Harrisburg Happenings

 A report on the budget hearings held during the week of March 30, 2015

Special Report: 2015-16 Budget Hearings

As a member of the Senate Appropriations Committee, I participated in the third and final week of public hearings on Governor Wolf’s proposed state budget for the 2015-16 Fiscal Year. We heard detailed reports from several cabinet secretaries and other officials over the three-day period of March 30 – April 1. This special edition of Harrisburg Happenings provides day-by-day highlights from those hearings.

More information on the budget, as well as photos, audio and video from the hearings, is available at: www.pasenategop.com/state-budget/

Monday, March 30, 2015

Department of Education

Appropriations Committee members told Acting Education Secretary Pedro Rivera about the need to change the public school retiree pension system to reduce skyrocketing costs that are diverting funds away from the classroom. In particular, I discussed public-private partnerships and state support for career and technical programs in Pennsylvania’s schools (video). Other topics included:

  • Career and technical education funding.
  • Early warning system for identifying students at risk of dropping out.
  • The constitutionality of the Governor’s proposed property tax reduction plan.
  • The negative effects of the “hold harmless” clause which prevents state aid from being diverted to districts with rising enrollment.
  • The growing responsibilities of school nurses.
  • The need to address wages and benefits driving increased education costs.
  • The savings to be realized by eliminating prevailing wage mandates on school construction projects.
  • Spending on pre-kindergarten education programs.
  • Schools being required to teach to the state-mandated tests.
  • Concerns that the Governor’s proposed property tax reductions are not permanent.
  • The need to increase accountability with any new state education funding.
  • The formula for proposed cyber education funding.
  • The lack of additional money for PlanCon school construction funding.
  • Disparities in state funding from district to district, and disparities in proposed property tax reductions.
  • The burden of requiring school districts to prepare a report by May 15 on budgeting proposed new state funding.
  • The need to reform the state basic education funding formula.
  • Removing pension spending from the education general fund budget gives a misleading view of actual education funding.
  • Funding and effectiveness of adult literacy programs.

Click here to watch the hearing.

Department of Labor & Industry

Acting Secretary of Labor & Industry Kathy Manderino answered questions on a number of issues related to jobs and workers. I asked Acting Secretary Manderino about efforts to stop prison inmates from receiving unemployment compensation and updates to the state uniform construction code (video). Other topics discussed during the hearing included:

  • Staff complement and pension-related costs.
  • The need to increase vocational rehabilitation funding to get more people into the workforce.
  • The rationale for using an out-of-state company for labor negotiations.
  • A crisis in finding skilled labor, particularly for manufacturing jobs.
  • Workers’ Compensation fraud.
  • The time frame for transferring information for Pennsylvania residents who work out of state.
  • Increased funding for assisted technology, which helps those with disabilities.
  • Providing funds and assistance for the Centers for Independent Living.
  • How the proposed increase in the minimum wage would affect small businesses.
  • Sole proprietors who pay into unemployment compensation, but cannot receive benefits.
  • Encouraging young people to obtain training in trades.
  • Cost savings realized by preventing inmates from receiving unemployment benefits.
  • The importance of New Choices/New Options in helping workers who have been out of the workforce for an extended period of time.
  • Vocational training for inmates before re-entry into society.
  • The status of the State Workers Insurance Fund and its importance to state businesses.
  • The effectiveness of the Unemployment Compensation Amnesty Program.

Click here to watch the hearing.

Department of Banking & Securities

Acting Secretary of Banking & Securities Robin Wiessmann fielded questions from members of the Appropriations Committee on a number of topics related to the banking industry in Pennsylvania including:

  • Issues facing community banks.
  • Mortgage servicing.
  • Bank shares tax.
  • The influence of global banking trends on Pennsylvania’s banks.
  • Financial scams.
  • Electronic transactions and cybersecurity.
  • The impact of the Governor’s proposed sales tax expansion on the securities industry and investment services.
  • Payday lending operations.
  • Regulations on loan origination.
  • Passive versus active investment strategies for pension funds.

Click here to watch the hearing.

