Plan to Renew Pennsylvania- A New Hope

On March 8th, Republican Governor Tom Corbett unveiled his 2011-2012 budget plan for the Commonwealth of Pennsylvania. Soon the state legislature overwhelming rejected many of the proposals contained within Gov. Corbett’s fiscal proposals, including the Department of Education’s funding.  Then on May 11th, the Pennsylvania House Republicans responded to Tom Corbett’s budgetary proposals with their own version, lessening the cuts by restoring $100 million in state funding to the school districts, $195 million to the State System of Higher Education’s 14 universities and $184 million to the state affiliated universities at Penn State, Temple, Lincoln and Pitt. This GOP counter-proposal relies on additional cuts to the Department of Public Welfare, by eliminating unfilled positions and reducing the Legislature’s budget by a mere $15.3 million.

The people of Pennsylvania deserve better solutions to the profound fiscal issues that are now affecting them in very personal ways. Basic education in Pennsylvania is not in a better financial position under the House GOP plan. Many school districts will still face funding cuts that amount to over $1,000 per student, while others face cuts amounting to just a few hundred dollars per student.  The fundamental inequities of both budget proposals translate into disproportionate losses of state dollars to the Commonwealth’s public schools.  Urban school districts are affected much more profoundly, and many of the these inner city school districts can ill afford such draconian cuts. The Republican Party of Pennsylvania is setting up a system that ill serves students already in a vastly disadvantageous position when compared to better funded and more successful suburban school districts.

In the realm of public higher education, the 14 state-owned schools rely on state appropriations, which make up over one-third of their overall operating budgets, in order to offer a quality education at a price that is accessible to working and middle class families. Many individuals pursuing a college degree through a public institution cannot afford drastic increases in their tuition costs. The budget proposals by Governor Corbett and the House GOP potentially put a college education out of their reach, therefore subjecting them to dramatically lower earnings potential and the possibility of relying on public assistance in order to make ends meet.

Public education is a bulwark of a democratic society. Through public education, a populace learns to critically think, acquiring methods of analysis and questioning how the world functions.  Without a well funded public education system a population is potentially relegated to a life of ignorance, which in turn could open up the way for a government to deprive them of their freedoms and liberties. Suffice it to say, cutting the funding of public basic education and public higher education in the manner the GOP is currently employing amounts to an unjust and unfair erosion on the tenets of democracy and of a liberal democratic society.

In the course of numerous rallies held throughout the Commonwealth, the people have demonstrated their anger over the Governor’s and House Republicans’ plans for the educational system but have yet to place on the table viable solutions and alternatives. The time to offer concrete solutions that could better serve the needs of this state has now arrived. The time for noting the fundamental disconnect between the priorities of the Corbett Administration, the Pennsylvania Republican Party and the people of Pennsylvania is far past.  The Commonwealth of Pennsylvania is in desperate need for reform and a reassignment of priorities. I propose the following solutions to bring Pennsylvania back to fiscal health and to return prosperity and opportunity to our communities.

Part 1- Government Compensation Reform of Staffing, Salary and Benefits

Our state’s government possesses the costliest legislature per capita in the Union, the second largest in the Union (after New Hampshire), with 253 members,  and our members of the General Assembly receive the 4th highest base salary in the country ($78,314/year).

There is no logic to support the bloat of our state legislature and the disproportionate pay they receive. A new model needs to be adopted. I propose that the membership of the General Assembly should be reduced to 150 members. House membership would consist of 120 chosen from single member districts, leaving the remaining 30 members making up the state Senate. Reducing the General Assembly by 103 members would save Pennsylvania taxpayers, using the base salary figures of our elected representatives, $8,066,342 per year.

The Corbett Administration has made repeated calls for shared sacrifice. Our elected representatives must answer their own calls. Therefore, I further propose cutting the base pay of ALL General Assembly members to $50,000 annually. Again, using the current base pay of General Assembly members and multiplying that figure by 150, Pennsylvanian taxpayers would see further savings of $4,247,100, for a combined savings thus far of $12,313,442 a year.

