We need to totally restructure PHEAA

Article posted on August 31, 2007

I started this morning by reviewing a letter the Governor wrote to the top people at PHEAA.  The letter stated that the total bonuses given in 2007 totaled $2.5 million, up significantly from the $570,000 figure originally released.  It also went on to say that there are over 2,500 employees at PHEAA, an amazing revelation; and that the financial performance was worse this year than last.  It also stated that the agency has spent over $400,000 in legal fees to fight full disclosure of their expenditures.  Having learned of this new information, I did a press release that garnered a fair amount of state-wide attention.  This outrageous activity can only happen in government, some would say, Pennsylvania’s government.  To make matters worse, the 20 member board of PHEAA includes 16 legislators, where were they?  Even after all of the excuses about things being built into contracts (which I understand is not true), how did they let this happen to a government agency?  Unfortunately, this is typical of what I have seen in my short time in Harrisburg, gross negligence and a total disregard for the people that we are charged to serve. Senators John Rafferty and Jane Orie have been working on the problems with PHEAA long before this scandal broke; we need to follow their lead and totally restructure this government agency.

– John

More Information Emerges in PHEAA Scandal

Article posted on August 31, 2007

HOLLIDAYSBURG (08-31-2007) – State Senator John H. Eichelberger, Jr. learned late yesterday of a letter mailed from the Governor to the Chairman, Vice Chairman and board members of the Pennsylvania Higher Education Assistance Agency (PHEAA) in which he listed startling new information about the depth of the problems swirling around PHEAA.  The $570,000 bonus figure initially released included just the agency’s management team.  The new total includes bonus money paid to all staff in 2007 and has soared to $2.5 million.  The patronage laden work force reaches a total of 2,574 employees.  Defenders of PHEAA cite the good work of the agency and the management in particular to justify these bonuses, but a closer look reveals that when comparing the same 9 month period from last year to this, operating expenses have grown 70% faster than operating revenues, operating income is down and the agency’s net assets are $11.5 million lower.  Eichelberger expressed his outrage by saying, “This mess is unfortunately what I have found all too often in Harrisburg.  The legislature and many state agencies are bloated bureaucracies that have no regard whatsoever for the hard working people who pay their salaries.  This is an embarrassment for Pennsylvania and I will do everything in my power to stop this abuse immediately.” 



Large non-profits exempt from property tax

Article posted on August 30, 2007

I spent most of the day in Pittsburgh at the Finance Committee hearing concerning Act 55 the Purely Public Charities Act. It was an interesting morning and early afternoon at the Pittsburgh City Council Chambers.  This issue primarily involves the standards set in the law that allow nonprofit agencies to be exempt from taxes.  Pittsburgh was the epicenter for the controversy that precipitated the current law.  The City of Pittsburgh testified about the lost revenue since the law was passed in 1997.  The hospitals, represented by legal counsel as well as UPMC individually testified that they like the law as is.  For those who don’t understand much about this matter, the law exempted hospital and other charitable organizations from paying taxes, most controversially, property taxes.  Municipalities, counties and school districts often feel that, particularly the larger nonprofits, use many of the services government provides and that the organizations should pay at least something for it.  Many cities now have about 35% to 50% of their total properties exempt from taxes.  This shifts a larger burden of taxes unto the homeowners and businesses.  Often hospitals and colleges are the largest employers and are viewed as corporate giants in that community.  Some of these organizations have agreements to make a voluntary payment and some don’t.  This is a complicated issue and one that will probably be a subject of legislation soon.

– John

Voters have more work to do in Pa.

Article posted on August 30, 2007

The executives of PHEAA have been awarded five- and six-figure bonuses on top of their six-figure salaries by state legislators who sit on PHEAA’s board, some of who had promised to reform this organization. Coming on the heels of exposing PHEAA’s wasteful expenditure of nearly $1 million on junkets and another $400,000 to try to hide the details of this embarrassment from the press, it is disheartening that only Sen Jane Orie, and, of all people, Gov. Ed Rendell, have expressed any outrage. Where are the other 252 legislators? Where is the reform movement that was so in vogue several months ago?

Many of us are outraged at what this General Assembly has done, but more so because of what it has not done. With the notable exception of the efforts of a few conscientious lawmakers like Sens. Mike Folmer and John Eichelberger and a handful of House members, this Legislature has approved an irresponsible budget; allowed our huge property taxes to continue to increase; reconfirmed some of Rendell’s top-level appointees, who had authorized the payment of millions of dollars to their spouses’ companies; refused to authorize an audit of the spending of tens of millions of dollars from House and Senate leadership accounts; continues to watch the state audit of bonuses to legislative staff members languish; totally ignored tort reform; crushed any hope of term limits; refused to pass totally open sunshine rules or eliminate political bribery by special interests; gave brief lip-service to a constitutional convention; and supported most of the governor’s spendthrift agenda. There is the record-to-date of the new leadership and those who replaced 25 percent of the House and Senate in January of 2007.

