Morning Must Reads: Helping the Poor Not a Core Mission of the PA Department of Public Welfare?

The Philadelphia Inquirer this morning reports on the move by the Corbett administration to end programs that help low-income households file their taxes.

These programs are especially important because they raise the rate at which low-income households file for the Earned Income Tax Credit (EITC). The credit provides these households with much-needed income that ends up getting spent in the local community.

Asked about the cuts, a spokesperson for the Department of Public Welfare, an agency that spent thousands on a flagpole recently, noted that helping people to apply for the EITC is not a core service of the Department of Public Welfare.

The Corbett administration has stopped funding a program that helped low-income working people get federal tax credits that kept them out of poverty.

The program, administered by the Department of Public Welfare for just over $500,000, also helped pay for low-income workers to have their taxes prepared free, which saves people at or below the poverty line hundreds of dollars, advocates say.

The cut echoes growing concerns among Republicans in Congress about the federal Earned Income Tax Credit (EITC) and other similar measures, seen as too much government in a time of financial crisis.

That would be a reversal of decades of bipartisan support for the tax credit, once called "the best antipoverty program in America" by President Ronald Reagan.

DPW spokeswoman Donna Morgan said funding was ended "because of budgetary constraints." She added, "We felt tax services is an extra service of DPW and not a core service" during a time of fiscal difficulties...


"I think the cuts are part of a general perspective of not really looking at what lower-income people really need," [Pathways PA CEO Carol] Goertzel said. "They're the silent minority who don't seem to matter. And they're not the ones who'll scream to the governor or march in protest anywhere."

Khadijah Jones, director of the Campaign for Working Families, said she learned — in a letter from InspiriTec in Harrisburg, a firm that processes invoices for DPW — that she'd lose her entire budget for tax work...

Jones said she used the $300,000 from DPW last year to obtain $20 million in tax refunds and credits for clients.

The Pittsburgh Post-Gazette reports a new contract for the workers at the Port Authority in Pittsburgh is under review by members of Amalgamated Transit Union Local 85. The deal is contingent on the Corbett administration providing additional state aid to the Port Authority.

By all accounts, public sector pensions seem likely to be a big issue over the next 12 months. Keystone Research Center's executive director, economist and potential stockholder in Manchester United testified on Tuesday before the House Finance and State Government Committees on proposals to switch state and public school employee pensions to a 401(k) plan.

WITF got what Steve said mostly right. (The last sentence in the excerpt below is too strong: Steve said only that the proposed defined contribution plan would provide a more secure retirement than private defined contribution plans into which employers contribute little or nothing.)

A joint panel of the state House Finance and State Government committees has kick-started the Legislature’s discussion of pension reform. Gov. Corbett has highlighted the issue as the number one legislative priority this fall, and the opening salvo of what’s expected to be a protracted debate began this week, as lawmakers tried to wrap their heads around the complicated mess of problems plaguing the state’s pension system, like a down economy and shortsighted underfunding.

Most of the testimony revolved around proposals to switch state and public school employees to a 401(k)-style retirement plan, in which it’s their contribution that is locked into place, instead of their benefit...

Testimony from a liberal-leaning group argued that switching to defined contribution plans could pinch the pocketbooks of public employees. Steve Herzenberg, director of the Keystone Research Center, said such a plan costs more to manage. He did acknowledge that it ultimately saves employers money 
 that’s why it’s the favored retirement plan of private companies, he said. But he warned that public workers without any education beyond high school will be the most vulnerable to drastic reductions in retirement benefits under a change in their retirement plans.

“You’ve taken the one place in our economy where food service workers and bus drivers and school secretaries can have a secure retirement 
 you’ve denied them that opportunity and you’ve transferred the money to financial services firms,” said Herzenberg. Later, he did agree with the sponsor of a bill to switch the public pension plans that the proposed rates of contributions by both the employer and employees would result in a decent retirement for the employee.

The always fabulous Rick Smith Show put up a brief question-and-answer from the hearing. Enjoy.

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