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Caps (and we don't mean baseball caps) could be coming to Pennsylvania; the question is when-now or 2005

Legislative leaders on both sides of the aisle now believe a bill to amend the state constitution to allow the Legislature to place financial limits on jury awards for pain and suffering damages arising from lawsuits could be approved before lawmakers adjourn for the summer.

Such legal limitation on lawsuits-long sought by doctors and the business community and fiercely opposed by trial lawyers-has come to be known in Capitol parlance as "caps."

Because the bill will approve only the concept, and not set actual dollars limitations this time around, conservatives in the Legislature do not except Gov. Rendell to mount a full court press to stop it since he will be immersed in the details of his own legislative agenda.

Then the fun politics starts. You'd think the business groups and others who keep touting caps as the be-all, save-all and end-all of the medical malpractice and liability insurance crisis, would want to put the issue before the voters as possible. Even this fall.

You'd be wrong. While the Legislature by a two-thirds margin could pass an emergency amendment to the constitution, putting it before voters as early this fall, the likelihood is they won't happen.

Why? Because, as the legislative majority party always does, they are election-shopping. Polling shows that capping damages is supported by those with upper-middle and upper incomes and generally opposed by the poor and lower middle class.

The actual middle class is split on the measure, surveys show. Polling also shows residents of Philadelphia and Allegheny County are more resistant to caps than are Pennsylvanians in general.

So if Perzel succeeded in getting the "caps" constitutional amendment onto the ballot this fall, it would go before the most hostile group of voters possible.

Why? Because Philadelphia will have 50 or 60 percent turnout for its hot mayor's race, Allegheny will have even higher turnout for its hot county executive race, and the rest of the state will have about 30 percent turnout, if they are lucky.

So an emergency election gives this proposed constitutional amendment its least chance to succeed.

Instead, Perzel will strive to get a simple majority vote this year that will allow the issue to carry forward into the next legislative session which doesn't begin until January 2005. A second affirmative majority vote-passage by 50 percent or more in both chambers-would put the issue on the ballot during 2005.

By waiting until the 2005 primary or general elections, (which will get about 10 percent turnout in Philadelphia, 30 percent in Allegheny, and in-between in other regions) the backers of caps change the composition of the electorate, and as one supporter said, "All the poor people and people who hate our idea will stay home from the polls that day."

So the 2005 election is the ideal battleground for a damages cap amendment as the measure will ever have. And Perzel is determined to get there. While the Senate remains opposed, you might not want to bet against Perzel, who is the legislative champ in these games of brinksmanship.

Also look for an unusual alliance between some pro-cap and some anti-cap camps. That's because some House and Senate Democrats and caps-opposing Republicans believe the best way to get the docs off their cases is to pass the bill as an emergency measure and stick the Senate with it.

That puts all the "young doctors are fleeing the state" pressure on the Senate. And here's where it gets really interesting.

Some really sneaky legislative types say opponents and proponents of the caps may both vote for them to go on the ballot in the fall, possibly giving it the two-thirds margin necessary to bypass two consecutive sessions of the Legislature with simple majority votes.

Proponents would do this to change the constitution faster. Meanwhile, anti-caps forces believe this fall's election is their best chance to let the voters do their dirty work for them and kills caps for the foreseeable future.

Stay tuned to the chess game on this issue.

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Political VIP Interview
State Rep. Mike Diven of Pittsburgh

In our last issue, we introduced you to Jeff Coleman and Dave Reed, a pair of young Republican state representatives from Western Pennsylvania who largely elected themselves to public office against the odds of age and superior financial resources. Now, meet a Democratic counterbalance: state Rep. Mike Diven of Pittsburgh, 33, another young officeholder who engineered his own political success through grit and determination.

This former college football player crashed through the political protocol of city politics. He was not willing to wait his turn and he first put his name on the ballot at age 22. Four years later he was elected to Pittsburgh's city council and he moved on to the state House in 2000, just in time for his 30th birthday.

Determination and grit are family genes for Diven as you will learn when he talks about his father, the legendary Pittsburgh street fighter Joey Diven and how he single-handedly decimated the University of Pittsburgh football team of the 1950s. Legislative leaders on both sides of the aisle might think twice about crossing this six-foot-five lawmaker, considering his gene pool. Plus he has his own considerable physical presence from his background as a serious college football player at East Carolina University before finishing up at Pittsburgh's Duquesne University so he could be close to his father in his final years.

