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Capitol View from East Wing

Bills Drafted in Response to Massive Floods

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Bloomsburg Flood - Tropical Storm Lee

Bloomsburg, Columbia County was among the hardest hit areas.

As recent flooding reached historic proportions in many communities, lawmakers are preparing bills to augment federal disaster aid and speed the recovery process.  “State government will never be the ultimate insurer,” says State Senator Lisa Baker (R-Luzerne).  “But when disaster strikes, it is a core function of government to protect lives & property, to restore public safety & infrastructure, and to provide victims the necessities of life when the emergency robs them of everything they need and value,”

Officials say the seven-bill, bipartisan package should be ready soon, and they expect quick action once it’s been formally introduced. 

One bill would create a special account to provide additional state grant money to eligible flood victims who’ve maxed out their federal aid. 

State Senator John Gordner (R-Columbia)

State Sen. John Gordner (R-Columbia)

Another bill would authorize $250-million dollars in bonds to pay to repair flood damaged roads and bridges.  “We will be getting, hopefully, a tremendous amount of federal assistance for the hundreds – maybe thousands – of roads and bridges that have been damaged, but normally the federal government provides about 75% of the funding,” says State Senator John Gordner (R-Columbia), who’s spearheading the effort. 

Three bills in the package would authorize county-by-county lists of flood damaged roads, bridges and flood control systems, adding them to the state’s capital budget. 

Local taxing bodies would have the ability to abate the property taxes on condemned structures, under another bill.  The final bill of the package would allow for educational waivers for things like the 180-instructional day mandate.  “I can tell you that I have at least one school district in my senatorial district that as of today still is not back in school,” Gordner explains.  “That is the Benton Area School District in Columbia County.” 

In addition to Senators Gordner and Baker, John Yudichak (D-Luzerne), Gene Yaw (R-Lycoming) and John Blake (D-Lackawanna) are sponsoring parts of the package of bills.  The sponsors have not yet put a price tag on the legislation, but the special account for flood victims would come out of the budget surplus from fiscal year 2010/2011.

PA School Districts

Will Act 1 Changes Give Voters Greater Say?

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State lawmakers’ last act before the summer break was to send Governor Tom Corbett a bill to limit the Act 1 exceptions that allow school districts to raise property taxes above the rate of inflation, without a voter referendum.  Governor Corbett called it an essential bill of the budget season, and managed to cajole lawmakers into a compromise. 

Governor Tom Corbett

Gov. Tom Corbett Visits With Students at Nativity School in Harrisburg

Appearing on Radio PA’s monthly “Ask the Governor” program, Corbett said the compromise should help keep school district spending under control.  Would he sign a bill to further reduce the remaining exceptions?  Yes.  “But, let’s take that half a loaf that we have right now and see how it’s working,” Corbett says.  The new law will take effect in July 2012. 

Pension costs represent one of the big exceptions that lawmakers ultimately kept in the Act 1 law.  Corbett says the pension woes were created by years of underfunding.  “There are a lot of sins of the past that are being paid for now, by everybody,” Corbett adds. 

Franklin & Marshall College political science professor Terry Madonna says it remains to be seen whether this new law will truly give PA taxpayers the chance to vote on property tax increases above the rate of inflation.  “One of the things that will play out will be whether or not this law… with two exceptions, whether those exceptions are meaningful,” Madonna tells us. 

As Governor Corbett awaits the opportunity to evaluate the law’s success, he notes that taxpayers are also the first line of defense against out-of-control school spending.  “We’re in a municipal [election] year,” Corbett says, emphasizing taxpayers’ ability to elect their school board members. 

Many school officials are already concerned that the new law will lead to additional reductions in educational programming.  They know it’s difficult to convince voters to approve any hike in property taxes.

Corbett Signs Budget Ahead of Deadline

PA Budget Signing Beats Midnight Deadline

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The $27.15-billion dollar, no-tax increase budget trims state spending by more than a billion dollars.  It passed the legislature with zero Democratic support Wednesday night, but Governor Tom Corbett waited until all of the supporting bills were in place before finally putting pen to paper late Thursday night. 

The administration reports that 66-line items were eliminated, 226-line items were reduced, and 52-line items were consolidated.  Basic education funding will receive $5.35-billion dollars in the new fiscal year.  That’s down from a total of $5.77-billion dollars last year (a number which included federal stimulus dollars).  The State System of Higher Education is already responding to 18% funding cuts.  Its board of governors approved a 7.5% tuition hike on Thursday.  Similarly, the state related universities (PSU, Pitt, Temple and Lincoln) face 19% reductions in state support.    

Governor Corbett calls the lean spending plan an important first step in putting PA’s fiscal house back in order.  “It spends no more than we have and it doesn’t pretend that we have more that we haven’t budgeted,” Corbett said referring to Democrats’ calls to use last year’s unexpected revenues to mitigate cuts to education and welfare programs. 

