February 19, 2013

Important Harrisburg Happenings:

Special Report: 2013-14 Budget Hearings

The Senate Appropriations Committee held its first week of public hearings on Governor Corbett’s proposed state budget for the 2013-14 Fiscal Year. The Appropriations Committee heard detailed reports from several cabinet secretaries and other officials over the three-day period from February 18 through February 21. This special edition of Harrisburg Happenings provides day-by-day highlights from those hearings.

Photos, audio and video from the hearings are available at: www.pasenategop.com.

Tuesday, February 19

Governor’s Budget Office/Executive Offices/Office of the Governor

The Appropriations Committee opened the series of hearings with a discussion of the Governor’s Budget Office/Executive Offices/Office of the Governor with Budget Secretary Charles Zogby. Issues discussed during the hearing included: closure of the New Castle Youth Development Center; the governor’s decision against expanding Medicaid under the Affordable Care Act; revenue projections; funding for state police cadet classes; trends in gaming revenue; reduction of state jobs in the budget; the governor’s public pension reform proposals; consolidation of state data centers and technology upgrades; investigations of welfare/food stamp fraud; implications to the budget if privatization of the lottery management and liquor sales do not occur; employment opportunities for veterans; education funding; budgetary changes to the state Racehorse Development Fund; and, spending for private sector consulting services.

Public Utility Commission

Public Utility Commission Chairman Robert Powelson and commissioners discussed the PUC’s $64.2 million state funding request and the commission’s increased responsibilities with natural gas development and other areas. The commission also requested to raise the PUC’s budget cap to deal with the increased workload. Other topics discussed included: Hurricane Sandy utility response; power outage grid indicators for municipalities; status of Distribution Improvement Service Charge (DSIC) projects and ratepayer protections; Marcellus Shale impact fee revenue distribution; increasing access to natural gas; pipeline safety for unregulated gas lines; and, Verizon’s request for relief of Chapter 30 broadband requirements.

Independent Fiscal Office

The Senate Appropriations Committee discussed several issues with Independent Fiscal Office (IFO) Director Matthew Knittel, including: the differences between the governor’s revenue projections and those of the IFO; the impact of federal tax increases on Pennsylvania; the use of Educational Improvement Tax Credit (EITC); tax law enforcement; changes in the housing market; the IFO’s review of the costs of Medicaid expansion under the Affordable Care Act; state unemployment rate projections; and, the impact of Affordable Care Act on businesses.

Wednesday, February 20


Members of the Senate Appropriations Committee questioned Treasury Secretary Rob McCord on the department’s request for a 24.5 percent increase in funding and why the increase is needed. Other questions centered on: a proposal to privatize the Pennsylvania Lottery; pension costs for teachers and state workers and their impact on the budget; growing concern about the rising debt of the Pennsylvania Turnpike; reforms being implemented at the Delaware River Port Authority; the status of an ongoing information technology modernization project that is intended to improve efficiencies; and, ways to make college education more affordable for students and families.

Attorney General

Attorney General Kathleen Kane answered questions on a wide range of issues, including how her office can continue to effectively fight crime with its current budget appropriation and the reasoning behind her decision to block a proposal to privatize management of the Pennsylvania Lottery. Senators also wanted more information on: efforts to get child predators off the streets and behind bars; the reduction in funding for the Bureau of Consumer Protection; the cost of witness relocation, particularly in the Philadelphia area; enforcement of a new program to crack down on home improvement fraud and assurance that contractors are registering with the state; what impact, if any, funding cuts to the Attorney General’s office over the past five years has had on the state’s ability to fight crime; the growing threat of drug cartels and gangs; and, increased drug use, particularly among young people.

Auditor General

Auditor General Eugene DePasquale outlined his office’s request for an 8.6 percent budget increase to pay for staff, operating expenses and new technology. Committee members also discussed: the technology shortcomings in the office; performance audits and follow-ups to audits; municipal pension audits; increases in the number of performance audits leading to a backlog of financial audits; auditor General oversight of judicial and legislative accounts; details on the office’s outside contracts; data storage system sharing; charter school audits –frequency and rigorousness; board of claims backlog; and, school safety audits.

Thursday, February 21

Department of General Services

DGS Secretary Sheri Phillips discussed the Department’s efforts to support veteran-owned small businesses. Other topics discussed were: the potential for streamlining the process for selling surplus state property; the number of outside contracts and consultants utilized by DGS; projected reductions in utility costs and energy use; reducing the state vehicle fleet and associated costs; the potential use of natural gas vehicles; heating costs at state correctional institutions; and, mineral resource development on state land.

Department of Insurance

Insurance Commissioner Michael Consedine discussed several issues related to the Affordable Care Act, including Medicaid expansion and the federal health exchange. Other topics included: Children’s Health Insurance Program (CHIP) enrollment; Medical Care Availability and Reduction of Error (MCARE) Act phase-out; fraud investigations; the economy’s impact on insurance companies; and, competition in the marketplace.

Department of Environmental Protection

DEP Secretary Michael Krancer was questioned about funding for gas well inspectors and increased inspections, as well as the status of efforts aimed at reducing the DEP permit processing backlog. Other topics included: Susquehanna River water quality improvements; effect of pharmaceuticals in waterways; proposed regulations on septic system runoff; the quality of air coming in from surrounding states; new electronics recycling law enforcement mechanism; summer gas and State Implementation Plan review; scrap tire piles cleanup efforts; status of brownfields projects; how the phase out of the Corporate Stock and Franchise Tax will affect the future of hazardous sites cleanup, since a large percentage of the funding comes from that tax; stormwater management regulations; increase in PENNVEST funding; and, mandatory curbside recycling program.

Gaming Control Board

Pennsylvania’s gaming industry is strong and continues to grow, according to Pennsylvania Gaming Board Chairman Bill Ryan. He said Pennsylvania is now the nation’s second-largest gambling market. Members of the Committee asked Ryan about: criminal activity at casinos and the use of State Police at gaming facilities; concerns about the impact of Internet gaming on casinos; the definition of Keno in casinos and in the governor’s private lottery contract; and, competition from surrounding states and the need to keep the casino industry strong in Pennsylvania.


Matt Moyer
(610) 366-2327