2008 Budget Hearings
Highlights and Summaries
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Attorney General | Auditor General | Budget Secretary | Department of Aging | Department of Agriculture | Department of Community and Economic Development | Department of Conservation and Natural Resources | Department of Corrections | Department of Education | Department of Environmental Protection | Department of General Services | Department of Health | Department of Insurance | Department of Military And Veterans Affairs | Department of Public Welfare | Department of Revenue | Department of State | Gaming Control Board | Historical & Museum Commission | Labor & Industry | Liquor Control Board | PSERS/SERS | State Related Universities | State Police | State System of Higher Education | Treasury Department
3/11/08 - Special Hearing on Budget
Cuts Senate Appropriations Monthly Report Attorney General -
Summary Senate Appropriations Committee members focused on reducing gang violence and preventing identity theft during a budget hearing with Attorney General Thomas Corbett. Senate Law and Justice Committee Chairman Senator John Rafferty, 44th District, asked if there has been an increase in gang activity in the Commonwealth. Senator Pat Browne, 16th District, asked how the Governor’s proposed 2008-09 budget would impact the Route 222 Corridor Initiative to prevent gang violence. Senator Browne urged Attorney General Corbett to request additional funding if it would help to curb gang activity in the eastern and central parts of the state. Senate Appropriations Committee Chairman Senator Gib Armstrong, 13th District, asked for an update on efforts to reduce identity theft. Appropriations Committee Vice Chairman Senator Robert Tomlinson, 6th District, voiced his concerns about identity theft that results from Social Security numbers on county documents. Several members expressed concerns about the limited funding proposed by the Governor for a number of vital public protection programs. Senator Armstrong asked what positions would not be filled if the Attorney General’s Office received the Governor’s proposed 1.9 percent increase, rather than the 3 percent that Attorney General Corbett requested. Senator Jake Corman, 34th District, expressed concerns that the Governor’s budget proposal would underfund the Attorney General’s Office and asked if the Governor gave any feedback on the Attorney General’s initial budget request. Senator Bob Regola, 39th District, commended Attorney General Corbett for requesting an overall funding increase less than the rate of inflation. Senator Regola also asked how the Governor’s proposal would affect the Attorney General Office’s efforts to crack down on illegal drugs. Senator John Pippy, 37th District, asked if the Attorney General’s Office had the resources available to educate the public on preventing crimes against children. Senator John Gordner, 27th District, expressed concerns about funding for regional offices that handle thousands of consumer complaints. Senator Pat Vance, 31st District, asked if the state’s Do Not Call list should apply to political “robo-calls.” Attorney General Corbett said that he had concerns about First Amendment issues, but he would be willing to look at any legislation that was proposed. Senator Rafferty suggested offering consumers the option to remove their numbers from robo-call lists. Senator Roger Madigan, 23rd District, thanked Corbett for his work on the Agriculture, Communities and Rural Environment (ACRE) Initiative and requested an update on the program. Auditor General -
Summary Senate Appropriations Committee Chairman Senator Armstrong, 13th District, asked Auditor General Jack Wagner about his office’s performance audit of the Pennsylvania Higher Education Assistance Agency. The Auditor General said an interim report was issued outlining previously undisclosed instances of questionable spending. Asked about funding for computer improvements, which the office requests but the Governor removes, the Auditor General noted that the Legislature has always restored the funding and that it’s important to maintaining security. Senator Pat Browne, 16th District, noted the Auditor General’s Office conducted a performance audit of the Department of Community and Economic Development’s Opportunity Grant program, and urged the office to undertake performance audits of all state economic development grant and loan programs. The senator said follow-up audits should be standard procedure to determine if the financial assistance has resulted in the promised job creation. Senator John Rafferty, 44th District, pointed out that the Administration is proposing new grant programs, such as grants to promote alternative energy, and asked for input on ways to implement spending controls and accountability on the new initiatives. The Auditor General said limits on grant money should be implemented through legislation, including the return of state aid if grant requirements are not met. Questioned about the fiscal stability of municipal pensions across Pennsylvania, the Auditor General told Senator Rafferty the majority are sound, but many older, urban communities’ systems are underfunded, adding the state should consider consolidating local pension plans. The last audit of the Pennsylvania Turnpike was in 2003, and Senator John Gordner, 27th District, asked when the next one was due. The Auditor General said the latest audit is underway, but that it is focusing on road safety, and began before discussions to lease the Turnpike to a private company were undertaken. Senator Gordner noted that state law requires a financial as well as safety review, and received assurance that fiscal matters will be included in Turnpike audits. In another matter, the Auditor General told Senator Gordner that his office’s Taxpayer Advocate Hotline receives thousands of calls per year, with the majority of cases being referred to various state agencies. If a call is related to an audit, his office will ask for a follow-up regarding how it was resolved. Senator Roger Madigan, 23rd District, asked about the number and nature of the office’s audits. The Auditor General said the office performs about 5,000 per year, with 290 currently underway. Many, such as audits of volunteer firefighter relief associations, take weeks or months. Larger ones, such as PHEAA and large pensions can take more than a year. Asked about audits of the new Pennsylvania Gaming Control Board, the Auditor General said the process is still gearing up, with audits of the board’s hiring practices and diversity programs, adding that the Department of Revenue can do a better job of tracking the movement of dollars from casinos to the state. Senator Pat Vance, 31st District, asked about audits of state-owned hospitals. The Auditor General said they are regularly audited, covering general hospitals and specialty facilities. Asked if any of the hospitals are in dire financial need, the Auditor General told Senator Vance that the specialty hospitals are generally sound, but that he would have to report back on the others. Senator Stewart Greenleaf, 12th District, suggested performance audits should include recommendations as to whether programs and agencies should be sunsetted or pared down if they have outlived their usefulness. The senator asked about audits of the weights and measures bureau within the Department of Agriculture and noted he has a bill pending requiring gas station inspections to include measuring octane levels. The Auditor General said a performance audit of thousands of stations found that one in five had a pump with a missing or outdated weights and measures sticker, and said that Pennsylvania is one of four states that does not require testing of gas quality, such as octane levels. On the issue of the Department of Corrections Inmate Employment Program, the Auditor General told Senator Greenleaf that a performance audit found the programs could be more innovative, with more productive programs aimed at reducing recidivism. Senator Jake Corman, 34th District, noted that the office will pay five more employees out of the General Fund in 2008-09, plus union raises negotiated by the Administration, and wondered if the Auditor General and the Administration had a plan to absorb the new costs without taking resources from audits. The Auditor General said no plan had been discussed, but that the office will try to absorb the new costs by using technology to reduce the time it takes to perform audits. Senator Corman said he was concerned that the new spending and new programs proposed by the Administration will require even more audits at the same time personnel costs are increasing, and that it’s “tying your hands a little bit.” The Auditor General said it was true, to an extent, but that he will try to do more with less. Budget Secretary -
