Solving PA’s School Property Tax Problem – a Radical Departure From Relief or Elimination Schemes


Seeking Simplicity & Fairness that’s Self Regulating & Self Limiting


Pennsylvania has been kicking around various ideas to either provide relief from or totally eliminate local school property taxes for nearly 40 years.  SB/HB 76 is the current legislation that, while potentially close to passage as the result of unrelenting textbook grassroots support over many years, falls short on several accounts.  In what follows I’ll attempt to explain and offer an alternative.

Funding schemes have created wild distortions in the ratio of local to state funding obligation across our 500 school districts, aided significantly by a hold harmless provision, whereby districts in attendance decline cannot have their state funding cut back.  District obligation of funding ranges from less than 40% to over 80%.  Spending per student is wildly disparate also, ranging 3 times, from about $10,000 to about $30,000.  Some districts run a tight ship while others simply spend too much.  The number of districts itself cannot help but create areas of advantageous and very difficult tax bases, from which to derive sufficient funds locally.

The impact of the local obligation thus varies considerably across the state for different reasons.  Generally, citizens who have benefited by hold harmless are not complaining.  Others in high growth areas or that have overspent, reside within a challenging tax base, or for whatever reason,  have faced school property tax hikes that have far outstripped inflation.  In the most extreme examples monthly school property tax obligation exceeds the mortgage payment, and homes have become hard to sell while falling in value as demand has been driven away.

Some people have been forced to sell to avoid foreclosure and others driven into it by inability to pay surging property taxes.  It is this extreme, down to where it doesn’t hurt so much, that has driven a powerful, centrally led, unusually well organized, grassroots push to totally eliminate the school property tax.

Sadly, the fervor of the school property tax elimination movement, has crowded out serious discussion of alternatives or sufficient questioning of what could go wrong, to the point that individuals and groups in opposition have mostly maintained that position quietly, to not offend those they normally find allies on liberty and limited government issues.  Departures have even been met with threats and ridicule on occasion.  What follows will risk that wrath.

So what are my objections to and problems with this popular legislation?

First, the problem has not been accurately defined.  All areas of the state don’t favor the huge tax shift that would be necessary with 76.  They’re satisfied with the status quo, suggesting the property tax is secondary to the undeniable problem of the amount of the school property tax in some areas.  There appears to be an amount of school property taxation below which it’s not worth making a fuss.

Make no mistake.  Any substantial tax on real estate has problems, chiefly that it’s difficult to apply fairly, but goes beyond that.  While real estate is no more property than the money in a paycheck exchanged for labor,  or the money withheld from a paycheck (that makes us treat it too lightly),  it represents accumulated wealth, income that’s survived ongoing expenses, wealth that has been purposed by choice, often is near term illiquid, and has uniquely acquired sentimental value over time.  Then that same wealth, apart from any current ability to pay, is repeatedly taxed over and over again.

It’s a form of wealth that is not regularly priced to market as stocks or bonds.  Its value and revaluation by costly reassessment is an educated guess beyond its last known sale price at market.  Some people regularly challenge assessments and others regularly evade permits when making improvements, adding to the unfairness in application.  Yet local taxing authorities rely on the relative stability of the property tax in fluctuating economic conditions, to ease budgeting.

Another problem with the local school property tax elimination scheme is its shift of all funding to the state.  On many occasions I’ve asked local elimination  supporters if they would favor shifting all school funding to the Federal level.  I’ve never gotten one expression of agreement.  They know control would go to the source of the funding, yet are so frustrated with high and rising school taxes they are willing to let the state take over all funding, risking any impositions it may bring.

They make the argument that local districts no longer maintain local control anyway, due to various state and federal mandates.  When I see my local board discuss whether to field a football team, the need to replace the turf, build a new running track, repair a building, sell a building, build a building, decide what instructional materials to use or how much to pay employees, I know this is not true.  I expect there would be less happiness after passing 76, when the state announces all will use the same books and instructional materials because they can make a bulk purchase or that one union contract and pay scale will apply to all districts, just as the pension agreement.

By the promise of 76 to replace all current property tax revenue dollar for dollar, then strictly limit spending increases, by allowing exceptions by local EIT or PIT application, only for specific purposes, for a defined length of time, after approval by no exception referenda, the law seems to place an unfair burden on those who have been most frugal and favor the spendthrifts.  As unexpected needs arise the wasteful, at least for some time, will have more wiggle room to make cuts and diversions.  Call it an odd blessing of wastefulness.

With each district knowing how much funding they will have available without having to ask the taxpayers for more, there will be a force to contain but not cut spending.  The motivation may more likely be to make sure every penny is spent so no one suggests sending less state funding in the future.