The bad guys are as firmly in charge of political corruption in Pennsylvania government as ever, and most lawmakers are passively standing aside, ignoring their commitments to much-needed reforms and busily planning their re-election campaigns. But some of us are tracking this disgraceful record and are planning the un-election of another 55 or more legislators in 2007 and 2008, until we have a state government that represents the will of the people. What say you?

Stan Alekna


Vote for Integrity PAC


Act 55 hearing tomorrow

Article posted on August 29, 2007

View As Web PageAfter taking care of a few things this morning, I stopped at the business outside of Bedford that is doing our signs, to check on the colors.  We arrived at an agreement on the blue but I have to check on something for the gold.  I proceeded to McConnellsburg to have office hours there for the entire afternoon.  Every county in this district is unique to some degree with their own issues.  The people today were all nice and presented information to me along with a problem or two.  I have some more work to do, as usual.  I am in Pittsburgh tonight in preparation for a Finance Committee hearing tomorrow morning on Act 55 (Purely Public Charities Act).  We have had some discussion on this in Harrisburg and it will be interesting to hear the testimony tomorrow.  If anyone has any opinions on this Act, let me know.  I will have a full report on the hearing in my next blog.    

– John

PHEAA bonuses to boost pensions

Article posted on August 29, 2007

Bonuses of more than $100,000 each awarded to four executives of the state’s college loan agency eventually would provide substantial increases in their pensions.Sen. John Rafferty, a Republican from Montgomery County, called the pension bump based on recent bonuses at the Pennsylvania Higher Education Assistance Agency “disgusting.”

Rafferty said Tuesday that the Senate should consider legislation that would ban bonuses from any new salary agreements at PHEAA. The agency’s executives could then agree to stay or leave, Rafferty said.

Read the full Pittsburgh Tribune-Review story here.

Will the backlash continue?

Article posted on August 28, 2007

Met with some constituents today and a Borough official then completed some work and spent the evening in Huntingdon County.  I went to the Huntingdon Chamber Business After Hours then had a Town Hall Meeting in McConnellstown. This was the second town hall meeting I have had, the first was in McConnellsburg (Fulton County).  We had a smart crowd this evening of over 60 people. It is surprising how much people know about different issues that are important to them.  My staff and I were amazed at the depth of knowledge some people had using dollar figures and changes in laws to set up their query to me.  Everything from the PHEAA bonuses to tax reform to WAM’s to the price of electricity was discussed this evening.  I have said it before and I will say it now again, people are paying more attention to what is happening in Harrisburg than they used to.  The last couple of election cycles were “surprises” to many in Harrisburg, does anyone think the backlash of resistance to the same old actions will continue in this election?

– John

Summer is coming to a close

Article posted on August 27, 2007

Went to Harrisburg today.  When we are not in session it is still important for me to get to my office at the capitol once a week or so to catch up on correspondence, invitations and whatever else hits my desk.  The capitol is a different place when the legislature is not in session.  There aren’t too many legislators in the building and the staff seems surprised to see one.  There aren’t lobbyists every few feet and the phones don’t ring as often. I don’t have to worry about what I am going to vote on or what committee meetings I have to juggle.  It is quieter and I can get more done.  I got back home in time for a Habitat For Humanity Board meeting (I’m on the board), stopped by the office to drop off some supplies and got a little work done on my stone walkway at home.  It is near the end of the corn season and my favorite variety is in, Silver Queen. We got some on Sunday and finished the rest of the dozen we bought tonight. I will miss fresh corn, summer is coming to a close.  

– John

Is it perception or truth

Article posted on August 26, 2007

After church, I hit the office for a couple of hours.  I am going to the capitol tomorrow and I have things here that need to be done while I am away and things to take with me.  I spent most of the day doing a stone walk way around two sides of my house.  I started this project two years ago and still have quite a bit to do.  I miss the opportunity to do things around the house, I enjoy doing my own work.  The papers today talked some about the PHEAA bonus situation.  A lot of the folks in Harrisburg still don’t understand that people don’t like, nor trust their government.  The PHEAA stories and the Superior Court Judge Mike Joyce scandal both contribute to the perception, or is it truth, that at least some of the people in state government are selfish and, or crooked.

– John

I like a clean truck

Article posted on August 25, 2007

Went to the Lighthouse, my men’s fellowship group, this morning at 7:00 then went to breakfast with some of the guys.  I hit the office for a couple of hours then went home to mow and clean my truck, I like a clean truck.  I got to drive the big fire truck in the East Freedom parade tonight, that was a thrill.  I ended the day at a large picnic in Huntingdon County with Charlotte and Pam Prosser from my staff.  We had a good time with some great people.  It’s another late night getting home but a good and productive day.

– John