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Budget Bill Clears Committee, Awaits Senate Vote

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The $27.65-billion dollar state spending plan cleared the Appropriations Committee with a unanimous vote late Tuesday morning.  It would spend about a half-billion dollars more next year that what Governor Tom Corbett proposed in February.

Senate Appropriations Chairman Jake Corman (R-Center) cites a recent Independent Fiscal Office report in telling the committee that the budget bill reflects the revenues of today. 

“This has restorations to basic education, particularly in the area of early childhood education, with Pre-K Counts and Head Start restorations,” Corman explained.  “This also sees significant restorations to higher education, back to level funding from last year.” 

He says that the state-owned and state-related universities have agreed to hold tuition hikes at or below the rate of inflation if their funding is restored. 

Senate Democrats want to see even more of the proposed cuts restored, but backed the bill to move the process forward.  “Now that the dollars have come in we have a document in front of us that better represents the dollars that are available,” says minority Appropriations Chair Vincent Hughes (D-Philadelphia). 

The Corbett administration is encouraged by the recent trend in state revenue reports, but isn’t ready to commit to spending more money until they see exactly how much revenue will be available.  “We think it will be a little better than what our original projections were,” Corbett spokesman Kevin Harley told us by telephone.  “We’re hopeful that will continue to be the case in May and June.” 

The Senate budget bill is likely to be the document from which high-level budget negotiations can begin in earnest.

Cash

New Reports Indicate Brighter Revenue Future

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April’s General Fund collections topped expectations by $99-million dollars, according to the Department of Revenue’s latest report.  It’s the state’s third straight month in the black, but fiscal year-to-date revenues are still running $288-million below estimate. 

On the same day as the monthly report from the administration, the Independent Fiscal Office released its initial revenue estimate.  “We think the year-end shortfall will be $300-million dollars,” says IFO Director Matt Knittel.  That’s a marked improvement over the $719-million dollar shortfall that Governor Tom Corbett projected when he made is budget address in February. 

“We are seeing additional economic strength moving forward… and we think a lot of that strength will carry forward into FY2012/13,” Knittel says.   His office will release its official revenue estimate in mid-June. 

 Senate Democrats are hailing the dual reports as reason to overhaul the governor’s proposed budget for the new fiscal year.  “There is now no question that there will be far more available dollars to restore key budget lines that support job creation, education, safety net programs and investments for the future,” says Senate Democratic Leader Jay Costa (D-Allegheny). 

Governor Tom Corbett has previously expressed the desire to finalize budget plans once the May numbers are available.  We’ll hear his latest fiscal observations on next week’s “Ask the Governor.”

Map, Travel, Tourism, Drive, Interstates

Industry Marks Tourism Day at PA Capitol

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The rally’s theme, ‘I am Tourism,’ plays off of the more than 400,000 jobs attributed to Pennsylvania’s tourism industry.  It ranks second only to agriculture as Pennsylvania’s largest industry, and Pennsylvania Association of Travel & Tourism President & CEO Rob Fulton says tourism is actually the number one industry for most counties. 

Fulton says the tourism industry’s annual economic impact nears $36-billion, and the reach is broader than one might think.  “Restaurants, convenience stores; visitors go the malls to shop, they go to the outlets to shop, they go the grocery stores,” he explains. 

Included in the economic impact estimate are the $3.4-billion dollars in tax revenues for which tourism accounts.  Officials say their industry is not a part of the state’s budget problems – it’s a part of the solution. 

Rob Fulton

Rob Fulton talks tourism with Radio PA.

Fulton tells us his fear is that without adequate marketing dollars tourists will start to go to other states.  “The numbers will lag a little bit,” Fulton says, referring to the ‘Marketing to Attract Tourists’ line item in the state budget.  The state poured more than $10-million into such efforts in FY2011.  However, the proposed budget for FY2013 would include just over $3-million. 

That doesn’t stack up with other states.  For instance, Fulton says Michigan invests $25-million dollars a year in tourism marketing. 

Looking ahead to this year’s budget negotiations, Fulton hopes Pennsylvania’s policymakers will recognize the important impact 175-million visitors have on the state’s economy.

