House GOP Budget Would Restore Some Education Funds

The House Republican budget is now out in the public – though in a sharp contrast to Governor Tom Corbett’s spending plan, the parameters of the budget had been public for several days, before the official announcement.

As previously reported, the GOP plan would maintain Governor Corbett’s $27.3 billion spending level, but dramatically increase funding for State System of Higher Education and state-related colleges and universities. Instead of losing more than half of their state funding, SSHE schools would receive 85 percent of last year’s budget, while Penn State, Pitt, Temple and Lincoln Universities would lose a quarter of their state support. “I think everybody standing behind me was as surprised as you were, when the governor proposed a 54 percent decrease in funding for our 14 state-owned universities,” said House Appropriations Committee Chairman Bill Adolph. “Many of these universities are the economic engine in those communities.” In all, the House GOP plan provides $377 million more than Corbett’s budget for higher education.

House Republicans would also up funding for K-12 education, and restore the accountability block grant program, which many school districts use to fund early childhood education efforts. (The block grant funding would be less than half of its current level, but Corbett wanted to completely eliminate the program. Other changes include a five prevent reduction for General Assembly funding – about three times as large of a cut as Corbett proposed – and $55 million more for hospitals across Pennsylvania.

The bulk of the education money comes from the Department of Public Welfare’s budget. Corbett wanted to increase DPW spending by $700 million, citing increased demands and case loads. House Republicans would eliminate $470 million of that bump. Monday, House Minority Leader Frank Dermody (D-Allegheny County) accused the GOP of “robbing Peter to pay Paul” by shifting money from welfare to education, instead of increasing the overall budget amount and raising taxes. Adolph disagreed. “$470 million dollars is a lot of money,” he said. “But you have to put in the perspective of what we’re spending in the Department of Welfare. This year’s budget is still a one percent increase over last year’s budget. We are spending $10.7 billion.”

Dermody’s Senate counterpart, Jay Costa (D-Allegheny County), refrained from bashing the Republican budget in an emailed statement. “"It seems that our colleagues across the aisle have heard some of the concerns of men and women across the Commonwealth who thought the governor's budget was too austere, too draconian in its cuts to education. We look forward to receiving the amendment and learning more of the specifics of the plan, particularly how those Department of Public Welfare programs which serve children, the elderly and the disabled are affected,” he wrote.

As expected, House Majority Leader Mike Turzai (R-Allegheny County) rejected the suggestion of incorporating a $500 million tax surplus into next year’s spending plan. “Look, as we move into the next year’s budget, we don’t know what this economy’s going to do,” he reasoned. “Gas prices are at four dollars. And everybody knows that it’s not clear whether the economy is going to continue to grow, or revenues are going to continue to come in.” Turzai said he doesn’t want to spend money just for the sake of spending it, and repeated his mantra of state government “living within its means.”

Turzai said his goal is to pass the budget and send it to the Senate by the end of May.

Senate Dems Want Drillers to Pay State Income Tax

The Commonwealth is losing out on hundreds of millions of dollars in revenues because corporations with subsidiaries that operate in Pennsylvania continue to register them in Delaware to avoid paying Pennsylvania's corporate net income tax. That's according to a group of Democratic State Senators who are urging the Department of Revenue to aggressively audit the tax filings of Marcellus Shale drilling companies.
Senator Tina Tartaglione of Philadelphia is the prime sponsor of legislation that would require "combined reporting" for businesses in Pennsylvania and close the so-called "Delaware Loophole." 23 of the 45 states with a corporate income tax have already adopted a combined reporting standard.
Under combined reporting, the parent firm and its subsidiaries are viewed as 1 entity with their profits combined and then taxed by the state based on the level of business that entity conducts in the state compared to its business in other states.

Tartaglione says about 70% of companies doing business in Pennsylvania do not pay the corporate net income tax, and the number of businesses registered in Delaware over the past 20 years has soared from 6,000 to 115,000.
“The boom in natural gas drilling in Pennsylvania has been mirrored by a similar rise in the number Delaware subsidiaries registered by Marcellus Shale energy companies,” Tartaglione said. “All Pennsylvania taxpayers should question the reason for these
numerous affiliates and seek assurance that energy companies are paying
their share of state taxes.”

Tartaglione says that more than 500 Delaware business entities have been registered in the names of Marcellus Shale drilling companies in the past five years even though Delaware doesn’t have a single gas well.

