Monthly Archives: February 2016

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Legislative Republicans were chastised and lectured several times by Gov. Tom Wolf during his budget address to a joint session of the General Assembly on Feb. 9.

Wolf’s budget address came more than seven months into a fiscal year that still hasn’t resulted in an agreement on his first budget.

Wolf called the $33.2 billion budget he proposed a “crisis” budget, meaning if legislators don’t do what ask he suggests, the state is headed for disaster, and very soon.

“… if you won’t face up to the reality of the situation we’re in … if you ignore that time bomb ticking … if you won’t take seriously your responsibility to the people of Pennsylvania – then find another job,” said Wolf.

“I was ready, pen in hand,” said Wolf of his hope back in December that the $30.8 billion “framework” budget would end up on his desk. “And then House Republican leaders just…walked away.”

“They walked away from the table and went home for the holidays without holding that final vote,” Wolf said. “They still have not held that final vote.”

That drew boos and other remarks from several Republicans in attendance, to which Wolf, going off speech, responded: “Listen, I understand the frustration you all must feel looking at this huge mathematical problem … but yelling will not make it go away. Wishing will not make it go away. We need to do what’s right for the people of Pennsylvania.”

Those off-the-cuff remarks got lots of applause from legislative Democrats in the room, and positive post-address Democratic reactions, but it definitely didn’t score points with the majority party in both chambers of the Legislature.

“The governor told the truth to the people of Pennsylvania and the General Assembly, and we needed to hear it,” said House Minority Leader Frank Dermody, D-Allegheny, echoing Wolf’s concerns about the structural deficit.

“We need to do our job, and I think that’s what he was getting at,” Dermody said.

“I applaud the governor for being very direct and communicating to not only the General Assembly, but to the people of Pennsylvania, we have a pretty serious fiscal crisis in Pennsylvania that needs to be addressed,” said Senate Minority Leader Jay Costa, D-Allegheny.

Both Dermody and Costa said lawmakers need to start making the tough decisions they, and Wolf, argue the Legislature under GOP leadership has been avoiding.

Some GOP leaders said Wolf’s remarks were both shameful and not as grounded in reality as the governor claimed. Some even suggested Wolf speech was intended to drive the GOP further away from him regarding the budget in hopes of capitalizing on the “crisis” in the upcoming November elections.

Senate President Pro Tem Joe Scarnati, R-Jefferson, following the address, offered no praise for Wolf.

“Clearly liberalism is alive and well in the Wolf administration. I mean a massive tax-and-spend budget built upon a pile of rubble left from the last huge tax-and-spend proposal this governor put in place,” said Scarnati.

“I was hoping he was going to come back from Fantasyland, instead he left for Neverland,” said House Majority Leader Dave Reed, R-Indiana, during a separate post-address event held by the House GOP.

“And until he returns to the realities of the challenges facing the people of this state, we’re going to continue to confront these challenges head on, because we are not going to rubberstamp $3.6 billion in higher taxes for $3 billion in higher spending and ignore all the other issues that are priorities for the people across this entire commonwealth in the past and in the future,” added Reed.

“This was, without question, the most absurd, politically-motivated remarks I’ve seen from a governor in the well of the House,” said Senate Majority Leader Jake Corman, R-Centre, noting it was the 18th budget address he’s attended as a state senator.

“This proposal and that speech have no intention of getting anything accomplished, other than divide us further,” Corman said, who also hit on the same tax-and-spend criticism voiced by Reed, and argued Wolf is as much to blame for the failure of the “framework” budget as anyone, since he didn’t push House Democrats to put up votes for the proposal. Corman also noted House Democrats backed off of forcing some floor votes on the $30.8 billion framework budget.

“I don’t know where he thinks we go from here. I don’t know how he thinks that gets him votes in either [GOP] caucus. My guess is today we are further away [from any budget] than we were June of last year. And my guess is that’s what the governor wants. He wants a fight. He wants to take this to the campaign [for House and Senate seats],” said Corman.

Both Costa and Dermody, when asked about Corman’s claims that Wolf wants to use this for Democratic political gain, said the governor just wants to get a budget done and put Pennsylvania on a better path.

But GOP leaders in both chambers claimed loading everyday Pennsylvanians up with new and higher taxes isn’t a way to chart a course to a brighter future, even with concerns about a structural deficit.

“Hard-working people want to keep more of their money to spend on their kid’s education for college, on a family vacation, on a rainy day fund for themselves, maybe a new washer and a dryer, these are good, solid, honest and hard-working people,” said House Speaker Mike Turzai, R-Allegheny. “And with all due respect, I think the governor is out of touch with those folks. I don’t think he’s out and about like we are.

“I think it’s easy to live off of Mount Wolf or Rittenhouse Square and not know what people are doing in everyday lives. I think it’s easy to lecture, and scold and to act like you know better and be an elitist. But come and see what real people are doing in everyday lives,” said Turzai.