While 76 supporters suppose a great benefit in stripping local elected officials of their taxing authority by bumping the state PIT from 3.07% to 4.34%, while calling a 41% hike modest, and the SUT from 6% to 7% over more goods and services, then shielding those revenues in a lock box, and setting limits on yearly increases, they trust state elected officials to leave everything alone down the road.  Future officials could jack up the PIT and SUT, raid the lock box, obliterate the ban on the local school property tax itself, or impose a property tax from the state level.  There should either be promise of something wonderful for the risk, or the much higher hurdle of constitutional amendments.

Supporters’ belief and claims that the tax money shift would magically cause an economic boom should be approached with extreme skepticism.  Almost the same amount of money is removed from Pennsylvania’s private sector economy.  A free ride would exist but would be small, from non citizens paying the increases in the SUT while visiting or passing through.

There are winners and losers.  Accepting claims property values would jump 10% or more is good for people who own property, or realtors’ commissions, but it heightens the barrier for young people saving for a down payment, after being impacted by a 41% hike in the tax on their income and paying higher taxes when they make purchases.  Big winners are retired people whose spending needs are less and face no state tax on pension income.

We should have been curious along the way, why professional conservative organizations have never been more than neutral with their positions on 76.  If there was confidence 76 would yield the economic boom predicted, based on sound academic study produced by their extensive research staffs, it’s hard to believe organizations like Americans for Prosperity, Commonwealth Foundation, NFIB, or the PA Manufacturers Association would not have been solidly in support.

76 is not without risks and even supporters admit it is not perfect legislation.  The amount of the tax shift to replace all money raised by local property taxes now is close to $14 billion.

One nagging question remains.  Why do liberty minded, limited government types, especially at the forefront of promoting 76, on this one issue, submit to entrusting government at a higher level, more distant from the people?

So, if not 76, then what?

To start, I agree with 76 supporters that any scheme to offer school property tax relief without total elimination risks return of even higher taxes locally and overall in the future.  Further the distortions caused by hold harmless need to be eliminated by whatever change is made to the current system, and if not done at once, likely will remain forever.

Assuming the core local funding (apart from spending) problem really lies in the ratio of state to local funding responsibility, with the property tax itself a secondary but important issue, the first step should be to more equally distribute state to local funding by defining the ratio.

The local districts, for their part, would be free to spend whatever and however they see fit.  But if districts completely control spending, and the state commits to a defined funding obligation, isn’t that crazy?  It certainly could be.

To avoid that obvious hazard, districts should be empowered with a moveable state to local funding ratio they can control, to or against their favor, depending on how much they actually spend per student relative to their peers.  While they are free to spend as much as they want, as spending per student rises relative to other districts, funding for that portion of spending shifts rapidly and heavily to local responsibility.  Heavy spenders could not expect to impose their largess on others.  This would force attention to the margins of local spending choices, by a realization that each district is in competition with others to not just contain but reduce spending and become more efficient.  Its integrity could only be confounded by the improbable collusion of all 500 districts with each other.

I’ll note here that this proposal will require some small immediate tax shift to state PIT and SUT, but far less than the massive shift required by 76.  The goal is to more equally share state and local funding obligations, then keep it that way, as defined by a funding ratio statute.

With that I suggest the following 5 steps:

1) Rank all 500 districts by actual total spending per student as determined by average daily enrollment, or preferably, average daily attendance.

2) Establish funding ratio breakpoints by relative spending per student.  While for illustration only (actual breakpoints would have to be determined by study) I suggest the following :

Up to 60th percentile funding = 60% state : 40% local

60th-70th percentile = 50% state : 50% local

70th-80th percentile = 40% state : 60% local

80th-90th percentile = 20% state : 80% local

>90th percentile = 0% state : 100% local

This means any district keeping spending per student below the 60th percentile would only be responsible for 40% of its funding.  The ratio of state funding responsibility is purposely tilted toward the low end, with the idea of elimination of some of the dubious factor adjustments for items like number of English as a second language students or free lunch eligibility, etc. that are applied today.

3) Give districts much more leeway in how to meet their local obligation by options to shift away from the traditional assessment based property tax.  Such may include EIT, PIT, sales tax, flat per capita tax, flat per registered vehicle tax, higher real estate transfer tax, or even property taxation that is always based on the last known value established by the purchase price at market, thus eliminating assessments, with only one exception, for sales among friends or family, at below the true open market price.

4) Provide an opportunity for districts to slightly shift their funding obligation onto the current users of the system by allowing a charge of up to 3% of their total spending per student as a per student tuition.  This small imposition of ownership, “skin in the game”, so to say, would likely provoke very significant response expressed as more pressure on elected boards to find efficiencies.

5) Investigate consolidation of districts to average the effect of pockets of poor tax bases across wider geographic and economic areas.

That’s the concept.  Yes, it requires a certain leap of faith, but confidence in its viability is vested in the predictability of how people react to properly presented economic incentives and constraints when making free choices in their self interest.  Competition is key to achieving a spending and funding scheme that is both self limiting and self regulating, while allowing free choice and government that resides close to the people.

Does Obamacare Contain a Serious Violation of the 14th Amendment?


Is another challenge in its future?