Tuesday, March 31, 2015

Department of Revenue

Acting Revenue Secretary Eileen McNulty was questioned about the Administration’s unprecedented tax hikes and the impact on the Pennsylvania economy. I questioned Revenue Department officials about over-optimistic projections for the Governor’s proposed severance tax and the negative impact that a cap on local funding would have on Beaver, Butler and Lawrence counties where drilling operations are expected to increase in the coming years (Video). Other topics included:

  • Confusion over a possible sales tax on lobbying.
  • Services covered by the proposed sales tax on financial planners.
  • Re-release of the bulletin on bank shares tax.
  • Ability to nullify existing contracts to prevent drillers from passing a severance tax onto property owners.
  • Disparities in property tax reductions under the Governor’s plan.
  • The failure of the Governor’s school property tax plan to prevent property taxes from going back up.
  • Unrealistic projections for severance tax revenue.
  • The Governor’s plan to cap natural gas impact fee funding and the effect on communities.
  • Strategy for meeting projections for lottery revenue increases.
  • The possible need to review criteria for Property Tax/Rent Rebate regarding surviving spouses over 50 and non-citizens.
  • The likelihood that retailers will round up the proposed 6.6 percent sales tax to 7 percent.
  • The complexity and legal challenges with implementing combined-reporting requirements on businesses.
  • The proposed sales tax on amusement park admissions and impact on local amusement taxes.
  • The Administration’s plan to implement a whole new regime of taxation and the ability to administer with current staffing.
  • The burden of adding $9 billion in new costs on the Pennsylvania economy under the Governor’s plan and the effect on economic growth.

Click here to watch the hearing.

Historical & Museum Commission

Senators asked James Vaughn, Executive Director of the Pennsylvania Historical and Museum Commission about his agency’s budget and mission, including:

  • The use of public-private partnerships and volunteers in operating historical sites.
  • Increased fees and how they affect the number of visits.
  • The trend in attendance at historical sites and museums.
  • How important cultural and historical sites are to tourism.
  • Concerns about expanding the sales tax to cover admissions to facilities and the impact it would have on the number of visitors.

Click here to watch the hearing.

Department of Transportation

During the hearing on the Transportation budget, I asked Acting Secretary of Transportation Leslie Richards about CNG filling stations, the Green Light Go Program and the use of roundabouts (video) . Other topics discussed during the hearing included:

  • Act 89, the state’s transportation funding plan, and the positive impact it has had on infrastructure.
  • Addressing the serious pothole problem caused by the harsh winter.
  • Federal legislation and funding needed to continue improvements.
  • Public-private partnerships for bridge replacement and other projects.
  • Exemptions for emissions testing for new vehicles.
  • The state’s Dirt and Gravel Road Program and its success in protecting streams.
  • Ensuring that seasonal workers are treated fairly with unemployment compensation and other benefits.
  • How to move transportation and development projects forward while protecting the environment.
  • Notifying communities when bridges are going to be closed or weight-restricted.
  • Solving serious traffic issues on Route 422.
  • A status report on the state’s structurally deficient bridges.
  • Encouraging the use of compressed natural gas and increasing the number of stations.
  • Updating the Pennsylvania Transit Revitalization Investment District (TRID) Act

Click here to watch the hearing.

Department of Agriculture


As Chairman of the Senate Agriculture & Rural Affairs Committee, I discussed a number of topics with Acting Agriculture Secretary Russell Redding including: inequity in tax breaks for farmland, particularly in light of the array of tax increases proposed by Governor Wolf; support for the horse racing industry in Pennsylvania; a proposed “Green Agriculture” initiative; and, funding for Penn State’s agriculture programs and the University of Pennsylvania’s vet school (video) .Other issues discussed during the hearing included:

  • The impact of Department regulations on church fundraising activities.
  • State support for fairs and the potential for those events to be taxed under the Governor’s proposed sales tax expansion.
  • Dog licensing and dog law enforcement.
  • Objections by the Pennsylvania Farm Bureau to the Governor’s temporary and limited property tax reduction proposal.
  • Elimination by the Governor of funding for a number of programs in the Agriculture budget.
  • Resource Enhancement and Protection (REAP) tax credits to assist farmers.
  • High school agriculture science programs.
  • The PA Preferred program and promotion of Pennsylvania-grown products.
  • Farmland preservation efforts.