During his speech, Wolf laid out his view of the “crisis” facing Pennsylvania, arguing it’s not his opinion, it’s simple fact based upon the state’s current budgetary math.

“… I want to be clear – with each member of the General Assembly, and with every Pennsylvanian – about the actions we must take to resolve this crisis, and the consequences we will all face if we don’t,” said Wolf.

“Please understand: We are not talking about a long-term budget projection,” Wolf later said. “We are talking about Pennsylvania failing to meet its basic obligations – this year. We are talking about pain that will be felt across our Commonwealth. This year.”

“Pennsylvania now faces a $2 billion budget deficit,” Wolf told lawmakers. “That’s not a Democratic fact or a Republican fact. It’s just a fact.”

The state Independent Fiscal Office late last month projected a slightly smaller potential structural deficit – nearly $1.9 billion – for the 2016-17 fiscal year.

The IFO’s projections are based on a fully-implemented House Bill 1460, which the IFO says would spend $30.2 billion. That appropriations bill was partially vetoed by Wolf on Dec. 29, with the governor whittling that legislation down to closer to $24.3 billion with his blue pen. The IFO also noted HB1460, without any new revenues, would come up $318 million short of necessary revenues by the end of the current fiscal year. If recurring revenues could be found to balance HB1460’s $30.2 billion in spending, the structural deficit projected by the IFO for FY2016-17 would likely be closer to $1.3 billion.

“This deficit isn’t just a cloud hanging over Pennsylvania’s long-term future. It is a time bomb, ticking away, right now, even as I speak,” said Wolf. “If it explodes – if the people in this chamber allow it to explode – then Pennsylvania will experience a fiscal catastrophe the likes of which we have never seen.

“If the General Assembly does not approve a responsible plan to solve this crisis, every Pennsylvanian will suffer the consequences. Those consequences will be real. They will be immediate. They will be severe.”

Wolf said failing to address the deficit and invest in the state’s future will result in slashed funding to the state’s schools and universities, cuts to necessary human services, increased local property taxes, impaired job growth, and added costs to the Commonwealth’s ability to borrow money.

Senate Appropriations Majority Chairman Pat Browne, R-Lehigh, said the assumptions employed by the Wolf administration to develop their estimate of the structural deficit do not match those used by the Senate GOP, which doesn’t believe the deficit is nearly as large.

“Remember, a short term deficit is based on what you want to spend, not what you have to spend,” added Corman, again noting the significant increase in spending – $3 billion more than what’s included in the $30.2 billion budget partially signed by the governor – proposed by Wolf. “He’s [Wolf] basing his numbers on what he wants to spend.”

Budget Secretary Randy Albright did note that even if all of Wolf’s proposals are adopted, more work will be necessary to control growing government costs as a structural deficit is projected to return in the 2017-18 fiscal year.

However for the coming fiscal year, to address the projected deficit and to increase specific areas of spending – most notably education – the governor has proposed $2.72 billion in new or increased taxes.

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By Charlie Gerow

Governor Wolf’s second budget message was delivered on Feb 9. It might as well have been delivered on Feb. 2, Groundhog Day. It would have been apropos.

In stunningly harsh tones, the governor spent his time before the General Assembly lecturing them on process rather more than outlining his budget. He didn’t call them “stupid” as he has in the recent past, but he came close.

Veteran Capitol observers were shocked by the tone and approach of his address. It was coldly political, reiterating the attacks he ran throughout the fall.

This was supposed to be a “different type of governor.” His budget message was different, but not in the sense he intended. No one could remember a budget speech so littered with political attacks and kick-in-the-shins rhetoric.

Lost in the political hits were the details of the Wolf proposal. The governor took no time to describe or defend the 15 taxes on working Pennsylvanians he wants to impose or raise. You had to look for a separate budget document to get any details of what he was really asking for.

His proposed dramatic increases in the tax burden on Pennsylvania families are there to offset another proposed big ramp up in spending. The Wolf proposal would boost state spending by more than 10 percent. Meanwhile inflation is rising at less than 1 percent.

Pennsylvanians from all walks of life have already sent a clear message through their elected representatives that they cannot afford huge tax increases and massive additional government spending at a time when they’re tightening their own belts.

That’s been the crux of the budget stalemate thus far. The governor certainly didn’t do anything to break the logjam when he spoke to the legislature.

In fact, he may have made things worse. The Democratic members of the General Assembly were muted in their approval. They had to know that the governor’s approach wasn’t helping to get things done. The Republicans were silent, although the governor’s rhetoric got so over the top that scattered boos were heard.

Senate Majority Leader Jake Corman summarized things, “This retread budget proposal offers superficial changes to his sizable tax-and-spend plan that has already been soundly opposed by taxpayers. In asking for a $3.6 billion tax increase…the governor is doubling down on his failures to provide leadership on accomplishing s bipartisan budget agreement and is being disingenuous on the starting point for his ‘new’ proposal.”

