Posts

Under the Capitol Dome

10 Days Left in State Budget Deadline Countdown

/in /by
   House Republican leaders say in 10 days or less, Pennsylvania will have its first on-time spending plan in nearly a decade. With June 30th looming, the process is kicking into high gear as lawmakers say work continues “non-stop” to meet the often-missed deadline.

    House and Senate budget negotiators are currently ironing out the differences in their spending proposals. In a memo to reporters, House Republicans say final-version budget bills could begin to move this week and progress is being made to craft a budget that fits the criteria set by Governor Tom Corbett. The governor has demanded a $27.3 billion no-tax-increase budget.  On a recent appearance on PAMatters.com’s Ask the Governor, Corbett also reiterated that he does not want lawmakers to spend any of the $500+ million in excess revenues collected during the current fiscal year. The governor is earmarking those surplus dollars for reserve funds and to pay down debt.

State Rep. Daryl Metcalfe (R-Butler)     Also this week, the House may act on State Rep. Daryl Metcalfe‘s (R-Butler) controversial Voter-ID bill. The Pennsylvania Voter Identification Protection Act has been rumored to be on its way to the House floor for weeks, but opposition to the bill has been frequent and vocal. Supporters say the legislation would crack down on voter fraud. Opponents say its intent is to disenfranchise poor and elderly voters.

    The House and Senate return to session today in Harrisburg.

Governor Tom Corbett Addresses Lehigh Valley Chamber of Commerce

Governor Tom Corbett Not Budging on Surplus Issue

/in /by

Through the first eleven months of the fiscal year, the Department of Revenue reports that collections have outpaced expectations to the tune of $540-million dollars.  Many lawmakers are ready to tap into that money to mitigate some of the proposed budget cuts.  However, Governor Tom Corbett isn’t ready to use the “S” word… surplus.  “I don’t know how you have a surplus when we know that Pennsylvania – because of the recession, because of the number of people who lost jobs – had to borrow money from the federal government, [and] owes the federal government $3.7-billion dollars as we sit here today.” 

Governor Corbett’s comments came on Radio PA’s monthly Ask the Governor program, which is featured here in PAMatters.com.  Corbett said he’s sticking to the $27.3-billion dollar framework he laid out during his March 8th budget address: “That allows everybody to plan based upon that number, and to make the difficult cuts, and I wish they didn’t have to make those cuts.  I don’t want to have to make those cuts, but it’s necessary to get our house in order.” 

Corbett has come under fire in recent months for the education cuts he’s proposed for next year’s budget.  “We didn’t do this lightly, we’re not being hard-hearted about this, but we have a $4.2-billion dollar hole in the budget,” Corbett says, referring to the structural deficit that exists in large part to the expiration of the federal stimulus program.  Corbett points out that basic education has been held at pre-stimulus levels (see insert). 

Basic Ed. Funding Chart

House Republicans’ budget bill would restore $100-million dollars to the basic education funding line item, and account for an additional $380-million dollars for higher education.  Governor Corbett’s original budget plan would have slashed funding for the State System of Higher Education, and State Related universities, in half.  But House Republicans didn’t add to the $27.3-billion dollar bottom line – they instead trimmed an additional $470-million dollars in welfare spending.  Asked about those projections, Corbett was skeptical: “Do I believe we’re going to find savings in the Department of [Public] Welfare?  Yes.  Am I going to find it at the rate, at the number and at the speed that we need to for one fiscal year?  I have grave concerns about that.  I’m a very cautious person.” 

Corbett, House and Senate leaders will flesh out their budget priorities in the weeks ahead, in hopes of meeting the June 30th budget deadline.  If successful, it would be the first on-time state budget in eight years.

Marcellus Shale Protesters

Shale Protesters Complain of Inaction

/in /by

Several hundred protesters, representing 13-environmental and related groups, converged on the state capitol Tuesday.  “We keep coming back to Harrisburg because [Marcellus Shale] drilling’s been going on in Pennsylvania for almost four years now, and what has our state legislature done?  They have done nothing,” said Myron Arnowitt, Pennsylvania state director of Clean Water Action.  Arnowitt called for a moratorium on natural gas drilling, until an impact study can be complete.  Protesters also called for a Marcellus Shale severance tax.  “Poll after poll tells us that the majority of Pennsylvanians want industry to pay their fair share in taxes, and they want clean air and clean water,” said Erika Staaf, PennEnvironment’s clean water advocate. 

State Senate Democrats

Senate Democrats talk state budget priorities

The protesters’ chants started filling the state capitol rotunda mere minutes after several member of the Senate Democratic caucus concluded a separate news conference on their state budget priorities.  But, there was some overlap in the two events.  Senate Democratic leader Jay Costa (D-Allegheny) said natural gas drillers should be a part of the budget solution, not a part of the budget problem.  “We believe that the conversation about the Marcellus extraction tax must take place now, must take place as a part of this budget, and must be as comprehensive as possible,” Costa said. 

