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[audio:https://s3.amazonaws.com/witfaudio/radiopa/Roundtable06-22-12.mp3]Governor Tom Corbett has repeatedly said that June 30th means something to him. With Wednesday night’s announcement that he and top Republican lawmakers have agreed to a $27.656-billion dollar budget framework, it appears that Pennsylvania is on pace to meet a second consecutive budget deadline.
Neither Corbett nor the legislative leaders were willing to discuss the details, as rank-and-file lawmakers are still being briefed on the specifics and a few details are still being finalized. However, $27.656-billion is the same spend number the state Senate used when it passed a budget bill in May.
One of the Senate’s top priorities at the time was the restoration of proposed 20% cuts to the State System of Higher Education and proposed 30% cuts to the three big state-related universities (Penn State, Pitt and Temple). The planned restorations came with a promise from those universities to keep next year’s tuition increases below the Consumer Price Index. Whether these restorations made it into the final deal has yet to be confirmed.
We do know that 40.3% of the budget is comprised of education spending and 38.9% is spent on social services. So, any movement in the spending plan – either up or down – will likely come from those two categories.
In addition to the budget framework, negotiators have confirmed agreement on an ethane tax credit that’s designed to lure a massive new petrochemical plant to western Pennsylvania. “We are investing I believe… in a new industrial revolution in Pennsylvania,” Governor Corbett said earlier on Wednesday. “We are investing in the opportunity for thousands of Pennsylvanians to have a good job.”
The American Chemistry Council estimates 10,000 construction jobs, 400 direct plant jobs in 17,000 spinoff jobs in chemical and manufacturing industries if the proposed Shell Oil petrochemical plant comes to fruition in Pennsylvania.
While Corbett was joined at the capitol by a large & diverse group of tax credit supporters, critics are wary of giving taxpayer money away to big industry. One of those critics is state Rep. Jesse White (D-Washington). He’s already proposed an alternative that would fund the incentives through a surcharge on Pennsylvania’s natural gas wells. “We should not be socializing costs while privatizing profits,” White said in a statement this week.
With the June 30th budget deadline fast approaching, House Majority Leader Mike Turzai (R-Allegheny) has decided to hold off on further liquor store privatization debate until the fall. That gives Turzai the summer to build consensus around a privatization plan with the help of Governor Tom Corbett.
“Nobody in Pennsylvania has a better bully pulpit than the governor,” says Turzai spokesman Steve Miskin. “We expect he’s going to use that and we’re going to get people to the table and get this thing done. We’re closer now than we ever have been.”
House Democrats have been critical of Turzai’s privatization plans, and Rep. Dante Santoni (D-Berks) is pleased with today’s developments. “It just didn’t make sense… I think the Majority Leader saw the error of his ways and pulled the bill,” says Santoni, the ranking Democrat on the House Liquor Control Committee.
Santoni supports modernization of the Pennsylvania Liquor Control Board (PLCB) over privatization. That could include everything from expanded Sunday hours, to flexible pricing and the use of coupons & rewards programs.
But Miskin stresses that the privatization plan is still very much alive. “We’re going to work on it and we’re going to continue working on it until it’s done; until the liquor stores are in private hands.”
Wisconsin is the only state with a fully-funded public pension system, according to a new report from the Pew Center on the States. “Overall the 50-states have a $1.38-trillion dollar funding gap between what they should have set aside to pay for their retirement promises – both pensions and retiree health care – and what they actually have on hand,” explains Pew Center senior researcher David Draine.
Draine tells Radio PA the economic downturn has definitely hurt state pension plans, but the problem has also been decades in the making. “Lawmakers in states like Pennsylvania and others failed to make the recommended contributions both in good times and bad.”
The current state budget includes $1.1-billion dollars in pension obligations. That number is expected to nearly quadruple to $4-billion dollars by 2016, and Governor Tom Corbett is making pension reform a top post-budget priority.
“We’ve got to get pension reform done… the vast majority of the money that the school districts say they need is to go to the teachers’ pensions. That’s where it’s going,” Corbett said at an unrelated news conference last week.
Republican leaders in the Senate appear ready to move on legislation that would move all new hires to a 401K-style defined contribution pension plan. “It is overdue for Pennsylvania state government to move in that direction,” says spokesman Erik Arneson. Numerous pension-related bills have been introduced in the state House as well.
A 2010 law increased employee contributions, raised the retirement age to 65 and extended the vesting requirement to ten years for all new hires. Draine says that will slow the growth of Pennsylvania’s unfunded pension liability, but will not solve the problem.
May was a good month for table games overall in Pennsylvania, but the numbers were helped by the newest casino.
The state Gaming Control Board is reporting a 7.4% increase in table games revenue for May. There were 140 new tables operating compared to May of last year, and 50 of them at the newest facility, the Valley Forge Casino Resort.
Revenues were up at four of the existing casinos, but down at six others. The Sands Casino Resort in Bethlehem saw the biggest increase.
Overall, table games provided over 55.2 million dollars in gross revenue.
In a report released earlier this month, slots revenue was also up for May, by 3.4%, and those numbers too were helped by the addition of Valley Forge, which opened in late March.
The jobless rate in Pennsylvania held steady last month. Even as the nation’s unemployment rate rose a tenth to 8.2% in May, the Commonwealth’s jobless rate held at 7.4%, unchanged from April.