The number of legislative aids accorded to each member of the General Assembly averages 11.6 per legislator (as of 2003). This makes the Pennsylvania Legislature possess the 2nd highest number of legislative staff in the country, after New York. This simply can not be allowed to continued. The legislative staffs should be reduced to an average of 6 per legislator. The base salary of these staff members is $26,000 per year. The current cost is an average of $76,304,800 a year. Under my proposal, with 150 General Assembly members possessing an average of 6 staff members with a base salary of $26,000/year, the taxpayers of PA would see the total cost reduced to $23,400,000/year, a savings of $52,904,800/year. The total savings thus far equal to $65,218,242/year.

I turn my attention now to the costs associated with the health care packages provided to our elected officials in the General Assembly. In an article in, Mary Beth Schweigert estimated the cost to the taxpayers to provide House members with their health care, in regards to their premiums,  to be $20.7 million. We the people pick up the entire tab for every member of the House, in addition to their staffers. The members of the Senate and their staff contribute a mere 1% to their premiums; that translates to approximately $783 in annual contributions, while the average Pennsylvanian contributes and average of $2,971 annually. Therefore, the cost of the Senate’s health care package is an additional $19 million. I submit the following alternative. Members of the General Assembly and their staff should be made to contribute more towards their health care premiums that is aligned with the average currently paid by the average Pennsylvanian. Reduce the annual value of taxpayer contributions to each House member AND to each of their staff members from $15,000 to an annual value of $5,000. Additional savings to the taxpayers in regards to House’s health care costs would then equal $9,860,000 per year. The Senate’s contributions to their premiums should be increased from 1% to 18%. This figure is aligned with the 2001 median income of Pennsylvania residents ($66,130) and average annual cost of health care of $11,801 (2001). This could save PA taxpayers $3,419,226 a year. Overall potential savings to the people of Pennsylvania would be $78,497,468 a year.

Part 1 Works Cited:

Part 2-  Government Compensation Reform of Full-time Status, Pensions and “Perks”

In Part 1, I proposed instituting reforms for the size of the Pennsylvania General Assembly, its salary and its health care plans. In Part 2, I will make proposals that effect the additional benefits granted to PA lawmakers at taxpayer expense, namely their pensions and non-monetary compensation, i.e. use of state cars and other ‘perks.’ I also reconsider the full-time status of the General Assembly.

The combination of a disproportionate salary and benefits package has created an obscene culture of corruption and entitlement in Harrisburg. The absence of term limits has contributed to this perverse culture as well. Forty years ago, the legislature of Pennsylvania operated on a part-time basis. The General Assembly moved to a full-time schedule in order to keep apace with the operation of the executive branch. I surmise that this move was purely for political and not practical reasons. Pennsylvania has a long history of elected officials in the legislature engaging in political posturing against the current governor, even if said governor is a fellow member of the legislator’s party. Republicans and Democrats in the House and Senate have been known throughout Pennsylvania’s modern history to go against the agenda of the state’s governor regardless of their party affiliation. We saw this take place under former Governor Edward G. Rendell, a Democrat, and the picture is not likely to change under current Republican Governor Tom Corbett.

Therefore, staying in line with my proposals to reduce the salary and benefits of the members of the General Assembly and their staff, I propose eliminating session days from the schedule of the Legislature, thus returning this body to a part-time operating model. According to the non-profit organization Citizens Alliance of Pennsylvania’s (CAP) research PA lawmakers who live 50 or more miles away from Harrisburg receive a daily supplemental payment of $163 to pay for food and lodging. This payment is on top of their already more than adequate salary. Returning the state legislature to a part-time body, this payment would be eliminated, thus saving the taxpayers of the Commonwealth approximately $20 million a year without affecting the effectiveness of state government. The lawmakers in Harrisburg are only in session 70-90 days out of the year; therefore the current base salary of close to $79,000 is simply unjustifiable. The $20 million in savings would be derived from the elimination of the daily supplemental payments and other similar expenses associated with a full-time legislature.

