By Ellen T. Horan – President & CEO, GRCCI

The budget is not the only fiscal issue facing our Commonwealth. A fair, predictable and even-handed legal system would provide a great “stimulus” to our lagging economy. Pennsylvania is one of only nine states that have not repealed or modified joint and several liability.

Too often lawsuits become attacks on ‘deep pockets’ in search of large awards or quick settlements from prominent defendants who played little role in causing the injury. Businesses, corporations, doctors, hospitals and governments are common targets.

Comprehensive legal reform would create jobs and stimulate investment in the Commonwealth while actually reducing the expenses of state, municipal, and school district governments.

 Current Pennsylvania law allows a defendant who is just marginally responsible for injury or harm to be made to pay 100 percent of the damages.  That is what is referred to as joint and several liability. We need meaningful reform to limit awards against defendants who are judged to have been only partially liable.  

The Fair Share Act proposes a compromise that would create a proportional liability system that includes important exceptions if a defendant is found liable for intentional fraud or tort; held liable for environmental hazards; held civilly liable as a result of drunk driving; or held more than 60 percent liable for the injury or loss.

The Fair Share Act was actually signed into law in 2002 but, because of a procedural technicality having nothing to do with the merits of the legislation, was thrown out by the Pennsylvania Supreme Court.  The Fair Share Act was passed again in 2005 but vetoed by Governor Ed Rendell.

In 2011 we have a real chance to achieve this important and meaningful reform.  The Fair Share Act has been introduced as HB 1 and SB 2 and is currently being debated in the House and Senate.  The bills are supported by Governor Tom Corbett.  Please send a letter to your state lawmakers urging quick action on these important bills, with no amendments. Go to the Greater Reading Voice section of the Chamber website to send an e-mail message today.

Thank you for your support of the Greater Reading Chamber as we advocate for a more completive business environment in Pennsylvania.

By Ellen T. Horan – President & CEO, GRCCI

This month, the Chamber will devote our State of Community update to the topic of municipal financial sustainability.  Since Reading filed for Act 47 protection this past year, our community is more aware of the issues facing cities.  You may be thinking this is a Reading problem, or an urban center problem.

The fact is, this is a problem facing our Townships and Boroughs too. 26 municipalities have declared Act 47 since the program began in 1987; only 6 have emerged. 54 municipalities have participated in the early intervention Program – 30 have been Cities, 24 have been Townships or Boroughs. 

The Mayor of Reading recently gave an update on the State of the City. I agree with the message he sent.  Act 47 was a positive move for the City.  It made available to the City financial experts to develop a short term plan to balance the budget. It also made available to the City experts in economic development and housing policy that are working on more strategic efforts to shore up the tax base of the City.

HOWEVER, the City faces a long term structural deficit that will require the State to act to change the ground rules under which municipalities operate. Cities are limited by state law to generating revenues from property and income taxes.  Think about what has happened to property values and income, particularly in the city, over the past several years as property values have declined and unemployment has risen.  Cities are also required to offer defined benefit plans to employees when the private sector has shifted away from those plans to defined contribution plans, like the 401(k) plan, over the past two decades because the private sector realized defined benefit plans were unsustainable.

The acceleration in pension plan costs to local government is exacerbated by PA law in binding arbitration. I was shocked to learn that PA court rulings have determined that a municipality’s ability to pay is irrelevant in an arbitrators ruling on a contract. Also, the City is required to pick up the full cost of arbitration.  Why wouldn’t any union hold out for arbitration under those conditions?

While we look to municipal officials to responsibly address their financial sustainability in passing balanced budgets while upholding core service delivery in the provision of public safety services, we need our state elected officials to step up and take on the difficult issues of pensions, binding arbitration and taxing authority. 

You can expect to see your Chamber involved in rallying statewide support on these issues.  We have already taken the leadership role of garnering support from Lancaster, York, Harrisburg, Lehigh Valley, Wilkes Barre and Pittsburgh. Look for a statewide movement in the coming year and attend the March 23rd State of the Community breakfast to learn more about key issues facing our communities. Register here.