Tom Wolf’s pedantic style only served to further inflame an already untenable situation. We’re not only no further down the road, we may be further behind. At this point it’s impossible to predict when things will change.

Gov. Wolf kept saying that “it’s about the math.” But the only numbers he seems able to master are additions to taxes and spending. That’s the problem.

Pennsylvania has been spending above its means for a long time. State government has grown far faster than the economy. That’s caused taxation that has made us less competitive with other states. As a result, jobs have been lost and economic growth stunted.

Sadly, the Wolf response is just “let’s spend some more.” Taxpayers, meanwhile, scratch their heads wondering why each time they’re asked to dig a little deeper into their pockets to pay for all of this, they’re almost immediately asked to do it again. Government never seems to have enough of their hard-earned money.

Tom Wolf was named the most liberal governor in America last year. Recently he added the title of “least popular governor in America” as his approval ratings dipped to the lowest level at this point in an administration since pollsters began measuring these things.

Maybe that’s why he feels compelled to go on the political attack at every opportunity. But it’s not working. Not for him, not for the process of governing, and certainly not for the people of Pennsylvania.

There’s got to be a better way.

 

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By Pennsylvania State Reps. Stephen Bloom and Tom Murt

 

 

 

Imagine you’re a single mom or dad working and struggling to lift your family out of a tough financial situation. One day, your boss offers you a small raise. You accept gratefully, excited at your family’s progress toward financial independence. But now, imagine you discover some very bad news. By accepting the small raise, you have just disqualified your family for desperately needed human service benefits worth far more than the amount of the raise. Your kids suddenly risk losing child care, nutrition and a safe place to live, because you simply can’t afford these things without the help you were getting. Your choices are stark: Reject the raise (and all hope of escaping the dependency cycle) to keep the benefits, or accept the raise and put your family in even worse peril. What would you do?

 

Regardless of how you would answer, this is a very real – but very avoidable – dilemma facing thousands of Pennsylvania families every year: a benefits cliff.

 

In its attempt to help families in need, government too often crafts laws that have unintended consequences. The “benefits cliff” is an example of such an unintended consequence. This misguided approach of state government creates powerful incentives that discourage low-income, working families who receive state-funded benefits from accepting raises or working more hours, inadvertently forcing parents to limit their own earning potential and stay trapped in cycles of government dependency.

 

Under the direction of Majority Leader Rep. Dave Reed (R-Indiana), the House Majority Policy Committee recently crisscrossed Pennsylvania, studying the barriers in place for individuals and families attempting to reach self-sufficiency. The committee reported its recommendations for implementing the best principles to combat poverty in the Commonwealth, which included ending benefits cliffs. One of the most prevalent benefits cliffs is the one that adversely impacts families receiving child care subsidies.

 

As committee members who share a desire to help citizens break free from government-created cycles of dependency, we drafted House Bill 1164 to smooth out the child care benefits cliff. Instead of a sharp and unaffordable loss of all benefits, our legislation gradually reduces child care benefits over time as a parent earns additional income. This way, we reward and encourage economic success, instead of penalizing it. Government should never hold people back from working toward self-sufficiency.

 

Our next challenge was to shepherd this proposal through the legislative process in the midst of a sea of rancor and partisanship. With state budget disagreements and a divided Capitol, the task initially seemed daunting. We began working with the Wolf administration and legislative colleagues in a bipartisan manner to draft the bill and move it through the General Assembly. A diverse set of right- and left-leaning community and nonprofit organizations around the state joined in support of our efforts. In the end, we attracted overwhelming support for our bill in the House and Senate, and it was signed it into law as Act 92 of 2015 in December.

 

While news headlines focused on controversy and partisan squabbling may have created the impression that there was nothing of merit accomplished in Harrisburg in 2015, we were actually able to buck the trend and take a very important, bipartisan first step toward eliminating unnecessary government obstacles faced by families who want to rise out of poverty.

 

And there are more steps now being taken. Our successful approach is serving as a model for many other initiatives needed to address areas of our welfare system where benefits cliffs still exist. The era of government policies that keep people trapped in poverty should have been over long ago. With the enactment of Act 92, we are leading the way in the fight to finally end the dependency-driven, all-or-nothing system of human service benefits that discourage working Pennsylvanians from fulfilling their own “American Dream.”

 

Rep. Stephen Bloom represents the 199th Legislative District in Cumberland County, and Rep. Tom Murt represents the 152nd Legislative District in Montgomery and Philadelphia Counties in the Pennsylvania State House.

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When Joseph Petrarca talks about growing up in the borough of Vandergrift, PA, he focuses the discussion on two things: his love of family, and his hometown pride.  That pride extends to fond words about his father, a borough councilman and steelworker who eventually became a state legislator from 1972-1994, holding the same seat in the House that his son now occupies and  representing the 55th District.

