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Prepping for another Tough Budget Season

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The Corbett administration’s third budget season may be its most difficult yet, according to Budget Secretary Charles Zogby.  The 2012-13 Mid-Year Budget Briefing projects the state will end the current fiscal year $85-million dollars in the black, but $1.3-billion in mandatory cost drivers await in the new fiscal year. 

For instance: pension obligations ($511-million), Medical Assistance ($650-million) and debt service ($89-million). 

Charles Zogby gives reporters a mid-year update on the state budget.

“We’re working very hard in a number of areas – education would be one, health & human services – to not have to make the level of deep cuts that we’ve made in the past,” Zogby told reporters huddled in a capitol conference room. 

Zogby’s not divulging many details ahead of Governor Tom Corbett’s February budget address, but says it will not include any new taxes. 

For now, the budget planning revolves around a hypothetical 3% revenue growth in FY2013-2014, but Zogby knows a lot can change in the next two months.  “Not the least of which is the fiscal cliff,” Zogby says, noting that sequestration alone could have a $300-million dollar impact on the Commonwealth. 

Legislative Democrats have been critical of the governor’s first two spending plans, and they don’t see things changing during the coming budget cycle.  “We have suggested that jobs, education, health care and transportation are things to invest in,” says House Democratic Appropriations Chair Joe Markosek (D-Westmoreland).  “The Governor has suggested that corporate welfare is something that we ought to be investing in.” 

Democrats say it’s showing up in the state’s tax receipts, where corporation taxes are running 18% above projection for the fiscal year, while sales and personal income taxes are lagging.

Distracted Driving Debate Gets Jump-Start

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Six months into Pennsylvania’s texting-while-driving ban, there’s already a push for the state to do more.  Rep. Joe Markosek (D-Allegheny/Westmoreland), a former chairman of the House Transportation Committee, wants to ban drivers from using hand-held cell phones.

Markosek’s new bill would mirror the texting ban in terms of enforcement and penalties.  Hand-held cell phone use behind the wheel would be a primary offense punishable by a $50-dollar fine.  No points would be tacked onto the offender’s license, and the phone could not be confiscated.

“As much as we would like to think that, okay, we’ve got the texting ban passed and we can wash our hands of everything… and everything will be fine,” Markosek says, “we are just deluding ourselves into thinking that.”

Some police officers are backing the more comprehensive cell phone ban language too, because they’re finding it difficult to enforce a texting-only ban.  “How can we say they are pushing letters rather than numbers, and that they weren’t in fact using their cell phone?” asks Allentown Police Captain Daryl Hendricks.

But Pennsylvania’s texting ban was a product of compromises, and the will was not there to include a comprehensive cell phone ban this session.  “We have a lot of unsafe driving habits that not only are due to hand-held cell phones, but they’re due to Big Macs and shakes,” says Senate President Pro Tem Joe Scarnati (R-Jefferson).  “I don’t know how we empower law enforcement to crack down on all types of unsafe driving.”

For his part, Markosek knows the bill likely won’t see action this session, but he’s hoping to set it up to be a priority when the 2013-2014 session of the General Assembly convenes next year.  “There’s no reason why it shouldn’t be.  It is about the safety of our citizens.”

Ten states already ban hand-held cell phones for all drivers.  32-states ban all cell phones for teen drivers.

Under the Capitol Dome

State Budget Votes Near

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The state’s current budget was enacted with zero Democratic support last year.  This year may not be much different if Wednesday’s House Appropriations Committee meeting is any indication.  After two hours of debate, the committee advanced the $27.7-billion dollar spending plan along party lines.

The spend number may be almost 2% above this current budget, but most of the increases are due to mandatory costs like pension obligations and medical assistance.  “This budget contains no tax increases,” Appropriations Chairman Bill Adolph (R-Del.) repeated twice for emphasis.

While better-than-expected revenues in the spring allowed Republican budget negotiators to spend a half-billion more than what was first proposed in February, Adolph told the committee the state is still on pace to end the fiscal year nearly $200-million dollars in the red.

“This is a sustainable budget that meets the needs of Pennsylvania residents,” Adolph concluded.

The recently released spreadsheets show $100-million dollars restored to the Accountability Block Grants that fund full-day kindergarten programs across the state.  Add that to $50-million being set aside for distressed school districts and budget supporters say all school districts will receive at least the same amount of state funding they got this year.