In re-establishing the General Assembly as a part-time body, I further propose completely eliminating the pensions currently awarded to our lawmakers who serve 10 or more years, along with the added benefit of having the taxpayers of Pennsylvania pay the $650/month car lease payments on behalf of the retired lawmakers. Being an elected official in government is a position of service, not a career. The General Assembly must be returned to the days of a “citizen legislature,” to borrow a term from CAP, and bring back the image of our elected officials as civil servants and not career politicians. The Commonwealth Foundation, an organization that works to reform Pennsylvania government, notes, “With a part-time legislature, lawmakers could be doctors, farmers, and small business owners who come to Harrisburg for a few weeks each year to make laws, and then go home to live and work under the laws they created. If this were the reality, only the most pressing issues would be addressed, leaving greater freedom for the Commonwealth to prosper. There is convincing evidence that restoring the General Assembly to part-time, citizen legislature would result in lower taxes, more efficient government, and less corruption.”

According to the Post-Gazette‘s Tracie Mauriello, in “Ousted Rep. Veon’s pension about $60,000”:

At the end of the month, 49 legislators will leave office, either because they did not seek re-election or because they were voted out in the May primary or last month’s general election. A dozen of them are from southwestern Pennsylvania, and the pension cost to taxpayers for those 12 could total as much as $564,000 a year. Data used to calculate pensions for eight of them were released in the spring; information on four others was made available to the Pittsburgh Post-Gazette recently in response to a Right to Know request submitted earlier last month. Michael Diven, R-Brookline, who lost in the general election to Beechview Democrat Chelsa Wagner, has served almost six years. His average salary for the last three years was $67,507, and his pension plan calls for a 3-percent multiplier. That means he is eligible for an annual pension of roughly $11,800 beginning at age 50. If Mr. Diven, 36, starts collecting now, he would get about $5,800 a year. Some, such as outgoing Rep. James Shaner, D-Lemont Furnace, will collect more in retirement than they did on the job. Mr. Shaner, whose salary is $66,172 this year, will collect an estimated $71,000 a year in retirement. That’s about $25,000 for his 12 years of service as a legislator and $46,000 for his 33 years as an educator. (Read more.)

I also propose that pensions awarded to top state officials who accept employment outside of the Commonwealth be declared forfeited. For example, former Chancellor of the State System of Higher Education, James H. McCormick, who retired in 2001 after working at the State System for thirty years, earned in excess of $100,000 while on the job. According to the Pittsburgh Tribune-Review, his pension upon retiring equaled $129,000 a year after a cash withdrawal of $320,000 made by Dr. McCormick from his retirement account. After his retirement from PASSHE, Dr. McCormick left the Commonwealth to accept a job as the Chancellor of the Minnesota system of higher education which would earn him a salary of $340,000/year on top of his $129,000/year pension payments paid for by the taxpayers of Pennsylvania. This practice must be eliminated. These monies should be going towards investment within the Commonwealth, not to those living in other states or even living in other countries.

Figures for the total cost of PA lawmaker’s pensions and gaining information of the pension system in general was extremely difficult to find. A Right-To-Know request must be submitted to the Auditor-General of the Commonwealth in order to ascertain this information.

Part 2 Works Cited:

Part 3- Tax Code Reform

The tax code of the Commonwealth of Pennsylvania unfairly shifts the tax burden to individual taxpayers as opposed to businesses and corporate entities. Many companies who operate in Pennsylvania have access to numerous tax “loopholes” that unjustifiably lower their total tax liabilities. Any business that operates in the Commonwealth must be made to pay its fair share in taxes, thus lessening the tax burden on individual Pennsylvanians. Governor Tom Corbett’s proposed budget cuts come premature. Before a government begins looking at balancing its budget through spending cuts, it would behoove that government to explore the notion that their jurisdiction has a revenue problem as opposed to or in addition to a spending problem. Instead, Governor Corbett has proposed what many Pennsylvanians call ‘draconian cuts’ to education, economic development programs and other initiatives that require further investment.

Surmise it to say, corporate tax loopholes and tax havens must be eliminated from the Commonwealth’s tax code, and efforts to increase revenue through fair and accountable means must be employed. One such special tax provision, a tax provision that has garnered much public ire, is the so-called “Delaware loophole.” The Delaware loophole is a tax provision that runs counter to the tax principle of combined reporting. In combined reporting, a company’s tax liability is computed by the amount of business activity that took place in a respective jurisdiction, i.e., a state. Pennsylvania’s Delaware loophole allows “tens of thousands of companies to avoid Pennsylvania state taxes because their home office is a file drawer in an office building somewhere in Delaware” (The Pennsylvania Budget and Policy Center).  Closing this loophole would provide Pennsylvania with approximately $500 million in corporate net income taxes. Currently in PA, 71% of companies subject to the corporate income tax pay no taxes. Companies that are paying the corporate income tax are paying a vastly disproportionate amount. In 1994, 75% of corporations paid $1,000 or less in corporate income taxes. By 2003, 84 percent of all corporations were paying that much – less than a Pennsylvania family earning $36,000 a year pays in annual income taxes. Reform must be instituted to make the tax burden far more equitable for the average Pennsylvanian.