It may seem from his heritage that Petrarca was practically born to serve his community and state, but he didn’t set out to be part of the Pennsylvania legislature.  “I was always interested in politics,” he admits, “But I wouldn’t say I aspired to be involved.”  Showing an early passion for history, he attended St. Vincent College for his bachelor’s degree, and then followed his leanings by graduating from the University of Pittsburgh School of Law.  Afterwards, he moved to Washington, D.C.  It was there that he became immersed in the political realm whether he wanted to or not.  “When you’re in D.C., politics is a part of everyday life,” he explains.  “I worked at the intersection of 20th and L, practically four blocks away from the White House.  You could walk by at lunch time.”

After several years getting his feet wet in the nation’s capital, Petrarca made the decision to move back to his hometown area due to his father’s ailing health.  His father, who served his last two terms with a transplanted kidney, was instrumental in passing the first organ donation law in the Commonwealth.  The elder Petrarca instilled in his son a very strong desire to continue the mission to support organ donation issues.  Since being elected to continue in his father’s footsteps in late 1994, Petrarca has helped to create model organ donor legislation as part of a gubernatorial-appointed position on the Organ Donation Advisory Board.

As a legislator who has been on the job for many terms, Petrarca knows that his role isn’t glamorous, but that’s not why he’s involved.  For him, being able to help his constituents on a daily basis, whether in Harrisburg or in his three busy district offices, is the reason he stays motivated.  Plus, he deeply appreciates those he serves.  “They are hard-working, down-to-earth… they have proud traditions.”

Of course, life isn’t all about politics.  Petrarca and his wife have four boys and a girl.  It was a full household (and still is when they return for celebrations), and throughout his children’s upbringing, Petrarca has tried to be as immersed as possible in their sporting and musical events.  However, he admits it’s challenging to find a work-life balance as a state legislator.  He recalls that when his daughter was very young, she would often cry when he put on a tie, a clear signal that he was leaving for a few days.  Yet he and his wife have weathered the reality of his occupation, which he feels is tremendously important, and perhaps more than a bit misunderstood.

“Ninety-nine percent of the people I work with are working hard for their areas,” he says, emphasizing that the media tends to focus on the negatives of politics. He hopes that all the negativity doesn’t dissuade younger adults from taking an active approach in government.  “We need young people to get involved in politics and vote.  When you look at the statistics at who is voting, by and large, they don’t participate.  We have about 15 to 20 percent of the people deciding who is elected, but those elected officials represent everyone.”

Petrarca isn’t planning to slow down any time soon, though he does have aspirations beyond his day-to-day public life that dovetail with his love of politics.  One is to travel to other state capitals.  “I would like to see how the legislatures in different states truly function to compare what we’re doing to what’s happening there,” he concludes, chuckling as he calls his vision of such visits as a veritable “Exchange Program” among likeminded politicians.

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By Tony May

 

In pre-Eisenhower America, every school kid was aware of Popeye, the cartoon character’s spendthrift friend, J. Wellington Wimpy, whose signature gag line was, “I will gladly pay you Tuesday for a hamburger today.”  But, the roly poly Mr. Wimpy never paid – although he always got his hamburger.

It’s not nearly so hilarious when J. Wellington Wimpy turns out to be your state government and “I will gladly pay you Tuesday” is a basic tenet of what has passed for budgeting over the past decade or more.

The current state budget crisis isn’t Gov. Tom Wolf’s fault.  It’s not even the fault of the current Republican-controlled state legislature.  It’s been caused by application, again and again, over years and years of the “Wimpy Principal” of budgeting.  It works out like this:  If you can eat the hamburger, do it, and pretend to pay for it by shifting funds around between one state account or another to conceal the fact that the bill has been passed off down the road.

The result? What the state’s non-partisan Independent Fiscal Office has defined as a $1.9 billion “structural deficit.”

What’s that?  According to the Financial Times, it’s a “budget deficit that results from a fundamental imbalance in government receipts and expenditures, as opposed to one based on one-off or short-term factors.

In other words, it doesn’t cover new programs or policies like increasing aid to education or hiring new inspectors in the Department of Environmental Protection,  It means state government continuing existing state programs – what some call “the cost to carry” through day to day business.

Why are we talking about $1.9 billion instead of the $2.4 billion Governor Wolf says we need to balance the budget AND increase aid to education?  Because it means that even if legislators figure out some way to thwart the Governor’s goal of getting more money to urban and struggling school districts, it means there’s still an elephant lurking in the corner of the room that’s left a big, steaming pile of bills that cannot be paid without increasing some taxes or other.

Policy-makers in Harrisburg have done a disservice to taxpayers  by suggesting these bills don’t have to be paid – or don’t exist.