Tartaglione and Senate Democratic leader Jay Costa of Allegheny County say if there is no severance tax on the drillers then the loophole on income tax should be closed.
The Democrats say several years ago, the revenue department estimated that $400
million in corporate taxes could be recouped by adopting a combined reporting standard.
Past legislative efforts to adopt the standard have failed.

Dem Lawmakers Support Suit to Restore AdultBasic

A group of 15 Democratic State Reprentatives and Senators have filed an amicus brief on behalf of the nearly 42,000 Pennsylvanians who lost their health coverage when the state's adultBasic insurance program for low income workers ended February 28.
Senate Democratic leader Jay Costa of Allegheny County says Governor Corbett "overreached" when he "unilaterally" terminated adultBasic...
"He had the obligation and the responsibility to try to find resources to fund the program at least until June 30 that was agreed to by the General Assembly in July 2010. We think it's important we make our argument to the court in support of the lawsuits that have been filed, expressing our argument that the governor acted beyond his authority."

Governor Corbett said the state had no money to fund the insurance program. But Costa, Auditor General Jack Wagner and advocates for adultBasic claim that the administration and the legislature has redirected funds from the Tobacco Lawsuit settlement. The lawsuit filed on behalf of former adultBasic clients claims that 30% of the settlement monies were to be shared between adultBasic and Medicaid for workers with disabilities.
According to the state Insurance Department, 8,000 of the 42,000 former adultBasic recipients have transitioned to another insurance program. Costa says that means that the others, who now do not have preventive care, will wind up in hospital emergency rooms..."Those costs are borne by the hospitals. They then turn around and force them (the costs) on to the health care deliver system, ans it relates to about a 7-8% increase in costs of the premiums paid by the public or rate payers who for for health insurance."

Costa has introduced a bill that would use $25 million from this year's current surplus but that measure remains in committee.
He says the program needs to be funded until June 30th but also a bridge is needed till 2014 when the federal health care act kicks in completely.

PA Legislative Reapportionment Committee Fails to Pick Fifth

The four legislative caucus leaders were unable to choose a fifth and final member for the Legislative Reapportionment Committee by midnight April fourth sending the task to the PA Supreme Court. The fifth member must be a resident of Pennsylvania.

The committee is charged with redrawing the state legislative districts based on the latest census numbers. The committee does not redraw the congressional districts, that task is the responsibility of the full house and senate.

State Senator Jay Costa of Forest Hills is a member of the committee due to his position as Senate Democratic Leader. He says the committee interviewed fifteen candidates over the last few weeks but could not come to a consensus on which one to choose. However, he stopped short of calling it a partisan issue. “We were impressed with the candidates that came forward but it’s a very complicated and complex issue to deal with and difficult to sometimes reach a consensus,” says Costa.

The fifth member becomes the chair of the committee. Costa says he is not concerned that the four caucus leaders could not pick a fifth member. “Three of the last four years that there has been a reapportionment there always have been, depending on who you talk to, the court has made exceptional selections,” says Costa.

The only time the caucus leaders have been able to agree on a fifth members since the 1970 census was in 1981. The court now has until May 4th to name a chairman for the committee. The committee’s work is then expected to be done near the end of 2011 and voters will make selections in the new districts in 2012.

Shale ‘Fee’ Building Momentum in PA

Pennsylvania Governor Tom Corbett says he’d be willing to “listen to” a natural gas drilling impact fee, as long as it doesn’t send money into Pennsylvania’s General Fund. The slight shift in stance comes as the governor’s commission on Marcellus is set to hold its first meeting later today. Top Democrats in the PA Senate say they are also favorable to the type of fee being floated by lawmakers.

Senate Minority Leader Jay Costa says it is “sinful” drillers aren’t paying a tax or fee for natural gas extraction. He wants money from a levy to go toward local impact costs, environmental protection efforts and infrastructure repair. “We’ll go along with not [putting money in the general fund],” says Costa. “If we’re going to impose a tax, which I think we should, it should be back to the local communities, it should be to the environmental community, and also further infrastructure investments.”

Costa is pushing for the environmental component of the fee to be placed in an “environmental stewardship fund or some other program” such as Growing Greener III. “That allows us the opportunity to drive it out, to do the regulatory piece, the policing, the enforcement and the monitoring that needs to take place,” says Costa.

Costa seems to be roughly on the same page as his Republican counterparts, who want a low-level impact fee to fund local governments and environmental protection. Corbett says he “understands” there’s a local impact, but he wants to wait for a final report from his Marcellus Shale commission, before committing to a specific plan.