Summary Appropriations Committee Chairman Senator Armstrong opened the budget hearing on the Office of the Budget by questioning Budget Secretary Michael Masch about the legality of tapping the Rainy Ray Fund to provide $400 “tax refund” payments to households – many of which are exempted from paying state income taxes. “I was always under the impression that the Rainy Day Fund was for a ‘rainy day,’ not when you want to start a new program,” Senator Armstrong said. Senator Vance asked if the Administration had received a legal opinion as to whether the “rebate” would be subject to federal taxes. “Wouldn’t it be easy to write a letter to the IRS to see if it is taxable?” Senator Armstrong also questioned the Administration’s methods for providing non-preferred appropriations, funding for higher education and the film industry tax credit program. Citing a proposed $10 million allocation for police programs in Philadelphia, Senator Armstrong said he would like to see some of that money provided to third-class cities across the Commonwealth. Senator Browne, Chairman of the Senate Finance Committee, which oversees the state’s tax programs, raised several “general concerns” about the Administration’s revenue projections. Specifically, he noted a projected decrease in Corporate Net Income Tax revenues, while revenues for other business taxes are projected to increase. Senator Browne also questioned the projections for the Personal Income Tax. Noting that the Administration expects a decrease in cigarette tax revenue, Senator Browne raised concerns about the Governor’s proposal to tap that money for his proposed universal health care scheme. “I have concerns about the validity of that if you are using a shrinking revenue source for a new expenditure. How does that make sense?” Senator Browne asked. Senator Corman also discussed the Governor’s proposed universal health care scheme. Currently, $14 billion in tax dollars (including $7.2 billion in state money) already goes for health care in Pennsylvania. “Taxpayers in Pennsylvania are already making a significant investment in health care,” Senator Corman said. He added that nearly half of the individuals who would be under the Governor’s universal health care scheme are in the 18-34 year-old age group – which includes individuals who aren’t in the workforce, are between jobs, are in school, or just uninterested in paying the costs of buying health care coverage. Senator Vance questioned the Administration’s actions to shift programs from the General Fund to the Lottery Fund, especially with the Lottery Fund experiencing decreasing revenues. Senator Rafferty commented on the MCARE abatement program, noting that the Senate has passed legislation to extend the program. He asked Secretary Masch what would take place once the March 31 deadline for the deferral of payments by medical practitioners arrives. Senator Rafferty also asked if those practitioners would receive a rebate once the impasse is resolved. Obviously frustrated by an elaborate, yet non-responsive answer by Secretary Masch, Senator Rafferty asked, “You know how Harrisburg works. Between now and March 31 I don’t see a bill getting passed by both chambers and on the Governor’s desk. What is the fallback position?” Senator Regola stated that General Fund expenses under Governor Rendell have outpaced increases in personal income. He asked Secretary Masch, “How difficult would it be to live within the 3.29 percent (spending) limit set by the Taxpayer Protection Act?” Senator Regola is the prime sponsor of legislation that would enact the TPA, a measure that uses economic factors to limit spending increases, through a constitutional amendment. Senator Regola also noted that while the spending increase is now at 4.2 percent for Fiscal Year 2008-09, the figure could go significantly higher since the Governor again – as he has repeatedly in previous budgets - cut vital state support for many important programs with the expectation that the Legislature would restore the funding. Senator Gordner, citing a new $2 million appropriation for “mentoring of children of incarcerated adults,” asked whether a contract for the program had already been awarded to an “entity in Philadelphia.” Senator Gordner also asked what potential fiscal problems the Commonwealth faces since the Turnpike Commission has already secured bond money and is making payments to mass transit and PENNDOT, even though the proposed tolling of Interstate 80 is at an impasse. Senator Mary Jo White questioned the Governor’s “reneging” on a deal for a set reduction of Capital Stock and Franchise Tax. She said Pennsylvania is one of the few states that has that tax and a Corporate Net Income Tax, which places the state at a disadvantage in promoting economic growth and job creation. Senator White said she was also concerned because the Governor is slowing down the CSFT rate reduction to pay for hazardous sites cleanup. “We passed legislation to fund HSCA. If the Governor objected to the funding we provided in Senate Bill 1100, why didn’t we hear a counterproposal?” Senator White asked. Senator Rhoades questioned the $26 million allocated for a new high school exit exam program. “It is going to cost millions to get the test developed and millions to get it monitored. Why are we doing PSSAs? If we are looking for money, I don’t need another 26 million for exit exams, modify the PSSA,” Senator Rhoades said. Senator Madigan, Chairman of the Senate Transportation Committee, asked for information about the Governor’s proposal to lease the Turnpike. “The sooner you get the information to the general public, the better off we all will be.” Department of Aging
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Senator Jake Corman (R-34) questions
Secretary of Aging Nora Dowd Eisenhower about the Shared
Ride program. State Senator James Rhoades (R-29) asks PA
Department of Aging officials to support his bill creating
the PA Home Heating Rebate Program. Summary Senate Aging and Youth Committee Chair Senator Pat Vance, 31st District, noted that 80 percent of the Department of Aging’s funding for support services goes to nursing home care and the remaining 20 percent is allocated for home- and community-based care, which places Pennsylvania 47th among states providing for in-home care. Senator Vance expressed concerns about the extensive waiting lists for basic services for the elderly such as Meals on Wheels. She said that was especially troubling when the Governor’s proposed 2008-09 budget includes funding for increasing several new initiatives, but flat funds current programs. Senator Gordner was informed that enrollment in PACE and PACENET currently stands at 157,000 Pennsylvanians in each program. He asked whether the Department anticipates any changes in Medicare Part D or in the contribution rate for enrollees in PACE and PACENET. Senator Rafferty cited the special role that senior centers play in the lives of older Pennsylvanians and asked why the Department has not sought more funding to provide additional grants for those agencies. Senator Greenleaf asked about the scope of community-based services available to families who want to keep an older person in his or her home. “It’s important that you keep up on that. Many people would stay in their homes if they could,” Senator Greenleaf said. Senator Regola cited a newspaper article in which the Department stated that there was a waiting list of 3,000 individuals, of whom, 500 needed nursing home care and the other 2,500 needed in-home services “to make life easier.” Senator Regola asked whether it is more cost effective to channel funding to those needing critical services or those needing assistance to make life easier. Senator Browne noted a shift in funding for Department of Aging General Government Operations from the General Fund to the Lottery Fund and asked whether there is a cap on the amount of administrative services that could be paid by the Lottery Fund. He specifically questioned tapping the Lottery Fund to pay for the oversight of services that aren’t covered by that fund. Senator Pippy asked whether the Department has specific plans to improve community-based services on the local level. “We do these hearings every year and the intent is good, but sometimes I think everything gets lost in the budget. With the things you are talking about, you have to think statewide, but act locally.” Senator James Rhoades, 29th District, asked if there is sufficient funding for the Property Tax Rent Rebate Program since the Legislature increased eligibility for the program. He added that is he introducing legislation that would divert unused money from that account to provide funding for energy assistance for senior citizens. Department of Agriculture -
Senator Gib Armstrong (R-13), Chairman of
the Senate Appropriations Committee, questions the need for
crop insurance. Senator Pat Browne (R-16) addresses funding
concerns with the State Food Purchase Program. Summary Several senators focused on proposed cuts to vital agricultural programs during the Senate Appropriations Committee budget hearing with Department of Agriculture Secretary Dennis Wolff. Agriculture and Rural Affairs Committee Chairman Senator Mike Brubaker, 36th District, expressed concerns about the proposed cut in state funding to the Animal Health and Diagnostic Commission. Senator Mike Waugh, 28th District, detailed the important role that the Commission plays in protecting food safety and public health. Senator John Rafferty, 44th District, expressed concerns about the flat funding proposed for food safety inspections and Senator Bob Regola, 39th District, urged the Department to place a greater focus on preventing agro-terrorism. Senator Regola also questioned why funding was not increased for the state food purchase program. Senator Pat Browne, 16th District, urged Secretary Wolff to reconsider budget priorities for the state food purchase program to provide more help to low-income state residents. Senator John Gordner, 27th District, pointed out the importance of Pennsylvania's hardwood industry and asked Secretary Wolff to explain the proposed 20 percent cut in funding for hardwood research. Senator Mary Jo White, 21st District, questioned the state's commitment to promoting bio-diesel with proposed cuts in agriculture research. Senator Roger Madigan, 23rd District, also expressed concerns about the proposed cut in agriculture research, adding that cutting funding for research sends the wrong message to the agriculture community. Senator Gordner asked if the bio-diesel subsidy will be helpful to promote renewable energy in the state. Senator Jake Corman, 34th District, pointed out that the Department's personnel costs were expected to rise by 9 percent, while agricultural programs took an overall 2-percent cut in the budget proposal. A number of senators also criticized inadequate funding for Conservation Districts. Senate Appropriations Committee Chairman Senator Gib Armstrong, 13th District, asked why the state subsidizes crop insurance for farmers. Senator Brubaker asked if the crop insurance program would be fully funded and asked Wolff to highlight the importance of the program. Senator Pat Vance, 31st District, asked why the Department has changed its stance on the duties of the Executive Secretary for the state Horse and Harness Racing Commission. Senator James Rhoades, 29th District, asked how the devaluation of the dollar could affect Pennsylvania's role in the global agriculture marketplace. Department of Community and Economic
Development -
During the budget hearing for the Department of Community
and Economic Development, Senator Pat Browne (R-16) comments
on the proposed economic stimulus package. Senator Mary Jo White (R-21) comments on the need to continue
with the phase out of the Capital Stock & Franchise Tax.
