Within Pennsylvania’s borders are a diverse and vibrant collection of communities where employers set up shop, residents raise families and tourists come to visit. The success of our Commonwealth is directly tied to the strength of its communities and public policy should help communities thrive.
Pennsylvania’s labyrinthine system of local governments is not conducive to strengthening economic competitiveness. As of 2015, the Commonwealth was comprised of 67 counties, 56 cities, 957 boroughs, 1 incorporated town (Bloomsburg), 1,547 townships, 500 school districts and approximately 2,000 authorities. Keeping government “close to the people” is certainly an important principle, but too many small governments with limited capacities and inadequate resources do not help advance economic development and job growth within communities.
Moreover, the financial wellbeing of many Pennsylvania municipal governments is often harmed by antiquated and unbalanced state laws and regulations, which may necessitate higher costs and inefficient spending. Ultimately, these costs are borne by Pennsylvania residents and businesses, many of whom now live and operate in financially distressed communities. The PA Chamber supports efforts and legislation to help ease the financial burden municipalities face.
Municipal sustainability can be effectuated by:
- Expanding opportunities for improving delivery and administration of municipal services: Eliminate legal barriers and provide assistance to local governments to deliver services in ways that make practical and financial sense for their respective regions; allow and encourage municipalities to enter public-private partnerships; provide tools for local governments to allow for a clear process and streamlined permitting so that Pennsylvania businesses and those seeking to locate in Pennsylvania can better compete with other states.
- Encouraging municipal cooperation and consolidation: Streamline the procedures and provide incentives for consolidating local governments; encourage municipalities to collaborate on delivery of services and consideration and implementation of policies and decisions related to land use, permitting, zoning or any process through which businesses must go to locate or expand a facility.
- Public Pension Reform: The PA Chamber recognizes the financial burden associated with post-employment benefits, including outmoded retirement plans. It is critically important for future beneficiaries that plans be sustainable. In order to mitigate rising costs in the near term and address unfunded liabilities, the PA Chamber supports allowing local governments to transition employee retirement plans to a defined contribution retirement plan, which mitigate the risk assumed by taxpayers and are more sustainable. “DC” plans have become standard in the private sector as the workforce has evolved, including employee demographics and the tendency for individuals to frequently change jobs, and even careers, during their working life. Moreover, as most of the state’s thousands of local retirement plans serve a small number of employees, consolidation could serve to modernize the existing system and create economies of scale that save both taxpayers and plan participants significant money. Whether or not municipalities are able to adjust pension plans or other post-employment benefits in order to evolve with the times, they should emphasize transparency to taxpayers, including administration costs, assumed rates of return and true financial health.
- Reforming binding arbitration: Current state law provides for binding arbitration in the event of a contract dispute between police and fire fighters and their municipal employers; and, in exchange, these uniformed public employees are prohibited from going on strike. The PA Chamber believes binding arbitration can be useful and should remain an option available to resolve disputes. However, it is clear the current system does not sufficiently protect the interests of the municipality as adverse decisions rendered through binding arbitration have become more frequent and a significant cause of escalating costs. The PA Chamber supports reforms to make binding arbitration laws fairer for municipalities, and thereby less costly to taxpayers, while ensuring that police and fire fighters’ rights are protected.