Known for his freshman year battles with his own caucus's leadership, Diven in his second term has turned his attention to some complicated legislation for a sophomore. In his recent interview with The Insider, he talked about two of them, one aimed at providing funds to rebuild cities and their neighborhoods and the other to save taxpayers money while helping school districts lower their costs of providing health coverage to their employees. He also is a close friend of Democratic political stalwart, Catherine Baker Knoll of Pittsburgh, and he talks about how he helped with her successful campaign last year to elect her lieutenant governor by driving her across Pennsylvania several times.

Insider: For those who don't know you, give us a brief review of your political history of how you got into politics, your family and all that?

Diven: In 1993, I was a college senior finishing up my last year at Duquesne, and I decided I was going to run for city council. My mother laughed because I had never been involved with politics but I placed third. It was a great experience for a 22-year-old.

My intention was go to law school after that but instead I ended up working for (late Allegheny County Commissioner) Tom Foerster for a couple of years. In 1996, I ran for the state House against an incumbent, Frank Gigliotti. I was outspent 20-to-1 but I came very close to winning that race.

In 1997, I ran again for city council and beat the guy who had won in 1993 when I lost. It was a big win too. I served there three years and then in 2000-after Frank Gigliotti was indicted on corruption charges-I ran again for the state House. He beat me 2-1 for the party endorsement but as his legal problems got bigger he withdrew from the race and I was the only major candidate in 2000 when I was elected to the House. 

Insider: Wasn't your father, Joey Diven, a professional boxer or semi-pro fighter in Pittsburgh?

Diven: Yes, but he was never a professional fighter, just a street fighter. He was kind of an urban legend. There was a chapter about him in a book called "Pittsburgh Characters" by Roy McHugh, the newspaper columnist. As the story was told to me, it started when some players on the Pitt football team in the 1950s were picking on some little old Italian guy who had a newspaper stand on a corner in Oakland near the university. As the story goes, people in the neighborhood called my father and he ended up putting four Pitt starters out of the game the next week. Pitt had been favored by 20 points before that happened and Pitt ended up losing instead.

After that, each week, players kept coming back looking for my father to settle the score and he kept knocking more players out of the game. The sports bookies at the time actually sent somebody into Pittsburgh to keep track of the feud. And if they heard a rumor that my father and the Pitt players were looking for each other, they would change the line on the game!

So he got some national attention from that, including one magazine that called him, "The King of the Barroom Brawlers." Then Sports Illustrated named him, "The World's Toughest Street Fighter."  He used that to open some doors for people and he ended up in government and politics and eventually was working for Tom Foerster who I later worked for. My dad died in 1997 and I got to help take care of him, make lunch for him the last few years of his life. We had a terrific relationship.

Insider: Tell us about your relationship with Catherine Baker Knoll and how you helped her with last year's campaign.

Diven: I think she is the most underrated but effective politician in Pennsylvania. Her work ethic, the connection she makes with the average voter. People always want to discount her but remember this in the primary, she won 57 counties; Ed Rendell won 10!

Having been part of her campaign-I must have driven her 17,000 miles last year from one end of the state to the other and back and forth. I saw how waitresses, hotel employees treat her and how much she is liked. She makes a connection with people. It was a tremendous experience.

I first got to meet her after I lost that first election for council in 1993. She was state treasurer then and she wrote me a letter congratulating me for running a good race. Anyone who has ever run a race and lost knows the feeling where you wake up on Wednesday morning and all your supporters are gone, afraid to be seen hanging out with you by the winner. But within a few days after the primary I got a handwritten letter from her encouraging me to stay in politics. And I did. Later, she and I struck up a friendship through Gene Ricciardi, the city council president in Pittsburgh who is her close friend and mine.

Insider: What are the tough parts of being a state legislator from an urban area these days.

Diven: It's not rocket science. If you can provide good, quality schools and clean safe streets, you're doing your job. Everything builds off that primary premise. If you do that, people will locate there; businesses will locate there. Economic development and jobs builds off that.

We're in a situation with cities where the trend the past 40, 50 years has been to leave the city behind for the suburbs and greener space. The idea behind House Bill 300, which I sponsored is that it's an urban blight bill. It provides $50 million for the City of Pittsburgh and $100 million for the City of Philadelphia in the state capital budget. They get clear titles through sheriff's sales and then they prepare sites that are ready to build. Then they take requests for proposals from community development groups, private developers, for -profit companies and individuals and who ever comes up with the best and highest use will get that property and have two years to complete construction.

