Morning Must Reads: The Debut of Pennsylvania’s Independent Fiscal Office

Yesterday, Pennsylvania's new Independent Fiscal Office (IFO) held a conference to release its economic and budget outlook for the next five years (PDF).

The event included presentations from staff at the Philadelphia Federal Reserve, IHS Global Insight, the Bureau of Economic Analysis and the National Conference of State Legislatures.

Several of the presentations noted that Pennsylvania’s job growth weakened over the summer primarily due to substantial layoffs of teachers and other state and local workers. The director of the IFO, Matthew Knittel, very cautiously predicted that state and local layoffs are at an end.

Developing Story: Bank Swaps and Philadelphia

As Sharon Ward wrote yesterday, the Pennsylvania Budget and Policy Center put out a new report documenting the millions made by large financial institutions like Wells Fargo, Morgan Stanley and Goldman Sachs off interest rate swaps negotiated with the City and School District of Philadelphia. Those swap deals have cost the city and school district $331 million in net interest payments and cancellation fees. If interest rates continue to remain low, still-active swaps could cost the city another $240 million in future net interest payments.

Here's a quick look at how the story is being told in the daily news clips.

Morning Must Reads: PA Department of Public Welfare Adviser Resigns $100K Job Over Conservative Journal, More on Banks

The Pittsburgh Post Gazette reports this morning that Bank of New York Mellon has reached a partial settlement with the Securities and Exchange Commission (SEC). Under the deal, the bank will stop listing services as "free" that it, in fact, charges a fee for. What remains to be settled are monetary damages for allegations that the bank overcharged pension plans and other clients for financial services.

Bank Swap Deals Cost Philadelphia City, School District

Large financial institutions, including many that received financial bailouts in the wake of the financial crisis, are making hundreds of millions of dollars off interest rate swaps negotiated with the City and School District of Philadelphia.

That's the key finding in a new report the Pennsylvania Budget and Policy Center out today. We found that swap deals negotiated with banks such as Wells Fargo, Morgan Stanley and Goldman Sachs have cost the city and school district $331 million in net interest payments and cancellation fees. If interest rates continue to remain low, still-active swaps could cost the city another $240 million in future net interest payments.

Morning Must Reads: Shameful: PA Has Denied 88,000 Kids Health Care Since August

Key elements of the Corbett administration's strategy are to cut business taxes while reducing spending on public health and education. This morning we learn this strategy has resulted in the loss of health care for 88,000 Pennsylvania children.

Third and State This Week: Food Stamps Assets Test, Lagging Job Growth and State Cuts

This week, Mark Price dominated the blog, writing about income inequality, challenges facing school districts and a new policy intended to limit access to food stamps for low-income families with modest savings.

IN CASE YOU MISSED IT

  • On poverty and public welfare, Mark Price blogged about a Philadelphia Inquirer editorial questioning the wisdom of the state's reinstatement of an "assets test" for Pennsylvanians receiving food stamps, As the editorial states: "Instead of encouraging the working poor to save, Pennsylvania welfare officials want to punish families for having a few dollars in a bank account."
  • On jobs and the economy, Mark wrote that Pennsylvania is headed in the wrong direction, with November 2010-November 2011 job growth less than November 2009-November 2010.
  • On the state budget, Mark highlighted news reports on the local impacts of state cuts, and he passed on news reports on income inequality and challenges facing schools and higher education.

More blog posts next week. Keep us bookmarked and join the conversation!

Morning Must Reads: While Governor and Legislature Dally, School Buildings Crumble and Tuition Rises

The Reading School District has a backlog of building repairs approaching $750 million. Is anyone in the Governor’s office or perhaps the Legislature paying attention? To see firsthand, they don't even have to go to Reading; they can just turn on CNN this weekend!

Morning Must Reads: Wasteful Asset Tests, Unsafe Schools and an Entire School District Headed for a Shutdown

The Philadelphia Inquirer has an editorial this morning questioning the wisdom of the Corbett administration's move to limit access to food stamps for poor families.

The Inquirer reported earlier this week that the state would reinstate an "assets test" for Pennsylvanians receiving food stamps beginning in May.

This means that anyone under age 60 with more than $2,000 in the bank ($3,250 for those over 60) will no longer be eligible for food stamps. Houses, retirement benefits and a single vehicle are not counted. The $2,000 threshold, a minimum set by the USDA, hasn't changed since 1980.

Morning Must Reads: Where Is the Shared Sacrifice?

When the economy is as weak as it is today, the prudent approach to the state budget is a balanced approach that looks to cut spending and raise additional revenue. A Patriot-News editorial this morning points out that nonprofit groups providing services to victims of domestic violence and rape, as well as people with severe health problems, have been particularly hard hit by the last several years of budget cutting.

Morning Must Reads: New Year, Same Old Economic Austerity

From November 2009 to November 2010, Pennsylvania added 63,300 jobs. From November 2010 to November 2011, the state added just 51,000.

Wait, isn't that backwards? Nope. A weak economy, the end of federal Recovery Act funds and state budget cuts slowed the pace of Pennsylvania job growth in the most recent year.

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