Yes, doing nothing is an option – one that seems to have been chosen as the least painful of the choices available.  By stretching the boundaries each time the state faces a budget stalemate, we’ve changed public policy from a hard and fast “no budget/no government” to “maybe we can pay public safety employees” to “we can pay to keep critical services going” to today’s climate where money is flowing in dribs and drabs to any wheel of government that squeaks enough.

It’s more or less the flip side of the mantra “we should budget just like a family does – if you don’t have the money, don’t spend it.”

The new government approach seems to be how most families really budget – you pay the bills you have to pay; then you pay the bills you can pay; and, if you have any money left over, you take the kids out for ice cream.

Last year, the Governor proposed the budgetary equivalent of buying a 40 foot Winnebago and taking the family on a six week vacation to Disneyland.  And the legislature said no.  This year, he’s proposed a two week camping trip involving sleeping out under the stars and roto-tilling the back yard and planting truck crops.

But there is still the reality of taxes.  Wolf says we can have the Winnebago AND the truck garden if we would just raise the personal income tax one-third of one percent (to 3.4%) and expand the sales tax to include basic cable TV, movie theater admissions and digital downloads plus enact the natural gas extraction tax and increase a couple of business taxes.  We can fill the structural deficit with just the income tax hike and the visual entertainment tax.

Or, we can gladly eat a hamburger today and pay on Tuesday.  Or not.

 

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By Gov. Tom Wolf

 

I used my line item veto power to veto the Republican plan to cut education by $95 million, while also taking action to ensure that schools received money owed to them through December 31.

There are many reasons why this budget is wrong for Pennsylvania, but these are the big reasons why I vetoed part of the GOP’s plan:

  • The Republican budget underfunds education.

Instead of finally providing funding for our schools, Republicans cut $95 million for local school districts. After $1 billion in budget cuts to our schools over the past several years, this budget makes it even worse.

Republicans continue to refuse to adequately fund Pre-K through 12 education and their budget fails to fund over $305 million in school construction reimbursements. The Republican’s failure to provide school construction funding to local school districts and the commonwealth’s inability to responsibly issue debt — which is a result of past Republican budgets built on gimmicks that led to a multi-billion dollar deficit — will lead to a direct cost to the school districts. This will wipe out any marginal funding increases for local school districts.

The Republicans did not pass legislation to provide funding for Pennsylvania’s institutions of higher learning including Pitt, Penn State, Temple, Lincoln, and the Penn Vet School, leaving them completely without state funding.

They did not pass a fiscal code or a school code.

  • The Republican budget does not balance.

This budget spends $30.3 billion dollars without sufficient revenues to pay for it. Assuming that we would certify the current year revenue estimate at the amount recommended by the Independent Fiscal Office earlier this month, if I signed this bill, the commonwealth would end the year over a half a billion dollars out of balance.

There is already $2.3 billion structural deficit, and the Republican budget increases it even more. It will lead to more credit downgrades and fiscal instability in Pennsylvania. Bottom line: It is not responsible.

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School districts have said the governor’s six months of emergency funding just won’t cut it and now one prominent education group is asking the court to do something about it.

 

The Pennsylvania School Boards Association, which represents over 4,500 elected school officials across the state, says it will file a lawsuit in Commonwealth Court asking for the “continued timely release” of state subsidies to districts.

 

PSBA alleges the state’s withholding of funds violates both state and federal constitutions and has forced districts to borrow almost $1 billion just to keep doors open. The lawsuit seeks damages for the interest charges and other fees incurred by those schools since the year began in August.

 

According to court documents, PSBA believes the state budget impasse violates the Equal Protection Clause of the 14th amendment because it funded state government without sending any aid to school districts. The association also claims federal law “requires the timely payment of federal pass-through funds even in the event a budget impasse by the state.”

 

In a statement PSBA Executive Director Nathan Mains called the state’s inaction “shameful” and promised not to “sit idly by” while schools run out of money and shut down.

 

“This is not a House versus Senate issue, nor a Republican versus Democrat issue,” he said. “What we are witnessing is a complete failure of our state government to fulfill its constitutional duty to ensure that the education of our children is not interrupted. We are hopeful that the court will be able to step in and provide a remedy so that Pennsylvania school districts and the children they serve are not made to suffer any further.”

 

Gov. Tom Wolf’s spokesman, Jeff Sheridan, said the governor “shares PSBA’s frustration,” but continued to cast blame on GOP leaders for not returning to session after the partial budget veto on Dec. 29.

 

“Governor Wolf has been fighting for historic increases in education funding at all levels since day one, but unfortunately Republican leaders have stood in the way,” he said. “Republican leaders would rather continue the failed status quo that resulted in devastating cuts to school districts that led to massive educator layoffs, increased class sizes and soaring property taxes. Last week, the governor vetoed the Republicans’ $95 million cut to education while ensuring emergency funding went out to schools through December 31st. Republican leaders left town for vacation before Christmas and have not returned to finish the work they left incomplete, including historic increases to education at all levels. Governor Wolf shares PSBA’s frustration and wants the Republican legislature to return to Harrisburg now to finish their work.”

