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Two Weeks ‘Till Governor’s Budget Address
Just past the half-way mark of the current fiscal year, Governor Tom Corbett says he’s dealing with the state’s difficult budget reality. “People elected me to bring fiscal discipline to Harrisburg,” Corbett said on Radio PA’s Ask the Governor program. “That isn’t always the easiest thing, I can tell you it’s not the most popular thing. But it’s necessary if we’re going to get through this period of time.”
In two weeks, Governor Corbett will address a joint session of the General Assembly to present is spending play for fiscal year 2012-2013. Year-to-date revenues, for the current fiscal year, are already running a half-billion dollars below expectations. Earlier this month, Corbett ordered a budget freeze of nearly $160-million in state spending.
While the governor isn’t revealing any budget details ahead of time, he doesn’t want to cut basic education subsidies. “At this point in time, it would be nice if we could increase that some, I certainly don’t want to cut it at all, but it might be that we end up at that same level as last year.”
Many Democrats call Governor Corbett’s first budget a disaster, however, and are wary of what may be coming in his February 7th proposal. “Governor Corbett’s first budget defunded welfare and other support programs, to the point of completely undercutting our social safety net at a time when people need it the most,” says Pennsylvania Democratic Party Chairman Jim Burn.
“Guarded Optimism” in New PA Economic Report
Pennsylvania appears to be on the road to economic recovery, but experts caution the road is long and full hazards. Pennsylvania’s new Independent Fiscal Office is out with its first ever Budget & Economic Outlook, which pegs the state’s “real growth” at 1.6% for 2012.
There are reasons for optimism in the Pennsylvania economy. “If you look at the balance sheets of the corporations, the profits are pretty healthy, the balance sheets are strong,” says IFO Director Matt Knittel. “If you look at the banks, they’re beginning to lend once again. If you look at consumers, they have brought down their debt balances and I think they’re in a stronger position now than they were a year or two ago.”
Demographic trends pose real economic concern in the years ahead, as Pennsylvania’s senior citizen population is projected to grow by 25% over the next decade. The working age population, meanwhile, is expected to contract by nearly 2%. “Extrapolating these trends out five years we find that if current policies are left in place and current tax laws are left in place, then expenditures greatly exceed revenues five years from now,” Knittel tells Radio PA.
The General Assembly created the Independent Fiscal Office in 2010 as a means to provide nonpartisan financial data. It was funded for the first time in 2011, and required by statute to release its first report this month. The IFO will release its state revenue estimates in May.
Governor Tom Corbett’s Budget Office will need to base a proposed spending plan on revenue estimates much earlier than that. Corbett’s 2nd budget address is scheduled for February 7th.
Critics Urge Administration to Reconsider Planned Food Stamp Asset Test
The Rendell administration did away with the state’s food stamp asset test in 2008. Four years later, Governor Tom Corbett says restoring it would ensure food stamp dollars are used for those who truly need them. “I think it’s incumbent if you are to get money from the government, than you should demonstrate your need for that,” Corbett said on Radio PA’s Ask the Governor program.
“I believe it’s incumbent for the people of Pennsylvania – those who are on welfare and those who are not on welfare – that we test for eligibility to make sure only those people who are eligible under the guidelines are entitled to get that.”
But an asset test would send the wrong message, according to Pennsylvania Hunger Action Center Interim Executive Director Laura Tobin Goddard. “We know that having small savings, encouraging people to save, does help them to become self sufficient,” she says.
The proposed asset threshold for non-senior households would be $2,000. Homes, retirement savings and first vehicles would be exempt. Second vehicles would be exempt up to a value of $4,650. Governor Corbett says there’s room for discussion about the thresholds, but their proposal simply returns to the asset test numbers that were in place in 2008.
The final decision rests with the US Department of Agriculture, which can either approve or reject the Department of Public Welfare’s request. State House Democratic Leader Frank Dermody (D-Allegheny) has already written Ag Secretary Tom Vilsack, urging him to deny the administration’s request.
In part, that letter reads: “Despite the Corbett Administration’s assertions that reinstating the asset test will aid in Pennsylvania’s effort to root out “fraud, waste and abuse,” the fact is that few such problems exist with SNAP in Pennsylvania. In fact, statistics show that Pennsylvania’s fraud rate in the program is among the lowest in the nation – a mere one-tenth of one percent.”
In a separate letter to Governor Corbett, Dermody urges him to reconsider the “ill-conceived” proposal.
Will Lawmakers Reach Marcellus Shale Compromise in 2012?
The House and Senate each passed their own versions of Marcellus Shale impact legislation prior to the holiday break. But Governor Tom Corbett says staff-level negotiations didn’t take a vacation. “I think there’s been a great deal of movement by everybody, and I believe we’re going to get a bill done this session,” Corbett said on Radio PA’s Ask the Governor program. “Particularly I would like to see a bill done before the budget address of February the 7th.”
But some 20 environmental groups rallied in the capitol rotunda, this week, urging lawmakers to scrap both bills. Among their biggest concerns are provisions that would limit the ability of local governments to regulate natural gas drilling. “How can [the state] say that they have more expertise than a local community does over their environment, over their health, over what their people want,” says PennEnvironment’s Erika Staaf. “I’m some areas the people might want a ban.”
But Governor Corbett says uniform zoning rules are necessary to encourage investment and create jobs. “Businesses, if there are going to invest in Pennsylvania – and they have been investing billions of dollars – have to know that there is consistency in the application of the zoning rules across the state.” He says this is not a case of state government bending over backwards for the industry.
Developing a New Natural Gas Infrastructure
Private industry is working to develop a new, natural gas infrastructure in Pennsylvania and beyond. For instance, Clean Energy Fuel Corp’s new plans call for “America’s Natural Gas Highway.” The nationwide project will develop about 150-natural gas fueling stations over the next three years. “We are planning… to put stations in Carlisle, Mill Hall and Smithton, Pennsylvania for the national network,” says Clean Energy’s Vice President of Public Policy and Regulatory Affairs Todd Campbell.
July’s Marcellus Shale Advisory Commission report made several references to natural gas-fueled vehicles, and Governor Tom Corbett wants to develop Pennsylvania’s natural gas infrastructure. “We need to encourage the development of markets for the use of that natural gas here in Pennsylvania,” Corbett said on a recent edition of “Ask the Governor” on Radio PA.
“For instance along the Turnpike, we have all of the Sunoco’s along the Turnpike. Just like there’s a diesel tank there, there should be a natural gas tank there.”
Clean Energy is already operating natural gas fueling stations in 28-states, including Pennsylvania, but they mostly serve high-volume fleets like the ones found at airports or operated by trash haulers. “I think the time where you and I are driving around in a natural gas car is probably five to ten years. That’s probably a little optimistic,” Campbell says. Regardless, he believes there is an industry out there waiting to be born.