Cash

State Revenue Picture Brightens

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Vincent Hughes

State Sen. Vincent Hughes

General Fund collections lagged expectations in each of the first seven months of the fiscal year.  The state got a reprieve in February, when the state collected $15-million more dollars than expected.  March was an even better month for the Commonwealth, as the Department of Revenue reports that collections topped expectations to the tune of $95-million. 

Governor Tom Corbett’s February budget addressed was based on an estimated year-end shortfall of $719-million; the year-to-date shortfall currently stands at $387-million.       

“We believe the deficit is probably going to be closer to $300 – $350-million dollars,” says Senate Democratic Appropriations Chair Vincent Hughes. 

Senator Hughes tells Radio PA that he’ll be keeping a close eye on revenue collections this budget season.  “I think it’s going to change over the next days and weeks, as we go forward,” Hughes says, “thereby creating new revenue for us to reinvest in the people of the Commonwealth.”

Senate Democrats view a revised revenue estimate as one of the keys to restoring cuts to educate, human services and other funding priorities. 

Last month, Governor Tom Corbett told us that it was too early to revise the revenue estimates.  We’ll check in with him again this week on the April edition of Ask the Governor.

Lawmakers Concerned by State Police Manpower Issues

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Manpower issues are creeping up on the Pennsylvania State Police and concerns are spreading under the state capitol dome.  “It’s not that we might be, Pennsylvania is on the verge of a public safety crisis,” Pennsylvania State Troopers Association President Joe Kovel told a panel of lawmakers this week. 

The Senate Law & Justice and House Judiciary Committees convened a joint hearing on the decreasing number of State Police troopers. 

With some 1,000 troopers becoming eligible to retire, sparse cadet classes haven’t kept pace in recent years.  State Police Commissioner Frank Noonan estimates they’ll be 465-troopers below compliment by June 2013. 

In the meantime, Commissioner Noonan’s top priority is keeping troopers on the road.  “In order to get troopers on the road, we would have to reduce our administrative manpower needs,” Commissioner Noonan told the joint committee, “and the one way to do that is to close stations.” 

Noonan says station consolidation isn’t ideal, but it may be necessary depending on how the retirement situation unfolds. 

Sen. John Pippy (R-Allegheny), who chairs the Law & Justice Committee, plans to follow up with Noonan and Governor Tom Corbett.  “I truly see, if nothing changes, we will be in that scenario where we’re going to be down 800 or 900 women.  Not too far away,” he says. 

The budget plan Governor Corbett rolled out in February allocates nearly $8-million dollars for a new class of 115-cadets this year.  The State Police Academy can handle up to 350 cadets in a year, and Joe  Kovel tells lawmakers that’s what they need.

Higher Education Rally, Capitol Steps

Students Rally to Stop Higher Ed Funding Cuts

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Higher Education Rally

East Stroudsburg University student Emily Sasz

Fed up with the prospect of another round of deep budget cuts, several hundred students marched down State Street and up the state capitol steps on Wednesday.  They carried signs that read “Some Cuts Never Heal” and Save Our Ship;” the latter of course referring to Shippensburg University, which is one of the 14-schools that compose the State System of Higher Education.     

West Chester University senior Rachel Wittman has already seen the effects last year’s 18% funding cuts have had on campus.  “Some classes just got completely cut,” Wittman explains.  “Those are things that these people are passionate about, that they want to do, they want to learn, but they can’t.”  Tuition was also hiked by more than $400-dollars across the system for the current school year. 

Higher Education Rally

Edinboro University student Kristina Kaiser

This year Governor Tom Corbett has proposed 20% cuts for the State System, and California University of Pennsylvania grad student Shane Assadzandi is fed up.  “This year when the pattern continued, myself and several students at our school, we knew it was time to stand up and take a stand against this.” 

Radio PA also caught up with APSCUF President Steve Hicks at the capitol rally.  “You’re going to hurt working class families, middle class families in the Commonwealth, and you’re going to shrink the number of degrees at a time when we need to increase it,” he says.   Hicks ultimately hopes for level funding in the new state budget.  APSCUF represents faculty and coaches at the 14-State System Schools.

Apartments, Apartment Building

Report Examines Affordable Housing Gap

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Fair Market Rent for a two bedroom apartment in Pennsylvania comes to $835/month.  That means 2.2-minumum wage earners would have to work 40-hours/week in order to afford the average unit, according to the 2012 “Out of Reach” report. 