Philadelphia has 60,000 such properties; Pittsburgh 15,000 properties. So you get those properties cleared and back on the tax rolls producing property tax revenue. And then 50 percent of that property tax revenue goes into paying back the state its initial investment so the state would be made whole eventually. The other 50 percent would go to the three taxing bodies-the county, the school district and the municipality. We have to be able to reinvent our cities, our neighborhoods. I'm hoping the bill gets voted on during June.

Insider: You're also come up with a proposal that would put all school district employees under "one roof" so to speak for health benefits to lower the cost to taxpayers.

Diven: Yes, it's House Resolution 159 that's already been passed by the House. Now it's with the Legislative Budget and Finance Committee and they are to issue a report back to us by December 31.

Here's what it does. You can increase funding for education but you also have to control costs. The one thing we kept finding is that 70 percent of school district expenditures come under the heading of salaries and benefits-70 percent! That's a huge expenditure. State Rep. Rod Wilt (R-Mercer) has a bill that would create one statewide school district contract but we all know that the teachers' unions would fight that tooth and nail. I'd personally like to see it but it won't happen. It's a local control issue as well. Understanding that a statewide contract would probably never fly, I tried to work backwards and I kept coming back to health care benefits, which have been rising at a rate of more than three times inflation.

First we identified the numbers. It costs the state about $4,900 per employee per year to provide family health benefits. But for the 501 school districts, the figure averaged out to $7,900 per employee, according to our research - which is a pretty big gap. You take that $3,000 per employee in savings and multiply it by the 211,000 employees that collectively work for the 501 school districts and you're looking at about $600 million in savings. It's huge!

The concept is the states spends $4 billion a year in basic education subsidies. Then school districts take that money and then they go out and contract with their employees and pay for the health benefits. Meanwhile, industry-wide health care is rising at a rate of 20 percent annually.

Insider: So under your plan you would have the districts stop supplying benefits and the state would provide them instead at a much lower cost per employee?

Diven: The state has an employees benefit trust fund that provides the benefits for about 110,000 state employees. It's self-insured. It's gives the state lots of leverage to bargain a good health care contract. So this would triple the size of the fund and give it even more clout.

I think we should reprogram about $1 billion of the $4 billion we're spending now and put it toward the health benefits of school employees. Why give that money to the school districts which, in turn, would have to buy health benefits at a much higher rate. Why don't we capture the $600 million in savings that would come about from creating a larger pool of employees under one plan?  It's a win-win across the board.

So if the state comes along and takes over an expenditure that is about 20 percent of a school district's operating budget, then let's require the districts to reduce property taxes dollar for dollar by the same amount. It makes all the sense in the world.

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The four corners of Pennsylvania and more
Regional political news you can use

Central Pennsylvania and General Interest

Our sources tell us that Gov. Ed Rendell has gotten some additional leverage in dealing with the Republican controlled Legislature by sitting on state capital budget money and legislative initiative grants for projects in individual districts that had already been committed to by the Ridge-Schweiker administration. The hardball tactic is intended to give the Democratic governor additional negotiating clout on the budget, property tax cut, personal income tax increase and other unresolved issues now in an over packed agenda for June before lawmakers break for summer recess.

Wonder who gives the most campaign cash to state legislators and statewide officeholders? The Pennsylvanians for Effective Government has compiled some interesting data on PA's Top PACs (political action committees). You can access the information at www. Pegweb.org.

Vice President Dick Cheney comes to the state capital to raise money for U.S. Sen. Arlen Specter with a $500-per-person fundraiser at the Crowne Plaza Hotel in downtown Harrisburg. It's yet another sign of national and state party unity around Specter as he faces a primary challenge from U.S. Rep. Pat Toomey of the Lehigh Valley in next spring's GOP primary when he will be seeking a fifth term. On the Democratic side, U.S. Rep. Joe Hoeffel is mulling a challenge to the winner of the Specter-Toomey tussle (see southeastern Pa. news). Those who want a photo taken with the vice president can get one by contributing $2,000 at the Specter event.

The Pennsylvania Republican who was most in the hunt for the vice presidency in 2000 will be making an appearance in St. Paul, MN, at a symposium entitled: "Homeland Security. What's Next?" Former Gov. Tom Ridge, now secretary of the Department of Homeland Security, will appear along with several Democratic presidential hopefuls at the June 19 event organized by Minnesota-based national journalist Barry Casselman, who like Ridge is an Erie native.

