RadioPA Roundtable

Radio PA Roundtable 11.30.12

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On this week’s Radio PA Roundtable, Matt Paul breaks down the sweeping recommendations of Pennsylvania’s Task Force on Child Protection. He’ll also be jointed by Radio PA Sports Director Rick Becker to look back at an unprecedented season of Penn State football, and learn how budget cuts are affecting the state’s nonprofit sector.

Radio PA Roundtable is a 30-minute program featuring in-depth reporting on the top news stories of the week.

Click the audio player below to hear the full broadcast:

[audio:https://s3.amazonaws.com/witfaudio/radiopa/Roundtable11-30-12.mp3]
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United Way Survey Uncovers Nonprofits’ Struggles

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Nearly 70% of the 800-nonprofit groups responding to the United Way of Pennsylvania’s budget survey report feeling the effects of state budget cuts in 2012, and some indicate the cuts have been going on for five years or more.  Nearly half of the groups also report feeling the pinch from federal budget streams.

At the same time, more than three in four of the human services agencies responding to the survey say the economic downturn has increased the demand for their services.

“Over a third of the responding organizations (35%) reported turning away individuals needing service, while another 21% revoked services from individuals due to a lack of funding,” explained United Way of Pennsylvania President Tony Ross. 

United Way of Lackawanna and Wayne Counties President Gary Drapek tells Radio PA the crisis extends beyond the human services agencies to the people they serve, and Butler County United Way Executive Director Leslie Osche is especially concerned about a group she calls the ‘invisible middle.’

“It’s the struggling young people and the struggling families that tend to get lost in the shuffle, and become somewhat invisible in this process, because they’re not necessarily those who are in nursing home care or in institutional care of some sort,” Osche explains.

Tony Ross recognizes that state policymakers may not be able to increase funding in these tough times, but he’s still urging them to stop the cuts to human services.  Another recommendation is to implement performance-based budgeting that funds the programs that work.

“In the long run we will be wasting more money because more services will be needed if we don’t start funding the preventative services to the level that we should,” Drapek says.

First Democrat Enters Gov’s Race

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The field of Democrats seeking to unseat Governor Tom Corbett may get crowded by 2014, but for today there’s only one.  John Hanger, a former Department of Environmental Protection (DEP) Secretary under Governor Ed Rendell, is touring the state to kick off his gubernatorial bid. 

Hanger wants to reverse education budget cuts and tax natural gas drillers.  “In September and October, for the first time in years, Pennsylvania’s unemployment rate went above the national rate,” Hanger pointed out during a stop at the state capitol.  “That’s an extraordinary thing because of the gas boom and the gas opportunity that we have here.” 

The Republican Party of Pennsylvania has already fired back, issuing a statement that reads: “…The Corbett record of responsibility and success is a stark contrast from the broken, bloated and unsustainable state government that tax-and-spend politicians like Ed Rendell and John Hanger helped to create…” 

October’s statewide unemployment rate stood at 8.1%.  While it’s above the national rate, data from the Department of Labor & Industry also show that Pennsylvania has added 105,700 private sector jobs since Corbett took office.    

A November Quinnipiac Poll finds that PA voters are somewhat divided on the job Governor Corbett is doing: 40% approve, 38% disapprove.

Pension Issue to Heat up this Winter

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The latest prelude to legislative action on Pennsylvania’s public pension crisis came in the form of the Keystone Pension Report, a 19-page document released by the Governor’s Budget Office this week.  It details what led to the $41-billion dollar unfunded liability problem, the consequences of inaction and possible solutions. 

If you do the math, each Pennsylvania household is on the hook for $8,000 worth of the unfunded liability in the state’s two big public pension plans. 

While laying out a broad framework for fixing this mess, the Keystone Pension Report notes several key points: tax increases should be off the table, retirees should not be affected, and the accrued benefits of current employees should not be touched. 