Summary Prior to the hearing on the Department of Community and Economic Development, Appropriations Committee Chairman Senator Armstrong recognized and honored Committee Executive Director Tom Starke -- the “Cal Ripken of the Appropriations Committee.” Director Starke is retiring at the end of the year after 23 years with the Appropriations Committee and attending “600 consecutive hearings.” He received an extended standing ovation from the members of the committee. Several Senators voiced their disapproval with the Governor’s proposed cuts to economic development programs during the hearing with Department of Community and Economic Development Secretary Dennis Yablonsky. Senator Pippy said the Legislature was promised a matrix regarding the various programs administered by the Department. He said that listing would help the Legislature make decisions regarding funding for those programs. Senator Pippy also asked who had direct oversight regarding Act 47, specifically as it relates to Pittsburgh. Senator Rafferty asked if the state has any provisions to require successful companies to repay “start up” state funding they received. “If these companies take off, we should be able to recapture some of that money and put it back into economic development and create jobs.” Senator Browne informed Secretary Yablonsky that he has heard that some businesses are not withholding the $1 per week municipal services tax. The Secretary said he would look into the issue. Senator Browne also expressed concerns that Industrial Resource Centers (IRCs) are using state tax money in efforts that are in direct competition with private companies. Senator Browne chided Secretary Yablonsky that the Department is too limited in working to promote economic development. Specifically, he said, the Department is focusing on subsidy stimulus instead of a broad-based approach, using methods such as innovative tax strategies and tax cuts, to get companies to invest in Pennsylvania. Senator Regola commented on a “drastic” $2 million cut in state funding to the St. Vincent Small Business Development Center in Westmoreland County. “To me, that means fewer businesses will be opened and less tax revenue will be coming to the state.” Senator Gordner asked why funding for facilities and infrastructure development grants is not currently being used, yet the Department is asking for additional funding for those efforts in Fiscal Year 2008-09. Senator Gordner noted that the Legislature may consider legislation later this year to extend Keystone Opportunity Zones to promote the development of unused land and potentially expand the program to additional areas. Senator White said senators should be careful in publicly supporting efforts such as PENNTAP and Small Business Development Centers because the Governor then cuts funding for those programs and forces the Legislature to “buy them back.” Senator White also questioned the interdepartmental efforts on issues such as the promotion and funding of alternative fuels in Pennsylvania by both DCED and the Department of Environmental Protection. Senator Roger Madigan, 23rd District, questioned the Department’s role in providing basic infrastructure and utility service to promote and maintain economic development and growth. He cited the case of a kitchen cabinet manufacturing company located near the border with New York. That company, which started eight years ago with 100 employees and is now up to 426 employees, lost two days of production because of a power failure. Senator Madigan also asked if the Department’s targeted investment strategy is making Pennsylvania competitive in the region and internationally. Senator Corman, citing the success of programs like PENNTAP, also stressed the need for the Department to provide a list of priorities. He noted that with additional costs in the proposed FY 2008-09 budget, particularly in personnel expenses, it is “becoming harder and harder to put money back in the budget.” Senator Corman also supported funding for research efforts in Pennsylvania. Senator Mike Waugh, 28th District, asked the Secretary to detail the DCED’s rationale for merging the Machinery and Equipment Loan Fund and the Industrial Development Fund. He also questioned the elimination of funding for emergency responders’ training and municipal code training. Senator Greenleaf discussed with the Secretary what was the investment strategy the Department and Commonwealth pursued when providing funding to start-up businesses, particularly in some high-tech fields. Appropriations Committee Chairman Senator Armstrong agreed that funding venture capital companies can be risky. “When it works out, you’re a hero. When it doesn’t, it’s ‘how could you be so stupid’,” Senator Armstrong said. Department of Conservation and Natural
Resources -
Summary Several senators raised concerns about a decision this year by the Department of Conservation and Natural Resources to no longer employ lifeguards at state park beaches. Senator John Gordner, 27th District, asked DCNR Secretary Michael DiBerardinis if the change was made to cut costs or because of staffing difficulties. Senator Gordner and Senator Pat Vance, 31st District, raised concerns about liability issues if drownings occur. Secretary DiBerardinis said the move is actually part of a five-year trend to reduce lifeguards at state parks, adding that Pennsylvania is not out of step with other states. Senator Gordner noted that the Legislature had not been aware of that trend. Pointing to the biggest threat from gypsy moths in over a decade, Senator Mary Jo White, 21st District, wanted assurances that the Department’s allocation was adequate to deal with infestations. Senator Roger Madigan, 23rd District, echoed those concerns, saying that gypsy moths and other forest pests are a major concern to the timber industry. Senator White also asked Secretary DiBerardinis about the Department’s decision to raise user fees at state parks and whether the Department has the authority to levy admission fees. Senator John Rafferty, 44th District, wanted to know whether the number of park employees will increase when user fees rise. Secretary DiBerardinis said the fee increases will be modest and competitive with other states and all new revenue will go back into the park system. Senator Rafferty and a number of other senators said they are very interested in a proposed flood mapping project that DCNR is currently undertaking throughout the state to identify flood-prone areas. “State government needs to make recommendations to county and local government once we get that information,” Senator Rafferty said. “I think the information is invaluable.” Senator Madigan said many municipalities are discovering that their flood maps are very much out of date, and he wanted to know when the new maps will be available and how communities could access them. Secretary DiBerardinis said the Department is committed to making the technology available and sharing it with anyone who could find it useful. Noting that many sewage treatment plants are being asked to spend a great deal of money as part of the Chesapeake Watershed clean-up initiative, Senator Vance asked what DCNR is doing to keep pollution from state park and forest lands out of streams. As a sponsor of the state’s Rails to Trails Program, Senator Stewart Greenleaf, 12th District, asked for a status report on the program and how it is being received. He noted that because Pennsylvania was a major railroading state, the Commonwealth has many abandoned rail lines that are ideal for hiking and biking. Department of Corrections -
