Pattye Benson

Community Matters

Month – July 2014

PA State Rep Warren Kampf’s Town Hall Meeting — Budget, Pension and Property Tax Reform, Liquor Privatization & the Legalizing of Marijuana

July 31, 2014
23 Comments

I attended State Rep Warren Kampf’s Town Hall meeting last night in Phoenixville. Kampf opened the meeting with a 15-20 min. update on the budget, pension reform and status of legislation, liquor privatization, and property tax reform. Following his presentation, the evening continued with Q & A from the audience members, with about 30 questions on a variety of topics.

In his discussion of the recently passed 2014-15 PA Budget, Kampf offered the following highlights:

  • The budget passed on time for the fourth straight year, with no tax increases to the residents.
  • Although there was a modest increase in the 2014-15 budget from the previous year, the budget increase remains well below the rate of inflation.
  • Pennsylvania received a $340 million cut in Medicaid Funds from the Federal government.
  • The budget includes an additional $250 Million to implement Affordable Care Act provisions;
  • The budget includes an additional $600 Million in increase in pension costs
  • The budget includes an additional $600 Million for Medicaid increase

There has been much discussion about Corbett cutting education spending but according to Kampf, the 2014-15 budget has education spending at an all-time high, and that the recently passed budget includes an additional $520 Million in educational spending. This topic was one of much interest from the audience members. We have all seen the campaign rhetoric with one side claiming cuts to education and the other side saying it is untrue

Kampf further clarified that Corbett’s budget includes $10.5 Billion on Pre K – 12 line items, stating it is the most ever committed. The budget includes an additional $20 Million for Special Education. The Pre-K Counts Program, which increases access to quality pre-kindergarten to PA children and their families with a priority in at-risk communities, received a $10 Million increase in the budget.

To help offset the cost of postsecondary education, the budget includes a new $5 Million ‘Ready to Succeed Scholarship’ that provides up to $2,000 to eligible students whose families earn up to $110K.

Pension costs and the need for reform continued to be a significant discussion point. Kampf offered the example that the PSERS line item on the 2014-15 PA Budget increased from $375 million to $1.4 Billion this year! As taxpayers, we know firsthand the effect that the skyrocketing pension costs have had on our own tax bill. The pension costs have impacted the school districts statewide, forcing school boards to make difficult decisions and painful cuts.

Clearly, pension reform is needed sooner rather than later. Kampf’s hybrid pension reform bill, HB 1353, which includes a traditional 401k type plan, was presented as a possible solution. It was interesting to note that there continues to be confusion among some of the residents – the suggested pension reform bill, HB 1353 is for new hires; not those workers currently in the system. Kampf believes that his plan would create $11 – $20 Billion in savings.

I was glad for a discussion on liquor privatization but it does not look like House Bill 790 is going anywhere anytime soon. The House approved the bill 105-90 in March 2013 but according to Kampf, the Senate has not agreed to move the bill forward. We hear the argument that the 600 states stores generate money and therefore the government should keep things status quo. Pennsylvania loses millions annual to neighboring states because of the inconvenience of buying at states stores. What is it going to take to bring Pennsylvania into the 21st century – 48 other states enjoy convenience and choice, why can’t we? Other than Utah and Pennsylvania, states don’t want to be in the business of selling alcohol.

On property tax reform, there were updates but little ‘new’ news. PA House Bill 76, the ‘Property Tax Independence Act’, remains in the House Finance Committee and has not moved forward for a vote. This legislation would eliminate school property taxes across the Commonwealth and replace those taxes with funding from a single state source.

Kampf voted yes on House Bill 1189, which would amend the Local Tax Enabling Act to provide school districts with the option to eliminate property taxes. Although Kampf supports HB 1189, he added that the Senate has not taken action on this legislation.

Because the Town Hall meeting was held in Phoenixville, several audience questions were local to that area. One question related to Phoenixville Area School District’s decision to acquire the Meadowbrook Golf Club via eminent domain and where did Kampf stand on the topic. Kampf supported the legal right of the school district to take the property [using eminent domain] but suggested it should only be used when all other alternatives were exhausted.