While I’m neither a lawyer nor a legal scholar I do have an interest in things legal.  I also have an interest in the healthcare issue and have posted many original articles and op-eds on this blog.  So when I noticed something at that seemed weird and just not right it stuck in my mind.  I bounced my thoughts around with friends and organizations via social media.  Finally when Pacific Legal Foundation tweeted that they were combing through the issue and would address it in a weekly podcast, I felt validated, humbled and eagerly await their opinion.

So what is the issue and could it eventually provoke a fourth (more on that later) Obamacare challenge to reach the Supreme Court?  From the home page of, rolling over “Get Answers”, then under “Coverage for…”, finally clicking “American Indians and Alaska Natives” a story of unequal special treatment for one group over others unfolds.

The level of special treatment is shocking in regard to our Constitution’s 14th Amendment which requires equal protection under the law for all citizens.  Qualification comes with membership in a Federally recognized tribe or being an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder.

American Indians and Alaska Natives most favorably have no closed season under the ACA.  They can sign up for a health plan on the exchange anytime they want and even change plans once per month.  They can choose to have no insurance at all without paying the tax penalty.  On top of that, up to 300% of federal poverty level (up to around $70,650 for a family of 4) they pay ZERO copay or deductible.  How is this equal treatment under the law?

Every other group not exempted from the law by provisions in the law, generally based on religious beliefs, is subject to the same rules governing the exchanges as anyone else.  This includes a closed season three quarters of the year, a hefty tax for choosing to go uninsured, and reduced copays and deductibles only up to 250% of the federal poverty level on silver plans.

Closed seasons, when there’s guaranteed issue as with the ACA, prevent gaming the system exactly as the special provisions for American Indians and Alaska Natives allow.  No closed season opens the door to only signing up for insurance after the discovery of a serious illness.  This is precisely why employer provided health benefits, which have long been guaranteed issue, have an annual open season for about a month each year, barring specified life event exceptions.  For such plans to work time commitment at all times must be required of everyone.

There is an Indian Health Service already on reservations where Indians can get free healthcare from Indian healthcare providers or others if referred by one, but discusses advantages of additionally obtaining plans in the exchanges, suggesting better access to programs not provided by other Indian health programs.  They also suggest this will help the tribe by allowing more services to others, suggesting tribal programs run on a globally limited budget.  Think rationing of services or extended waiting times that accompany such approaches and perhaps the ineptitude of the Veterans Administration as well.

This raises questions of possible reasons if American Indians and Alaska Natives could or should be treated unlike ordinary citizens under the Constitution.  Are they citizens at all?  Aren’t Indians sovereigns within our country, nations within a nation?  The answer seems to be to a point.  The “FAQ” section of the Bureau of Indian Affairs website provides many clues and answers.

First let’s consider eligibility.  Described in the FAQ, membership in a federally recognized tribe is determined by each tribe.  It makes clear that “there is no single federal or tribal criterion or standard” and eligibility for membership “will differ from tribe to tribe”.

If this doesn’t seem loose enough, the FAQ tells us that “blood quantum” is not the only means by which a person is considered, including “how strongly a person identifies himself or herself as an American Indian or Alaska Native”.  As it’s becoming popular to identify outside one’s race or even gender, it appears any of the 561 recognized tribes could open membership to anyone willing to learn the history and customs and believe enough, perhaps even paying a hefty entry fee in the process, thereby granting them special benefits under Obamacare too!

Even among those with sufficient blood quantum, estimated by the Census Bureau to be 4.5 million in 2007, enrolled tribal members are around 2 million, less than one half.  Of the total population more than half do not live on reservations, and can be integrated into the larger society to any degree, while still maintaining tribal membership.

It’s worth noting some of the other facts provided in the FAQ as follows:

American Indians are citizens of the United States and the states in which they reside, and have been so, generally, since 1924.

American Indians have the right to vote.

American Indians can run for and hold any public office as any other US citizen.

American Indians do not have special rights different from other US citizens unless based on treaties or other arrangements.

American Indians do pay taxes like everyone else with the exception of state taxes when living or conducting business on a reservation.

Laws that apply to non Indians also apply to Indians except on reservations where only federal and tribal laws apply to members.  Only state laws do not apply to members when living on a reservation.

American Indians do serve in the armed forces of the United States.

So what is the takeaway of all this?  It seems proper application of the 14th Amendment would back and provide standing for any uninsured non Indian to be exempt from the individual mandate and its tax or require American Indians and Alaskan Natives to be subject to it.

It also seems that any uninsured non Indian tribal member who encounters a serious illness outside the open season without a qualifying event, would have standing to claim harm by being denied immediate access to insurance on an exchange as is afforded American Indians or Alaskan Natives primarily as a result of their ethnicity.  It’s with this I await what the legal minds at Pacific Legal have to say.