Democrats and Republicans in Harrisburg have come forward, this session, with a variety of Marcellus Shale severance tax and/or impact fee proposals.  Governor Tom Corbett made a no tax pledge during the 2010 campaign, but has left the door open for a local impact fee, as long as no revenue goes to pad state coffers.  Corbett’s Marcellus Shale Advisory Commission has meetings scheduled through July 15th.  Their recommendations are due at the end of July, however the state budget deadline is June 30th.

Under the Capitol Dome

What Should Lawmakers Do With Unanticipated Revenue?

/1 Comment/in /by
Sen. Jay Costa

Sen. Jay Costa

Almost everyone expects an on-time budget, for a change.  But there’s no consensus on how to handle state revenues that have come in $540-million dollars above estimate through the first 11-months of the fiscal year.  Senate Minority leader Jay Costa (D-Allegheny) says it should be used to mitigate proposed education budget cuts for the new fiscal year, which starts on July 1st.  “It’s very hard to defend – given the nature of the reductions in expenditures that are being proposed – that we can squirrel away $600-million dollars,” Costa says, as he predicts the state will end the fiscal year with a $580 – $600-million dollar surplus.

“We will ultimately use about half of the budget surplus, or somewhere in that vicinity, is sort of my prediction in terms of where we are going,” Costa tells us.  He adds that it’s still not enough for Senate Democrats’ liking, but that the cuts won’t be as “draconian” as they are now.  Earlier in the week, a Senate Republican spokesman told us they will seek to use “some” of the surplus to soften the impact of education and hospital cuts. 

House Republicans, however, passed a $27.3-billion dollar budget that would not spend this year’s higher-than-expected revenues.  During last month’s budget debates, Appropriations chair Bill Adolph (R-Delaware) stressed that we don’t know if this revenue is sustainable.  “Calls for increased spending, based upon a few months of bringing in more money than expected, are irresponsible in our current economic climate.” 

That’s long been the stance of the Corbett administration, and it seems they have at least one Democrat on their side.  “I think Governor Corbett is right to say that the majority of the surplus needs to be kept in reserve for the unknown,” says Auditor General Jack Wagner, who finished second in the 2010 Democratic gubernatorial primary.  Asked about the budget battle at an unrelated news conference, Wagner cautioned that Pennsylvania’s liabilities dwarf any surplus.  He cites additional pension obligations, money owed to the Pennsylvania Employee Benefit Trust Fund and a pending labor contract, just to name a few.        

The state budget deadline is June 30th.  Senate Republican Appropriations chair Jake Corman (R-Centre) recently told us that he expects to have an “action plan” by the end of the week.

Pennsylvania Finance Building

Auditor General Raises Red Flag on Tobacco Settlement Fund

/in /by
Jack Wagner

Jack Wagner meets with the news media on Thursday

Fresh off of a series of five statewide public hearings, Auditor General Jack Wagner has delivered a special report to state lawmakers.  “It’s about time the General Assembly steps to the plate and listens to what the public is talking about in relation to their dollars, these tobacco settlement dollars,” Wagner said at a Thursday news conference.  “Overwhelmingly, in 99.9% of all the testimony we heard, the public wants these dollars to be spent for health-related purposes.”  Wagner says that was the intent behind the Tobacco Settlement Act of 2001, but about $1.3-billion dollars has been quietly diverted to other budget purposes over the past six years. 

Pennsylvania has been receiving $350-million tobacco settlement dollars a year, and is expected to continue to receive that money for at least the next 15-years.  Two of the high-profile uses spelled out in Act 77 of 2001 were the adultBasic health insurance program, and tobacco use prevention and cessation programs.  The adultBasic program expired earlier this year due to a lack of funds, but Wagner says it can still be salvaged with a combination of public and private financing.  “There is a significant need for it to continue,” Wagner says.  “There were 42,000 people on the rolls of adult basic and there were almost 500,000 on the waiting list.” 

When it comes to tobacco cessation programs, Wagner was flanked by a chart that shows they received $50.5-million dollars in funding for fiscal year 2003, but only $14.7-million in FY2011.  He says 20,000 Pennsylvanians die of smoking-related illnesses each year.  “We are hopeful that what has happened over the last five or six years does not continue to happen in this budget,” Wagner said, upon delivering his special report to legislative leaders and Governor Tom Corbett.  A Senate Republican spokesman confirms that the Tobacco Settlement Fund will be discussed during the upcoming budget negotiations, but he could not speculate as to the result of those talks.

Cash

Another Good Revenue Month for PA

/1 Comment/in /by

May’s tax receipts have been tallied, and the Department of Revenue reports that collections exceeded estimates by nearly $34-million, or 1.9%.  That means Pennsylvania’s revenues are outpacing estimates by a total of $539-million through 11-months of the fiscal year.  “It just points out once again how bad the Republican budget that was passed last month actually is,” says Bill Patton, a spokesman for House Democratic Leader Frank Dermody (D-Allegheny).  A GOP-backed, $27.3-billion dollar budget bill passed the House last month with zero Democratic support.  It would not have used any of the current fiscal year’s excess revenue.  “We should use a good bit of this surplus revenue to restore cuts that were made in the House Republican budget, and we think we can do that in the month of June,” Patton tells us. 