GOP Praises Budget, Dems Call Cuts Unconscionable

Education cuts lead the way in Governor Corbett’s $27.3 billion budget.
The Republican is proposing reducing funding for Pennsylvania colleges from $1.5 billion dollars to $836 million.
He’d also shave about $550 million dollars from the state subsidy to local school districts. Governor Rendell pushed to increase that line item every year, but Corbett’s budget secretary called its rate of growth “unsustainable.”

Senate Democratic Leader Jay Costa called the cuts “unconscionable,” saying, “Somebody just asked the question about, ‘how are we going to deal with that?’ The outcome is simple: it’s going to mean higher tuition costs for our families that are already struggling to put their kids through school.”

While every Republican leader praised Corbett’s spending plan, most of them stayed away from endorsing the higher ed reductions. Senate Appropriations Committee Chair Jake Corman’s non-answer summed up the typical GOP response: “You know, the governor laid out a blueprint today. So I think now it’s important for us to do our job. To allow the institutions to come in, to allow the students to come in, to make their case on how this would impact higher education, both from a tuition perspective, from an infrastructure perspective,” he said. “And then allow the governor – we just heard his speech, we haven’t had a chance to go through it with him – articulate his vision on higher education for Pennsylvania’s future.” (Corman – who’s considering a 2012 run for U.S. Senate -- is walking an especially tricky line, since his district includes State College.)

On top of the spending reductions, Corbett asked public school employees to accept a one-year pay freeze, which he claims could save $400 million. “Trust me – you’ll have plenty of company out there to keep them warm. With unemployment running over 8 percent, working people across the state are going without pay raises. Or they’re giving back to keep their companies afloat,” he said.

The governor also told public employee unions he’ll push for benefit cuts in upcoming negotiations. “I want to be clear about this to our union leaders: collective bargaining doesn’t mean some ill-defined middle ground. It means finding a spot where things work,” he said. “In this case it’s going to have to work for the good of the taxpayer, or it’s not going to work at all.”


Corbett’s budget would lead to 1,550 public employee layoffs, according to the administration’s budget book. More than 1,200 of those positions would come from the Department of Public Welfare, even though the agency’s overall budget would increase. In all, 19 agencies would see reduced funding. Four
would receive level funding, and 12 would get an increase.

“I said we’d cut,” said Corbett at the beginning of his speech. “I’m not asking you to read my lips. I’m asking you to read my budget.”

Listen to Scott Detrow's wrap up of the budget and reaction to it here.

Costa: Budget May Force Local Tax Increases

Senate Minority Leader Jay Costa says Governor Tom Corbett’s budget proposal is likely to cause local property tax increases, as school districts struggle to maintain programs with less state revenue.

Costa says many school districts will cut sports, arts, and other extracurricular programs in lieu of raising property taxes, but others will opt to keep them and raise rates.

It’s unlikely that a statewide Marcellus Shale severance tax will pass while Republicans hold the governorship and majorities in both legislative chambers. Costa says Corbett is said to support “local impact fees” on drillers, which would use a fee to abate damage to roadways. But the Senate Democrat says those fees won’t provide for environmental policing or stewardship and a statewide tax is needed.

Costa says Senate Democrats want balanced cuts across the board, as they recognize the need to cut spending. He says the minority doesn’t want to deal with “sacred cows” in this budget process.

Health Insurance for Low Income To End in 5 Weeks

Democratic leaders in the State Senate are trying to come up with a plan to prevent AdultBasic, a health insurance program for low income Pennsylvanians from running out.
AdultBasic is funded through tobacco settlement money, and contributions from Pennsylvania’s four Blue Cross Blue Shield insurance companies.
The Blues’ agreement with the state has expired and the state has failed to negotiate a renewal so the program is likely to stop at the end of February.
Governor Tom Corbett plans to offer AdultBasic enrollees a spot in the providers’ “Special Care” program, but health care advocates say that program is more expensive and allows just 4 doctor's visits a year.

AdultBasic was created in 2001 to provide health insurance for state residents ages 19 through 64 who meet income-eligibility requirements, with a monthly premium of $36 per person. Special Care’s rates start at 80.
Senate Democratic leader Jay Costa of Allegheny County says he' sent a letter to legislative leaders and the Corbett Administration asking for a meeting to discuss alternatives....
"We don't think we are out of policy options and we need more substantive discussion with legislators on both sides of the aisle, and in both chambers, to resolve the AdultBasic funding crisis. The impact of failing to look at all alternatives will be devastating to those families who rely on this insurance."

The AdultBasic program currently covers 41,953 state residents, and there is a waiting list of 478,735. That waiting list more than doubled between January 2009 and January 2010, creating an estimated three-year wait.