Pennsylvania’s minimum wage is $7.25/hour. 

The National Low Income Housing Coalition and Housing Alliance of Pennsylvania released the report, which concludes a Pennsylvania household must earn more than $16/hour to afford the average apartment (without spending more than 30% of income on housing). 

“It means that having a decent place to live – that people can afford, that’s near their job – it’s out of reach for many people who are working hard and playing by the rules,” says Housing Alliance of Pennsylvania executive director Liz Hersh. 

She says how state government addresses the budget can either make things better or worse for the housing market.  “We’re really seeing a lack of investment in accessible housing, even thought a small investment actually saves a lot of money in nursing home placement.”

Neither the Homeowners Emergency Mortgage Assistance Program nor Homeless Assistance received funding in the governor’s budget plan. 

HEMAP may be restored through mortgage foreclosure settlement dollars.  While Homeless Assistance is slated for elimination, budget documents indicate that 80% of the savings would be transferred to Human Services Development Block Grants.

Agriculture Budget Hearing Dissects Fund Transfer

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$72-million may not seem like much in relation to a $27.1-billion dollar budget.  But plans to transfer $72-million out of the Race Horse Development Fund dominated the discussion when Agriculture Secretary George Greig appeared before the House Appropriations Committee on Tuesday. 

The Race Horse Development Fund receives 12% of gross slot machine revenues.  That money is in turn used to bolster purses and otherwise support the horse racing industry.   The governor’s budget plan would transfer $72-million from that fund to help pay for agricultural research at Penn State, the University of Pennsylvania’s veterinary center and payments to Pennsylvania fairs. 

“The funding that it’s headed toward, I think, is very relative to racing,” Secretary Greig told the House budget panel.  “I think it’s ag helping ag.” 

While some lawmakers wondered if it was actually ‘ag hurting ag,’ State Rep. David Millard (R-Columbia) pointed out that the fund takes in more than $5-million a week.  He thinks the horse racing industry will still flourish, even if these dollars are diverted into other agricultural programs. 

But the Pennsylvania Equine Coalition fears the transfer would pull the rug out from under the industry.  “People invested millions and millions of dollars in Pennsylvania with the expectation that they’d be able to compete for certain sized purses to recoup their investment and have the chance of making their money back,” spokesman Pete Peterson told Radio PA. 

In addition to the newly proposed transfer for agricultural programs, millions of dollars are already being diverted from the Race Horse Development into the General Fund.  Act 1 of 2010 provided for the annual transfers through fiscal year 2013.

Capitol, State Capitol, Dome

Key Higher Ed. Budget Hearings set for Tuesday, Wednesday

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For the second straight year, proposed budget cuts in higher education are creating a stir under the capitol dome.  Senate Appropriations Chairman Jake Corman (R-Centre) referred to the state-related universities as the “state barely related universities,” as he lamented planned 30% cuts to Penn State, Pitt and Temple’s state support.  Corman’s Centre County district includes the Penn State University Park campus. 

Using Penn State as an example, the governor’s office will tell you that the planned spending reductions only amount to 1.5% of its overall budget.  Corman, however, turns those numbers around and points out that the state’s share of PSU’s overall budget would only be 3.8% next year. 

In a direct line of questioning with Education Secretary Ron Tomalis, Monday, Appropriations Committee member John Rafferty (R-Montgomery) asked if there’s an effort to privatize the state-related universities.  “No sir, there is not,” Tomalis replied.  “A lot of these decisions, as you know, are budget-driven decisions.” 

The three major state-related universities would see 30% cuts in state support under the governor’s budget plan.  The State System of Higher Education would receive 20% cuts, and community colleges’ state funding would be reduced by roughly 4%.  Governor Tom Corbett recently addressed the issue on Radio PA’s Ask the Governor program.     

Jake Corman

State Sen. Jake Corman

“If we truly want these to continue to be public universities, then I look forward – at the state-related level, at the state system level and at the community college level – to restoring all of these cuts,” Corman said at Monday’s hearing, which focused on the State Department of Education. 

On Tuesday afternoon, the State System of Higher Education will sit down with the Senate Appropriations Committee.  Then, the committee has carved out all day Wednesday to meet individually with the four state-related universities.