Another important issue to the public is the current policy of imposing no tax liability upon the gas industry, more specifically the gas drillers operating in the Marcellus Shale regions of the state. According to a fact check done by the Pennsylvania Budget and Policy Center, in 2008 only 15% of drillers operating as corporations paid corporate net income tax and in 2009 the drillers paid just $44.4 million in state taxes. Again, these companies must be forced to pay their fair share if this state has any hope of putting itself back on sound fiscal footing. Gov. Corbett has done this state a great disservice by allowing the over $1 million in campaign contributions from the gas industry to cloud his judgment to the great detriment of working class families throughout the Commonwealth.

The gas industry  argues that keeping their tax liabilities low allows them to provide more jobs and allows them to act as one of the chief drivers of local economies, with benefits for the states. However, this argument does not hold weight–their economic activity is highly localized, thus minimally affecting the overall state economy. The cost of providing oversight to their industry and cleaning up their accidents further puts strain on the state coffers, yet they contribute very little towards the overall cost of the operations to oversee their industry and ensure the environmental impact of their operations is mitigated. I will also turn your attention to the notion that without their industry paying their fair share in taxes, we are seeing massive lay offs throughout the state. Instead of creating jobs, they are costing Pennsylvania jobs. Their tax-free or minimal tax presence will only serve to further erode the finances of the Commonwealth.

Every single business entity, be they a gas company or any other company, should pay the corporate income tax, and all practices to avoid paying need to end. Equal treatment for all; no special tax provisions should be provided in efforts to elect a candidate to state office. Many estimates point to the fact that potential tax revenues from imposing an income levy on the gas drillers would net the state close to $400 million by 2015.

In my plan thus far, I have identified approximately $1.1 billion in savings and added revenue to the the Commonwealth and its citizens. I now ask for public scrutiny to further develop my plan.

Part 3 Works Cited:

Part 4- Reforming the Executive Branch

In the previous three parts of the Plan to Renew Pennsylvania, I have proposed reducing the size and cost of the General Assembly, reforming the Commonwealth’s tax code, and holding businesses who operate in Pennsylvania accountable to their tax liabilities. In Part 4, I will focus my attention on the Executive Branch of the Commonwealth’s government, chiefly the Office of the Governor and its major subordinate parts.

Under the Administrations of Rendell and now Corbett, the people of Pennsylvania have witnessed the filling of top ranks within each Administration’s agencies with political allies, campaign contributors and even relatives, all at the expense of appointing individuals who are much more capable of carrying out a post’s duties. The nepotism displayed by engaging in the unfair and unjust ‘spoils system’ must come to an end. Pennsylvanians have seen the interests of the people thrown by the wayside in favor of appeasing those who contributed donations and other assistance to Rendell’s and Corbett’s gubernatorial campaigns.

Under Corbett, the Marcellus Shale Advisory Commission is comprised of members who have intimate relationship with the gas industry. Of the 30 total members of the Commission, 13 have ties to the gas industry, four are environmentalists and the remaining membership are state and local officials with one geologist among them. Tracie Mauriello and Laura Olson report in the Pittsburgh Post-Gazette, “Thirteen of the members contributed a total of $557,000 to Mr. Corbett’s political campaigns since 2008; 12 have ties with companies whose executives or political action committees contributed another $562,000; one is the son of a $300,000 contributor. All together that amounted to just over $1.4 million.”  These facts point to a gross negligence in ensuring that the Commission’s duty of balancing the economic interests of the state with the environmental impacts of the gas industry are carried out in an effective manner.