The state Department of Labor and Industry says it marks the 49th consecutive month that the state’s rate has remained below the national average. The jobless rate in Pennsylvania last month was 6-tenths of a point lower than May of last year.
Resident employment was up 23 thousand for the month. Seasonally adjusted non-farm jobs were down 9,900 in May.
Leisure and Hospitality saw the biggest decline. Professional and business services jobs posted the largest increase. The jobless rate was 6-tenths of a point lower than May of last year.
Late blight has been confirmed in four Pennsylvania counties (Blair, Franklin, Lancaster & Mifflin), and the count is likely to increase as additional samples are analyzed. “It’s the same pathogen and disease that caused the Irish potato famine,” explains Penn State Extension plant pathologist Beth Gugino.
While late blight has only been found in commercial potato and tomato operations so far, Gugino says home gardeners should be alert for brown lesions on the leaves of their potato and tomato plants. “When they flip the leaf over they’re going to see kind of a whitish-gray fuzzy growth, which is the pathogen growing out of the leaf.” She tells us that fuzzy growth is how the pathogen moves between plants.
A close-up of a late blight lesion on a tomato plant.
(photo credits: Beth Gugino)
If you suspect late blight in your garden, Gugino recommends you contact your local Cooperative Extension office. “We need to try to manage the disease as quickly as possible, because we tend to think about late blight as a community disease… and we want to take measures to manage it for the betterment of everybody.”
While some fungicides can help to prevent late blight, Gugino says there’s not much that can be done once the disease develops. Plants showing the symptoms should be removed – or affected parts should be pruned out – and placed into a dark plastic bag.
Late blight is most commonly found in cool, wet weather. The warm, dry conditions that many Pennsylvanians are experiencing can stop the disease from progressing, but cannot eliminate it.
Radio PA Roundtable is a 30-minute program featuring in-depth reporting on the top news stories of the week. Professionally produced and delivered every Friday, Roundtable includes commercial breaks for local sale and quarterly reports for affiliate files.
Click the audio player below to hear the full broadcast:
[audio:https://s3.amazonaws.com/witfaudio/radiopa/Roundtable06-15-12.mp3]
On the chopping block this budget season is the cash portion of the state’s General Assistance program in the Department of Public Welfare. The $150-millon dollar effort provides more than 60,000 recipients with monthly checks of around $200-dollars.
Those recipients most often include the disabled, sick and those fleeing domestic violence. “General Assistance is the last knot of the safety net… many of those are persons who have no other means of support,” says Stephen Drachler, executive director of United Methodist Advocacy in Pennsylvania.
Numerous faith-based groups recently joined a diverse, statewide coalition to write the General Assembly in hopes of saving the welfare program.
Housing advocates are even adding their voices to the chorus. Housing Alliance of Pennsylvania executive director Liz Hersh says General Assistance is typically used for basic living expenses and homeless shelters are already stressed. She fears more people would wind up on the streets.
“As taxpayers, while it may be unpalatable to have a program like General Assistance, it actually saves us money,” says Hersh, noting that the aid actually keeps people out of more costly public programs.
The governor’s 1,000+ page executive budget (released in February) notes that eliminating the cash portion of General Assistance will allow the DPW to maintain health care for individuals who do not qualify for Temporary Assistance to Needy Families or Medicaid.
Governor Tom Corbett’s spokesman Kevin Harley tells Radio PA that federal programs will be there to assist the truly needy. “The state program was always above and beyond what the federal government provided, and many states have eliminated or drastically cut back similar programs because of difficult budget situations.”
Like the governor’s budget plan, the Senate budget bill does not include funding for the cash portion of General Assistance. “There is competition for limited resources,” noted Senate Majority Leader Dominic Pileggi whilie meeting with capitol reporters late last month.
But advocates say there is room for compromise, as they seek to preserve General Assistance for those most in need.
Governor Tom Corbett and top Republican lawmakers continue to negotiate next year’s state spending plan. The final budget is expected to spend more than the $27.1-billion proposed by Corbett in February, but less than the $27.7-billion passed by the Senate in May.
Senate Republicans announced a pension reform proposal late last month, now there’s a House package. The two house bills would require future state and school district employees to enroll in a defined contribution plan, similar to a 401K.
The state or school district would contribute 4% and the employee would have to contribute at least 4% of their salaries. The plan also includes an incentive for current employees to switch. If they agree to freeze their benefits and join the new plan, the employer would contribute 7%, instead of 4%. The employee contribution would be at least 4%.
Representative Warren Kampf (R- Montgomery/Chester) says the current defined benefit system is unsustainable. He says under his plan, the contributions would go into an account controlled by the employee. House bill 2453 applies to state employees and House Bill 2454 applies to school employees.
The two pension systems are currently under funded by about 40 billion dollars. Representative Kampf says the taxpayers he has talked to are angry and want some change. He says this plan provides change. He adds that it says to the taxpayers “We’re smart enough now to realize we cannot continue to add more people to this system, because it only makes the problem worse.”
Representative Stephen Bloom (R-Cumberland) says it fits into the context of getting Pennsylvania back on the right track fiscally and making us a solvent state without an excessive burden on the taxpayers.
Representative Kate Harper (R-Montgomery) says something has to be done. She says the pension “deficit” is bigger than the state’s entire budget.