higher maximum per diem of $163 for the new federal fiscal year.

The founder of a Carlisle-based political reform group is critical of per diems, comparing them to a second salary for lawmakers.

"Under this second salary, they don't even have to pay taxes for the most part," said Tim Potts of Democracy Rising.

Eachus: $10,611

Among the Northeast delegation, House Majority Leader Todd Eachus, D-116, Hazleton, and House Speaker Keith McCall, D-122 Summit Hill, led the pack, taking $10,611 and $7,988 in per diems respectively.

As lead budget negotiators, both men were in Harrisburg many days during the impasse, including two holiday weekends.

Eachus said it was his responsibility as a leader to engage in the negotiations with Gov. Ed Rendell and Senate leaders and work out the compromises needed to pass the budget. While it took a long time to resolve, Eachus said the final budget came together in the way he hoped by maintaining health care for children, distributing additional money for education and providing enough recurring revenues so Pennsylvania doesn't have to reopen its budget like some states are doing this fall.

"We ought to be able to get through the next two years without a revenue increase," he said.

Eachus pointed out that lawmakers - unlike the governor - don't have a taxpayer-funded residence to stay in when they are in Harrisburg.

"These (per diems) are real expenses," he added. "It's a federally allowable expense. Many people think it's income, but it's not."

It may be an allowable expense if you follow their guidelines. There is also a huge question on whether it is income. Look what happened in Massachusetts. Finally, any legislator who talks like he is "entitled" to something including taxpayer funded residences is no longer representing the taxpayers' interests. It could be said "It's all about me."

Rules concerning per diems need to be rewritten
Published: February 25, 2010

As if any further proof were necessary, some state lawmakers helpfully have added to the case that their flat rate daily expense payments should be eliminated.

Lawmakers from districts outside the capital area receive per diem, or daily flat-rate payments that are meant to reimburse them for their expenses while in Harrisburg. That flat daily rate is $163, the maximum allowed by the Internal Revenue Service. Since the money technically is for expense reimbursement, it is not taxable.

It is an open secret, however, that the reimbursements add to the income of lawmakers who do not spend anywhere near daily $163 on expenses but collect that maximum amount without having to prove that they spent so much as a penny.

Borys Krawczeniuk of The Times-Tribune reported Sunday, for example, that at least five lawmakers from Northeast Pennsylvania - Reps. Jim Wansacz, Todd Eachus, Mario Scavello, John Yudichak, and Michael Peifer - own properties in and around Harrisburg where they stay while in the capital on business.

Yet they also collect per diem expenses that are meant to cover housing.

Some of the properties are mortgaged, but reimbursement for expenses cannot be intended to cover mortgage payments. If the money is used for that purpose it becomes a different animal because it builds the owner's equity in the property and would contribute to his profit when the building is sold. Other costs related to property ownership, including utility payments, property taxes and insurance, are not reimbursable expenses by even an expansive definition.

In some cases the lawmakers can rent apartments in their buildings, and sometimes do so to other legislators. That makes the property a business. Taxpayers should not have to contribute to lawmakers' businesses under the guise of paying their expenses.

All of this is permissible by House rules. Those rules, of course, are written by House members.

Lawmakers who wish to be Harrisburg landlords have every right to be just that. But in order to ensure that taxpayers are reimbursing them for their expenses rather than helping them to pay off mortgages or cover their extracurricular business expenses, lawmakers should rewrite the rules to provide reimbursements based on actual receipts for valid expenses.

The House Rules beg for overhaul. At least one lawmaker, Rep. John Yudicahk sees the light. It is a shame more weren't by his side.

Pa. legislators play by different rules on expenses
BY BORYS KRAWCZENIUK (STAFF WRITER bkrawczeniuk@timesshamrock.com)
Published: March 1, 2010

When it comes to getting expenses reimbursed, Pennsylvania's legislators play by different rules than everyone else.

If you work for one of 48 state departments, agencies or offices directly under Gov. Ed Rendell's control, you have to have receipts to back up expenses when traveling on state-related business.

No state employee can skip providing receipts and still get up to $163 a day for lodging, meals and incidental expenses.

But a state legislator can.

The $163 a day is the federally established per diem rate - $111 for lodging and $52 for meals and incidental expenses.

Legislative per diems have long been controversial in Harrisburg because they do not require proof an expense was incurred. Legislators are eligible for the full amount simply for being in Harrisburg on state-related business.