And speaking of homeland security, a former Ridge confidant and administration official, Carlton Sherwood, is now executive vice president of the WVC3 Group, a well-connected anti-terrorism, security firm headquartered in Reston, VA. (www.wvc3.com). Sherwood directed then-Gov. Ridge's award-winning broadcast TV and radio operations in Harrisburg. Sherwood has been tapped to create and manage a new Fed website- www.firstresponder.gov-a key Bush Administration public outreach program directed to the more than 8 million police, fire, EMS and emergency management personnel nationwide. The new "professional" internet site, scheduled to go on-line later this year, will feature an array of training and educational components in addition to news and information tailored to the interests of the first responder community.

Sherwood himself is no stranger to Washington's power elite. Before joining Ridge's staff in 1995 he was a seasoned, Washington, D.C., investigative reporter who scored a first by winning journalism's highest honors in both print and TV news, the Pulitzer Prize and Peabody Award. He was appointed by Ridge in 1995 to reorganize his TV and radio news operations, Commonwealth Media Services. Under Sherwood, CMS captured dozens of national and state honors, including two Emmy Awards, the first for a state agency. Ridge and Sherwood, both decorated Vietnam combat veterans, had become close personal friends when Ridge was elected to Congress in 1982.

Northeastern Pennsylvania

U.S. Sen. John Edwards, D-North Caroline, sneaked into Scranton March 31 for a fund-raiser at a hangar at the Wilkes-Barre/Scranton International Airport. The former prominent trial lawyer from North Carolina has been enjoying support from his trial lawyer brethren in his fund-raising efforts to move forward in the pack of presidential hopefuls for the 2004 Democratic nomination.

Meanwhile, one of his rivals, former House Minority Leader Dick Gephardt of Missouri is scheduled to be the beneficiary of a $500-per-person event at the home of attorney Pat Casey on Tuesday, June 10. Casey, who made two unsuccessful runs for Congress in 1998 and 2000 against U.S. Rep. Don Sherwood, is a son of the late governor and younger brother to Robert P. Casey, Jr., the state auditor general.

Northwestern Pennsylvania

A July 22 special election has been set to fill the state House seat of the late Karl Boyes, a veteran state legislator from the Erie suburbs who died in early May from a lung aneurysm.

Democrats quickly coalesced around Brian McGrath, a veteran supervisor in Millcreek Township, the most populous part of the 3rd Legislative District. Five Republicans sought the party nomination which was decided by a vote of Republican Committee people in the district. The winner was Matthew Good, Boyes' chief of staff the past seven years. Also in the race is Larry Sawdy, a Green Party candidate.

Southeastern Pennsylvania

A serious Democratic challenger to U.S. Sen. Arlen Specter, R-Pa., may be emerging. Congressman Joe Hoeffel of Abington Twp., a liberal Philly suburb, is telling reporters that he is taking a serious look at the race. "I'm looking at some polling data that shows the Senator is vulnerable," Hoeffel said. "I have some more people to talk to, some more issues to consider."

Former PUC commissioner John Hanger has also expressed an interest in running for the Democratic nomination but several higher-profile Democrats have turned down Sen. Jon Corzine, D-New Jersey, leader of the Democratic Senate Campaign Committee, a she hunts for a "Big Name" candidate in Pennsylvania. Hoeffel would likely fill that bill.

The problem is money. Specter and Hoeffel share a fund-raising base and Arlen was there first.   Hoeffel conceded both fund-raising and the willingness of dual donors to back Hoeffel were both factors he was considering. Some power brokers in both parties say the new interest in a Specter challenge from Hoeffel is due to the growing perception that Toomey might beat Specter, and then be vulnerable to a challenge from a suburban Democrat like Hoeffel.

Southwestern Pennsylvania

In addition to everything that's already on the legislative plate for June, pile on another major regional problem-solving Pittsburgh's municipal finances so the city can avert bankruptcy.

Among the items mentioned to help close a $60 million budget gap in the city's $386 million annual budget is a proposal to eliminate exemptions now enjoyed by many businesses to the city's gross receipts and business privilege taxes. Among the businesses currently not paying the taxes to the city are manufacturers, banks, brokerage houses and utility companies.

Other parts of the fiscal rescue plan include raising the city's $10 annual worker tax on residents and suburbanites employed within the city limits to $58; a new 0.5 percent payroll tax and a 10 percent tax on each alcoholic drink sold at restaurants and bars. Unless the city is granted some relief by the Legislature, Mayor Tom Murphy has said he may have to lay off 500 municipal workers and file for municipal bankruptcy later this year.

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