Governor Tom Corbett:
After having carefully read and digested your proposal for the Pennsylvania budget of 2011, after having considered the relevant facts concerning the Commonwealth’s fiscal health, the relationship of the state to its constitutional responsibilities, and particularly your proposal for cutting by 54 percent the state appropriation for the Pennsylvania State System of Higher Education (PASSHE), we, the undersigned, must conclude that your motives have little to do with the current recession—and everything to do with an ideologically motivated agenda that aims to privatize and corporatize institutions traditionally identified as public goods. It’s evident, moreover, that part of that agenda is to undermine Pennsylvania’s public unions by starving the institutions that employ union members. We are compelled to conclude this for a number of reasons:
1. Failing to tax natural gas extraction:
You claim the state is on the brink of fiscal disaster and must fill a $4 billion dollar budget shortfall; yet, you refuse to impose a severance tax (or any tax) on Marcellus Shale Drilling. You claim that the drilling companies will go elsewhere were such a tax imposed. False. Ninety-six percent of states that drill for natural gas impose a severance tax—including the largest gas drilling state, Texas. No evidence supports the claim that companies drilling in those states are threatening to leave. What discourages gas drilling, according to a respected University of Wyoming study, isn’t taxation but rather the market price of natural gas. Moreover, the Marcellus drilling fields are limited—drilling is only possible where it is possible—and this suggests that companies like Cabot and Penneco aren’t going anywhere. Indeed, their profit margins promise nothing but substantial future gains, and at a 5 percent tax (akin to West Virginia’s), that was closely regulated to prevent customer gouging/passing the expense on to customers, a projected minimum of 200 million a year could be raised to fund essential social services and education in what some are now calling the Saudi Arabia of natural gas extraction.
You also claim that drilling will bring wealth and jobs to Pennsylvania, but this too is false on the evidence. In fact, profits from natural gas extraction exit the state at about the same speed at which the environment is destroyed. Even worse, as Pro Publica reports, “the state’s oil and gas inspectors have been stripped of their power to issue violations to the drilling companies they regulate,” increasing profits for the drilling companies at the cost of Pennsylvania’s environment and its citizens who will no doubt shoulder the burden of restoration after the drillers have left—including the restoration of 74,000 acres of state forest land. You insist that “we need to send a powerful message to the Pennsylvania Business Community that Pennsylvania is open for business.” Indeed you have—at the cost of every citizen of the Commonwealth who works, goes to school, attends a state university, drinks Pennsylvania water, utilizes Pennsylvania social services, or has any sense for the fairness and equity embodied in the Pennsylvania Constitution.
2. Ideological motivation:
Given the clear economic advantages for taxing natural gas extraction, we must surmise that your opposition to it is either ideological or self-serving—or both. Fact: You received more than $800,000 in donations from drilling corporations for your gubernatorial campaign. Fact: in delegating some of the state’s most critical environmental decisions over to Alan C. Walker (appointed to head the Department of Community and Economic Development), CEO of Bradford Energy and Bradford Coal—a corporation who donated $184,000 to your campaign—you have effectively put a fox in charge of the henhouse as ProPublica reported:
Walker’s ties to the energy industry are deep. He is listed on state disclosure forms as an executive of the Pennsylvania Coal Association and he has served as chairman of the Pennsylvania Chamber of Business and Industry…[L]ike many energy companies, his, too, have run into problems with the state. In 2002, three of Walker’s coal companies notified Pennsylvania’s Department of Environmental Protection that they had run out of money and were going to stop treating the 173 million gallons of polluted water they produced each year and released into tributaries of the Susquehanna River. The state eventually got a court injunction to force them to continue treating the wastewater as required by state and federal law.
Why, Governor Corbett, should we believe that your investment in natural gas extraction has to do with anything other than an ideology that seeks to maximize private profit of a public good—all the while padding the pockets of your political and business allies? Why shouldn’t we think you endorse a new suggested slogan for Pennsylvania: PA, Inc.—like OH, MI, and WI only dirtier, poorer, and dumber? Taxing natural gas extraction (a) would not drive any relevant corporation out of the state, (b) would provide for significant state revenue to fund social services, education, and a department of environmental protection able to do its job. What is the argument against it?
3. An end to publicly funded state universities:
This brings us directly to your proposal to lacerate the funding of PASSHE. In addition to refusing to tax gas extraction—and in the same week you drastically reduced funding for health services for the poorest of Pennsylvania citizens—you offered $833 million in tax breaks to corporations who do business in a state which already taxes fewer than 30 percent of corporate enterprises: “Governor Corbett announced that Pennsylvania’s corporate tax will allow corporations to follow federal accelerated bonus depreciation rules adopted as part of the tax cut compromise in December. The rules allow companies to write off or “expense” 100% of equipment purchases made in the last quarter of 2010 and all of Tax Year 2011…Bonus depreciation goes to investment in other states not just Pennsylvania. Companies do not have to purchase equipment in the state to take advantage of the provision. Thus the bonus may lead to no new investment in the state” (Pennsylvania Budget and Policy Center). In other words, such a give-away will not benefit Pennsylvanians. Nonetheless, to finance this generous gift to your corporate allies, you propose devastating education—leaving local school districts and their taxpayers to foot the tsunami-sized bill coming their way, undermining education at the K-12 level, and insuring that students are under-prepared for college.
