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Auditor General’s Report Critical of Wine Kiosk Program

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There has been more criticism of the PLCB‘s wine kiosk program, this time from a special performance audit.   Auditor General Jack Wagner says the program does not meet the goals of greater convenience or increased profitability, or reaching under-served areas.  He says unless there are radical changes in the contract with the vendor, the LCB should terminate the contract.

Wagner says there are still 22 kiosks operating at supermarkets in Pennsylvania since Wegman’s pulled out of the program, but sales at those stores are running far below the LCB’s original projections.

Wagner the kiosks were not even open on Sunday. He adds the General Assembly needs to take the handcuffs off the LCB, permitting all of the state stores to be open seven days a week, 12 hours a day.   

Joe Conti, CEO of the Pennsylvania Liquor Control Board, says the future of the kiosk program depends on the resolution of a financial dispute with the vendor over cost reimbursement.  The vendor was declared in breach of the contract.  There is a 45 day cure period which expires September 19th.

Conti agrees with Wagner that the state stores should be able to change their hours of operation.  He says they need a legislative amendment to the liquor code to expand those hours.  He says one was adopted last session but vetoed by then-Governor Ed Rendell.  Conti says there is legislation moving again to expand the hours.

Conti called Wagner’s report very fair and balanced.  He says they will certainly review the recommendations.

Wagner’s report recommends that if the contract for the kiosks is not terminated, the LCB should explore other options for testing blood alcohol concentrations at the kiosks and be more aggressive in holding the vendor accountable for ensuring the kiosks are fully functional at all times.

It recommends the LCB work with the General Assembly to pass legislation that would allow all stores and kiosks to be open seven days a week, with state stores open from 9 a.m. until at least 9 p.m. and kiosks available from 9 a.m. until midnight if they are housed in stores open during those hours.   It also recommends the kiosk offer liquor sales as well as expand wine offerings.

The report finds the kiosks had more than 900 malfunctions before they were shut down last December for repairs.  Even after they were brought back on line in January, there were more than 100 malfunctions reported from late January into late February.

The report also finds that the LCB has spent 1.12 million dollars more than it took in over two fiscal years on the program. The board has billed the vendor for the costs, but the vendor has not paid, resulting in the breach of contract situation.

Ex-Speaker Perzel Pleads Guilty, Will Cooperate

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Flanked by two attorneys and wearing a dark blue suit, former Speaker of the House John Perzel stood in front of Dauphin County Judge Richard Lewis, Wednesday, to enter his guilty plea.  The Philadelphia Republican did not speak to reporters as he entered or left the third floor courtroom, but he did release a written statement. 

It reads: “…The truth is that as the legislative leader of my caucus, I oversaw the spending of millions of dollars in taxpayer funds, and I bear the responsibility for the improprieties that occurred in the spending of those dollars.”  Perzel also expressed regret for his actions.  “You had a right to expect better from me, and I am sorry I let you down,” the statement concludes. 

Perzel pleaded guilty to 8 of 82-charges that were leveled against him in 2009.  They range from conflict of interest, to theft, to conspiracy.  He could face a maximum of 24-years behind bars, but the standard minimum sentence is 18 – 50-months.  The charges also carry $50,000 dollars in fines. 

Frank Fina - Bonusgate

Prosecutor Frank Fina talks to reporters after former Speaker John Perzel pleaded guilty.

“Whenever we have somebody of this responsibility and this position stepping forward and pleading guilty, and taking responsibility for illegal conduct, I think it is an important event,” Chief Deputy Attorney General Frank Fina told a tightly-packed gaggle of reporters.   Fina says the plea agreement includes Perzel’s cooperation – and likely testimony – as the political corruption cases proceed. 

A former Perzel aide was also in the courtroom, Wednesday, to plead guilty.  It brings to five the number of guilty pleas out of the 10- Republican House members and staffers who were charged in the second round of the “Bonusgate” investigation.  The political corruption probe also indicted 15-Democrats in phases I and III of the investigation. 

A 188- page grand jury presentment from November of 2009 concluded that Perzel was the mastermind of a sophisticated scheme that spent more than $10-million taxpayer dollars for campaign work. 

Political activist Gene Stilp of Taxpayers and Ratepayers United thinks Perzel’s guilty plea breathes new life into the ongoing political corruption investigation.  “If he cooperates with the prosecution, many people in the House and the Senate should be worried,” Stilp says.

Controversial Bills Get 2 Days of Capitol Hearings

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15-bills are up for discussion before the state House State Government Committee, most of which are included in a package called “National Security Begins at Home.”  The bills range from authorizing local police officers to conduct Arizona-style enforcement, to requiring government-issued ID to receive public benefits, to barring babies born to illegal immigrants in PA from automatic citizenship status. 

The Federation for American Immigration Reform (FAIR) testified that this is a states issue too, and government can’t pick and choose which laws to enforce.  “They might be the nicest person in the world, looking for work, however we’ve got lawbreaking that starts here,” says FAIR’s Robert Najmulski.