 

Legislative Republicans aren’t taking the administration’s latest rhetoric lying down.

 

“We are reviewing the lawsuit at this point and will defend the role of the General Assembly in the budgeting process,” said Jenn Kocher, spokeswoman for the Senate Republican Caucus. “An important point to consider is that three times we have passed budgets that would have given school districts hundreds of millions of dollars in new money to continue educating our children. Three times the governor has chosen to use kids as pawns. The lawsuit is further evidence that while the governor continues to travel the state working from talking points, the ongoing decisions to deny school funding affects children and their education.”

 

GOP leaders have also poked holes in the administration’s $95 million cut claim, insisting that it was the governor who cut $3 billion from public schools when he blue-lined $6 billion in spending from the budget sent to him last month.

 

Steve Robinson, a PSBA spokesman, said the organization is “grateful” that some state aid has been released, but says the lawsuit isn’t just about the money.

 

“I believe everyone was hopeful the state would work things out. It certainly would not have made sense to file such a suit on July 2,” he said. “We are grateful that state money has begun to flow to schools, but one goal of the suit is to make sure funds continue to flow and that this does not happen again in the event of another budget impasse. Additionally, schools will be out of a lot of interest and expenses as a result of the nearly $1 billion borrowed. That is money owed to districts and their taxpayers.”

 

Wolf has said he would support state reimbursement for districts’ borrowing costs, but so far no legislation — or budget line items — have materialized to make the concept a reality.

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Gov. Tom Wolf, presiding over a cavalcade of bands, livestock, farm equipment, agriculture royalty, and volunteers at the opening ceremony of Pennsylvania’s 100th Farm Show Jan. 9 touted the state agriculture industry’s ability to meet food demands and to strengthen Pennsylvania’s economy.

 

“Agriculture is a tremendous resource that fuels our economy,” said Governor Wolf. “Pennsylvania is already a national leader in commodities like milk and mushrooms, apples, eggs and hardwoods. These goods generate billions of dollars for our economy and employ tens of thousands of people.

 

“I envision a Pennsylvania agriculture industry that builds on our existing strengths and expands to meet growing demands for food year round. But to do that requires new investments in technology, in market development, in education and workforce development, and in improving access to food. It requires us to be vigilant on matters of food and animal safety, as well as plant health, and controlling against invasive threats. These are priorities for my administration, and we’re making great progress, which people can see firsthand here at the 100th Farm Show.”

 

Since taking office, the Wolf administration has taken steps to launch new agricultural operations and expand existing businesses; open new markets; safeguard Pennsylvania’s food supply; protect against emerging invasive species; and develop a workforce capable of filling tens of thousands of job vacancies in the agriculture and food industries over the next 10 years. Among other things, the state Department of Agriculture under Governor Wolf has:

 

  • Prepared Pennsylvania to protect against the threat of Highly Pathogenic Avian Influenza by developing an emergency response plan, encouraging greater biosecurity, and securing $3.5 million in dedicated funding for planning and response;
  • Worked with the U. S. Department of Agriculture to secure nearly $3 million in funding to combat the Spotted Lanternfly, an invasive insect found for the first time in the country in Berks County;
  • Helped farmers with transition planning and assistance, whether from generation-to–generation or from conventional practices to organic crop production;
  • Invested in young beginning farmers through the Next Generation Farmer Loan Program, as well as Pennsylvania Industrial Development Authority loans;
  • Begun to tackle the problem of Pennsylvanians being at risk for hunger by signing an executive order to coordinate Pennsylvania’s food and nutrition programs and securing additional funding for the first time to implement the Pennsylvania Agricultural Surplus System, which would provide Pennsylvania-sourced commodities to the charitable food system;
  • Placed a renewed focus on meeting Pennsylvania’s obligations to help clean up the Chesapeake Bay, while taking steps to ensure farmers receive full credit for the conservation measures they already have in place; and
  • Initiated the development of a 10-year strategic plan for the state’s agriculture industry, in conjunction with agricultural stakeholders, to discern challenges and opportunities for the industry and position it for continued success.

 

“It is an exciting time to be in agriculture,” said Agriculture Secretary Russell Redding. “People are increasingly interested in knowing where their food comes from. We’ve tried to illustrate the connection between the work of producers on the farm and the food we enjoy three times a day at the dinner table. That is a major theme of this year’s Farm Show. And we’re showcasing how the state is making considerable progress in meeting Governor Wolf’s charge to capitalize on the tremendous resource that is Pennsylvania agriculture.”