On allowing illegal immigrant children in the US, Kampf deferred to the Federal government, stating that as a State Representative he was not in a position to cast a vote.

A couple of people asked Kampf for his personal opinion on legalizing marijuana in Pennsylvania. Although he was not aware of any currently proposed legislation in the House on the subject, he said he could support the legalizing of medical marijuana. He was not going to commit himself beyond the use of marijuana for medical usage, preferring to take one step at a time.

On June 27, the Senate Law and Justice Committee unanimously voted in support of the bipartisan Senate Bill 1182, known as the Compassionate Use of Medical Cannabis Act, to ease the suffering of people with epilepsy or other ailments. Twenty-three states and the District of Columbia have approved medical cannabis programs, could Pennsylvania be next?

I give credit to any elected official who holds a Town Hall Meeting with no pre-screening of questions. Last night numbers were distributed and the questions asked in numerical order; everyone with a question was given an opportunity to ask it. Nothing was off limits – only requesting that questions be asked by residents of Kampf’s legislative district. As a registered Independent, I am pleased to report that the evening contained no political party bashing by audience members or by Kampf. Would love to see a similar forum in Tredyffrin Township. Or how about a PA-157 State Representative debate between incumbent Warren Kampf and his challenger Marian Moskowitz?

Education Degree no longer a requirement for PA School District Superintendents. With a graduate degree in management, business, finance or law, you could be a Superintendent

July 12, 2014
31 Comments

We all remember Chester Upland School District’s well-publicized financial struggle to keep their electricity on, the doors open and their teachers paid a couple of years ago. Chester Upland and other PA school districts in similar severe financial distress were aided by the passage of Act 141 of 2012 (House Bill 1307). The recovery plan legislation allowed the PA Department of Education the ability to declare school districts in severe financial distress and to appoint a CRO (Chief Recovery Officer) to improve academic performance and bring financial stability to these districts.

Other changes to the Public School Code of 1949 by the PA Legislature at the close of the 2011-12 included an overhaul of Section 1073, which governs the selection of school district superintendents and assistant superintendents through amendments made by Act 82 of 2012 and Act 141 of 2012. Section 1073.1 provides ‘Performance Review’ requirements for superintendent/assistant superintendent employment contracts including the following points:

  • The employment contract for a superintendent/assistant superintendent shall include objective performance standards and assessment tools mutually agreed to in writing by the school board and the superintendent/assistant superintendent. The legislation treats superintendents/assistant superintendents in the same fashion as teachers and principals. Objective performance standards may be achievement on PSSA tests, achievement on Keystone Exams, attrition rates, graduation rates, financial management standards, etc.
  • The district’s board shall post the mutually agreed to objective performance standards contained in the superintendent/assistant superintendent contract on the school district’s publicly accessible Internet website.
  • The school board shall conduct a formal written performance assessment of the district superintendent/assistant superintendent annually.
  • The district’s board shall post on the publicly accessible Internet website the date of the superintendent/assistant superintendent evaluation and whether each of the performance standards contained in the agreement were met.

It does not appear that the new requirements affected the existing contracts of district superintendents/assistant superintendents. There was no expectation that existing contracts were to be opened and the new requirements added. However, going forward all new superintendent/assistant superintendent contracts would need to adhere.

By now, most parents and residents know that TE School District Superintendent Dan Waters is retiring at the end of his contract on June 30, 2015 and that the school board has launched a superintendent search for his replacement. The District’s contract with whomever replaces Waters will need to adhere to new provisions of the Public School Code.

The PA Legislature updated another section of the Public School Code – Article X, Section 1003 Eligibility in 2012. Given the current superintendent search in T/E, I found the new provision added of particular interest. Did you know that the requirement that prospective superintendents and assistant superintendents have experience in a classroom was dropped when the Public School Code was updated in 2012?