Pacific Legal Foundation, which has been defending against government impositions on property rights and liberty since 1973, is involved with another Obamacare case, Sissel vs HHS, that could invalidate the entire law as a violation of the origination clause, and is now under appeal to the Supreme Court.  If accepted it will be the 3rd challenge, hence the chance a possible violation of the 14th Amendment outlined here could eventually become number four.

Pacific Legal produces a weekly podcast each Wednesday and maintains an informative website, both with stories and updates on the many fascinating cases they agree to accept.  Importantly and impressively they represent every client and every case at no charge.  Liberty minded individuals would do well to consider supporting them with a donation.

King v Burwell, Marijuana, and a Path to Marginalize Obamacare in its Presence


States Should Start It / If Weed is Worth it……..

Short of repealing Obamacare the next best thing would be finding a method to marginalize it in its presence.  Oddly King v Burwell, along with 23 states plus DC that approved medical use of marijuana and three plus DC that approved recreational posession and use of the plant, may provide a path to doing just that if King prevails.

King v Burwell is the case challenging whether government subsidies can apply to qualified health insurance sold on exchanges run by the federal government.  Proponents of King, led by Michael Cannon of Cato Institute, and Jonathan Adler of Case Western Reserve University School of Law, contend the law is clear that subsidies can only be applied in exchanges established by the states.  As the issue was raised, the IRS simply declared that federal exchanges too are eligible for subsidies.

Four separate but related court cases challenged this IRS decision, and in November the Supreme Court agreed to hear King.  The case is scheduled to be heard March 4th, with a decision sometime in June.  In the event King prevails, most agree there will ensue chaos of a sudden affordability vacuum if the approximately 5 million people who own qualified health insurance bought in states with federal exchanges lose their subsidies.  This will likely bring intense political pressure to find a fix, even as businesses, relieved of penalties triggered by employees obtaining subsidies will argue for other remedies.

In addition, many individuals will find the cost of unsubsidized ACA triggering plans now exceed 8% of their income, relieving them of the individual mandate and its tax for not buying insurance, except they will then either have to scrape to find the unsubsidized premium or be left uninsured with no other choices.

Several Republican governors of federal exchange states, including rising star Scott Walker are feeling nervous about a King win, and don’t seem to know what they may be able to do.  At a National Governors Association event, they took to saying that it’s Congress’s job to deal with any fallout.  None expressed any ideas of what states may be able to do short of somehow restoring the subsidies.

So what if federal exchange states, rather than looking to Congress, switching to a state exchange or piggybacking on another state’s successful state exchange, as has been suggested, would simply make alternate, non ACA qualified, more affordable choices available off the exchange?

Since I had never seen evidence to the contrary and had been told by both Andrew Schlafly, attorney with the Association of American Physicians and Surgeons, and Oklahoma Attorney General Scott Pruitt, whose name is on one of the other three cases, that they knew of nothing in the ACA to prohibit states from making available non ACA qualified choices off the exchange, I heretofore thought this was possible and within the law.

My take had been that the ACA only defined what must be in health insurance plans to be on the exchange, qualify for subidy, and avoid paying the mandate tax, making possible, with or without King, state provision of a parallel free system along side the government control system, allowing states, with their retained authority to regulate insurance through their insurance departments, the potential to allow or even require the availability of alternate choices off the exchange, understanding non qualified plans would not avoid the mandate tax.

I thought this may be especially attractive to those individuals discovering low cost direct primary care arrangements, where an increasing number of primary care physicians are offering unlimited care for a monthly fee.  Here is a rapidly growing need for pure catastrophic insurance as a compliment, that ACA qualified plans have shut down.

I believed all this.  Then, February 9, in a twitter exchange with Phil Kerpen, President of American Commitment, he sent me a link indicating otherwise.  There is indeed federal code that prohibits what I thought was possible.  The office of my Congressman, also previously unaware, identified it as a law from the 1940s that had been amended by Obamacare.  Talk of leaving no stone of iron fisted control unturned!

So what to do now?  State offer of non ACA compliant health insurance off the exchange, no matter how welcome, or as immunization against the affordability aspects of a King win in 37 federal exchange states, would run afoul of Federal law.  It would be an act of defiance, but isn’t this what 23 states plus the District of Columbia did when they approved the medical use of marijuana?  Taking it further, isn’t this what Colorado, Washington, and now Alaska and DC did by approving the recreational use of marijuana?  So far, for those state actions, the feds have chosen to stand down.  If legal weed is important enough to risk federal admonishment, how is offering citizens, still willing to pay the mandate tax, the choice of affordable non ACA qualified options off the exchange not?  It would seem.

More likely, on an Obamacare challenge, the feds would push back hard, but states would have arguments in defense, as well as significant public support that may even exceed weed, especially if King prevails, subsidies are lost, and a sudden affordability vacuum ensues.  While the stand down on marijuana would mean nothing in a legal sense, it may help state defiance on Obamacare play well in the court of public opinion, giving state officials more backbone to act.