 

Following a tour of the Farm Show, which included stops at the show’s new Farm-To-Shelf display, meetings with leading farm organizations, and a stop at the food court, Governor Wolf and Secretary Redding participated in the official opening ceremony. The ceremony included performances by the Pennsylvania State Police Mounted Drill Team and the Harrisburg High School Marching Band. It also featured the Journey of Agriculture parade, which chronicled the progress made in agriculture since the first Pennsylvania Farm Show in 1917.

 

The 100th Pennsylvania Farm Show, themed “Our Commonwealth’s Blue Ribbon Experience,” runs today through Saturday, January 16, and features special exhibits that chronicle the evolution of the show and the development of Pennsylvania’s agriculture industry, as well as the traditional competition, exhibition and food found at the annual state agricultural showcase.

 

The Pennsylvania Farm Show is the nation’s largest indoor agricultural event, featuring 6,000 animals, 10,000 competitive exhibits, and 300 commercial exhibitors. According to a report issued by the Hershey Harrisburg Regional Visitors Bureau, the 2015 show had an estimated economic impact of $95 million to the south-central Pennsylvania region, supporting more than 18,000 jobs over the course of the week-long event.

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Former Gov. Ed Rendell told the Senate panel scrutinizing Attorney General Kathleen Kane it would be “chaos” if they removed her from office before the state Supreme Court, with its three new Democratic members, rules on reinstating her law license.

Rendell pleaded for them to back away from the direct removal method. Although agreeing the Senate has the authority, he suggested another path.

“Guys,” he said, abruptly adjusting, “Senators, impeach her. Don’t use this method.”

Rendell said the Senate should wait until after the state’s high court rules on an emergency petition Kane filed Jan. 12. There is “almost an entirely new Supreme Court from the one that suspended her” license, Rendell said, before posing a hypothetical: what were to happen if this committee recommend that she be removed and the Supreme Court decided to reinstate her license?

“Would we have to come back to the Senate for action? How do you defend your position? Are you removing her as long as her license remains suspended?” Rendell said. “It’s a very difficult question because she’s going before a new court, (with) at least three judges who haven’t heard this issue before. I would urge you not to take action at all, but certainly not to take action until the Supreme Court has ruled on her request.”

The committee has 15 days to complete a report recommending future actions on removal.

Kane is arguing the high court’s unanimous ruling to temporarily suspend her law license was tainted by the participation of Justice Michael Eakin. A bit more than three months after the ruling on Kane’s license suspension, Eakin was temporarily suspended with pay by a disciplinary tribunal over controversial private emails.

With Eakin temporarily suspended, the six-seat high court’s makeup is now five Democrats, three of which were sworn in last week, and one Republican, the chief justice.

Rendell, who served as district attorney of Philadelphia from 1978 to 1986 and Philadelphia mayor in the 1990s, also testified that during his tenure leading the largest D.A.’s office in Pennsylvania he mostly made policy, public relations, or enforcement decisions, while leaving legal decisions up to his staff attorneys. While this was to show that Kane can perform the duties of her office without a valid law license, he admitted some of his decisions were made with both legal and policy considerations.

At one point, Rendell and committee chairman Sen. John Gordner, R-Columbia, clashed when the former governor asserted the committee is trying to remove Kane over her conduct in office, not her license suspension, so they should impeach her. Kane is facing several criminal charges in Montgomery County stemming from an alleged leak of grand jury material to a Philadelphia newspaper, covering it up and lying about it under oath. She denies any wrongdoing.

“Would we be having these hearings if someone had a suspended license because they didn’t fulfill their C.L.E. requirements? Of course not,” Rendell said. “You’re having these hearings because of the other things Kathleen Kane is charged with doing. Do it the right way. Impeach her if that’s what you believe.”

“That’s apples and oranges, governor,” Gordner said.

“No, it’s not apples and oranges. It’s a suspended license,” Rendell said.

Rendell’s approach to interacting with the committee was almost gladiatorial, creating a noticeable contrast to the previous two hours when the committee grilled Kane’s chief of staff, Jonathan Duecker, who had at least one heated exchange with Senate President Pro Tem Joe Scarnati, R-Jefferson.

Duecker, who described himself as an “objective loyalist” to Kane, said he was testifying to give a different perspective on the office’s functions compared to the testimony provided by four of the Office of Attorney General’s top lawyers in November.

“The practice of law is narrow to all the other things we do in the office,” he said. “I’m not part of any of the three legal divisions within the office. I am in charge of, at the direction of the Attorney General, everything else. So I get to see things, frankly, that our attorneys have historically never seen, never want to see, never ask to see, were not interested in seeing. I can’t answer why they don’t understand or don’t see what the full scope of authorities, responsibilities and duties are for the office in general.”

 

He pointed to the Supreme Court’s suspension order which specifically mentioned the order was not removing her from office. Duecker argued the wording showed the court “understands and recognizes her vast responsibilities outside of the practice of law.”

Pennsylvania has passed the halfway point of its fiscal year and right now things, revenue-wise, aren’t looking too bad for the state.

