PA Surplus and Debate Grows

Pennsylvania’s tax surplus grew by another $34 million dollars in May, and now sits at nearly $540 million. Strong sales and corporate tax revenue came in well over projections, augmenting a deficit in personal income tax returns.

Democratic lawmakers say the increase gives added momentum to their argument for a larger budget.

Governor Corbett and House Republican leaders want to hold the extra cash in reserve, while most Democrats, including the party’s Appropriations Chair, Joe Markosek, have argued for months that it should lessen proposed cuts. He’d use the money for “Education, certainly,” but also, “Long-term care for our frail and chronically ill senior citizens. And certainly additional restoration of the funding cuts for the handicapped population in Pennsylvania.”

Not every Democrat agrees, though. Auditor General Jack Wagner said the Republican plan to put the money in the depleted Rainy Day Fund is the right call, pointing to billions of dollars in debt and overdue bills. “Our commitment – our additional commitment to SERS and PSERS going forward is simply in the next couple years – is in the billions of dollars. The Pennsylvania Employee benefit trust fund is owed two to three billion dollars,” he said, warning other “fiscal unknowns” may rise in the coming year, as well.

Marksosek is confident the surplus will grow even larger, once June revenue comes in. “We still have one month to go, and my econometric staff folks tell me that all expectations, based on past history, etc, is the June is shaping up to be at least a fairly strong month. So I don’t think the $540 million figure will shrink,” he said.

The House passed its budget next week, and the next round of action will come in the Senate. Markosek says he’s been in touch with Senate leaders, but no formal budget negotiations have been scheduled.

Controversial Sprinkler Law Closer to Repeal

A Pennsylvania House panel has voted to end a mandate requiring all new homes built in the state to have a sprinkler system. The Labor and Industry Committee took the vote yesterday on the initiative that took effect January 1st. In an effort to pacify supporters of the sprinkler requirement, the repeal would include language requiring builders to educate consumers about sprinkler system options. "It would be offered as an option. The consumer would be given the information...you know....here's the information. It's up to you to decide, but you've been educated,” says Melissa Etshied with the Pennsylvania Builders Association (PBA). Etshied supports the measure saying consumers weren't happy with the new code. "The most common thing is...you know...it should be my choice. I should be able to decide if I'm going to spend the extra money on this,” says Etshied. Adding a sprinkler system to a new home adds $5,000 to $7,000 to the construction cost.

But, Maria Figueroa of the National Fire Protection Association says the change will cost lives. “We're not losing people in hotels because they've had sprinklers. We're not losing people in high rises. They've had sprinklers. It’s in the home, where people feel the safest, where people are dying,” says Figueroa. She says this should not be a choice, “Consumers do not get to pick any other safety feature in any product that they buy, including their homes. Why does a single issue get removed from the minimum codes? It's not very smart. We don't know where this is going to lead. We know that lives will be lost.”

A final House vote on the plan could happen as early as this week.

PGH Council goes to Harrisburg

Five of the nine members of the Pittsburgh City Council are in Harrisburg today talking to lawmakers about matching the state’s priorities with the city’s priorities. Among the delegation is Councilman Doug Shields. He says meetings have been held with members of all four caucuses but not the governor.

Most of the discussion has center on the state’s budget. Shields says the members of the legislature have yet to see Governor Tom Corbett’s budget blueprint but it is clear that funding for cities and municipalities will be tight. He says the only bright spot is that state revenues seem to be slowly climbing as the economy begins to recover. The city’s delegation is also trying to point out to the state how much has improved financially for the city in the last few years.

Shields says he has also spent some time talking to lawmakers about statewide pension reform. He says for now, the issue is on the back burner and will not come up for debate in the first half of the year. Shields also spent some time talking about Marcellus Shale issues but says he has remained focused mostly on budget priorities.

Shields says in general the trip has been productive. He says if nothing else it has been successful in allowing city and state leaders to build relationships. “It is very difficult to have to grapple with what we have to do, in good times and in bad, even with people you known,” says Shields, “there are a lot of new faces on the council in the past three years and also a lot of new faces in Harrisburg so I think it is incredibly important that we meet and get to know one another a little bit.”