State Rep. Joe Markosek

State Rep. Joe Markosek

That doesn’t satisfy House Democrats though.  “I would challenge anybody in this room to go to any school director in the Commonwealth, in the public school system, and ask them if they think they are getting more money for educational purposes,” says Democratic House Appropriations Chair Joe Markosek (D-Allegheny/Westmoreland).

Markosek also lamented a planned tax credit for “big business” at a time when county human services are facing 10% cuts.  That 10% cut, however, is half of what was proposed back in February.

Final House votes could come as early as Thursday, with Senate votes to follow.  The state’s new fiscal year starts on Sunday.  Details of other budget season priorities – like education reforms and the ethane tax credit – are still being finalized.

Transportation Funding Crisis Not a Budget Item

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The governor’s Transportation Funding Advisory Commission released its final report in August, and House Democratic Appropriations Chair Joe Markosek (D-Westmoreland/Allegheny) says it’s been ignored for too long.  “I’m just flabbergasted that he’s ignored transportation to the extent that he’s ignored it,” Markosek told us after this week’s budget address.  “It’s just almost unbelievable in my opinion.” 

Pennsylvania faces an annual transportation funding gap that tops $3-billion dollars.  While the new spending plan does not address the matter, Governor Tom Corbett did call it a priority in his budget speech on Tuesday:   

“This is not a budget item.  It is too large for that.  Transportation must be confronted as its own distinct and separate topic.  This problem has grown for the past several decades and it will not be solved overnight.  But, whatever solution we enact must be a lasting one.”

“I have spent significant time considering this issue with my transportation team and developed some workable solutions.  However those solutions will only be possible with your input, assistance and support.” 

Jake Corman

Jake Corman discusses state budget issues with the assembled media.

Senate Republican Appropriations Chair Jake Corman (R-Center) recently put the TFAC recommendations in to bill form in hopes of spurring action on the transportation funding crisis.  But he stresses that this type of funding falls outside of the General Fund and can be addressed at any time – not necessarily during budget season.  “We’ll be waiting for the governor to make his proposal… I look forward to that proposal, and once that comes forward I’m sure we’ll negotiate something that works for everybody,” Corman said during a Q&A with the media following Tuesday’s speech.

Gov’s Basic Ed. Budget Plans Already Being Debated

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Pennsylvania policymakers still aren’t on the same page when it comes to the current fiscal year’s public schools budget, let alone Governor Tom Corbett’s newly proposed education spending plan.  For instance, Governor Tom Corbett made it a point to stress that basic education funding was not cut in June. 

“When the Obama Administration handed states billions of dollars in stimulus monies, the previous administration reduced the state’s share in the Basic Education funding formula.  In its place, they put the stimulus funds.  Almost a billion dollars worth,” Corbett said during Tuesday’s budget address.  “That money is gone.  It’s not coming back.” 

As for his new spending plan, Corbett says there are no cuts to the basic education funding formula.  “In fact you will find a slight increase, just as we did last year,” Corbett said to a partisan applause from lawmakers gathered in joint session.  

Corbett’s new education budget does have a new look however, as the Basic Education Funding, Pupil Transportation, Nonpublic and Charter Transportation and Social Security line items have all been lumped into a $6.5-billion dollar block grant.  

Bill Adolph

Bill Adolph addresses the media following the governor's annual budget address.

“We’ve heard for years that local school districts needed more flexibility,” says House Republican Appropriations Chair Bill Adolph (R-Delaware).  “I think what the governor has laid out today… will give the school districts this type of flexibility.  Sometimes they may not need all of that money in transportation, and can put it into the classroom.”  

But House Democratic Appropriations Chair Joe Markosek (D-Westmoreland) is wary of the block grant approach, and he’s identified $124-million dollars in cuts to education programs.  “I think most school directors would tell you they will have less money to spend, in spite of what the governor has said,” Markosek tells us.  

He’s referring primarily to the elimination of something called the Accountability Block Grant, which received $100-million dollars in the current fiscal year.  It’s a program that primarily helps to fund full-day kindergarten classes across the commonwealth.  

While Governor Tom Corbett’s new approach to education is being interpreted in different ways, there’s not debating the challenges created by a different education line item.  The state’s contribution to the Public School Employees’ Retirement System is slotted for a $315-million dollar (53%) increase in FY2013.