All governing power is derived from the people, not from the personal motives of a particular elected official. Governor Corbett is doing the Commonwealth and its citizenry a great disservice. The people must recognize that we are not powerless, that when we demand our government to carry out its duties, it must do so according to the will of the majority- not according to the will of Governor Corbett. Under Article I, Section 2 of the Constitution of the Commonwealth of Pennsylvania, “All power is inherent in the people, and all free governments are founded on their authority and instituted for their peace, safety and happiness. For the advancement of these ends they have at all times an inalienable and indefeasible right to alter, reform or abolish their government in such manner as they may think proper.” The events in Wisconsin, Michigan and elsewhere have shown what can happen when people stand united, and what can happen when the people remain silent. We have the capacity and the legitimacy to take back what has been stolen from us. Our government in Harrisburg has run amok for too long and with impunity. The buck must stop here- with us.

The power of the Governor must be placed back within its constitutional framework. To use the issue of Marcellus Shale extraction once more, the PA constitution enshrines our inherent right to a clean environment in Article I, Section 27, which states, “The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.” Such a blatant violation of the state’s constitution can not go unanswered by the people.

Moreover, the compensation structure of the Executive Branch, similar to the that of the General Assembly, is profoundly over bloated.  The Sunshine Review conducted a research piece on the salaries of the five main elected offices of the Executive Branch that derives their information from the Council of State Governments’ Book of the States 2010. According to their webpage, the state’s Treasurer and Attorney General’s annual salary, as of 2010, is $145,529. The salary of the state’s Auditor General, another state row officer, is also $145,529.  The Secretary of the Commonwealth’s annual salary is slightly lower at $125,939, the Lt. Governor’s yearly salary is $146,926 and finally the Governor’s annual salary is $174,914 making the Governor of Pennsylvania the 6th highest paid governor in the Union (see Sunshine Review: Pennsylvania State Government Salary). However, when we take into account the COLA law, past in 1995, that gives all top PA officials a 1.7% cost of living raise, the governor’s salary increases to $177,888, the Lt. Governor $149,424, the Secretary of the Commonwealth $128,080 and the three offices of Treasurer, Auditor General and Attorney General $148,003.

I call on of the Executive Branch to fulfill Governor Corbett’s call of shared sacrifice by accepting cuts in their own personal salaries and benefits. Just as there is no justification for our state possessing one of the largest and costliest Legislatures, there is not one logical piece of justification for our Executive officers to possess some of the highest salaries of any of their counterparts in the United States. If the economic times are as dire as the Corbett Administration portrays, then there exists no counter arguments for them to share in the sacrifices they ask the people of Pennsylvania to endure. Therefore, I propose that the salaries of the Treasurer, Auditor General, Attorney General and the Secretary of the Commonwealth be reduced to $80,000/yr, the salary of the Lt. Governor be reduced to $95,000/yr and the Governor’s salary be reduced to $100,000/yr. This would in turn save the Commonwealth $384,401 per year just in reduced salary costs.

The salaries of the Governor’s Cabinet could bear reform as well. According to PA Bulletin, Doc. No. 09-2393 (issued Dec. 26, 2009), which outlines the salaries according to the Consumer Price Index formula used to calculate the COLA raises of state officials that come into effect for those assuming office in 2011, no cost of living increases came into effect as of January 1, 2010. However, the 1.7% increase would come into effect December 1 of that same year. Therefore, one need only look at the salary effective 1/1/10 and add 1.7% to get their current salaries today. The salaries of agency heads are as follows:

Large Agency Heads: $139,931/year

Secretary of Education

Secretary of Environmental Protection

Secretary of Health

Secretary of Labor and Industry

Secretary of Public Welfare

Secretary of Transportation

Secretary of Corrections

COLA Adjustment of +1.7%= 142,310/year


Medium Agency Heads: $132,934

Secretary of Aging

Secretary of Community and Economic Development

Secretary of General Services

Secretary of Revenue

State Police Commissioner

Secretary of Conservation and Natural Resources

COLA Adjustment of +1.7%= $135,194


Small Agency Heads: $125,939

Adjutant General

Secretary of Agriculture

Secretary of Banking

Secretary of the Commonwealth

Insurance Commissioner

COLA Adjustment of +1.7%= $128,080

Grand Total Costs for Salaries (Minus the Secretary of the Commonwealth): $2,319,654/year (this figure excludes health benefit costs).