That’s right — Section 1003 (b.1) was added to the PA Public School Code which states that if you have a graduate degree in business, finance, management or law you can be a school district superintendent in Pennsylvania. According to the Pennsylvania Department of Education, the highest-level manager of school districts no longer needs to be a teacher or principal or have an education-related degree.

To be a school district chief, the law previously required a person to have a letter of eligibility, issued by the state Department of Education. To receive that letter, the person had to complete a graduate-level program of educational administrative study, which consisted of two full academic years. The candidate also needed to have at least six years of experience in education, including at least three of those years in a supervisory capacity.

The ‘eligibility’ section of the Public School Code, states that someone with a graduate degree in business, finance, management or law, along with four years of relevant experience in business, finance, management or law, can also be a superintendent. From what I understand, the change in the law occurred for several reasons.

By expanding the allowable requirements for superintendents, it gives area school districts a much larger pool of applicants for the top jobs. However, more importantly, individuals with business and finance experience are what a school district superintendent needs in the time of unprecedented budget cuts in public education. Although sec. 1003 (b.1) of the Public School Code is set to expire in 2015 – it states, “A person who is issued a commission by the department based on satisfaction of the requirements of this subsection may retain his commission after the expiration of this subsection.”

TE School Board Vice President Kris Graham serves as chair of the District’s superintendent search committee. A review of the job posting on the TESD website, indicates that the board is seeking applicants with school superintendent experience, a PhD in education and requires PA letter of eligibility. As of June 2012, the Public School Code does not require a superintendent to have educational experience, a doctorate in education or a PA letter of eligibility. The public was told by Graham that there were only five qualified candidates inside the District and only one who had applied (Dr. Richard Gusick).

Graham served as chair of the District’s Legislative Committee and Gusick served as the administrative liaison and I do not recall Act 82 or Act 141 of 2012 changes to the Public School Code (particularly those related to performance assessment in superintendent contracts or the change in state requirements for superintendents) discussed in any of the Legislative Committee updates presented at school board meetings.

Pennsylvania legislators serving on the Education Committee fought hard for these 2012 changes to the Public School Code. I understand that our T/E school board directors can write the superintendent job description and applicant requirements, anyway that they wish. My question is why would they want to limit themselves to a superintendent applicant pool that is based on specific requirements that the PA Department of Education does not currently require? Wouldn’t they want to make certain that they had the best candidate for the job?

It is interesting to note that 1,000+ stakeholders in the TE School District returned the recent superintendent survey and that 74% of the respondents listed ‘leadership’ as the most important qualification needed by the new superintendent. The second most important qualification, cited by 58% of the respondents, was ‘budget & financial expertise’. Only 36% of the respondents believed that ‘teaching experience’ should be a requirement for the position.

The superintendent of a school district is the chief executive officer. The superintendent is the manager and he or she manages the fiscal and financial affairs, buildings and grounds, personnel, equipment, etc. A nontraditional candidate can offer a real benefit to a school district, including leadership, finance skills and knowledge about business or law.

As we learned from the survey results, T/E School District stakeholders placed leadership and expertise in budget and finances as the highest priorities needed in the next superintendent. The position could appeal to a number of people like a retired CEO seeking a new challenge. Or maybe there is a prospective candidate with management expertise and a law degree. An individual with strong financial and business management background could also be a good fit for the job.

Here’s my suggestion – I think my friend Neal Colligan should apply. An involved T/E School District resident, he has strong business/management background and finance expertise – BS in Accounting, MBA from Villanova U and has worked as a CPA. And he understands the District’s budgetary requirements and management climate. If you recall in 2013, Neal developed a plan that would provide health care benefits to the District’s aides and paras and help save their jobs from outsourcing.

Speaking of applying for the superintendent position, there is a short window of opportunity. The job posting for superintendent went up on the District website on July 1 and applications for the position will close on August 8, 2014. Why the rush? The start date for the job is not until July 1, 2015; I do not understand why the school board is closing the applications after barely a month.