Dermody: Dems "Will be More than Warm Bodies"

The theme of this week’s inauguration was Republicans taking control of Pennsylvania government.
But Democratic leaders insist they’ll still have a voice during legislative debates.
Republicans hold sizable majorities in the House and Senate, but House Minority Leader Frank Dermody of Allegheny County says Democrats will be more than warm bodies over the next two years.

"We are going to be their conscience. We’ll be the loyal minority. We’re going to fight hard, and obviously we want to work with them, too. We have – the people expect us to work together to accomplish some things for the commonwealth. We intend to do that the best we can."

One issue that will test Democrats right away is the AdultBasic health insurance plan, which covers 41-thousand low-income Pennsylvanians, but will run out of money at the end of February.
The Senate’s top Democrat, Jay Costa, wants to keep the program running through July, so lawmakers can create a replacement program during this year’s budget negotiations.
The Corbett Administration has proposed shifting AdultBasic enrollees to a more expensive health care plan that offers less coverage.
Costa says he also plans to mount an aggressive opposition to Republicans’ plan to sell off state-owned liquor stores.

First Override Of A Rendell Veto

Republican leaders in the Pennsylvania Senate have pledged since February they would not vote on bills after the November 2nd election.
Despite the promise, the Senate voted to override Governor Rendell’s veto of an education bill Wednesday. In October, Rendell vetoed the wide-ranging legislation because of language granting tax exemptions to groups and people who rent out space to charter schools. He claimed that was unconstitutional.
Senate Majority Leader Dominic Pileggi acknowledged he had vowed again and again not to convene a lame duck session this year.
But he said “it’s safe to say no one foresaw” the Democratic-controlled House overriding a bill Rendell had vetoed in a post-election vote.
Before the vote was held, Pileggi said the override was different than holding a lame duck vote on a new or controversial measure.

"I am asking the members to vote on precisely the same language we all considered on September 29th when we approved House Bill 101 by a unanimous vote of 47-0. Not a single word has changed."

Newly-elected Minority Leader Jay Costa of Allegheny County said the Senate was violating what he called “a very hollow promise,” and warned the chamber was contributing to public mistrust of government.

"The public view of our institution, in my opinion – and as I think we heard over the course of the last year – is at one of its lowest points in history. Some of the reasons for that may be fair, and they may be unfair. But unfortunately much of it is at our own doing. Much of it is our own fault."

The chamber voted 42-7 to override the bill. Governor Rendell has vetoed 35 bills during his tenure. This is the first time he’s been overridden.

Package Would Use Tobacco Tax and TANF Funds to Create Jobs

A group of Pennsylvania lawmakers and a cabinet level member of the Rendell administration have introduced a legislative package they say will create 40,000 part-time temporary jobs in the state without dipping into state coffers. The jobs program would be funded by federal Temporary Assistance for Needy Families (TANF) block grants and by instituting a tax on the wholesale price of smokeless tobacco products. State Sens. Jay Costa, Vincent Hughes and Christine Tartaglione are sponsoring the bills and PA Dept. of Labor and Industry Sec. Sandi Vito says she supports the proposal. The federal government has allocated $360 million in TANF contingency funds to Pennsylvania and the state has already drawn down about $90 million but a 20% match is needed to gather in the rest of the funds. The tax on smokeless tobacco would fill that roll. Many of the jobs would come as nine-month community service jobs paying $10 an hour for up to 30 hours per week. A second youth employment component creates six-week summer positions at $9 an hour for 25 hours per week. Vito says these are transitional jobs that will help get families through until the economy improves and the workers can find more permanent positions. Tartaglione says, “The economic downturn has caused widespread hardship, but working families have been hit hardest. By creating 40,000 jobs (over two years) we will not only be able to help these families make ends meet, but we will be able to provide paid help to community service organizations that would not have been able to hire workers otherwise.” After the two-year program expires, the bills call for the estimated $80 million dollars a year created by the smokeless tobacco tax to be used for a continuing statewide job-creation program.
Pennsylvania is the only state in the nation that does not have a smokeless tobacco tax. Costa says even though supporters have been unable to get the tax approved in previous sessions, he thinks there is now enough momentum to get the job done. Gov. Rendell proposed such a tax in his 2011 budget address. However, it would store the revenue in a reserve fund to fill future budget holes once federal stimulus dollars stop flowing from Washington. Costa says the money could be better used today, “With job loss continuing throughout the Commonwealth, putting people to work should be our first priority. There are federal job-creation funds and targeted state dollars that we can take advantage of now to help our neighbors earn a steady paycheck while they continue to look for permanent jobs.”