Also on the trip was Council President Darlene Harris, council members Bruce Kraus, Daniel Lavelle, and Natalia Rudiak, and Council Budget Director Bill Urbanic. Council’s regular Tuesday meeting was postponed until Wednesday and the Wednesday meeting was moved to Wednesday afternoon.

PA Rep: Teens Need More Drive Time

State Rep. Kathy Watson of Bucks County says the bill she introduced this week would help to save the lives of young drivers. Her bill carries three main changes to the state’s driving laws. The first would extend the number of behind-the-wheel hours a permit holder needs before moving on to a driver’s licenses, from the current 50 hours to 65 hours. Watson says ten of the additional hours would have to be logged at night and the other five during “inclement weather.” “We have found in reviewing crashes for this age group, these are factors that occur, that often young people are not prepared to handle,” says Watson. She says she hopes parents will abide by the rules and not just sign off on the specialized hours. “If your child is really good at sports you get them out there to practice soccer or baseball, or if you’ve got the concert pianist in the family, or whatever it is, you work with them because you get better with practice,” says Watson, “this is the same thing and this has really deadly consequences if they don’t get that experience.”

The bill would also force anyone from birth to age 18 to wear a seatbelt while seated anywhere in the car and it would make that law a primary offense, which means a police officer could pull over a car based solely on that violation. Watson says more than 50-percent of all automobile accident fatalities among 16 to 18 year olds can be traced back to not wearing seatbelts.

Finally, the bill calls for the number of teens that can be in the car with a young driver to be limited to just one. “They can not text or they can put the cell phone away but they can’t tune out the others who are in the car with them talking, laughing, asking questions,” says Watson, “that is very difficult for a new driver to deal with and process all that is going on on the road around them.” Exceptions would be made for family members.

Watson says she will work hard to make sure the bill is not bogged down with amendments. She says while, issues such as texting while driving and the use of hand held cell phones are important, they should not be added to this bill. She says those items are better handled in stand-alone bills that impact all drivers, not just teens.

Legislation Introduced to Consolidate School Districts

Democratic State Senator John Wozniak, who represents Somerset and Fayette Counties, is introducing a school district merger bill based on the idea presented in 2009 by former Governor Ed Rendell to consolidate the state’s 501 districts into 100.

Wozniak’s new bill would require districts with fewer than 2,500 students to merge with nearby districts.

Jim Buckheit, Executive Director of the Pennsylvania Association of School Administrators says Wozniak’s new legislation is more strategic than the idea offered in 2009.

“The Pennsylvania Association of School Administrators feels that if there is going to be any effort to consolidate school districts, then it needs to be done on a case-by-case basis, and that this is a movement in that direction,” Buckheit says.

Many school districts would prefer to voluntary merger if necessary instead of a state mandated merger for some districts. Some administrators have complained that students in larger districts are often overshadowed because there's more competition in the classroom, in sports, and in extracurricular activities.

Buckheit says tight budgets in some districts may cause consolidation even without a state mandate simply because it can be cost effective.

“As long as there are barriers removed, particularly the cost to local taxpayers to actually make the merger happen. As long as those barriers are taken out of the way then districts probably will be looking to voluntarily merge,” Buckheit says.

There was one consolidation that occurred in 2009 - Monaca and Center Area School Districts in Beaver county. According to the state Department of Education, this shows that consolidation can be a tax relief for the merging communities.

Dems Say Plan Could Generate 30,000 Jobs

State Senate Democrats are introducing a package of new bills they say could spur the Pennsylvania's economy.
The Democrats say their economic plan would create nearly 30-thousand new jobs, by consolidating Pennsylvania's job training programs so they're all under one agency, and expanding tax credits to small businesses.
Minority Leader Jay Costa says he thinks the package can become law, even though Democrats are in the minority.

"When it comes to matters, I think one of my colleagues says this is about jobs. It's not about Democrats and Republicans. When they're good ideas, I think they're good ideas to everyone. And I think that's what we've put together here: a series of good ideas to allow us to work closely with them. We've provided the governor and some other folks copies of this. We will be sharing it with our Republican colleagues."

Caucus leaders want to use unspent state grant money to generate more private investment in new projects, like infrastructure repairs.
Senator Vince Hughes of Philadelphia says the recent gas explosion in Allentown is the latest sign the state's roads, bridges and pipe lines need to be fixed.