To the TESD Superintendent Search Committee – please do not discount candidates because they do not have a doctorate in education or a superintendent letter of eligibility. For Neal and other qualified superintendent candidates, click here to apply.

PA Pension Crisis: A Vote to Change the Pension Laws is a Vote to Protect the Taxpayers

July 7, 2014
3 Comments

Unfunded pension liabilities are the dark cloud hanging over the state budget. Years of underfunded retirement promises to public employees has plunged the state into a financial black hole that is approaching $50 billion. The cost of doing nothing increases on a daily basis, and translates into higher property taxes, an inability to fund public education in the manner in which it deserves and painful cuts to critical government programs. The time is now for meaningful pension reform.

Facing huge shortfalls in the two public pension systems in Pennsylvania – PSERS (Public School Employees’ Retirement Systems) and SERS (State Employee Retirement System), State Rep. Warren Kampf (R-157) turned to a strategy that a lot of private companies adopted years ago – moving workers away from the guaranteed pension plans and toward 401(k)-type retirement savings plans. In 2013, he introduced two pension reform bills to move the public pension systems toward a defined benefit plan with defined contribution systems for all new hires while protecting the benefits of employees currently in the system.

Working with Mike Tobash (R-125) from Berks County, Kampf’s House Bill 1353 was amended to a hybrid pension reform plan that would not change benefits for current employees but would place new employees in a “stacked” pension system, including both a defined benefit and a defined contribution component. An overview of the proposed hybrid plan, including details on the defined benefit and defined contribution aspects, from Tobash website indicates:

  • Benefits of current employees would not change
  • All new state and public school employees would be subject to the same plan
  • The plan is a combined traditional, defined benefit plan and 401-K-type defined contribution investment plan
  • Bill would include provisions to allow absences for leaves of absence, furloughs, military service, disability, maternity leave, Family Medical Leave Act while remaining in the system
  • Employee contribution would be 6 percent
  • Defined benefit for first $50,000 of salary, indexed 1 percent annually
  • Defined benefit is fully earned after 25 years of service
  • Participants are vested after 10 years
  • Defined benefit cannot be collected prior to age 65 without penalty
  • No different classes of service
  • Employee contribution of 1 percent and employer contribution of .05 percent on all compensation up to $50,000
  • Employee contribution of 7 percent and employer contribution of 4 percent on all compensation more than $50,000
  • Employee contributions vest immediately and three-year vesting of employer contributions

Private employers decided years ago to terminate traditional pension plans in lieu of 401(k) plans and likewise, it is time for government to shift the pension plan’s risk to the worker. Some employees prefer the 401(K)-type retirement system because it gives more control over the retirement assets, including the ability to take the money with them when they change jobs.

Pennsylvania’s pension reform bill was on a roller coaster ride this last week. Gov. Corbett has been urging the legislature to pass pension reform, indicating that he would not pass the 2014-15 budget without its inclusion. But rather than approving HB 1353, the General Assembly voted 107-96 to send it to the House Human Services Committee. Sending it back ‘to committee’ could have meant the death knell for the bill. Fortunately, that was not the case and the House Human Service Committee voted to send HB 1353 to the full House for final consideration when the legislators reconvene in the fall after summer recess.

According to Tobash website, the plan is “estimated to save between $11 billion and $15 billion over a 30-year project period” but it is not without its naysayers. Some who oppose the proposed pension reform plan suggest that it will not solve the current underfunding problem and that it will reduce pension benefits of new employees. Although it is correct that under this plan, new employees will not have the same retirement benefits as those currently in the system, I would ask what is the alternative … do nothing and continue to feed the ballooning unfunded retirement black hole?

Doing nothing to affect the pension obligations is not acceptable, because it only allows a very bad situation to deteriorate even further. Taxpayers in Pennsylvania are on the hook for almost $50 billion in unfunded pension liability. The staggering pension debt should concern all of us — it threatens our state’s economy, our citizens and future generations. Now is the time for meaningful pension reform and lawmakers need to take action. A vote to change the pension laws is a vote to protect taxpayers – support House Bill 1353.

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