Summary The growing inmate population in State Correctional Institutions and the system's increased costs were the primary issues explored by the Senate Appropriations Committee during a budget hearing on the state Department of Corrections. Senate Judiciary Committee Chairman Senator Greenleaf opened the hearing by commenting on the "tremendous explosion in (Pennsylvania's) prison population," in part due to the incarceration of less serious, non-violent offenders. He said Pennsylvania's experience is directly counter to that of New York. Pennsylvania incarcerated about 1,600 new inmates last year while New York reduced its prison population by 1,000. Secretary of Corrections Jeffrey A. Beard said the population jumped significantly since 1980. Then, the state had 8,000 inmates in eight institutions with a budget allocation of $94 million. Today, Pennsylvania has 46,000 offenders in 27 institutions with a budget of $1.7 billion. Senator Rafferty asked if there is sufficient funding in the proposed 2008-09 budget for inmate education and vocational training programs. Secretary Beard said the funding will have to be monitored, adding that vocational technology programs are voluntary, but the education programs are mandatory for inmates who do not possess at least a GED. Senator Browne asked whether a 109-percent increase in federal funding provided for incarcerating illegal immigrants had a correlation to a similar increase in the number of illegal immigrants in Pennsylvania. Noting that about 14 percent (6,000) of the 46,000 state inmates are convicted sex offenders, Senator Regola asked what treatments are available for those individuals and their recidivism rate. Senator Regola is the prime sponsor of legislation that would provide for the chemical treatment of certain sex offenders who commit their crime on a victim who is under 13 years of age. Senator Gordner asked about contract negotiations, departmental staffing, and the planned construction of new prisons. Senator Gordner asked if enactment of pending legislation that would ban mandatory overtime for nurses could be extended to potentially affect the Department's ability to assign overtime to corrections officers. Senator White asked whether security measures had been upgraded at SCI Albion in the wake of a recent escape from the facility. She also inquired about housing provided for wardens at the correctional institutions. Senator Vance asked what provisions are made for Pennsylvania's 150 "nursing home eligible" elderly inmates. Secretary Beard said inmates tend to "age faster" than the general public as a result of their lifestyles. Senator Corman asked Secretary Beard to identify what drug crimes he considered to be non-violent. He noted that the illegal drug trade fosters violence in the community. Senator Waugh asked how many inmates will end up spending the rest of their lives in prison and raised concerns about the increased costs, particularly for health care associated with geriatric prisoners. Department of Education
Senator Mary Jo White (R-21) explains to
Education Secretary Gerald Zahorchak how the current school
funding formula shortchanges rural school districts. Senator Gib Armstrong (R-13), Chairman of
the Senate Appropriations Committee, urges Secretary of
Education Gerald Zahorchak to reconsider funding cuts to
technical schools. Senator Mike Waugh (R-28) discusses an
education incentive to help recruit volunteer fire and
ambulance personnel. Senator Pat Browne (R-16) and Senator Jake
Corman (R-34) question the value of a study of the
department’s five-month-old pre-kindergarten program, and
the Administration’s attempt to use the study to increase
spending on the initiative. During the budget hearing for the Department
of Education, Senator John Rafferty (R-44) raises concerns
about the impact of high property taxes on residents and
communities. Summary Members of the Senate Appropriations Committee pointed out several flaws in the proposed funding formula for public schools during a budget hearing with Department of Education Secretary Dr. Gerald L. Zahorchak. Chairman of the Senate Education Committee Senator James Rhoades, 29th District, asked how the new distribution formula for schools was created and questioned the total cost of adequacy funding formula. Senator Mary Jo White, 21st District, criticized the costing-out study that the formula was based on, saying that it discriminates against poorer rural districts. Senator White and Senator Rhoades pointed out a number of financial factors that were not considered in the costing-out study and Senator White criticized the Department for not giving schools enough time to plan for the new formula. Senator Pat Browne, 16th District, urged the Secretary to delay funding increases based on recommendations contained in the study until the funding formula could be better understood. Senator Jake Corman, 34th District, joined Senator Browne in supporting the concept of the costing-out study, but called the hasty implementation of costing-out study recommendations "irresponsible." Senator John Rafferty, 44th District, said the costing-out study does very little to help schools in his senatorial district and asked if the Department would do anything to fund public schools in a way that would reduce the crippling effects of rising property taxes in the southeast. Senator Stewart Greenleaf, 12th District, pointed out that 7 out of 10 schools in his senatorial district would receive the minimum funding increase under the funding formula, which forces local taxpayers to provide a disproportionate level of funding for schools. Senate Appropriations Committee Chairman Senator Gib Armstrong, 13th District, questioned why funding was cut by 20 percent for the Thaddeus Stevens College of Technology despite the school’s overwhelming success in job placement for graduates. Senator Bob Regola, 39th District, criticized the direction of the priorities in the budget proposal, including the elimination of funding for Science in Motion. Senator John Pippy, 37th District, asked if the Department supports access to cyber schools for the children of military members who are deployed out of state. Senator Pippy also asked what measures are being taken to support the construction of environment-friendly "green" buildings. Senator Mike Waugh, 28th District, asked if the Department would encourage the use of standardized school construction plans and if these plans would reduce costs. Senator Pat Vance, 31st District, asked how the state could incentivize greater local funding for libraries. Senator Vance also asked why there is a backlog in emergency certification for school nurses. Senator Browne asked what the Department had planned for the Higher Education Equal Opportunity Program (Act 101) and urged an increase in funding after several years of flat funding. Senator Corman asked about the Administration's philosophy in increasing funding for community colleges and the State System of Higher Education while state-related schools would see greater tuition increases. Department of Environmental Protection
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Summary Senate Environmental Resources and Energy Committee Chair Senator Mary Jo White, 21st District, said the Governor originally indicated that a proposed new tax on property insurance to pay for flood remediation would apply only to property owners in flood plain areas and asked if that was accurate. Secretary Kathleen McGinty said the tax would actually be assessed on all property insurance bills throughout Pennsylvania. Senator White noted the Administration has not funded sewage treatment programs and took issue with the Administration’s claims that it was the result of federal cuts, noting that the federal 1999 law enacting cuts anticipated states would fund the programs. The senator also asked if the Secretary would pledge to release the names and amounts of unsuccessful applicants for funding through the Energy Development Authority, as required by the Ethics Act regardless of whether a potential conflict of interest exists. The Secretary said she had to check with legal counsel. Senator Vance took the Secretary to task for alleging in a newspaper column that critics of the proposed Chesapeake Bay Tributary Strategy are motivated by politics. The senator noted that efforts to protect the bay region have been led by Governors of both political parties and that legislators in the affected area are speaking up for area taxpayers who will be seeing huge increases in sewer bills. The senator also noted that Virginia and Maryland provide funding for their bay mandates, while Pennsylvania’s is unfunded. The Secretary said it’s “time to pay the bill” and that the legislature will face difficult votes on the issue. On the issue of black fly spraying, the Secretary told Senator Vance that the cost of the program has gone down, but there is no decrease in spraying. Senator Gordner said a per-gallon production incentive is necessary to