Carnegie Library Board of Trustees Decides To Keep Libraries Open

The Carnegie Library's Board of Trustees has decided to delay the closing of any library branches for a year and not reduce library hours as originally planned. The board said it was able to cover a $1.5 million budget gap as a result of increased fees and fines, voluntary employee retirements of ten employees and increased revenue from the city of Pittsburgh. At a public hearing today before the meeting library users asked the board to keep the libraries open and allow for board meetings to be public. One speaker, David Tessitor, announced that he had filed a lawsuit against the board of trustees in common pleas court for not allowing the public to attend its meetings. State Senator and member of the board Jay Costa said a board committee will consider whether or not to open its meetings to the public and will have a recommendation for the entire board by February. Barbara Mistick, President of the Carnegie Library of Pittsburgh said while it is good that they have been able to close the budget shortfall more revenue sources will be needed for next year and the future to avoid closings and hour reductions. Costa said that he anticipates increased state funding as a result of a better economy and the addition of revenue as part of an amendment that was added to the table games legislation currently in the State House of Representatives.

Next PA Budget Process Shouldn't Be So Long

The Democratic Chairman of the Senate Appropriations Committee does not believe the process to approve a budget in 2010 will be as prolonged as this past year. It took Governor Ed Rendell and the legislature until October 9 to approve the 2009-10 budget, more than 100 days late.
But Senator Jay Costa of Allegheny County doesn't believe there will be the same drawn out wrangling in this coming year. Costa told DUQ News that 3rd and 4th quarter numbers should allow the state to hit the mark on expected revenues..."because of that we will be in position not to worry about raising taxes." He says they are already taking into account the projected $1.2 billion in additional expenditures that the state must do in the next budget year.
Costa says he believes the major debate involving the governor and the 4 legislative caucuses will be about where to focus expenditures rather than revenues. Costa believes Governor Rendell still can play a big role in the budget negotiations "simply because he controls the pen that could veto or not veto a budget. As long has he has that authority, even in his lame duck year, he still has a lot of input into what our budget looks like."
The governor will deliver his budget plan in early February and Costa expects expenditures to focus on 3 areas of investment: education, the environment, and economic develop/job creation proposals.
Costa says all caucuses should come together and work expeditiously to provide a budget to the people of Pennsylvania by June 30th "because that's what we're supposed to do, should do."
He expects the legislature to get the work done quickly but do it right and that "we would be letting the people of Pennsylvania down" if it took anywhere near as long as it did this year.

CLP Board Chair Will Ask Members to Hold Closures

Several state, county and Pittsburgh elected officials gathered in the regional enterprise tower this morning in an effort to find a way to keep the four Carnegie Library of Pittsburgh branches open for at least another year. The Library says it needs about one million dollars to keep the branches open in 2010. State Senator Jay Costa called the meeting. He says, “The task is now in our hands. The public officials need to work … to be able to develop the proceeds we need to keep them open.” Library Board Chair Jacqui Fiske Lazo says she will ask the board at its December meeting to put the closures on hold while the elected official look for the needed cash. She says if legislation is not in place by the February board meeting they will need to move forward with all portions of the cost saving plan. She says, "A check would be best. But we need some sort of firm commitment. We understand there is a process that the public officials need to go through. We would like to respect that." Costa is pushing for the use of table game revenues to fund the library’s shortfall next year. Legislation being debated in Harrisburg would give one percent of the taxes generated by expanded gaming to the host county and one percent to the host municipality. He says that would put about $860,000 into to city’s coffers and he would like to talk about how much of that would go to the libraries. Costa says he would like to see a portion of the county’s take to be earmarked for suburban libraries.

Costa’s money would only keep the libraries open for 2010. Lazo says the budget gap will grow to $2 million in 2011 and continue to get larger in the out years. To deal with the growing number Costa is putting together a taskforce to look at long term solutions. He says the taskforce would be made up of elected officials, library staff and community representatives. He says they need to take a look at more private funding, the city and state’s roll in the funding mix and how libraries of the future should look and be run. The Senator says the taskforce would spend the better part of 2010 grappling with those issues.

Resolution says Buy US with Stimulus

Pennsylvania Senate unanimously passed a resolution that recommends state officials to spend economic stimulus money on American products as much as possible. State Senator Jay Costa say Senate Resolution 62 is not a requirement or a quota, but is a reminder that American products and companies should be the primary beneficiaries of the stimulus package.