Copyright (c) : Paid for by Friends of Mike LaPolla

Topic of the Week     -    3/08/2010

This week's topic is a proclamation.  When elected to represent you in Harrisburg, I will not use per

diems for personal gain.  Any and all per diem reimbursements will be supported with receipts and all

expenses will be posted on my website for public viewing.

Per diems paid over and above actual expenses documented with receipts are personal gain and,

though perhaps legal, are immoral.  Dictionaries define integrity as adherence to moral and ethical

principles and I pledge to maintain the same integrity I maintain in my private sector employment while

serving you in the Legislature. 

This is the way I live my life and the example I will set for my son, not a vote-seeking pledge.  The

papers and electronic media are full of allegations of impropriety of legislators which detracts from the

real business of reducing spending to an affordable level.

The constituents of the 113th deserve a legislator they can count on to represent their interests without

compromising integrity.  Today I am that candidate and, come January, will be that legislator.

Topic of the Week     -    3/14/2010

Over the past two weeks, I have had the pleasure to walk various neighborhoods in the 113th District. 

From West Scranton to Moosic and North Scranton to Clarks Green, the taxpayers all had the same

message to tell me, change needs to happen in Harrisburg.  The voters are looking for true and honest

representation in Harrisburg. 

The 2009 budget impasse has left disgust in their hearts for what politics and politicians represent. 

Scouting ideals, principals, values and beliefs have played a key part in my life.  These characteristics are

what I will bring to the office if elected.  I truly believe these characteristics will change the perception

voters have for elected officials. 

I want to thank the over 500 voters who took time out of their busy schedules to sign my petition these

past two weeks.  They invited me into their home and shared their views and concerns with me.  While

walking and meeting individuals within the 113th district, although it was brief, it was rewarding and

enlightening. 

I am really looking forward to spending more time walking neighborhoods and spending time with the

voters.  As I continue to walk the district with fellow volunteers, I appreciate your continued support on the

issues that I represent.  With a unified cause and belief on issues, we will bring that change you so desire

in Harrisburg.

I recently read a very interesting article on Unemployment Compensation in the State of

Pennsylvania.  The article is so eye opening that I wish to share it with you.  The article is from

the Commonwealth Foundation website, written by Elizabeth Bryan.

The True Cost of Unemployment Compensation

FEBRUARY 17, 2010 |

by ELIZABETH BRYAN

Pennsylvania's unemployment compensation fund is bankrupt. Beginning in March 2009, the Keystone

State borrowed over $2 billion from the federal government to keep it solvent. Unfortunately,

unemployment continues to grow, making a bad situation worse. Since December 2007, Pennsylvania

has lost more than 200,000 jobs. It is imperative that policymakers revisit the unemployment

compensation system and understand how the existing structure hinders economic recovery.

The Keystone State's unemployment compensation fund has been in danger of insolvency for years.

Even without the recent surge in job losses, it would be bankrupt. Only California, with 3 times the

population and much higher unemployment rates, pays out more in unemployment claims than

Pennsylvania. Each week the Commonwealth pays between $70 million and $75 million in benefits.

Approximately 69% of the state's unemployed receive benefits, the highest percentage of any state in the

union. Pennsylvania's unemployment insurance woes stem from an inherently flawed system that

subsidizes unemployment, stunts job growth, and discourages personal responsibility.

With 435,000 residents dependent on unemployment benefits, the state cannot afford to incentivize

people not to work. However, the current system does exactly that. Generous unemployment benefits

reward those who take more time to find a new job.

In addition to rising unemployment, the time people spend between jobs is growing. Congress' extension

of benefits from 46 to 79 weeks has nearly doubled the average duration of aid for those out of work.

Research shows that extending unemployment benefits lengthens periods of joblessness. When

government pays workers about 40% of their previous wage to stay at home for a year, many of them do

just that. In other words, benefit extensions increase unemployment.

Had the average unemployment claim duration for Pennsylvania matched the average of the five states

with the lowest duration time, Pennsylvania could have added over 41,500 jobs to the economy and

saved $727.9 million last year in unemployment trust funds.

Pennsylvania ranks among the top 10 states in highest unemployment taxes per employee, near New

Jersey and Illinois. Last year, employers paid approximately $380 per employee in unemployment

compensation taxes. For 2010, the average tax per employee jumps to $432 per worker.

Governor Rendell is now advocating for expanding benefits and the threshold of taxable income to qualify

for a one-time $270 million federal stimulus, but this is not a solution. Taking the money would cost

taxpayers another $60 million each year, long after the stimulus money disappears. Bailing out the

bankrupt unemployment compensation trust fund by increasing taxes on employers only exacerbates job

loss. Pennsylvanians will pay for this benefit, and tax on each job, through lagging employment growth

and reductions in wages.