Click here to watch the hearing.

Wednesday, April 1, 2015

Pennsylvania Emergency Management Agency

PEMA Director Richard Flinn and State Fire Marshal Timothy Solobay briefed members of the Senate Appropriations Committee on emergency operations and services. I asked the officials about preparations for emergencies in Marcellus Shale drilling areas and the inability of some county 911 centers to handle text messages (video). Other topics discussed included:

  • Legislation to implement the updated statewide 911 system and how fees will be assessed.
  • Concerns about the statewide radio system.
  • The dwindling number of volunteer firefighters and emergency services workers.
  • A status report on the new PEMA building, including costs involved in its construction.
  • Recruitment and retention of volunteer fire fighters and the savings they provide to communities.
  • Efforts to attract new volunteers, including tuition credits, loans and training.
  • PEMA’s working relationship with the State Police.
  • Training for responding to incidents involving Marcellus Shale.
  • Responding to motorists who are stranded on highways for long amounts of time due to road condition.
  • Concerns about trains carrying large amounts of crude oil through communities and whether there is notification.
  • Merging fire companies to save costs and prevent duplication.
  • Funding issues faced by county 911 centers.
  • Hazard mitigation efforts to prevent reoccurrence of flooding.
  • Increased workers comp insurance rates for firefighters.
  • Pipeline emergency response training.

Click here to watch the hearing.

Department of Conservation & Natural Resources

Acting DCNR Secretary Cindy Dunn answered questions about the benefits and impacts of natural gas drilling on public lands. I asked her about timber sales in Pennsylvania and amenities in state parks (video). Other topics of discussion included:

  • The legality and impact of the Governor’s moratorium on new natural gas leases in state forests and parks.
  • Increasing numbers of visitors to state parks.
  • Proposed funding cuts for Heritage Parks.
  • Funding for high-hazard dams.
  • The impact of additional funding dedicated to dirt and gravel roads.
  • A proposed increase in the Realty Transfer Tax.
  • Avoiding using state parks and forests as political pawns in the event of a prolonged budget debate.
  • Uses of Oil and Gas Lease Fund revenues.
  • Capital projects on public land.
  • Areas available for the use of alternative energy.

Click here to watch the hearing.

Department of Military & Veterans Affairs

Acting Adjutant General (Maj. Gen.) James Joseph discussed a number of issues pertaining to the Pennsylvania National Guard, the Pennsylvania Air National Guard and services provided to veterans by the Commonwealth. I asked General Joseph about delays in processing Disabled Veterans Real Estate Tax Exemption program applications and lauded the Veterans Court in Beaver County and the Department’s  mobile veterans outreach effort (video). Other issues discussed during the hearing included:

  • The number of National Guard members deployed.
  • Trends in recruitment and retention.
  • Information technology matters.
  • Funding for the education of veterans’ children.
  • Waiting lists for state veterans’ homes.
  • Veterans service outreach efforts.
  • Veterans Trust Fund donations and expenditures.
  • Health care coverage for veterans under Medicaid expansion.
  • A court ruling changing the definition of a paralyzed veteran.
  • Matching veterans with job openings.
  • Partnerships with the private sector to serve veterans.
  • Terrorist threats against service members.
  • Federal funding for veterans’ services.
  • The success of county veterans’ courts.
  • Dementia and Alzheimer’s Disease issues among veterans.
  • Increases in personnel costs caused by pensions.
  • Privatization of some services.
  • Creation of a separate Department of Veterans’ Services.
  • Military advocacy of early childhood education.
  • Options for long-term care.

Click here to watch the hearing.

Department of Insurance

Acting Insurance Commissioner Teresa Miller answered questions regarding the effect of the federal health care law, as well as other topics including:

  • The cost of healthcare exchanges under Obamacare.
  • Consolidation of healthcare insurers and the effect on consumers.
  • Federal concerns regarding minimum essential coverage under CHIP.
  • The consent decree between Highmark and UPMC.
  • Projected cost savings for employers in terms of Worker’s Compensation.
  • Unfunded liability for MCARE and the number of malpractice claims in Pennsylvania.
  • Companies declining to sell long-term care insurance.

Click here to watch the hearing.

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