Illegal Immigration Issues

Members and supporters of the Pennsylvania Immigration and Citizenship Coalition rallied ahead of this week's committee hearings.

But the Pennsylvania Immigration and Citizenship Coalition (PICC) contends that the bills being discussed are fueled by fear, and detrimental to all Pennsylvanians.  “Their goal: attrition through enforcement will weaken our commonwealth, which relies on immigrant workers and employers to keep our economy strong,” says PICC executive director Brian Baldia.  He spoke in the capitol rotunda, as critics lamented that the committee’s agenda was lob sided in favor of the bills’ supporters. 

Inside the hearing room, Chairman Daryl Metcalfe (R-Butler) defended his references to Pennsylvania’s “illegal alien” invasion.  “Personally, I take offense when somebody calls a foreign national who is here illegally an immigrant.  My wife is an immigrant.  My wife immigrated here legally.” 

Both sides of the debate are talking dollars and cents.  FAIR testified that taxpayers’ bill for illegal immigrant amounts to $1.3-billion dollars a year.  “That is broken down through education, Medicaid, criminal justice system, welfare and other benefits,” Najmulski says.  But, the ACLU of Pennsylvania contends that study can be debunked.  Legislative director Andy Hoover says most of the so-called cost is for the education of the children of undocumented immigrants, who are US citizens according to the Constitution.

“Two states that have passed these ‘papers please’ laws, these law enforcement bills, have lost hundreds of millions of dollars in business.  Arizona and Georgia have both seen economic disaster as a result of passing these laws,” Hoover adds.

First Probable Human West Nile Virus Case in Pennsylvania This Year

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Pennsylvania has its first probable human case of West Nile Virus this year.   An elderly Lebanon County woman was hospitalized in late July with a high fever and neurological symptoms.  Officials say she is currently recovering from what they believe is West Nile Virus.

So far this year, mosquito samples in 54 counties have been identified with the West Nile Virus.

 Severe human infections from the mosquito-borne virus can cause encephalitis or inflammation of the brain along with high fever, headache, neck stiffness, disorientation, tremors, convulsions, paralysis and coma.  There is a milder form of the infection known as West Nile fever that may produce head and body aches, skin rash and swollen glands.  Unusually, the infection does not result in any illness.

New Marcellus Shale Study Shows More Modest Economic Benefits

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A new study shows Marcellus Shale is benefiting the economy, but maybe not as much as some believe.   The study looks at employment and other economic activity in the Marcellus Shale Region for 2009 and was conducted by the Marcellus Shale Education and Training Center.

Tim Kelsey, professor of agricultural economics at Penn State, is the lead author of the study.  He says they estimate some 23 thousand jobs were created that year, but those estimates are about 20 thousand less than previous studies of the employment effect.   

Kelsey says they found only about half of the land in counties with drilling activity is owned by local residents, with 25% owned by people in other parts of the state and almost 8 percent owned by out-of-state landowners. In addition, a significant amount of the leasing and royalty dollars are being saved, rather than spent immediately.

Among other findings, Kelsey says they surveyed municipal governments in 12 counties with the most Marcellus Shale activity. The majority of those with gas activity say they’ve seen no impact on their taxes, the services they provide or the cost of providing services.  Of the ones reporting effects, only 18% said they have higher tax revenue because of gas activity, but about 26% said they have higher costs.

Kelsey says they randomly selected 1-thousand businesses in Bradford and Washington Counties to survey on the economic impact. Across the economy, he says businesses were likely to report higher sales and positive effects from the gas activity. He says this included not only businesses that contract with the gas companies, but Laundromats, tourism-related businesses and others.

Kelsey cautions this is an early snapshot of the activity in the shale region and it’s likely the effects will be different five years down the road as there are more wells in production.

He says the short run view does allow them to identify the things they know and don’t know.  He says they still don’t have good information on the distribution of benefits and costs.  He says they also need better information on the economic impact of some of the environmental issues that are arising.

First Director Named for new Independent Fiscal Office

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Pennsylvania’s Independent Fiscal Office has its first director.   Matthew Knittel is   a senior financial economist with the U S Department of Treasury.  He says the office will be a great tool to help lawmakers craft policy, providing revenue and expenditure projections and undertaking special studies and developing performance measures.

Knittel’s first day on the job is expected to be September 19th. Then, he’ll need to hire a staff to get the office up and running. The first report is due November 15th; an annual assessment of the state’s fiscal condition, but since the hiring process took longer than anticipated, that first deadline may slip a little this year.

Knittel says it’s his intention to use the office’s web site to post data analysis that will be interesting to the legislature and general public.  He says the intention of the legislature is that the office should be very transparent, and he’s a big advocate of that.

Knittel says there are several ways that he will keep the office independent.  He says he does not have any pre-existing connections to the Pennsylvania legislature, and as he hires the new staff, he’ll be sensitive to the needs for the office’s independence. He adds that given his six year appointment, he does not anticipate feeling any pressure to arrive at any particular conclusion or answer.

Knittel says even though they won’t be fully staffed right away, they should be able to meet their deadlines in May and June for issuing budget figures.