States can point to their continued regulation of health insurance where the feds have found it convenient to not supplant them.  State coverage mandates in excess of ACA essential minimum coverage rules still apply, as do their definitions of regional pricing zone boundaries.  They can question also why their regulation of all other types of insurance remains intact, without federal meddling.

There’s the argument McCarran-Ferguson 1945 still gives states the authority to offer alternatives, so long as they don’t attempt to eliminate the federally designed plans.  They could claim restriction only to such limited choices represents overbearing federal imposition and violates the Constitutionally protected freedom of their citizens to contract.  They could point to a long standing tradition of state regulation of insurance in return for insurance being exempt from federal antitrust law.

Perhaps as important, since the ACA unquestionably allows doing absolutely nothing upon payment of the mandate tax, any opposition would be forced into the absurd argument that doing something substantially more than nothing in protecting others from one’s potential inability to pay their medical bills should be prevented, so long as the tax is paid.  In fact, Congress, seeing this argument play out, may be motivated to specifically allow non ACA qualified offerings and reduce or eliminate the mandate tax for buyers, in recognition of their obvious reduction in potential liability to others by their actions.

If only one state or a few, federal exchange or otherwise, would boldly take this course of action, we would present, at least the opportunity to embark on a path to marginalize Obamacare in its presence.  A parallel free system, alongside the government control system could be created, and repeal would no longer be necessary as people could freely choose which system they prefer.

The sudden chaos of a King win would be the perfect time to have alternate choices available, as the potential to quickly attract sufficient numbers to spread the risk enough to insure viability would be most opportune.  If weed is worth it………

Don’t Be Like Me…Resolve to Get That Colonoscopy!


Now over two weeks into 2015, those well intended resolutions, often centered around taking better care of one’s self, are no doubt already beginning to be forgotten.  Gym attendance is likely already on the slide.  Diets are being forgotten.  Tobacco revenue is recovering.  All as accepting return to the status quo proves easier than determined vigilance for many.

Most of us can take better care of ourselves and should keep tabs on the state of our health.  As I’ve learned the hard way, having that screening colonoscopy, especially after age 50, in spite of a family history, is one diagnostic test not to be avoided.

Not being one to worry or “run to meet trouble”, as an old friend used to say, for the 13 years that it has been available at no cost to me, I’ve avoided and made excuses for getting this most important procedure.  In spite of reminders and urging from my wife, as well as the fact that my mother had polyps removed, I took the position that only a small percent of those who don’t bother to get checked, will actually develop colon cancer.  While this assumption is true, I’m now facing what should have been caught in its earliest stages, likely as a  precancerous polyp, years ago.

The trouble with colorectal cancer is that it can grow without pain or notice until it becomes very serious, causing a bowel blockage or spreading to other organs.  Nor do tumors always bleed.  Fortunately mine did.  A couple months ago, when I noticed blood in my stool, I knew something was amiss.  I went to a primary care physician for only the second time in my adult life for a head to toe checkup.

Of course when I described the symptom that motivated my visit, a diagnostic colonoscopy was arranged a week later, on Christmas eve.  An “ulcerated mass”, confirmed as cancerous by pathology inspection, was discovered along with a polyp showing cancerous attributes.  A surgical resection of part of my colon was suggested.

Three days later I had a lower abdominal CT scan and chest x-ray that fortunately showed no obvious spread of my cancer to other organs.  Although that’s great news, if the cancer is found in surrounding lymph nodes that will be harvested and inspected during my surgery, I’ll certainly be facing chemotherapy follow up to try to attain a cure, often considered 5 year cancer free survival.  My odds of achieving that outcome are about 65%.

So, yes, my negligence to have regular medical exams, and a screening colonoscopy in particular, may yet prove a fatal choice.  I can’t begin to explain the feeling of personal complicity and stupidity that comes with my situation, nor the impact this has on friends and loved ones.  My hope, in writing this, revealing the details of my medical condition, is to spare others.  Don’t be me! Resolve to get that screening colonoscopy!  Don’t make excuses!

Even for those without insurance coverage there are options.  Healthcare Bluebook is a great resource to find fair prices in your area, that can be used to negotiate with providers.  In the Harrisburg, PA area where I live, the fair price for a screening colonoscopy, that amount normally accepted as insurance payment by network physicians, is listed as $1609.  This is broken down as $676 facility fee, $413 physician fee, and $520 anesthesia fee.  Also, colonoscopies can be, and sometimes are, done without anesthesia.

Another option is MediBid, a medical brokerage service started by a Canadian immigrant, Ralph Weber, to connect patients and physicians for specific procedures nationwide.  As one notable example, KATU, Channel 2, Portland, reported in September, 2013, the story of a Chicago man without insurance, looking for a colonoscopy.  Through Medibid he found a physician in McMinnville, OR.  His cost for the procedure, including airfare, lodging, and a rental car was less than half the average $3500 best price he could find in the Chicago area.

Three days from now I’ll be in surgery, beginning the process of trying to stop what could still prove fatal, and likely could have been prevented.  Again, don’t be me!  Resolve to get that screening colonoscopy!  NO excuses!