"In many respects they're miles and miles and miles of steel-cast systems running beneath our cities and towns and communities, driving out natural gas. And they're old, and they're breaking down, and unfortunately they're causing tragic accidents."

The Democrats also want to close tax loopholes and adjust corporate tax rates, to provide additional funding for the initiative.
Many of their proposals have failed in previous sessions, but the Democrats and the Corbett Administration agree on a few points, like privatizing more state-owned resources to fund infrastructure repairs.

Proposal to Cut PA House by Nearly 25%

Pennsylvania House Speaker Sam Smith is drafting a bill to shrink the size of his chamber.

Smith’s bill would reduce the state House by 50 seats, to 153 members.

Political scientist Terry Madonna of Franklin and Marshall College says it’s “unusual” for a legislative leader to back this sort of reform bill, adding Smith’s support suggests the measure has a good chance of passing the House.

"Now the Senate, in a sense, doesn’t have a horse in the race, because it only talks about reducing the size of the House. But we’ll still have to see if the Senate is willing to take it up. And then it has to pass two sessions and go directly to the voters."

The voter approval via a ballot question is necessary because changing the size of the legislature requires an amendment to the state constitution.

Madonna says polls have shown consistent voter support for a smaller House or Senate.

Pennsylvania has the largest full-time legislature in the country.

Smith’s bill is still in the early stages of drafting, so it’s not clear what the time frame for reducing seats would be.

Opponents of a reduction argue rural voters would suffer, since their districts would become larger and more spread out, if seats are eliminated.

Rendell Cuts Half Billion From His Budget Plan

Governor Rendell has updated his budget proposal by adding more cuts to nearly every executive department’s spending plan. The release comes just a day after Rendell proposed a 16% increase in the state’s Earned Income Tax from 3.07% to 3.57%. During today’s emergency cabinet meeting, Governor Rendell told administration officials he wants to cut 212 million dollars in education spending, 106 million dollars from the Public Welfare budget, 3 million from parole and probation funding, and 43 million from the Department of Community and Economic Development, among other cuts. But Rendell says no matter how many cuts are put in place, taxes still need to go up this year. “I know a lot of people, unfortunately react ideologically and say ‘no taxes. No new taxes, ever. I’ll never vote for any new taxes.’ Well, how are we going to fulfill our Constitutional requirement? I mean, I’ll be happy to ask the four, any of the four caucuses to submit a budget that balances, and I’ll be happy to take a look at it.” Rendell says he’s not happy about his cuts, but they need to happen. He says the “Classrooms for the Future” program is one of his favorite initiatives, but its spending has been zeroed out. In all, Rendell trimmed 500 million dollars from his initial budget. Republicans point out his updated spending plan is still more expensive than this year’s budget, and say the governor isn’t serious about curbing government expenses. Rendell says he is still optimistic the June 30th budget deadline can be met, “We’ve got, as I’ve calculated, 15 working days. If we were here for ten hours a day, that’s a 150 hours of work. And I can’t imagine that we couldn’t get this resolved. So I want all of us prepared to be in Harrisburg 7 days a week until there is a budget.”

PA Senate Panel Okays Privacy Bills

You may not be aware that when a business swipes your driver's license to check identification, they're also getting other personal information and in some cases then sell that to marketing firms and credit card companies. The Pennsylvania Senate Communications and Technology Committee has approved 3 measures aimed to protect privacy and personal information.
The panel approved Wozniak's bill, the "Identification Card Electronic Swiping Act," which would restrict the use of information obtained from a person's driver's license to verifying a person's age and to collecting information required for reporting or preventing fraud or abuse. Wozniak says right now some businesses, mainly restaurants and bars, are selling the information without the customer's knowledge or consent. His bill would prohibit the selling of that information.

The committee also approved legislation which would block Pennsylvania's participation in the federal "Real I-D" program which among other things requires Departments of Motor Vehicles across the country to connect their databases, creating a new national database. Wozniak, a co-sponsor of the bill to block the federal program, says calls "Real I-D" a "kneejerk reaction" to the 9-11 attacks on the U.S. He said at a time "when we're trying to protect people from identity theft, the federal government wants more information."