At Thursday night’s bill signing, Governor Corbett said the budget was crafted to grow PA’s economy: “Make no mistake here. This is a budget for Pennsylvania families, for Pennsylvania working families.  It is a budget that imposes no new taxes on them.”

Governor Corbett also hailed legislative passage of a new bill to limit Act 1 exceptions – thus requiring a voter referendum if a PA school district seeks to raise property taxes above the rate of inflation.  While it was technically an unrelated bill, it represents a Corbett priority and the final piece of the budget package.  “I believe we need to give the citizens of Pennsylvania, in the school districts, the ability to voice their opinion in more than just the election of school board directors,” Corbett tells reporters.     

However, the Pennsylvania School Boards Association is concerned that this will result in additional reductions in educational programming.  They know that voter referenda on property taxes are extremely difficult to approve.  “The problem is, less than 25% of the population has children in schools, so there’s 75% of the population that the districts need to reach that they don’t necessarily reach on a routine basis,” says PSBA director of research Dave Davare.  “Districts are not willy-nilly raising taxes,” Davare tells us. 

With this year’s budget work behind them, the State House and Senate have each recessed until September.  This marked the first time in nine years that PA’s state budget was signed by the constitutional deadline.

Lawmakers May Give Voters More Say on School Tax Hikes

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Governor Tom Corbett calls a local property tax reform bill crucial for this budget season.  Specifically, he supports the removal of exceptions that allow school districts to raise property taxes above the Act 1 inflationary index, without voter approval.  “I believe that if [school districts] are going to go beyond the rate of inflation than they ought to have the right to vote on it,” Corbett said on Radio PA’s monthly “Ask the Governor” program. 

An apparent compromise has started to move in the State House, which would remove many exceptions and tighten several others.  Executive director of the Pennsylvania Association of School Business Officials (PASBO) Jay Himes tells us the most important exceptions would remain: pensions and special education.  “It’s good that they’re in.  Unfortunately – particularly with regard to the pension exception – they are in with a very limited form.”  Himes says state-mandated pension costs aren’t controlled by inflation.  Rather, pension costs are going up by hundreds of millions of dollars every year, for the next several years. 

 The House voted 103 – 98 to amend SB 330 with the property tax reform language on Wednesday night.  During floor debate, Republican Leader Mike Turzai (R-Allegheny) said schools could still raise property taxes up to the Act 1 index (1.4% next year).  “You need referendum when it is at or above that index,” Turzai said.  But PASBO’s Jay Himes says Pennsylvania’s history with school property tax referenda has been one-sided.  “It’s going to be a huge uphill struggle that will take additional resources and additional efforts for school districts.”

Supporters say the change would hold school districts more accountable.  On “Ask the Governor” Corbett said teachers’ contracts are one of the biggest components of increasing school budgets.  “And I have seen across Pennsylvania, in the last few months, contracts that are 3, 4, 5% increases per year.”

Lottery Fund

House Committee Wants to Study PA Lottery

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The State House Aging and Older Adult Services Committee has unanimously signed off on a comprehensive study of the Pennsylvania Lottery.  “I think it’s going to bring out a number of factors that we really need to consider, because we know that the Lottery system really does provide a lot of revenue for programs that benefit senior citizens,” says State Rep. Martin Causer (R-McKean), the prime sponsor of HR 106.  Causer spoke briefly to the committee, last week, before his legislation was brought up for a vote.  The study would be conducted by the Legislative Budget and Finance Committee, and officials say the cost would be minimal. 

The Pennsylvania Lottery’s contribution to programs and services that benefit older Pennsylvanians is anything but minimal.  “The Lottery, over the course of its existence, has contributed over $19-billion dollars to funding for senior programs,” says State Rep. Tim Hennessey (R-Chester), chairman of the Aging and Older Adult Services Committee.  Since the last study of the Pennsylvania Lottery was conducted in 1994, Hennessey thinks HR 106 is a good idea: “To see in a sense how solvent it is and what it looks like going forward.” 

The largest program supported by the Lottery Fund is the Property Tax and Rent Rebate program, which was expanded with the advent of casino gaming in 2006.  PACE is the second biggest program paid for with dollars from the Lottery Fund; it provides prescription drug benefits to older Pennsylvanians.  According to a financial statement contained in Governor Tom Corbett’s budget proposal, the Lottery Fund is expected to begin the new fiscal year with a balance of $133-million dollars.  It also projects $3.14-billion dollars in gross ticket sales, which is up slightly from the current year.     

Rep. Causer told the committee that budgetary factors have changed since 1994, and casino gaming has been introduced, so it’s time to re-do the study.  Up next for HR 106 is the House floor.