PA Race for Governor: Tom Wolf Ducks Equal Time on Hometown Radio Show


leaves locals lacking – The wolf’s not quacking

With the 2014 election now less than one week away, Democratic candidate for Governor of Pennsylvania, Tom Wolf, has been curiously ducking repeated invitations, both on air and off, to join NewsRadio 910 local talk show host Gary Sutton for an interview.  The station, WSBA, is based in candidate Wolf’s hometown, York, PA, and airs Sutton’s show Monday thru Friday from 9am to noon.

While born in York, PA, Wolf grew up in Mt. Wolf, a small community also in York County.  Sutton is native to Manchester, PA, a small community adjacent to Mt. Wolf, separated only by the names and a railroad track.  To anyone not knowing better, the two small towns appear as one.  With only a few years difference in age, Wolf and Sutton would have attended the same school district and were acquainted in their youth.

Both went on to distinguish themselves.  Wolf eventually became owner and head of his family’s building supply business, and acquired political aspirations, serving in Governor Casey’s administration and then as Governor Rendell’s Secretary of Revenue in 2007-2008, after selling the business in 2006.  His 2010 reacquisition of the business precluded his desire to run for Governor in that year.

Sutton, according to what he often references on his show, taught history in high school as well as coaching basketball.  At some point he transitioned to talk radio, distinguishing himself as a local host with the ability to regularly attract big name figures for interviews on national topics, while maintaining a distinctively local flavor.  While he personally leans conservative, Sutton strives to keep his show focused on ideas rather than ideology, welcoming all points of view in lively discussion and search for the truth.

According to Sutton, he invited Tom Wolf to appear on his show even before Wolf won the Democratic primary nomination.  Invitations were also extended to the Corbett campaign, causing frustration for Sutton, as neither campaign was very responsive to his invitations. Finally the Corbett campaign responded with a request for time on air and the Governor was interviewed Thursday, October 23 on the Gary Sutton Show.  Mr. Sutton duly noted his station’s obligation to provide equal time to candidate Wolf, in accordance with FCC regulation.

According to Mr Sutton, it was during that October 23 show when he finally heard back from Jeff Sheridan, with the Wolf campaign.  Sutton said Sheridan told him “it was my fault for not getting back to you”, but that they would still confirm nothing as far as an interview.  On his show the next day, Sutton again extended the invitation, even telling the Wolf campaign they could name their time and he would shuffle his schedule to accommodate them.  As of midday Wednesday October 29, less than one week before the election, Sutton had not received a response.

While it’s understandable the business of any campaign is to win elections, and media appearances should be in those markets most likely to have a positive effect, it’s also curious why any candidate would not make exception for a prominent media outlet in his hometown, especially with the common history of Mr. Wolf and Mr. Sutton, even if simply for courtesy.

It makes folks wonder if something more is afoot in Tom Wolf’s avoidance of Gary Sutton’s show.  Sutton has made on air suggestions that he would like to hear more specifics of Wolf’s positions on the issues.  He has also, while emphatically denying endorsement, stated, for the first time ever in his radio career, that his personal vote will be for Governor Tom Corbett, a decision contributed by candidate Wolf’s perceived lack of clarity as opposed to Corbett’s.

In the event Tom Wolf decides to emerge from the shadows to address his hometown community directly before the election, his time is quickly running out.  WSBA has gotten a request from the Corbett campaign to be on Sutton’s show on election day.  If an arrangement is concluded, this will require equal time for Tom Wolf, if requested, presumably in addition to that for Corbett’s appearance on October 23.

Both campaigns were shown copy of this article and invited to add short comments in response prior to its publication. Republican candidate Governor Tom Corbett’s campaign responded:

It seems the last thing Tom Wolf wants to talk about and share details on is his 188% income tax hike on Pennsylvania’s middle class families and small businesses. We always appreciate Gary’s flexibility and hospitality in hosting Governor Corbett as time allows.

Democratic candidate Tom Wolf’s campaign provided no response.  In the event they do prior to Friday October 31, it will be added to this space.

This article was shared to WatchdogWire-PA

Stolen Health Data Threatens Pennsylvanians/Others With Identity Theft


Chinese Hackers implicated

Monday August 18 CNN Money reported Community Health Systems, headquartered in Franklin, Tennessee, announced it’s 206 hospital system, spanning 29 states, had been hacked, exposing critical personal information of 4.5 million patients of its affiliated physicians.  Anyone who used the services of a linked doctor in the past five years, even if never seen at a hospital, is potentially at risk.

Pennsylvania is one of seven states identified as having the most significant presence in the Community Health Systems network, operating 20 hospitals in the Commonwealth.  As a rough estimate, 20 of 206 hospitals is 9.7% of the hospitals in the network.  9.7% of the reported 4.5 million patients suggests about 436,500 Pennsylvanians could be at risk.