To add insult to injury, you also propose cutting state funding to the very colleges and universities that middle and working class families have depended on for generations to educate their children, the PASSHE. Ninety percent of PASSHE students are Pennsylvanians. Hence, the perversity of your reasoning on this matter can hardly be overdrawn: You insist that PASSHE universities have failed to “live within their means,” and that the evidence of this is found in rising tuitions—but you fail to acknowledge that state funding for PASSHE has already been cut to less than one third of total funding. It is, moreover, false to claim that PASSHE has failed to “live with its means.” In fact, three PASSHE universities, West Chester, Millersville, and Bloomsburg made Kiplinger’s prestigious list of the 100 best state universities in the United States. Their criteria: “the best education at the best price” (apscuf.wordpress.com). Facts: “In FY 2010-2011, PASSHE will receive nearly $8.3 million less in state funds than it did in FY 2001-2002.Tuition increases have been below the rate of inflation in four of the last six years…Controlled for inflation, the System will operate with 13% fewer dollars from all sources per student in FY 2010-11 than it did in FY 1999-2000. Despite fiscal challenges, PASSHE continues to offer the lowest-cost baccalaureate degree programs in the state. However, the combination of flat state funding and low tuition increases has created historic shortfalls for the universities, which, if continued, could translate into viability issues” (www.passhe.edu).
Add another 54% cut in funding, and here’s what “viability issues” means in plain English:
A 25-33% rise in tuition that will exclude many deserving Pennsylvania citizens from being able to access higher education.
The laying-off of faculty, particularly adjunct faculty, and the resultant loss of courses and opportunities for students.
The inability to attract high quality faculty to the state, and the resultant loss of the quality instruction which PASSHE can clearly demonstrate that it provides. Indeed, at least four PASSHE graduates are appointees in your government.
The expansion of class size, and the resultant loss of high quality instruction made possible by smaller classes and access to professors.
Brain drain from the Commonwealth as students seek educational opportunities elsewhere in the pursuit not only of their dreams, but their economic wherewithal.
Campus closures and the resultant loss of access to students to higher education in their communities.
No valid argument can be made for cutting funding for university education in Pennsylvania. Indeed, there is every argument for funding education at a much higher level, especially if you mean what you say, namely, that you want to see a citizenry fully equipped to participate in the global economy. Moreover, as J.L. Helms argued in 1985, “[s]tates and local tax increases significantly lower economic growth when the revenue is used to fund transfer payments, but when the revenue is used to finance improved public services such as education, highways, and public health and safety, the impact on location and production decisions provided by the enhanced services more than counterbalance the disincentive effects of the associated taxes” (Helms, 1985). The consequences of eviscerating support for education, especially for middle class working families will be a blow for their aspirations and their communities. Hence, again, we are compelled to wonder what are your motives; they cannot be preparing Pennsylvanians to live and thrive in a globalized world; they cannot be to encourage what is essential to a thriving culture—the humanities, arts, and music; they cannot be what the Pennsylvania Constitution explicitly specifies is the responsibility of the state—the education of its citizens and the provision of their basic welfare.
4. The destruction of public sector unions:
Much like your apparent aims in effectively selling off Pennsylvania’s environment and resources to natural gas interests, your aim in undermining PASSHE funding is to see the end of the state university system in Pennsylvania, to see, in other words, a fully privatized, for-profit, university system. But the only way to accomplish this—much like what are perhaps your models in Ohio, Michigan, Indiana, and Wisconsin—is to destroy the one real obstacle in your way—the public sector unions. Unlike Governor Scott Walker who committed a political blunder in seeking to destroy collective bargaining rights for state workers in Wisconsin through legislation, you have in fact executed a far more insidious strategy of starving public sector unions like APSCUF (The Association of Pennsylvania State College and University Faculties) by starving their institutions of funding. One way to force the state universities to either privatize or close is by cutting the funding that supports their central missions—a mission instantiated by their faculties who, through the power of collective bargaining, are the bedrock of the excellent education offered by the PASSHE. As you surely must know, what such devastating cuts will mean is that the dream of higher education for thousands of Pennsylvanians will come to a grinding halt next year. We can only gather that you regard this as an acceptable casualty in the drive to corporatize higher education in the state.
This agenda is unconscionable, and it is premised on the erroneous view that the budget deficit is the product of funding for public services and goods. It is not. Rather, it’s the result of licentious gratuities to corporate entities—some from whom you directly benefit. This has likely contributed to forty-one percent of your own Republican Party members recently assessing your performance as “poor.” The rallies on the steps of the state house also clearly show where the vast majority of PASSHE students stand, particularly the Lock Haven students who ran one hundred miles to get your attention. A Franklin and Marshall College poll demonstrates that two thirds of Pennsylvanians oppose the budget cuts. In fact, these same Pennsylvanians who generally oppose tax hikes made clear they support taxing Marcellus Shale drilling in the interest of funding education (www.pennlive.com). Given all of the facts, Governor Corbett, what could justify what amounts to the re-invention of the Commonwealth as Pennsylvania, Inc. other than that this is precisely your goal? The problem, of course, is that the Constitution of Pennsylvania is a charter for a state—not a business plan for a corporation.
For the sake of the state and especially its citizens, we hope you will reconsider this ill-fated ideological agenda for the sake of your state and its citizens.