That last point, however, leaves the door open for the exploration of changes to current employees’ future benefits, and that has the public employee unions especially concerned.  “The constitution protects that contract.  No one has the unilateral right to change that contract,” says AFSCME Council 13 Executive Director David Fillman in stressing that current workers’ benefits are sacrosanct. 

A spokesman for the Governor’s Budget Office says the report does not recommend one particular route to solvency, it simply lays out all of the options. 

Governor Tom Corbett wants to include comprehensive pension reform in next year’s budget, and Senate Republicans have already signaled their intent to prioritize the issue as well.

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What Would the Fiscal Cliff Mean for PA?

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The fiscal cliff is more than just a federal issue.  The automatic spending cuts called for in federal sequestration could mean $60-million fewer federal dollars for Pennsylvania next year, and that’s just half of this so-called cliff. 

Without Congressional action, a variety of tax increases will also take effect as of January 1st, which could raise a combined $600-billion dollars in federal revenue in 2013.

Those tax increases could have serious implications for the Pennsylvania economy.  “Pennsylvania comprises about 4% of US economic activity, so if we apportion that number to Pennsylvania, a very rough order of magnitude might suggest a tax increase of $22-billion dollars,” Independent Fiscal Office (IFO) Director Matthew Knittel explained on Radio Smart Talk.  “[That’s] a very rough order of magnitude and a worst-case scenario.” 

Knittel believes Congress will take some action by the end of the year, just not full action, so he says a more realistic economic impact on PA would be in the $8 – $20-billion dollar range.” 

The payroll tax cut alone would mean $5-billion fewer dollars for PA taxpayers.  “If one assumes that roughly 70% of that would have been spent, and roughly 40% would have been spent on taxable items, that tax increase suggests a roughly $70 – $80-million dollar reduction in sales & use tax revenues,” Knittel says. 

The potential impact of the fiscal cliff was included in the IFO’s recently-released Economic & Budget Outlook, which projects lackluster growth in the Pennsylvania economy.

Online Shoppers Should Pay Attention to Sales Tax

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“Cyber Monday” sales increased nearly 30% over last year, according to early reports from IBM Benchmark.  Many online retailers are now collecting and remitting Pennsylvania’s 6% statewide sales tax, but the Department of Revenue is still advising shoppers to save their receipts.

“The first thing to do is to check and see if sales tax was charged on the online purchase.  If it was charged, then the consumer doesn’t need to do anything,” explains Department of Revenue spokeswoman Elizabeth Brassell.

But if you don’t see sales tax on your purchase records, Brassell says it’s the responsibility of the consumer to report the “use tax” to the state when computing their 2012 tax returns. 

It appears that many more people are taking notice of the sales & use tax rules, as the state collected $3.8-million dollars in self-reported use tax last year via a new, simplified process on the PA-40 tax form.

Changes Coming to Capitol Christmas Tree Lighting

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There’s a renewed focus on family for this year’s lighting of the state Capitol Christmas Tree, as the ceremony is being moved outside and to the evening hours to allow for greater public participation.  Among the activities slated for the capitol steps in Harrisburg: Christmas caroling. 

Governor Tom Corbett says this year’s events will capture the true essence of the holiday – bringing families together.  He and First Lady Susan Corbett hope to make this year’s event fun, festive and more family-oriented. 

It’s happening at 5pm on Tuesday December 4th.  There will be free parking throughout the Capitol Complex for anyone who wants to attend. 

Next week also marks the start of the 2012 holiday tour season at the Governor’s Residence on Front Street in Harrisburg.  The tours are free, and First Lady Susan Corbett says they’re again partnering with the American Red Cross for a “Holiday Mail for Heroes” program, which invites guests to send holiday messages to servicemen and women.

Even Anglers would Feel the Fiscal Cliff

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The Pennsylvania Fish & Board Commission doesn’t receive any government funding, but even it would feel the effects of the looming fiscal cliff. That’s because their trust fund dollars would be subject to federal sequestration. 