The third bill would prohibit government bodies from capturing or releasing biometric information without a person's approval. Biometric data includes fingerprints, palm prints, facial feature pattern characteristics, voice data and retinal scans.
The full Senate is to take up the three measures soon.

Vote Today on AdultBasic

The state Pennsylvania House is set to vote today on a measure that would add 86,000 people to Pennsylvania's adultBasic health insurance program. The measure is a top priority for House Democratic leaders, and would expand the amount of people receiving state-funded health insurance from 46-thousand to 131,000. House Bill would pay for the expansion by tapping into Pennsylvania's medical malpractice fund, raising a tax on health insurance companies and pulling down funds from a federal matching grant program. It would also add prescription drug coverage to adultBasic. The bill troubles Republicans like Berks County Representative Doug Reichley, who argues a private sector approach is a better way to expand health care access. He says, “[W]e think that's an unreliable funding source, as opposed to providing tax credits to employers. If they get a certain kind of health care policy that tries to emphasize wellness initiatives, they would get anywhere from a 500 to 1,000 dollar tax credit per employee, rather than creating this whole new government program. We think the private sector is a better way to offer more affordable health insurance.” Majority Leader Todd Eachus, a Luzerne County Democrat, says the bill wouldn't go into effect until the federal funding is secured. Senate Republicans are cool to the measure, but Eachus says if it passes the House he'll try to make it part of budget negotiations.

Bill about Public Notices

House Bill 795 is to eliminate the requirement for municipalities and school districts to advertise public legal events such as foreclosures and public hearings in newspapers, and instead post the information on the internet. State Representative Peter Daley of Fayette County says these groups spend a lot of money for advertising, and estimates that millions are spent to advertise such events in Allegheny County. However, because only 70 percent of residents have internet access, Daley says that leaves a big hole in who can receive information. The House is discussing ways to make this all-inclusive by possibly adding an amendment to the bill. The Bill will be voted on at the end of June.

Committee says Foreclosure Law Needed

The Pennsylvania House Commerce Committee has wrapped up a series of hearings on a proposed foreclosure law and Committee Chair Peter Daley says the result is an increased certainty that the law is needed. The bill would mandate that county courts establish programs requiring lenders to meet with homeowners facing foreclosure at the very beginning of the process. Rep. Daley of Donora says during the series of hearings he has learned that many home owners “give up” and “put their head in the sand” when they get their first notice of foreclosure. He says there are a variety of programs available that can help them renegotiate the terms of their loan and stay in their homes but most people do not take advantage of them. Daley says he has the support of the banking industry and community nonprofit groups that help those about to lose their homes. Daley says wile the first round of foreclosures involved people who had bad loans or owned homes they could never afford, this round of foreclosures is impacting people who have lost jobs or income due to the economic slowdown. The measure will be moved to the full house later this month and Daley says he thinks it will pass easily before the summer break.

Lawmakers Balk over Rendell Hire

Republican lawmakers are criticizing Governor Rendell for appointing a former Democratic House member to a newly created state position while the state is in a hiring freeze. But the governor insists he did the right thing. Former state Representative Dan Surra lost a reelection bid in November, but now makes 95-thousand dollars a year promoting northern Pennsylvania tourism in a Department of Conservation and Natural Resources post. Cumberland County representative Glen Grell is one of six Republicans who have sent a letter to Rendell, asking him to respect his self-imposed hiring freeze and rescind the job. Grell says the appointment left him scratching his head. “I'm disappointed because for months I've been defending the governor and actually complementing him for being proactive and imposing the hiring freeze. And banning out of state travel and doing other things, like asking agencies to cut back.” But Rendell says he's allowed to make appointments, arguing Surra is filling a vital need in his new job. “I reserved the right when I announced the hiring freeze to make exceptions. We have made a number of exceptions. This is the first one for anybody who has held office.” Rendell says he didn't interview anyone else for the job or seek applications, but says he has the right to fill his administration with the people he feels will do the best job.

Orie Wants New Gaming Board Members

A local state senator wants the four legislative caucus leaders to recall their appointments to the gaming control board. Senator Jane Orie says she has already been talking with her caucus leader and has reintroduced legislation that would reorganize the board. Orie says the members of the board have been negligent in their duties to the point that their actions could be seen as criminal. The legislation calls for the caucus appointee to be approved by two thirds of the senate. It would also force the board members to give up any outside jobs. The members are paid $145-thousand a year. The governor names the three other members of the board. Orie says the board has botched the handling of the licenses awarded to Don Barden in Pittsburgh and Louis DeNaples in the Poconos. The four legislative appointees all have terms that expire on Jan. 19.

