Un-Frozen COLA

Posted by By at 2 July, at 19 : 57 PM Print

There are moments in history that, once missed, cannot be recaptured – even if you try to do exactly the same thing mere minutes later.  Imagine Washington hesitating for 30 minutes before attempting to slip across the water from Brooklyn Heights back to Manhattan.  Doing so would have left him stranded and the cause likely lost.  Or imagine Jefferson waiting and asking Congress first before making the Louisiana Purchase – Napoleon might have come to his senses.

These moments are remembered because of the action taken; this past Wednesday the state legislature – the GOP in particular – may regret the actions they failed to take.

First, back up and consider the last 6 months of rhetoric.  The theme of “shared sacrifice” was undergirding all of the legislative maneuvering.  State employees were warned to expect frozen wages.  Programs and agencies were quietly told to not fill vacant positions and to expect dramatic cuts.  School districts were told that state funding was going to be dramatically reduced and the governor asked teachers across the Commonwealth to agree to a salary freeze.

Then the governor announced a budget that accepted the present reality:  we have to cut spending.  And while the specific “how” we spent the $27.15B was still open to negotiation, the total spend number was not.  The governor made that point clear.

So, with a total number in hand and the governor’s stance clear, the “horse trading” began.  The first battle was waged over education funding, the public works and assistance.  Economic development and vouchers made a play.  As the give and take started to take coherent shape, the pain ended up significantly spread around between the former Rendell sacred cows of Education and DPW.

This was not just revenge – the fact is these two areas saw astronomical increases under the “borrow and spend” policies of our last executive, making these two areas the ripest for cuts.  And when you consider the limitations on certain types of cuts (you generally don’t want to cut funds that receive federal matching funds as that makes the pain twice as bad), the cuts, for the most part, were made from what was available to cut.

The budget could have been sold on this basis and be hailed as a success – a budget we don’t relish, but need – had things stayed static from March to now.  But they didn’t stay static – we ended up with an “extra” $611M dollars, the Marcellus tax grew in public popularity, and the legislature replaced most of the cuts to its own budget through a variety of means.

It is against this backdrop that the legislature missed its moment – several, really.

The first blown opportunity was to apply a portion – even a small portion – of the $611 M in carry over tax collections to some of the deeper cuts within the 2011-2012 budgets.  I agree that it’s not a surplus, but it is unbudgeted, and using even $50M for basic education would have been smart.

The legislature also blew the Marcellus issue.  The governor was willing to go past the deadline as his referendum battle Thursday showed, making a game of Marcellus chicken viable.  But the legislature was apparently not willing to play, even when doing so might have given them a huge PR win.

Like it or not, the public wants some type of tax on the shale, and sooner or later it is going to get one – whether now or from the new majorities they will vote in soon enough.  It is rare that a 70% issue can be long ignored, and Sen. Scarnati’s plan would have satiated the reasonable critics and established a moderate and local foundation for any tax plan.  Instead, by punting, the legislature picked up a double whammy – bad politics AND bad policy.

But the blown revenue and Marcellus moments are nothing – NOTHING – compared to the COLA.  The COLA, or “cost of living adjustment,” is a statutory raise the legislature built into its pay back in the days under Speaker Ryan.  It bumps up legislator pay annually by a percentage pegged to an index.  The idea is that it keeps the amount of money in legislator pay constant in terms of buying power without a pesky vote on the record.

It is, in any private workplace, called a raise.

And at a time when you are asking people who make far less than you to accept some of the pain, it would have been an act of leadership to do so as well.

In the coming days and weeks I suspect many of the legislators will announce they will not be taking the cola – they will donate it to charity or something similar.

That is all well and good, but the leadership moment has passed.  The time to be bold and to lead was this past week and the months before.  These moments, when missed, can’t truly be recaptured.

However, the lack of leadership can very easily become the battle cry of an insurgent minority party seeking to take power – just ask the 111th Congress.

Photo by Tom Owad

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This post was written by:
- who has written 77 posts for Rock The Capital
Scott Paterno is an accomplished policy analyst and political consultant based in Hershey, PA. Mr. Paterno, never one to sit still, has practiced law, run for a house seat, and worked as lobbyist in Harrisburg and Washington. Paterno is Vice Chairman of the Sustainable Energy Fund and is currently pursuing a master’s degree in Political Science. He is happily married with three children. - Email scottp

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