The Sport Fish Restoration and Boating Safety Trust Funds are raised through excise taxes on things like fishing tackle and boat fuel.  The money can’t be spent on anything other than the intended purpose, but Pennsylvania Fish & Boat Commission Executive Director John Arway says that wouldn’t stop the government from sequestering 7.6% next year. 

“I really liken it to someone at a bank, who has access to your account information, and takes 7.6% out of your savings account without your permission to show that they can cover the bad checks that they’ve written,” Arway explains.  “They promise to return the money sometime in the future, but in the meantime you have to find other funds to pay your bills.” 

The shortfall would amount to almost a million dollars for the Pennsylvania Fish & Boat Commission next year, which translates into almost 40,000 additional fishing licenses they would have to sell in order to avoid cuts to programs and services. 

Arway is urging PA’s Congressional delegation to exempt excise tax revenue from sequestration, in the event that the federal government does not avert the fiscal cliff (a potentially devastating mix of tax hikes and automatic spending cuts) on the first of the year.

Special Elections Pending in State House

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A pair of Democrats won higher office, earlier this month, while simultaneously being reelected to their state House seats.  Allegheny County’s Matt Smith is moving across the capitol to the Senate, while York County’s Eugene DePasquale will set up shop in the nearby Finance Building as the state’s next Auditor General. 

The development will leave two vacancies in the GOP-controlled chamber when the 2013-2014 session gets underway in January, but DePasquale says the transition has not affected the work of his legislative office.  “We were being pretty adamant and keeping up with that stuff even during the campaign,” DePasquale explains.  “We don’t have much of a backlog here.  I mean certainly there’s some work that needs to get done, and we’re going to make sure it gets done.” 

There’s no word yet on when the special elections may be scheduled. 

DePasquale, who will tender his resignation in the House just before he’s sworn-in as Auditor General on January 15th, broke new ground by taking the Majority Party PA’s public service pledge during the campaign season.  “It commits them to using their position of leadership in service to the priorities of the majority of the Pennsylvania voters, as determined by scientific public opinion research,” says Majority Party PA chairman Tim Potts. 

Two other newly reelected state Reps also took Potts’ pledge: Scott Conklin (D-Centre) and Mario Scavello (R-Monroe). 

While critics dismiss the idea of a pollster setting the agenda for the state, Potts tells Radio PA somebody has to represent the public if we’re going to have a representative democracy.  He says nothing is added to their agenda until the public opinion is settled.

Senate Leader Discusses Accomplishments, Goals

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With the 2011-2012 legislative session set to expire at the end of the month, Radio PA’s Matt Paul took a look back at the past two years with state Senate Majority Leader Dominic Pileggi (R-Chester/Delaware) in a wide-ranging interview.  Calling it an extremely productive session, Pileggi says jobs were the top legislative issue and the most important jobs bills are the ones that will have long-lasting effects. 

“The continued phase out of the capital stock and franchise tax, in both the 11/12 & 12/13 [fiscal] years, we continued that phase out,” Pileggi says.  “Just in this past year we eliminated the death tax on family farms.  We’ve also updated the film tax credit program and actually added a new tax credit for historic buildings.”

Pileggi also cites Pennsylvania’s Fair Share Act and expanded Keystone Opportunity Zone program as important jobs bills from this past session. 

Looking ahead to the 2013-2014 legislative session, Pileggi the biggest jobs issue is transportation funding.  It would obviously provide short term jobs in the form of construction projects.  “Longer-term I think every serious observer agrees that an effective transportation infrastructure – both for cars & trucks and mass transit – is necessary for a competitive environment for job creators,” Pileggi explains. 

He also tells us the Senate will be ready to move forward with a package of bills to address the state’s pension crisis within the first six months of 2013. 

Earlier this month, newly-elected and returning Republican senators tapped Pileggi for his fourth term as Senate GOP Leader.