The New PA House Session Begins

Pennsylvania's General Assembly gaveled into session Tuesday and lawmakers are already looking ahead to the tough financial decisions they anticipate making this year. The House's first order of business was electing a new speaker. As expected, Keith McCall of Carbon County won the vote with the support of all 104 Democrats. McCall, who's served in the chamber since 1983, urged the House to take on major issues head-on this year saying “Some people wait for things to happen. Those who work in this chamber make things happen.” There was a lot of talk about bipartisanship and cooperation, but new Majority Leader Todd Eachus of Luzerne County jumped right into Democratic priorities, saying lawmakers need to increase Medicare access, lower prescription drug costs and tackle the impending expiration of utility rate caps. Minority Leader Sam Smith of Jefferson County delivered a less partisan speech, instead reflecting on the value of time and the Book of Ecclesiastes. The lawmakers will not return to Harrisburg for a working session for several weeks.

PA Budget Fight Could be Tough But Nice

When the PA State Legislature begins its new session in January the budget is sure to be among the top priorities. All estimates show the state is facing a 2-3 billion dollar short fall in the coming year. State Representative Mike Turzai of Bradfordwoods is the Republican House Whip. He says everything needs to be on the table if they are to balance the budget. He says spending and borrowing have been out of control in recent years. Noting that in the past 6 years, the budget has increased by 40-percent or 9 billion dollars. In the same time period the rate of inflation has equaled only 19.5 percent. He says the state has also pushed its annual debt service to more than one billion dollars a year. He says the economic downturn has exacerbated the problem but it was already going to be a bad year.
Turzai says he hopes revenue projections in 2009 will not be overly optimistic. He says this year's projections were out of line and that has made the monthly revenue shortfalls look worse than they should. He says the state's budget crisis is less a product of a slowing economy and more an issue of over spending in the past.
Turzai says he thinks there are several places to begin the search for spending cuts. He says he would start at the Department of community and economic development and the department of labor and industry. He says there are also a number of quazi state agencies that have not had their budgets scrutinized in years.
Turzai says this does not have to be an ugly fight. He says several lawmakers have spoken to him saying they are behind him on budget cutting efforts because they know sacrifices need to be made.

Critics: COLA Giveback a Sham

More state lawmakers are pledging to return the cost of living raise they received December 1st to help the state's budget crisis. But others are critical of those public proclamations.

Republican State Representative Daryl Metcalfe says many of the new Democratic House leaders are hypocritical for calling on members to give back their raises, while the leaders will still be getting large salary increases for being elected to the new caucus posts.

"I think they're trying to pull the wool over the taxpayers' eyes. I think they're trying to make the taxpayers think that they're looking out for them because they're willing to give back a few thousand dollars."

Metcalfe says even if lawmakers return the net amount of the cost of living increase - they still get credit on their pensions for the higher salary.

GOP State Senator John Eichelberger says if lawmakers are serious about saving state money, they should stop using those funds for what he says are campaign purposes.

"The taxpayers provide through the caucus newsletters to all the constituents, television show programs on community access and public service announcements."

Eichelberger has refused those perks and others including a state car, per diem payments. He estimates that over four years he will save the state $500,000.
However, Eichelberger's Senate Republican leader earlier this week announced he would return the cost of living increase.

New House Resolution Would Reform How Bills are Considered

A new state house resolution (HR 851) seeks to reform the way bills are introduced and considered in the legislature. A group of bipartisan lawmakers say they're fed up with watching key issues get bumped down the priority list and Representative David Steil says only 10 to 15 percent of around 3,000 bills get considered during a legislative session. He says that's because committee chairmen and those who schedule floor action don't want to deal with important and controversial issues.

Under the proposed rules the number of bills that could be introduced by a member would be cut down to eight, with exceptions, and lawmakers would be allowed to fast track two of those bills to committee for consideration and a vote. Steil says this reform could ensure that meaningful legislation gets discussed and considered in the legislature.