The notion of tapping into that money is a bipartisan one over in the Senate.  “We have proposed using some of the revenue surplus that exists to help soften the impact of cuts in the education area, cuts to hospitals,” says Senate Republican spokesman Erik Arneson.  “This gives us continued reason to think that it can be done in a fiscally responsible way.”  However, Arneson cautions that while the economy appears to be recovering, there are still “some serious soft spots.” 

Looking at how the state’s major revenue sources fared in May:  sales taxes and corporation tax receipts were above estimate.  Personal income tax revenue was below estimate for the month, but still 2.1% above estimate for the fiscal-year-to-date.  In an email to his colleagues, Wednesday, House Democratic Appropriations Chair Joe Markosek (D-Allegheny/Westmoreland) pointed out that May is one of the smallest revenue collection months.  He suggests that further surplus could be posted in June, which is a more significant month for state revenues.  Both the House and Senate are in recess until June 6th, but state budget matters will get top billing between then and the June 30th budget deadline.

Under the Capitol Dome

Human Services Concerns Raised as Budget Bill Advances

/in /by

The State House has already advanced a $27.3-billion dollar budget bill, despite Democrats’ objections.  In fact all House Democrats voted against a budget that Minority Human Services chairman Mark Cohen (D-Philadelphia) calls “cruel and draconian” in many ways.  “We believe that as the Republicans in the Senate get to know this budget better… there’s going to be a role for us in the negotiations,” Cohen said as he convened a hearing of the House Democratic Policy Committee on Thursday. 

The hearing probed the proposed state budget’s impact on human services.  United Way of Pennsylvania President & CEO Tony Ross has a mixed reaction to the House GOP budget bill.  “We want to thank the House for restoring some funding for the Human Services Development Fund, and also we want to encourage lawmakers not to cut what works,” Ross says.  He tells us that investments in human services keep people healthy and reduce long-term costs to taxpayers. 

The $23.5-million dollar Human Services Development Fund (HSDF) was zeroed out of Governor Tom Corbett’s March budget proposal.  The House GOP budget bill restored $19.9-million of those dollars.  Ross says the HSDF is the only flexible source of funding that counties have to address human services needs.  “What’s so wonderful about it is that it allows each county to determine where their need is greatest.” 

Among Ross’s biggest budget concerns is the Homeowners Emergency Mortgage Assistance Program (HEMAP).  It too was zeroed out of the governor’s initial budget proposal, and House Republicans have restored about 75% of its funding.  Ross says the Federal Reserve has actually cited Pennsylvania’s program as more effective than the federal program for assisting citizens facing foreclosure. 

As the budget bill heads to the Senate, Ross says the United Way and others will continue their advocacy efforts.  “We hope that perhaps with the better than expected revenues… we can use some of that to restore and mitigate some of these cuts.”  Behavioral health services, rape crisis centers and domestic violence shelters are all facing 10% budget cuts under HB 1485.

PA Budget Debate

State Budget Battle Shifts to Senate Side of the Capitol

/in /by

The budget bill’s next stop is the Senate Appropriations Committee, following this week’s largely party line vote in the State House.  Senate Appropriations chair Jake Corman (R-Centre) tells us they’ll spend the next week or so reviewing the legislation, and hope to have an action plan by the first or second week of June.  When asked about the $27.3-billion dollar bottom line, Corman said, “We’re certainly not locked into any number.  It could go lower, it could go higher.” One of the most contentious parts of this week’s House budget debate was what to do with this year’s revenue, which has so far exceeded expectations to the tune of $500-million dollars. 

On the issue of higher education, the House budget bill would fund the 14-State System schools at 85% of the current year’s appropriation.  State Related Universities (like Penn State and Pitt) would receive 75% of the current year’s funding.  While this compares favorably to the roughly 50% cuts that Governor Tom Corbett proposed in March, Corman says he’d like to do even better and show some parity between the State System and State Related universities.  “We’ll review that to see where monies are available… but the House did a pretty good job in showing commitment to higher ed,” Corman says.  Senator Corman’s 34th Senatorial District includes State College Borough, the home of Penn State University. 

Corman says, overall, the House did a good job crafting a budget.  “The Senate will have a different set of priorities I’m sure, and we’ll put our stamp on it.  That doesn’t necessarily mean that we disagree with what they did, just that we maybe have different priorities.”  The process will result in a Senate version of the budget, from which legislative leaders and the Corbett Administration can negotiate.  Like all legislative leaders, Corman is well aware of the June 30th budget deadline.  “The people of Pennsylvania have been put through enough over the past eight years,” he says.  The budget process is currently running ahead of schedule.