 

The Commonwealth in December brought in $101.2 million more last month than it did in December 2014, which pushed the state’s year-to-date General Fund revenues $168 million, or roughly 1.3 percent, ahead of the Independent Fiscal Office’s expectations for the first six months of Fiscal Year 2015-16.

 

In July, the IFO suggested FY2015-16 revenues would grow by only 0.6 percent, or about $182 million, over the total revenues collected for the prior year.

 

Despite the current run of revenue performance, in its December 2015 Five-Year Outlook report, the IFO revised its overall General Fund revenue growth projection only slightly, to 0.7 percent from its prior 0.6-percent growth estimate.

 

So it’s possible, given the IFO projections – and assuming state lawmakers don’t come to some type of an agreement to raise a few taxes – the next six months won’t be much of an improvement over the second half of FY2014-15.

 

As for last month’s collection of more than $2.7 billion in General Fund revenue, it was helped in large part by better-performing personal income (an increase of $47.1 million, or 4.6 percent, compared to December 2014) and sales and use ($20.1 million, or 2.5 percent, better than last year) taxes.

 

For the fiscal year so far, both the PIT and SUT continued to perform better than last year, but the SUT remains short of the IFO’s July official revenue estimate for FY2015-16, while the PIT is currently right on the money, no pun intended: in July, the IFO expected a 3.5-percent growth rate for the SUT, but so far it’s only up by 2.9 percent six months into the fiscal year; the PIT is matching the IFO’s projected 4.8-percent growth rate. In its revised outlook released last month, the IFO held to its 4.8-percent PIT revenue growth rate and revised upward – to 3.7 percent – the growth rate for SUT revenues, so Pennsylvania consumers are going to have to do a lot more buying over the next six months.

 

As noted by the governor and others on Monday, this year marks the final phase-out of the state’s Capital Stock and Franchise Tax (it brought in $24.2 million last month). And while it brought in more last month than it did in December 2014, the ongoing CSFT phase-out has helped to reduce incoming tax revenues from Pennsylvania businesses. Two years ago it brought in $161.7 million through the first half of the fiscal year, but for the current FY2015-16, it has delivered $87.2 million.

 

However other corporation taxes – primarily the Corporate Net Income Tax (CNIT) – underperformed compared to last year, leading to total corporation taxes coming up $35.6 million, or 6.3 percent, short of December 2014’s total.

 

While business tax revenues for the current fiscal year have come up short of where they were six months into last year, the difference isn’t quite as significant: $25.4 million, or 1.8 percent, less than midway through FY2014-15.

 

That isn’t completely unexpected, as the IFO has been projecting a retreat of the state’s corporate tax revenues compared to last year, although that retreat right now is worse than had been anticipated. In July, the IFO projected a 1.6-percent decline in total corporation taxes compared to FY2014-15. In its December 2015 updated revenue outlook, the IFO did ratchet-back expectations for the state’s primary business tax, the CNIT, for FY2015-16 from its July projection, to a revenue decline of 1.3 percent compared to the original estimate of a 1.1-percent decline.

 

All the state’s other revenues – from such things as the inheritance tax, the realty transfer tax, and the various “sin taxes” – collectively delivered revenue last month that was slightly higher than what those taxes produced in December 2015 ($257.5 million versus $255.4 million), but the current year-to-date totals are approximately 2.5-percent lower ($35.9 million) than they were at the halfway point of FY2014-15.

 

The drop-off is still largely due to the inheritance tax last year, in October, getting a one-time, nearly $100 million revenue windfall from one estate.

 

However, the collective revenues of the state’s other taxes could be better than they appear, thanks to what looks to be an improvement in Pennsylvania’s real estate market. The IFO in its new quarterly report for the second quarter of FY2015-16 suggests the realty transfer tax, which is already $32.4 million (or 15 percent) ahead of FY2014-15 revenues six months into last year, might actually be doing even better.

 

“News reports indicated that some counties may have withheld funds [realty transfer tax revenues] during the budget impasse. If this occurred, the reported results understate the strength in this category,” the IFO reported.

 

And, like the realty transfer tax revenues, it’s possible the collective strength of the state’s tax revenues – as they relate to overall General Fund revenues – is likewise being understated, given the disparity between FY2014-15 and FY2015-16 regarding non-tax revenues.

 

Helped by one-time revenues last year, Pennsylvania’s non-tax revenue was $376.8 million at the halfway pole through FY2014-15, which was nearly $270 million (247 percent) more than the first six months of FY2013-14. For the current FY2015-16, non-tax revenues midway through the year total $144.1 million, which is 61.8-percent less than where they were a year earlier.

 

Total tax revenue – not the larger General Fund revenue figure – halfway through FY2015-16 is 2.6 percent ahead of the tax revenue generated at the midway point of FY2014-15. The IFO in July projected 2.5-percent growth of tax revenue for all of FY2015-16.