produce soybean biofuel production in Pennsylvania, otherwise producers will have to shut down and Pennsylvania will buy its biofuels from Midwestern states with incentives. Secretary McGinty said Pennsylvania currently offers a production incentive of 5 cents per gallon, and she would support increasing it. Senator Gordner asked what steps the state is taking to explore the Marcellus Shale Fields, which runs from upstate New York, across Pennsylvania into eastern Ohio and West Virginia and could contain as much as 50 trillion cubic feet of recoverable natural gas. The Secretary said DEP is meeting with Penn State researchers and investors coming to the state to consider development opportunities, and the senator urged her to continue the efforts. Senator Rafferty thanked the Secretary for DEP’s work in addressing TCE air emissions in his district. The senator asked if the state was planning a public education campaign to prepare consumers for the end of rate caps on electric bills. The Secretary said the heart of the Administration’s plan is reducing energy prices, but mentioned no specific education plan. The senator noted that residential rates could go up 35 percent in his area and the state should protect consumers. Senator Greenleaf asked what the Commonwealth was doing in the area of waste coal. The Secretary said it has supported new waste coal plant construction and supports existing plants. The senator asked if there are any concerns regarding Pennsylvania’s water supplies, as some other states face. Secretary McGinty said the legislature implemented a five-year study of Pennsylvania’s water supplies, with the report to be issued on March 18. Several members, including Senator Regola, noted the proposed cut in funding for Conservation Districts, even though they face increased work loads. The Secretary said the proposed funding is level, at $3.1 million, but that the General Assembly has been responsible for the increase last year and in previous years. The senator asked if funding for emergency response hazardous cleanups was adequate, and the Secretary noted that the Legislature’s recent passage of a bill funding the Hazardous Sites Cleanup Act was helpful. Senator Browne asked DEP Secretary Kathleen McGinty for an update on the status of sewage grant permit approvals and asked about the budget for the Advanced Energy Development Program which reduces energy consumption in Commonwealth-owned buildings. Senator Browne noted the projected energy savings are constant for the next several years, with no improvement. Senator Browne asked Secretary McGinty if proposed DEP regulations to limit truck idling are different from his legislation to do the same. The Secretary said some enforcement provisions may be different and that there is no plan before DEP to extend limits beyond commercial trucks. On competing Alternative Energy Investment bills passed by the Senate and House, Senator Browne noted that one difference is the Senate bill provides more tax credits to energy development companies, which need them to get beyond the upfront assistance proposed by the House and Governor. The Secretary said paying for credits is the issue, and the senator said the Governor may have to reduce upfront capital to pay for it. Many departments and agencies are faced with increased personnel costs tied to a union contract negotiated by the Administration, and the Secretary acknowledged to Senator Corman that the bulk of the DEP budget increase is due to that contract. Senator Corman said he is concerned that the Governor has put legislators in a box, by limiting overall spending increases to around four percent while hiking personnel costs, making it less likely that initiatives such as Conservation Districts can have their funding restored. Noting that the proposed Chesapeake Bay Tributary Strategy will impact taxpayers, sewer ratepayers and farmers, Senator Corman asked why the Administration has not yet advocated for assistance as it has for mass transit, for which the Governor has traveled the state and held rallies. Secretary McGinty said, “I think that’s to come.” Senator Rhoades cited a newspaper article on a liquefied carbon project in Greene County that quoted the Secretary as saying Pennsylvania has to find a way to not burn coal. The Secretary said that is not her position, and that DEP is pushing approaches that enable coal use to grow even under carbon restraints, through the use of sequestration and other methods. Senator Rhoades also noted that while the use of biosolids and sludge has many of the same downsides as waste coal, they do not face the same scrutiny or restrictions. The Secretary agreed that waste coal is no worse and should not be used to stoke fear. On alternative energy, Senator Rhoades said the Administration has several far-reaching ideas for the future, but that more could be done to allow individual property owners to access alternative energy more quickly, without a vast energy program. He said Pennsylvania has abundant water, wind, oil and gas resources and the state needs a clearinghouse for innovative ideas that are already being used by individuals. Senator Rhoades also said he supports ongoing use of hidden cameras to combat illegal dumping, and asked about news that South Carolina is going to close a dump that accepts radioactive waste from Pennsylvania. The Secretary said the closing could happen, but there is no imminent problem. Senator Roger Madigan, 23rd District, asked if there was anything the Legislature could do to clarify the issues involved with oil and gas leases, which often lead to conflict between property owners and those holding the rights to underground resources. The Secretary said it would be helpful if laws were updated to clarify the rights of surface and subsurface property owners. Senator Madigan asked what would be entailed in the upcoming release of a statewide inventory of Pennsylvania’s water supplies, authorized by the General Assembly five years ago. The Secretary said it would lead to a series of findings, including water atlases for each region, water budgeting tools, and ultimately proposed regulations of water withdrawals and reporting. Department of General Services -
Summary Senator Rafferty thanked General Services Secretary James Creedon for his assistance with the Southeast Veterans Center. Senator Rafferty asked about "green buildings" owned by the state and how effective and energy efficient they have proven to be. Rafferty asked if the proposed new prisons to be constructed will be green buildings as well. Senator Browne commended the Secretary for the Strategic Sourcing program. Senator Browne inquired about expenditures and procurement, citing spikes in the upcoming fiscal year. Senator Vance asked if there are current plans for now-closed Harrisburg State Hospital property. She also asked about an agreement dealing with historic buildings in Philadelphia. Senator Greenleaf asked about the status of security in the Capitol building, including the ban of firearms and other weapons and the ability of Capitol Police to quickly respond to incidents. He also asked about the status and personnel of the judicial center now under construction in Harrisburg. Senator Greenleaf asked about other additional projects planned for the Capitol Complex. Senator Corman questioned the number of unfilled positions being requested in the Department’s budget request. Senator Regola asked about the current status of asbestos abatement in state buildings. Senator Regola also asked for an explanation of the temporary fleet vehicles line item in the budget. Senator White commended the Secretary for his Department's work on the preservation of the State’s Rare Books collection. Senator White asked if the number of insurance claims involving the state is trending up or down. Senator Waugh asked about the COSTARS program and if the Department was working on ways to do more outreach to municipalities. Senator Waugh asked about the Department's use of other alternative energy sources. He suggested that the Department take a look at the biomass dropped every year at the Farm Show for use as an energy project. Department of Health -
Senator Roger Madigan (R-23) urges Dr.
Calvin Johnson, Secretary of Health, not to weaken the
privacy of patient treatment records.