By contrast, agencies under the governor's office treat the $163 as a maximum possible reimbursement, and employees are only reimbursed for actual expenses when they produce receipts, said Mia DeVane, a spokeswoman for Rendell

Per diems are allowed by the federal government and reflect real expenses incurred by lawmakers, House Majority Leader Todd Eachus, D-116, Hazleton, told the Scranton Sunday Times recently.

Lawmakers - unlike the governor - don't have a public residence to stay in when they are in Harrisburg, added Eachus.

The House rules on per diems follow the internal revenue code and can cover expenses beyond food and lodging that come from spending three or four days at a stretch in Harrisburg, said Stephen Miskin, spokesman for House Minority Leader Sam Smith, R-66, Punxutawney.

He said any effort to change per diem rules would probably come when the House adopts rules for the next legislative session starting in January.

Per diems rarely used as intended
Published: November 29, 2009

Sen. Lisa Baker of Luzerne County, for example, could have received per diem payments totaling $5,500. Instead, she filed for reimbursement of her actual expenses - $2,083 for lodging and food. Her actual expenses were just 38 percent of the allowable flat rate.

Rep. Todd Eachus, the House majority leader from Hazleton, claimed that the public has a misconception about flat rate per diem payments: "Many people think it's income, but it's not."

What, then, to call the $3,417 difference between what Ms. Baker actually collected and what she could have received from the flat rate?

Well, perhaps Ms. Baker is unusually frugal. But that's another advantage of keeping receipts, as business travelers know. They force you to keep your expenses down.

Credit goes to Ms. Baker and a few other lawmakers who accept reimbursements only for their proven expenses. Their conduct should become the model for new House and Senate rules requiring specific receipts for claimed expenses. The "per diem" rate should be, as intended by the IRS, the maximum daily reimbursement rather than the standard flat rate.

Editorial From WMGH October 8 and 9, 2009

IF YOU'RE A SENIOR CITIZEN ON A FIXED INCOME YOU MUST BE APPALLED WHEN YOU HEARvELECTED LEADERS GETTING OVER $7,400 FOR JUST 2 MONTHS. THAT'S $7,400 OVER & ABOVE BASE SALARIES EXCEEDING $68,000 A YEAR. AND HERE YOU ARE WITH YOUR MONTHLY SOCIAL SECURITY CHECK OF JUST A COUPLE HUNDRED BUCKS. WHAT'S MORE APPALLING-- WE ARE MORE THAN ONE-FOURTH INTO THE FISCAL YEAR & WE STILL DON'T HAVE A BUDGET.

MANY SOCIAL PROGRAMS THAT ARE SUPPOSED TO HELP SENIORS HAVE BEEN AFFECTED.
500 PUBLIC SCHOOL DISTRICTS HAVE MISSED 3 STATE CHECKS. MANY DISTRICTS ARE TALKING ABOUT TAKING OUT LOANS. INTEREST ON THOSE LOANS WILL BE PAID FOR BY TAXPAYERS, WHILE THE STATE CONTINUES TO ACCUMULATE INTEREST ON BILLIONS OF DOLLARS SITTING IN THE BANK. $532,585 IN PER DIEMS PAID FOR 2 MONTHS. SEPTEMBER & EARLY OCTOBER ARE NOT INCLUDED. WHILE LAWMAKERS POCKET MONEY FOR FOOD & LODGING, MANY CONTINUE TO PUSH FOR HIGHER TAXES & FEES. THE FACT WE STILL DON'T HAVE A BUDGET IS AN OUTRAGE.

LAWMAKERS ADD INSULT TO INJURY WITH PER DIEMS FOR FOOD & LODGING. IT'S SOMETHING VOTERS SHOULD REMEMBER WHEN GOING TO THE POLLS NEXT YEAR.

I'M MARK MAREK WITH THIS WEEK'S OLDIES 1410 WLSH EDITORIAL.

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Petrilla- Send Me A Lifeboat

Times Leader Photo

Due to the expert reporting of Jennifer Learn-Andes the homestead tax exemption surreptitously taken back by Luzerne County demanded a spotlight on its "midnight" raid of taxpayer money. Well it really didn't happen at midnight but you get the idea.

In this article that appeared in the Standard Speaker by Michael Buffer it was reported that Luzerne County property tax bills were mailed without the homestead exemption. In effect the tax break was reclaimed on top of the 15% tax increase approved by the Luzerne County Commissioners.