The state unemployment system is defunct, but there are alternative ways to attain income security.

These include:

•Requiring participation in job search programs,

•Deducting other benefits, such as severance pay,

Social Security, and vacation pay   from unemployment benefit rates,

•Adjusting eligibility for benefits, and 

•Ensuring that the length of benefits does not exceed actual weeks worked.

Ideally, unemployment benefits should be arranged between employees and employers or other voluntary

organizations. The Mercatus Center recently published a report that takes a fresh look at Unemployment

Insurance Savings Accounts. These individual accounts operate like a retirement fund. In lieu of

compulsory unemployment taxes, employees make contributions to an unemployment fund. If the

individual is never unemployed he can roll these funds into a retirement account. The whole system

would negate cumbersome government bureaucracy and promote personal responsibility.

Returning unemployment insurance to the private sector, or at least resisting demands for benefit

expansions, will better position Pennsylvania for an economic resurgence. We need an individualized

unemployment system that encourages personal responsibility and economic productivity.

Elizabeth Bryan is a Research Associate with the Commonwealth Foundation

(CommonwealthFoundation.org), an independent, nonprofit public policy research and

educational institute based in Harrisburg.

Topic of the Week     -    3/01/2010

Sales Tax Expansion

The recently released Rendell 2010-2011 Budget assumes Congress will once again

providSales Tax Expansion

The recently released Rendell 2010-2011 Budget assumes Congress will once again provide

federal stimulus funding which may be used to balance a budget that increases spending $1.15

billion.  In fact, to balance the Budget a $2.7 billion federal stimulus plug is assumed.

Governor Rendell also proposes to expand the sales tax base to items currently untaxed and

reduce the rate to 4%; it is estimated this tax increase would raise $1.4 billion over two years.

These funds would be placed in a "Stimulus Transition Reserve Fund" to help the State cover

expenses in future budgets when there is no longer any stimulus funding available. In other

words, this fund would end up in that black hole called the operating budget to cover ever-

increasing spending.

On the other hand, Representative Sam Rohrer has proposed expanding the sales tax base at

the current 6% rate to eliminate the school property tax (H.B. 1275).  Calculations show it would

take purchases of $25,000 of newly covered items to offset a property tax bill of $1,500.  Since

spending is, at least partially, discretionary, savings from eliminating the property tax would be

controllable. 

So, which sales tax expansion program would you prefer; one that funds increased spending or

one that eliminates your school property tax?

Topic of the Week     -    3/28/2010

Harrisburg is stifling economic growth in Northeastern Pennsylvania!

Legislators are considering Governor Rendell’s proposed severance tax on gas

producing companies within Pennsylvania.  Harrisburg's logic behind the tax is that it

will offset part of the budget deficit the Commonwealth is going to incur for the fiscal

year of 2010-11, but what if this proposed tax chases this important new industry from

Pennsylvania?  We will have lost perhaps tens of thousands of good jobs, already

established taxes, income for residents selling drilling rights and we will still have a hole

in the budget.

This quick fix “gas severance tax”  will stifle the economic boom occurring in our region. 

Legislators have pointed out that other gas producing states are taxing their gas industries.  Let’s take this in two

points.  Point one, it is true that other states tax the gas industry, HOWEVER, some states give tax exemptions for

horizontal wells, which most of the gas industry in the Marcellus Shale use and are far more expensive than vertical

wells.  Point two, when Governor Rendell talks about “Fair Share”, we must look at WHAT TAXES the gas industry

already pays in Pennsylvania.

According to the Commonwealth Foundation website, gas companies doing business in Pennsylvania already pay

either the highest Corporate Net Income Tax in the world or the Personal Income Tax, plus the Capital Stock and

Franchise Tax, leasing fees, and royalties, and they finance bonds to maintain local infrastructure.  The business tax

burden in other gas producing states is lower compared to Pennsylvania, which is currently ranked 11th highest in

the country.  Do we really want to increase this tax burden?

The gas industry is claiming that the State is taxing them out of business before they even get started and I agree

with them.  According to Terry Engelder, professor of geosciences at Penn State, horizontal wells cost $3 million

compared to vertical wells that cost $800,000.  Before we even explore a severance tax on the gas industry we must

first let them become solvent and recoup their investment.

One final point, our State Legislators will be using this tax to fund their ever increasing spending. 

WE MUST ADDRESS THE ISSUE OF FISCAL RESPONSIBILITY and stop this tax and spend policy.