Summary Senator Madigan was among several members to question Department of Health Secretary Dr. Calvin Johnson over proposed regulation changes that would weaken protection of personal records of individuals in drug and alcohol treatment. The Secretary said the proposed changes have not been finalized and were designed to give both treatment centers and clients access to information, while still requiring patient consent. Senator Rafferty asked if any increase in diseases was particularly worrisome, noting a higher incidence of tuberculosis and whooping cough cases. The Secretary said there is a combination of new and emerging diseases being watched, including chronic diseases and asthma. Asked about prevention efforts, he told Senator Rafferty that the Department is working with other agencies to promote vaccinations. On the matter of the Department's new Gambling Addiction Hotline, the Secretary told Senator Rafferty and Senator Gordner that the hotline received 80 calls from July 2007 to February 2008 and that 86 people have been trained as addiction counselors across the Commonwealth. Senator Gordner and Senator White questioned the Secretary about Pennsylvania's pandemic influenza planning, noting that the budget to stockpile vaccines was down. Secretary Johnson said Pennsylvania has purchased enough vaccines to meet its part of the federal goal of 25 percent coverage nationwide. Noting the three-to-five-year shelf life of vaccines, Senator Gordner and Senator White encouraged the Department to rotate the medication into active use as its age limit nears and purchase fresh supplies. He told the senators that the federal contract with pharmaceutical companies makes it difficult to rotate the medication, but that the contract could be revised. Noting that smoking prevention and cessation was the original intent of the Tobacco Settlement Fund, Senator White asked why it appeared money was cut to evaluate prevention cessation efforts. Secretary Johnson said the evaluation budget is multi-year and will go up and down, adding that reports show cigarette smoking by adults and youths is decreasing. When asked why funds were left over for mobile health care clinics and other initiatives, the Secretary said the state did not receive enough bids and has to start the process again. Senator Browne asked why funding for drug and alcohol treatment was reduced, with the Secretary saying some activities were one-time initiatives and not due to receive ongoing funding. The Senator also noted that the Administration's change in the formula to calculate "bad debt" among not-for-profit acute care facilities was having an adverse effect. The Secretary also assured the Senator that the Administration is not planning on forcing community treatment centers to make methadone available as part of heroin addiction treatment. Pointing out that the purpose of budget hearings is to find ways to save money and not just spend it, Senator Vance asked if the Department would coordinate with the Department of Public Welfare in the training of assisted living facility inspectors to save money. The Secretary said it hasn't yet, but would look into it since the departments have combined the licensing function for drug and alcohol treatment and mental health structures. Senator Vance said she was concerned that funding for school district nurses remains flat while nurses are faced with more problems to handle. The Secretary agreed, noting that funding for school nurses has been flat for more than 20 years and needs to change. Senator Waugh expressed concerns that funding for some emergency medical services programs has been reduced or cut in the 2008-09 budget. He asked if there is adequate funding for emergency medical services coordination statewide. Senator Corman asked the Secretary how the Administration derived the estimate that uninsured Pennsylvanians add 6.5 percent to the cost of insurance premiums. Secretary Johnson said he did not know, but would check. Senator Corman noted that since the Governor's proposed health care insurance program would not cover all of the uninsured, even if implemented, the net savings would not amount to 6.5 percent. Senator Corman also noted that personnel costs were up in the Health Department's budget, while many other line items were reduced. He expressed concern that the trend was not uncommon throughout the budget and that state spending was going in the wrong direction, therefore resulting in service cuts. Senator Rhoades said a non-profit primary care facility in his senatorial district had to temporarily close due to lack of funds. He stressed that the state should more clearly define "primary care" so facilities can better access support. Senator Rhoades said the need for new nurses has reached "catastrophic" levels and asked if the Health Department and Pennsylvania's colleges can address the problem. Senator Stewart Greenleaf, 12th District, asked what Pennsylvania was doing to assess the problem of autism. The Secretary said the state uses Tobacco Settlement funds for research, and will be awarding a $16 million to $18 million contract soon. Responding to Senator Greenleaf's question on Lyme disease, the Secretary said a task force was recently convened to address diagnosis, treatment and surveillance efforts. Senator Greenleaf said he was concerned by what appeared to be a reduction in funding for biotech research, but the Secretary said the funding usually fluctuates from year-to-year. Department of Insurance -
Senator Don White (R-41), Chair of the
Senate Banking and Insurance Committee, questions the
Administration's proposal to fund an expanded healthcare
plan with the MCARE fund. Senator Pat Browne (R-16) and Senator Jake
Corman (R-34) debate funding
for "Cover All Pennsylvanians" with Acting Insurance
Commissioner Joel Ario.
Summary Several Senators raised concerns about the Governor's proposed universal health care scheme during the Senate Appropriations Committee's budget hearing with Acting Insurance Commissioner Joel Ario. Senator Don White, 41st District and Chairman of the Senate Banking and Insurance Committee, extensively grilled Acting Commissioner Ario about the Governor's proposal to take a $400 million surplus from the MCARE fund to pay a portion of the costs of his universal health care scheme. Noting that overpayments by practitioners built the surplus in the MCARE Fund, Senator White asked, "To the best of your knowledge, did the Administration ever ask the Legislature to take another look at the assessment formula? That is a substantial amount of money to be overcharging providers." Senator Don White also raised concerns about spending the surplus when the Fund faces an unfunded liability of $1.8 billion. A better use of the surplus, Senator White said, would be to "wean the doctors" off of the program through a plan that he introduced as a key component of Senate Bill 1137. Under questioning from Senator Gordner, Acting Commissioner Ario admitted that high-risk medical practitioners, such as obstetricians and neurosurgeons, who already pay more than $100,000 in medical malpractice insurance premiums, could see those costs increase by 50 percent if the MCARE abatement program lapses. Generally, the premiums for providers would go up by 25 to 33 percent, he added. Senator Browne, Chairman of the Senate Finance Committee, asked about the Insurance Department’s role in the Governor's proposed 7-percent tax surcharge on property owners' flood insurance policies. Senator Browne said he was not aware of any similar surcharges imposed by any other state. Following up on questions he originally raised with the State Budget Secretary on Monday, Senator Browne again questioned the Administration's funding plan for the Governor's universal health care scheme. He noted that the Governor originally wanted to impose an "unpopular and unsustainable" 3 percent tax on businesses. Now, the Governor is looking at cigarette taxes, even though those revenues are decreasing and the health costs would certainly go up. Senator Regola, noting that the Governor is patterning his universal health care scheme after similar programs in California and Massachusetts, asked whether he would follow the example of those states and exempt small employers from state mandates for the coverage. Senator Regola also urged the Administration to work with the Legislature to provide state oversight on the proposed merger of Highmark and Independence Blue Cross to ensure competition in the market. Senator Mary Jo White said she also supported the need for state oversight on the Highmark/IBC merger. Further, she noted a need in Pennsylvania for more fairness in insurance reimbursements to providers. Some providers may receive as much as three times more than others for the exact same medical procedures, Senator White said. Senator Mary Jo White sharply criticized the Governor's plan to tap the MCARE program for his universal health care scheme. She said she expected the MCARE abatement program to eventually be phased out, something that won't likely happen if the fund is used as a funding source for a new entitlement program. Senator Rafferty cautioned that Pennsylvania still has a shortage of doctors, especially in high risk fields. He said too many graduates from Pennsylvania's medical schools, especially those in high-risk specialties, are leaving the state after they complete their studies. Eliminating the MCARE abatement could exacerbate the problem, Senator Rafferty said. Senator Pat Vance, 31st District, reviewed enrollment trends in the existing adultBasic health insurance program in Pennsylvania. She asked how the Administration could claim that the Governor's proposed universal health care scheme, which would include prescription drug and some mental health care coverage, would have lower costs than the existing adultBasic program. Senator Stewart Greenleaf, 12th District, asked if the Administration has looked at public-private partnerships for the universal health care scheme. He said the experiences of other countries show that costs go up and availability goes down if a health care program is "overly dominated" by government. Senator Jake Corman, 34th District, criticized the Administration’s contention that the Governor's universal health care scheme is not an entitlement program. He added that the Administration would be better off working to address health care costs. Senator Corman said the real problem is affordability, especially when government spends $14 billion (including $7 billion in state money) for subsidized health care in Pennsylvania. "We don't have a health care problem in Pennsylvania. We have a health insurance cost problem in Pennsylvania," Senator Corman said. Senator James Rhoades, 29th District, asked about trends in long-term care insurance in Pennsylvania. He also raised concerns that employers may drop insurance coverage as a cost-saving step if the Commonwealth sets up the Governor's universal health care scheme. Department of Military and Veterans
Affairs -