It’s reported that the hackers, identified as Chinese, did not get any information related to medical history or credit cards, but information critical to obtaining credit cards and stealing the identities of those at risk, including names, social security numbers, addresses, birthdays, and telephone numbers.  Community Health Systems has said it will be offering identity theft prevention services when it notifies individual patients.

Spokesperson Jason McSherry, representing affiliated and affected Memorial Hospital in York, PA, provided the following statement, shared here in its entirety:

Limited personal identification data belonging to some patients who were seen at physician practices and clinics affiliated with Memorial Hospital over the past five years was transferred out of our organization in a criminal cyber attack by a foreign-based intruder. The transferred information did not include any medical information or credit card information, but it did include names, addresses, birthdates, telephone numbers and social security numbers.

We take very seriously the security and confidentiality of private patient information and we sincerely regret any concern or inconvenience to patients. Though we have no reason to believe that this data would ever be used, all affected patients are being notified by letter and offered free identity theft protection.

Our organization believes the intruder was a foreign-based group out of China that was likely looking for intellectual property. The intruder used highly sophisticated methods to bypass security systems. The intruder has been eradicated and applications have been deployed to protect against future attacks. We are working with federal law enforcement authorities in their investigation and will support prosecution of those responsible for this attack.

Many American companies and organizations have been victimized by foreign-based cyber intrusions. It is up to the Federal Government to create a national cyber defense that can prevent this type of criminal invasion from happening in the future.

In discussion with McSherry, he emphasized that stolen information resided in connected doctors offices rather than the hospitals.  For this reason, he does not think anyone using a hospital directly for emergency or any other reason would be at risk.  The Memorial Hospital website currently lists 267 affiliated physicians.

McSherry also said that not all network hospitals are affected by the breach.  For instance, the affiliated nearby Carlisle Regional Medical Center, although part of the Community Health Centers network, uses a different information system.  He did not know how many different information systems are used by Community Health Centers.

Back to the provided statement, it’s interesting that Community Health Centers looks to the Federal Government to “create a national cyber defense that can prevent this type of criminal invasion from happening in the future”.  There may be some justification to their position, as it’s the Federal Government that’s been dictating so much of what has been happening in medicine.

HIPAA, the 1996 Health Insurance Portability and Accountability Act; ASCA, the 2001 Administrative Simplification Compliance Act; HITECH, the 2009 Health Information Technology for Economic and Clinical Health Act; PPACA, the 2010 Patient Protection and Affordability Act all, along with regulations promulgated under them, address, in various ways, requirements concerning electronic medical records, their use, protection and transmission.  While purported to be money saving measures or patient protections, this maze of imposed regulations, with cost of compliance and threat of substantial penalties, has been driving doctors out of independent practice to hospital employment or out of the profession entirely, while exposing patients to hacking risks, as we’ve seen here.

In addition, can the same Federal Government that runs the Post Office or Veterans Administration really ever do more than stay one step ahead of hackers in protecting us, as the cost of the attempt must be born by all?

Note: This article shared to WatchdogWire-Pennsylvania

GOP Stuck in ACA Replacement “Plan Trap” as Magic Bullet Solution Hides in Plain Sight


Best Plan is NO Plan

Whether by reaction to charges from Obamacare supporters on the Left, or by their own lack of faith in freedom over planning, Republicans, not one of whom voted for the Affordable Care Act, along with conservative allied groups, think tanks, or prominent individuals, are, by last count, now promoting close to a dozen different concepts of how to replace one version of federal government planning with another less abrasive one.  Despite many replacement proposals, Republicans in congress seem unable to coalesce around any one approach, still leaving the impression they have none.

Some of the proposals are introduced bills. Others are wish lists of items to be in bills.  All have myriad suggestions that either move money around by extending tax deductions or refundable credits, allow formation of small business associations, require price transparency, reform medical malpractice, enhance health savings accounts, shuffle money to states for high risk pools, or various changes to Medicare and Medicaid, among others.

Far away the most popular inclusion is selling health insurance across state lines, itself a dangerous (and here) invitation to Federal micromanagement under the twisted  modern interpretation of the Commerce clause.

Such is the pressure and propensity for government to “do something” that bears on both sides of the political spectrum.  This is the plan trap.

Rarely is there a peep from anyone suggesting that no plan is the proper path, that simple policies to promote, restore, and support the proper functioning of the free market, usually by removing government intrusion rather than supplanting it, should be the goal.  One lone voice, Association of American Physicians and Surgeons past-president Dr Alieta Eck, GOP candidate for the 12th Congressional district from New Jersey, wrote an article defending freedom over planning in January 2014.  She opens:

We constantly are told that “while ObamaCare might not be perfect, the right has not come up with a better plan.” Is it possible that we do not need a “plan” at all?

Think about it. Has the federal government set up a food plan for all? A housing plan? Is the Secretary of Whatever empowered to decide what and when we eat? What kind of house each of us lives in? Of course not. We work, we plan and we buy what we need, saving up for the big-ticket items. Government does not control us, nor should it.