Knittel  applied for the job after seeing it advertised on the website of the National Association of State Budget Officers. He was  chosen by the Independent Fiscal Office Selection and Organization Committee established in Act 120, which authorized the new office.  The selection committee signed a unanimous letter appointing Knittel.

Thousands of Pennsylvanians Still Without Power

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The wrath of Hurricane Irene was too much for many electric transmission and distribution lines in the eastern half of the state.  At the height of the storm, 768,000 homes and businesses were without power.  As of 1pm, Monday, the Public Utility Commission reported that number had been reduced to 385,000. 

Utility crews from Ohio, Indiana and Kentucky have arrived in PPL Electric’s 29-county service territory.  “Right now were’ still looking at probably a 3 – 5 days in which to wrap up all of the storm restoration.  That’s the extent of the damage we’re seeing,” says PPL spokesman Kurt Blumenau.

First Energy has more than 4,000 extra workers on hand in New Jersey and Pennsylvania.  “We’re going to have to probably, in the Met-Ed area, replace more than 200-poles and more than 400-spans of wire that have come down,” explains spokesman Scott Surgeoner.  While crews are working around-the-clock, Surgeoner says it’s too early to estimate how long it will take to restore power to all Met-Ed and Penelec customers. 

If your power is out, the Public Utility Commission recommends unplugging large appliances (except for the refrigerator/freezer) and keeping most light switches in the off position.  “Otherwise, when the power comes back on, it could cause a surge to your home and really short out some of your equipment and belongings,” says PUC spokeswoman Jennifer Kocher.  She says to leave one lamp on, so you know when the power is restored.  Then, wait 15-minutes before turning on other appliances.

Maryland Resort Dodges Worst of Irene

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A popular Maryland resort ordered a mandatory evacuation on Thursday ahead of Irene, but the town was back in business by noon Sunday.    Ocean City, Maryland dodged a bullet as Hurricane Irene roared up the coast.

Mayor Rick Meehan says the winds were not quite as strong as predicted and the height of the storm surge came at low tide, rather than high tide. 

 Meehan says they still received a significant storm, and the town was no place to be while Irene was pounding the surf. He says the town was battered by sustained winds of 50 to 60 miles an hour with gusts up to 80 , along with a six to eight foot storm surge.  They had to shut down the sewer treatment plant on Saturday. 

Meehan says   it was the right thing to do to evacuate the town.  He says they wanted to make sure visitors would have time not only to get out of Ocean City before the storm hit, but to get back to their homes.  Meehan says they didn’t want people to be forced to travel  during the storm. He thanked people for heeding the warnings.

Meehan says the dune system is still in place and intact and the seawall along the boardwalk protected the properties there.

Meehan says businesses are looking forward to the Labor Day holiday. He says living along the Atlantic Coast has some tremendous benefits, but every once in the while, there’s a bump in the road.  Meehan says that’s all Irene turned out to be.  He says businesses are ready to bring back customers and move forward.

The Clean-up and Recovery Begins…

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As crews tried to restore power to hundreds of thousands of customers left in the dark by Hurricane Irene, state officials continued their efforts to set Pennsylvania on the path to recovery in the wake of the enormous storm.

Governor Tom Corbett provided updates on the state’s fatalities Sunday, including people killed by falling trees in Dauphin, Monroe and Luzerne counties. A fourth person died after losing control of their car along the Pennsylvania Turnpike in Carbon County. Authorities in Montgomery County say the body of a woman was discovered in a creek near her abandoned car. The death toll stood at five by Monday morning, but more reports of storm-related fatalities were possible.

Flood waters threaten vehicles in suburban Philadelphia Saturday night

Officials also say the flooding threat is not over. The Delaware River will crest above flood stage Monday and other waterways throughout eastern Pennsylvania will be affected as the rains dumped by Irene to the north of us run off to the south.

Governor Corbett has asked Washington for federal disaster assistance for at least 11 counties affected by Hurricane Irene: Bucks, Chester, Delaware, Lehigh, Monroe, Montgomery, Northampton, Philadelphia, Pike, Wyoming and Wayne.

While Irene is gone, another potentially dangerous storm system is developing in the eastern Atlantic. Tropical Depression 12 is expected to be a hurricane by Thursday as it moves slowly westward.

More Woes for Electric Customers in Hurricane Irene’s Wake

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As the high winds associated with Hurricane Irene picked up velocity in Pennsylvania during the early morning hours, the state’s utilities were scrambling to keep the lights on. As of 10:45am Sunday, PPL was reporting more than 191,000 customers out of service in 29 counties, with more reports of additional outages coming in. The most widespread outages were reported in Dauphin, Lancaster, Cumberland, Lehigh and Schuylkill counties.

Meanwhile, PECO was also working to restore power to thousands of customers in southeast Pennsylvania as dawn arrived and the extent of damage from Hurricane Irene became evident.

There are numerous reports of flooding, downed trees and other property damage throughout eastern PA as the massive storm finally begins to move to the north east.