Summary Senate Veterans Affairs and Emergency Preparedness Committee Chair Senator Lisa Baker, 20th District, asked state Adjutant General (Major General) Jessica Wright if her Department has adequate funding and staff to implement the growing number of new programs that it administers. Specifically, she said she has heard concerns about the processing of applications for the Persian Gulf Bonus program. General Wright acknowledged that the Department is facing higher demands and is working to process applications more efficiently. Senator Baker also suggested that the Commonwealth partner with health care providers to improve treatment of post traumatic stress disorder and asked if the state pensions for blind or paralyzed veterans is spent down every year. General Wright said they are not, and she would like the legislature to give her the authority to use leftover funds for other veterans programs. Senator John Pippy, 37th District, asked General Wright what she needs from the Legislature to assist with the growing number of programs for veterans, such as the Real Estate Tax Rebate Program and the Military Family Assistance Program. Noting that the state does not reimburse local governments for properties of disabled vets that receive a tax exemption, he said “there are some who feel that if we believe in the program and mandate it, then we should fund it.” Senator Gordner questioned General Wright about recruitment efforts and wanted assurances that the state had adequate funding to provide tuition benefits and life insurance to those serving their country. A member of the Southeast Veterans Center Advisory Board, Senator John Rafferty, 44th District, praised the Department for its “dramatic leadership” in improving services at the state’s veterans’ homes. He said that all the homes now have dementia units to help assist patients and that the quality of care is excellent. Citing a report that rated only 67 percent of Pennsylvania’s armories and field sites as “adequate,” Senator Browne asked if the Department needed additional resources to bring more facilities up to standards. General Wright acknowledged that many of the facilities are old and outdated, but modernizing them is costly. Senator Browne also applauded the Department for providing funding for veterans outreach assistance and said that there have been discussions in the Legislature about establishing a cabinet level position for Veterans Services. Senator Stewart Greenleaf, 12th District, centered his questioning on the Base Realignment and Closure (BRAC) decision to close Willow Grove Air Station, which is home to the 111th Fighter Wing – an extremely skilled and important air unit. Senator Bob Regola, 39th District, asked General Wright to explain how the increased funding for veterans outreach will be used. The General said veterans organizations will apply for money and demonstrate how they would they would use it, for example, to help eligible veterans process applications for benefits. The funds would not be used for direct assistance to veterans. Senator Regola said he would push to restore funding for the Civil Air Patrol. General Wright acknowledged that she did not request the elimination of CAP funding, adding that it was the Administration’s idea and that she considers CAP “a very worthy organization.” Department of Public Welfare -
Summary Senator John Rafferty, 44th District, and several Appropriations Committee members expressed opposition to the “carve out” excluding pharmaceutical benefits from the rebidding for state contracts to provide services to Medical Assistance patients. He asked why payment for pharmacy services was not included in the Healthy Choices rebidding process. Department of Public Welfare Secretary Estelle Richman said the change was to save money and told the senator that about $1 billion out of DPW’s $23 billion combined state/federal budget is for pharmaceuticals. Senator Rafferty later suggested that the rebidding could have taken place along two tracks – with and without including payment for pharmaceutical benefits. Senator Rafferty asked if the DPW’s Pharmaceutical and Therapeutics Committee was conducting its meetings in compliance with the state Sunshine Law. Secretary Richman said the meetings are abiding by the law. Senator Rafferty said there have been complaints in his district about administration of the Low Income Home Energy Assistance Program (LIHEAP) related to delayed callbacks and fuel delivery and asked the Secretary to look into it. Senator Bob Regola, 39th District, said he also opposes the pharmacy “carve out”, and asked the Secretary if she considered the change significant. Secretary Richman replied that the change is more about claims processing and that users will not notice a change. The senator urged DPW to delay implementation until the Senate Public Health and Welfare Committee has a chance to hold a public hearing on the matter. Senator Regola noted that spending for home and community based services has been increased in recent years, but the promised savings have not been seen, as the number of nursing home residents has not gone down. Proposed assessments to be levied on hospitals in Philadelphia and Allegheny County raised concerns from Senator Pat Browne, 16th District. The senator said the assessments don’t take into account a facility’s current financial circumstance and amounts to taxing health care services, while allowing counties and the state to use that revenue for non-health care needs. Senator Browne noted that while the number of welfare cash assistance recipients has gone down, the number moving on to work has remained flat. The Secretary said that as the number of cash assistance recipients comes down, the people remaining are harder to employ than those who previously moved into jobs. Senator Browne also advocated additional funding for nurse-family partnerships. Senator John Gordner, 27th District, was among several members to call for a cost-of-living adjustment for community care providers. The senator noted that the AFSCME contract negotiated by the Administration provided raises for Commonwealth employees, but nothing for direct-care providers. When the Secretary noted she had tried to find the $100 million needed to fund a provider COLA, Senator Gordner said the Governor could scrap his “gimmick” to provide a one-time tax rebate to Pennsylvanians who pay no income taxes and use some of the $130 million cost for a COLA. Senator Gordner also expressed concerns over possible changes in medical assistance transportation in rural areas. The Secretary said DPW has only solicited information on improving the system to save money. Senator Mary Jo White, 21st District, noted that a new federal funding formula increases the county share of funding for child support enforcement, but Secretary Richman said the state’s policy has been to not step in and make up the difference caused by federal funding reductions. Senator White noted that county, state and federal taxpayers are essentially the same people and the state would be better suited to pick up the shortfall. Pennsylvania law allows the state to intercept lottery winnings over a certain amount if the winner owes child support, and Senator White asked if the same precedent applies to slots parlors. The Secretary said legislation is pending that would do that. Senator Pat Vance, 31st District, asked about the independent review panel that oversees how domestic violence funds are distributed and whether new money for domestic violence would go primarily to Philadelphia, as it did last year. Secretary Richman said she traditionally does not override the panel’s recommendation unless it is way out of line. She added that the Philadelphia allocation was a one-time payment. Senator Vance said she was concerned about flat funding for county medical assistance, noting that many nursing home residents are on medical assistance. She said it amounts to a funding cut since counties are facing higher costs. Questioned about the creation of 19 new DPW positions, Deputy Secretary Mike Hall said they were necessary to implement Senator Vance’s legislation licensing long-term living facilities in the state. Senator Robert Tomlinson, 6th District, said counties are bracing for a new centralized, statewide payment system for mental retardation services. The Secretary acknowledged that it’s a major change, shifting authority from counties to the state, but Pennsylvania must submit a centralization plan if it wants to continue receiving federal waivers to fund services. She said counties will still administer services and that the state will find a way to make up financial losses tied to the change. Senator Tomlinson asked why early intervention services for birth-to-age-3 receive less funding than programs aimed at children age 3 to 5. It was explained that the birth-to-3 initiatives are run by DPW, while programs for older children are administered by the Department of Education, which must fund COLAs for service providers. Senate Appropriations Committee Chairman Senator Gib Armstrong, 13th District, questioned an $8.8 million request for Facilities and Service Enhancement. The Secretary said it is part of negotiations that have been going on for more than a year with hospitals looking for a different way to deal with rates. Senator Armstrong said he was surprised that it had not been discussed in the last budget either, and that no one could give an explanation for a $500,000 contract with the Philadelphia Treasurer’s Office. He requested further detailed information on the spending. Senator Jake Corman, 34th District, noted that the “carve out” issue had been negotiated out of the budget last year, and that the Secretary could wait until the issue is settled with passage of the 2008-09 budget and then send out bids for the Healthy Choices program. Regarding the lack of COLAs for mental health workers, Senator Corman noted the Governor has proposed many new spending programs, when core needs such as this should be taken care of first. Senator Corman warned that it was risky for DPW to base its budget on the assumption that House Bill 1150 will pass, which would shift the cost of autism services from Medicaid to private health insurance carriers. He also expressed concerns that the insurance mandate would negatively impact premium rates at a time when Pennsylvania is trying to make insurance more affordable. Senator John Pippy, 37th District, echoed Senator Corman’s comments that the Administration should fund COLAs for mental health workers before unveiling new government programs, noting that it is a part of a larger problem in which the Administration cuts good programs because they were legislative initiatives. Senator Pippy urged the Secretary to work with the Legislature on plans to impose new taxes on hospitals in Allegheny County and Philadelphia, saying that more discussion is needed. Responding to a question from Senator Stewart Greenleaf, 12th District, the Secretary said DPW is trying to reduce the size of waiting lists for mental retardation services and is careful that any new policies do not add to the wait. She said it would cost $262 million to eliminate the waiting list. Senator Greenleaf said operators of home health care agencies are overdue for an increase in reimbursement rates. Secretary Richman said DPW is implementing selected increases, but first targeting private duty shift nursing, dentists and primary care physicians. Department of Revenue -
State Senator Pat Vance (R-31) expresses concern that the
Commonwealth is becoming too dependent upon the lottery fund.