Commissioners Chairwoman Maryanne Petrilla said county officials didn't think the homestead tax break was in effect this year because commissioners didn't vote to authorize it for 2010.

"How do you raise taxes and give a break? It's almost like a shell game," Petrilla said. "We're going to raise taxes, and then you're going to have to raise taxes even higher yet to cover an exemption. It didn't appear to make much sense.

But Commissioner Stephen A. Urban said a 2009 resolution authorized the tax break for 2009 and requires the tax break to stay in effect until commissioners rescind it.

"It should not have been taken off the tax bills," Urban said.

In this article by Jennifer Learn-Andes of the Times Leader Commissioner Petrilla is taken to task for her statement.

County Solicitor Vito DeLuca said Monday that he researched the law and concluded that a homestead tax break must continue unless commissioners vote to rescind it.

Urban said he and Commissioner Thomas Cooney had no idea the break had been eliminated and both agreed that the homestead should be restored.

County Commissioner Chairwoman Maryanne Petrilla said last week that she never knew the break had to continue beyond 2009. She maintained that a higher tax increase would be necessary to fund the break.

However, county Budget/Finance Director Tom Pribula said the cost of the tax break was never removed from the budget, and the county would receive an unanticipated $3.5 million to $4 million windfall if the break was not offered.

Urban said the break was meant to reward property owners who choose to make the county their primary residence.

“We value home ownership and understand the importance of this program, particularly at this economic time,” Urban said.

The homestead knocks $10,000 off an assessment for county taxes -- not school or municipal ones.

Her lack of knowledge cost the county a ton.

The county already spent thousands of dollars on mailing, printing and labor to prepare the tax bills that must be scrapped. The county mailed 12,262 tax bills last week, and another 36,700 were printed but not mailed.

County Information Technology Director Steve Englot said he had to order about 70,000 more tax bill forms and additional postage and printer cartridges to prepare the new bills for roughly 165,000 property owners.

To add the calamity of the situation Commissioner Petrilla tries to cover her hide with some self serving statements right out of a campaign stump in a subsequent article by Jennifer Learn-Andes.

Following is Petrilla's statement:

I want the taxpayers of the county to know I hear their frustration and anger at the recent mix-up concerning the Homestead Tax Exemption. There was a mistake made here. We’re all human. I told the people attending the commissioners’ meeting last week who protested that we would correct this. And we have.

I can’t dial back the play clock on this one item. We will make sure things like this don’t occur again.

I also hope that all I have tried to do to improve county government at this crucial time in our history will not be judged by this one incident. I’ve finally put an end to the wasteful practice of seemingly endless county borrowing. We had to raise taxes, but we made many cuts in this year’s spending to try to minimize the pain. We now have a fairer tax system with everyone paying their fair share instead of some receiving a better deal over others. This preferential treatment went on for decades beyond when other counties reassessed. Additionally:

• I singlehandedly worked with the principals of PA Child Care to end their lease that cost $58 million.
• Discovered the practice of contract piecemealing, stopped and exposed it, saving hundreds of thousands of dollars.
• Completely put an end to nepotism and cronyism by hiring professional and experienced directors to fill jobs.
• Developed a cooperative working relationship with the courts to streamline their budget and save taxpayer’s two million dollars a year.

There has been much to cleanup since I became chairwoman of the commissioners. I’ve worked hard to begin the cleanup. I hope people won’t rush to judgment on my overall record before some time passes and it can be judged in it’s entirety.

These have been tough times in Luzerne County for a variety of reasons. We’re doing our best in these trying days. I hope people will look at the big picture. Thank you to the taxpayers for any patience they can afford us. We will continue to try and do better.

She singlehandedly did what??? She discovered what?? With all due respect Commissioner Petrilla you sound like Todd Eachus when he states he was managing the Bonusgate investigation from Harrisburg. I believe the FBI and AG Tom Corbett had respective roles in what each of you claim.

As for Maryann rooting out waste let's revisit the Frank Vita debacle.

Psychologist denies involvement in alleged juvenile justice scheme

BY MICHAEL R. SISAK AND DAVE JANOSKI
STAFF WRITERS
Published: Thursday, February 19, 2009 4:06 AM EST

“Every bill that was paid to Frank Vita was approved by the county controller’s office, including the two years that Maryanne Petrilla was controller,” McGarry said. “They were approved and reimbursed. All I did was sign the rate card.”

Petrilla, who has served since last January as the chairwoman of the county’s board of commissioners, did not return telephone messages late Wednesday.