Yet one element contained in a few of the plans and wish lists can be the basis for a market revolution.  Unfortunately, no one seems to have grasped the power of its singular focus.  Had Dr Ben Carson simply stopped at Step 1 of his still in progress 5 step plan he would be almost completely there.

Relatively simple modification, enhancement, and expansion of tax policy surrounding HSAs, done right, has the power to be a true game changer by its potential to encourage employers to drop their long standing provision of health insurance in favor of a defined contribution approach.  It is the magic bullet.  It hides in plain sight, and here is how to get there:

Please follow these simple policy modifications:

1) Decouple HSAs from the requirement to be attached to any insurance policy.  While HSAs could still be attached to insurance (suitable for many), anyone should be allowed (and perhaps even required) to have an HSA.  Monies in HSAs receive rare triple tax advantage and protect others from the owner’s potential inability to pay for needed medical services.

2) Allow the purchase of health insurance or medical services through an HSA.  This establishes favored equal tax treatment without the need for separate legislation.

3) Greatly expand contribution limits to allow #2 to happen.  The HSA can be the tax advantaged conduit for all medically related purchases allowed under it.

4) Allow employers to contribute pre tax to an employee’s private HSA.  This is the crucial trigger for a spontaneous move of employers away from policy provision to defined contribution.  Resulting individual ownership solves portability and suitability issues for those who choose to buy health insurance in the open market through their HSA.  Employers could offer direct contributions or matches to employee HSAs.  Contributions from several employers could be combined, as well as HSA assets among family members’ accounts to purchase one insurance contract if desired.

5) Establish a permanent mechanism whereby Americans can look to each other rather than government for assistance by allowing gifting from one HSA to another both within and beyond family connections.  This is similar to the medical sharing ministry concept without the structure of membership or formal organization.  Any groups could pledge to come to the assistance of each other as needed. Such transfers could keep some people away from Medicaid, where access problems are well known or safely allow lower cost policies with higher deductible amounts.

6) For those in need fund a portion of all government assistance transfer payments into personal HSAs to be used ahead of Medicaid.  The power and influence of ownership is stronger than artificially concocted restrictions on use.  Funds from HSA extend dignity of choice and equal access until exhausted

Nothing more at the federal level may be necessary.  States would have to do their part by discovering their proper constrained regulatory role, requiring sufficient reserves to pay claims and enforcing rather than defining terms of health insurance contracts buyers and sellers find right for them.  All this, of course, requires and follows total Obamacare repeal.

While the benefits of defined contribution in a free market (not to escape or game Obamacare) have been recognized (tops list in American Doctors for Truth Plan) and discussed, no one has suggested a good way to transition. Less attention has been paid to the damage done by employer provision of health insurance, which itself was propelled by government tinkering with wage controls in World War II.

Frank Chodorov, in his 1959 book The Rise and Fall of Society, provides clues to understand why employer provision has been the enabling force of most of our problems.  He argues that a natural law of human behavior leads men to seek the highest degree of satisfactions with the least expense of labor to thereby pursue limitless desires, in order to obtain even greater gratifications.  This leads to efficiencies of effort and specialization of tasks via cooperation with others in forming societies.

Unfortunately this natural inclination also presents a weakness to seek something for nothing.  Such is the case when the employer provision of health insurance disconnects the employee from its cost.  As soon as the employee disassociates health insurance with being a part of his employer’s total cost of his employment, rather than realizing he is really giving his employer permission to spend his money in ways that may be against his best interest, he’s in trouble.  He will request or even demand more, without consideration of alternatives that would be likely choices if he was paying directly.

This then is the source of a gradual movement away from direct payment, even for that normally within the ability to easily afford otherwise, to prepayment schemes that defy the normal purpose and function of insurance to protect assets from expenses that are beyond the ability to pay.

This excess third party payment itself bolsters the illusion of getting “covered” services for free or almost free, even as the premium includes the incentivized overuse of others when not getting one’s own.  It is through these false satisfactions that we accept in healthcare what we don’t see anywhere else in our economy, a situation where almost every transaction involves, at least in part, someone else’s money, driving overuse from both the consumer and provider side along with the associated administrative costs to accomplish it.

It’s not hard to imagine how employer provision of car insurance over time would look just as ridiculous.  Oil changes would require a small copay and many other services would be “covered”.  The brake lobby would have used safety as an excuse to convince legislators to require brake “coverage” in every policy issued, all as employees, under the illusion of something for nothing, would keep asking and demanding more “generous coverage” from employers.

On the other hand, employees reconnected to cost through defined contribution, sparked by simple modification of tax policy related to HSAs, in states that likewise get government out of the way to allow multiple market choices, will make wise decisions that fit their specific financial needs.  The abuses of excess third party payment will naturally end and the free market magic bullet solution some say cannot exist will be a reality.  No one thing can accomplish so much by doing so little.

Note: This article shared to Watchdogwire-Pennsylvania