Senator Mary Jo White
(R-21) questions whether a recent decline in lottery sales could be linked
to legalized gambling in Pennsylvania.
Summary Senator Browne, Chairman of the Senate Finance Committee, which has oversight over the Department of Revenue, asked Revenue Secretary Tom Wolf about several projected tax revenue estimates. Senator Browne specifically cited a projected decrease in Corporate Net Income Tax revenues during Fiscal Year 2008-09, while revenues for other business taxes are expected to increase over the same period. Senator Browne also questioned the projections for the Personal Income Tax. Senator Browne also noted a projected 3.4 increase in sales tax revenues, compared to an expected national increase of 2.2 percent even though Pennsylvania's sales tax base is "thin when compared to other states." Senator Rafferty said he had serious concerns about the extensive borrowing and fund transfers pushed by the Governor in the past and proposed for the future. Senator Rafferty specifically cited borrowing for economic development programs, Growing Greener II, and the proposed $850 million bond for alternative fuels, as well as the Governor's proposal to tap funds from MCARE and the tobacco fund. He cautioned that Pennsylvania could end up in a financial crisis such as the one currently facing New Jersey. "What about us financially with all the borrowing that we have done and are going to do if the Governor's plan is accepted? What position does that put Pennsylvania in?" Senator Vance noted that lottery sales revenues are down $47.1 million this calendar year to date. She added that Pennsylvania has spent $118 million over the past six years to modernize and upgrade the lottery program. "Are we really getting a bang for our buck?" Senator Vance asked. Citing the Administration's on-going transfer of funding for general government operations and other programs from the General Fund to the Lottery Fund, Senator Vance said that with the dip in sales the Department will have to work hard just to maintain the solvency of the Lottery Fund. Senator Greenleaf asked about revenues currently being generated by Pennsylvania's slot machine venues and the projections for when all 14 sites are operating. Senator Greenleaf also asked if increasing gas prices would impact Pennsylvania's Liquid Fuels Tax collections. Senator White said the Legislature had agreed to a plan that reduces the Capital Stock and Franchise Tax by 10 percent a year. She said she was surprised to hear that the reduction proposed for FY 2008-09 would be less than 10 percent. Secretary Wolf admitted that the proposed reduction was "less than half" of the 10 percent that was agreed to. Senator White also expressed concerns about the Governor's proposal to tap the Rainy Day Fund and the fact that the Governor is not adding money to that fund in FY 2008-09. Senator John Gordner, 27th District, said the Governor's rebate scheme would require a change in the law regarding the Rainy Day Fund. He said the law currently bans the use of the Rainy Day Fund for new programs. Senator Gordner said the law also requires the Governor to make a payment in FY 2008-09 and would have to be changed if the Administration intends to skip out on that mandated payment. Senator Waugh asked why tax revenues from horse racing are stagnant even though one of the "sales pitches" for slot machines was that they would help promote the racing industry in Pennsylvania. Senator Waugh also expressed concerns about the Governor's plan to tap the Rainy Day Fund. He suggested providing a $500 tax credit to Pennsylvania's emergency responders at one-third of the cost of the Governor's rebate scheme. Senator Roger Madigan, 23rd District, said commercial trucking companies pay a tax to the Commonwealth based on miles traveled, with revenues projected at $37 million. "How often is the program audited and what assurances are there that the numbers are accurate?" Senator Madigan asked. Appropriations Committee Chairman Senator Armstrong followed up on that issue, saying that he has heard that Pennsylvania "is being shortchanged." He added that many drivers are buying fuel in New Jersey where prices are lower than in Pennsylvania. Senator Armstrong also asked what happens to money from gift cards that are not redeemed. Department of State
-
Summary The state’s new Lobbyist Disclosure Law, the effectiveness of new voting machines and the processing of overseas military ballots were the main focus of testimony during the Department of State’s hearing before the Senate Appropriations Committee. Appropriations Committee Chairman Senator Armstrong wanted assurances that the current complement of five employees was enough to implement the new Lobbyist Disclosure Law. Noting that the registration fee is $100 every other year, he asked Department of State Secretary Pedro Cortes exactly how much money has been generated. Secretary Cortes said approximately $486,771 was raised in fees in fiscal year 2006-2007. Senator Gordner echoed that concern, asking for a more detailed breakdown of fees collected and expenditures. “We want to make sure that you are enforcing the provisions of that law and that you have the resources to do it, particularly since there will be a drop-off every other year,” Senator Gordner said. Secretary Cortes called the enforcement of the law a “labor intensive operation” and said the fees collected may not be sufficient to cover total costs. Saying that he had “more of a plea than a question,” Senator Corman wanted assurances that the Department would not change its stance and force counties to purchase new voting machines, when the ones they have currently meet federal standards. “There are still groups out there that are adamantly opposed to these machines, even though they have worked well,” Senator Corman said. “Many counties went to a lot of trouble to purchase them and now are being asked to buy all new machines, just because some groups don’t have the same confidence that you do.” Secretary Cortes agreed with Senator Corman, noting that the machines are effective, and that the cost to move to other methods could be up to $100 million. On a related issue, Senator Browne cited a “substantial breakdown” within election results at the Northampton County election bureau, and asked the Department to determine how future mistakes can be avoided. Secretary Cortez said that most of the problems were caused by human error and did not impact on any races because the margins were relatively wide. Several senators raised concerns about the process for providing absentee ballots to military personnel and others overseas. “My concern isn’t the intent but in the execution, based on mailing timeframes,” Senator John Pippy, 37th District, told Secretary Cortes. “The problem is getting them to folks overseas in a timely manner and getting them back. Why is it so important to mail a ballot? Why can’t we use email?” Senator Pippy said such an effort could be attempted on a pilot and serve as a model for others – saving money and improving efficiency. Senator James J. Rhoades, 29th District, concurred, saying he wanted to “add my voice to the proper processing for our military personnel.” Senator Rafferty also questioned Pennsylvania’s procedure for processing overseas ballots. “Pennsylvania may be stricter than other states, if that is the case please let me know so we can make changes for you and certainly for military personnel overseas,” he told Secretary Cortes. Noting that many poll workers must work up to 15 hours on Election Day, Senator Rafferty also asked for recommendations to ease burden on judges of elections and minority and majority inspectors. “We have to work out something logistically to make sure we have people at these polls, and that they have some relief,” he said – pointing out that many workers in large assisted living facilities are asking for additional help. Senator Bob Regola, 39th District, wanted to know why the Administration is opposed to str |