To rectify this gross bloat of executive compensation, I propose reducing the salary of every Small Agency Head to $80,000/year, Medium Agency Heads to $85,000/year and Large Agency Heads to $90,000/year. This could save the Commonwealth (again excluding the savings with reducing the Secretary of the Commonwealth’s salary) $859,654 by reducing the overall costs to $1,460,000 annually. Furthermore, when we add the savings incurred by reducing the salaries of PA’s row officers ($384,401) with the savings incurred through the reduction of the salaries of the various agency heads ($859,654), we come to a grand total savings of $1,244,055. This number only includes the agency heads and not their various deputies and assistants and heads of other major state agencies such as the Pennsylvania Liquor Control Board.

Let us now focus our attention on those individuals who head these other agencies and their monetary compensation. The figures below denote the number of posts, their current earnings and my proposals for their reduction in salary (Note: As of this writing, no information regarding whether the COLA increases are applied to these officials was found; therefore I will only use their base salary):

Liquor Control Board

Chairperson $71,084 (1) Proposed Salary: $42,000

Member $68,284 (2) Proposed Salary: $40,000

Savings: $85,652/year


Civil Service Commission

Chairperson $79,987 (1) Proposed Salary: $44,000

Member $76,910 (2) Proposed Salary: $41,000

Savings: $107,807/year


State Tax Equalization Board

Chairperson $24,489 (1) Proposed Salary: $15,000

Member $22,738(2) Proposed Salary: $12,000

Savings: $30,965/year


Milk Marketing Board

Chairperson $22,738 (1) Proposed Salary: $12,000

Member $21,864(2) Proposed Salary: $10,000

Savings: $34,466/year


Securities Commission

Chairperson $38,259 (1) Proposed Salary: $22,000

Member $34,905(2) Proposed Salary: $20,000

Savings: $46,069/year


Athletic Commission

Chairperson $18,369 (1) Proposed Salary: $10,000

Member $17,490 (5 including the Secretary of the Commonwealth as a member) Note: In addition to the Secretary of the Commonwealth’s salary, this individual also collects the salary as an Athletic Commission member. Proposed Salary: $8,000 in addition to the elimination of the Secretary of the Commonwealth collecting a salary as an Athletic Commission member

Savings: $63,819/year


Board of Pardons

Member $16,091(6 including the Lt. Governor as Chair) Note: In addition to the salary as Lt. Governor, this individual also collects the salary as a Board of Pardons member. Proposed Salary: $100/year in addition to the elimination of the Lt. Governor collecting a salary as a member of the Board of Pardons

Savings: $96,046/year


Public Utility Commission

Chairperson $135,434 (1) Proposed Salary: $75,000

Member $132,934 (4) Proposed Salary: $72,000

Savings: $304,170/year


Environmental Hearing Board

Chairperson $135,434 (1) Proposed Salary: $75,000

Member $132,934 (2) Proposed Salary: $72,000

Savings: $182,302/year


Board of Claims

Chairperson $129,190 (1) Proposed Salary: $72,000

Member $122,389 (2) Proposed Salary: $70,000

Savings: $161,968/year


Total in Savings to Pennsylvania taxpayers: $464,734/year

Grand Total in Executive Branch monetary compensation reform: $1,708,789/year

Total Savings to Pennsylvania Taxpayers derived from this Plan: approximately $1.27 billion/year (does not include total savings to unidentified pension and other benefits costs)

The justification of these salary reductions is that civil service is meant to be an honor, not a career. The individuals working in these top posts should not be permitted to make a living or supplement their incomes at the expense of the taxpayers. Many of these individuals hold alternate employment elsewhere. If this is the case, I find no valid reason as to why they deserve the monetary compensation the taxpayers of Pennsylvania provide to them. In addition, the duties of many of these bodies are nowhere near a full-time basis. Therefore, the members of these bodies earning something akin to a full-time salary are very nearly repugnant to the ideals of civil service.

I now hereby humbly submit Part 4 of my plan for public debate.

Part 4 Works Cited:



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About J. Rizzo Mertz 3 Articles
Age: 26 - Executive Director of The Pennsylvania Center for Civic & Community Engagement - 2011 Millersville University graduate (BA- Government & Political Affairs)
Contact: Website

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