As a member of the
Senate Appropriations Committee, I took part in the first of
three weeks of public hearings on the proposed 2015-16 state budget.
Below are summaries of each hearing along with hearing video and video of
my discussions with the department heads who testified before our panel. This is
an important step in the process of vetting the proposed spending plan and
enacting a budget by the June 30 constitutional deadline.
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Monday, March 16
Governorís Office/Governorís Budget Office/Executive Offices
The Senate Appropriations Committee opened its three-week series of hearings
on the Governorís proposed 2015-16 budget with a discussion of the Governorís
Budget Office/Executive Offices/Office of the Governor with Budget Secretary
Randy Albright. Issues discussed during the hearing included:
- Pennsylvaniaís projected revenue surplus for the current fiscal year and
the Commonwealthís current economic climate.
- The Administrationís proposed spending increase and the movement of
PSERS funding from the General Fund to a separate restricted account.
- The potential inequity of the Governorís proposal to increase state
income and sales taxes for a reduction of property taxes at the local level.
- The impact of the Governorís proposed tax increases on Pennsylvaniaís
- Contract negotiations with the stateís labor unions and the costs of
pensions and benefits.
- The impact of the Governorís tax increases on small businesses.
- The proposed severance tax and the impact on lease holders.
- Parallels between Governor Wolfís proposed tax increases and those by
Governor Casey in 1991.
- Productivity and accountability in state government operations.
- Elimination of prevailing wage mandates on school districts.
- Legal issues related to imposing combined reporting by business.
- Cost containment efforts by local school districts.
- Funding for the stateís film tax credit program.
- Costs of intermediate units.
- State funding per student and wealth redistribution for education
- The Governorís proposal to float a pension obligation bond that would be
repaid by liquor store revenues.
||Senator Mensch questions Budget Secretary Randy Albright about
Redevelopment Assistance Capital Program funding commitments and the effect of
the Governorís proposed Personal Income Tax increase on small business job
Independent Fiscal Office
IFO Director Matthew Knittel briefed the committee on the economic outlook
for the coming fiscal year as well as debt levels and general revenue trends.
Committee members focused on the following topics:
- The need for conservative revenue estimates.
- How to estimate the effect of tax increases on revenue and economic
- The effective rate of PIT and Sales taxes vs. those of surrounding
- Proposed changes in corporate income tax structure.
- Property tax relief and pension relief funds being used for general fund
- The effect of elderly population growth effect on state budgets.
- Concerns about Pennsylvaniaís long-term debt going forward.
- The difficulty in calculating and administering a sales tax rate of 6.6
- The need to calculate the total tax and fee burden on Marcellus Shale
- Projected increase in school property taxes under the Governorís plan,
- Pension plans rate of return and investment growth sectors.
- Comparing total local and state tax burden in Pennsylvania to other
- The difficultly in comparing states in job growth and severance taxes.
- The need to measure effectiveness of tax credits.
- The estimated revenue that would be generated by a state personal income
tax on public pensions.
- Savings realized by school districts by eliminating prevailing wage
rates for construction projects.
- Pension management fees.
- Measuring structural deficits, Senate Bill 76 and district debt, and the
school retiree pension crisis.
- Pulling money out of economy to subsidize economic development through
- The danger in balancing the budget by moving expenditures to separate
Department of General Services
Questioning during the proposed budget for the Department of General Services
focused on how to achieve cost savings, ensure best costs and maximize the use
of state resources. Specific topics included:
- Cost-savings achieved through strategic sourcing of contracts.
- How rapidly changing markets can affect requests for proposals.
- Statistics on the amount of unused office space and the cost to the
- Locating state offices in downtown locations to encourage economic
- The status of the sale of SCI Greensburg.
- The importance of fair and transparent purchasing.
- Giving preference to PA-owned companies when contracting for services.
- The importance of keeping options open leases for liquor stores.
Senator Mensch questions Acting Secretary Curt Topper about the number of
vendors taking part in bidding and preferences for Pennsylvania companies in
Tuesday, March 17
Attorney General Kathleen Kane outlined her officeís activities and funding
needs. Committee members focused on the following topics:
- Human trafficking and missing children.
- An update on the Child Predator Interceptor Unit.
- An outline of drug prevention efforts include enforcement.
- The impact of the Mobile Street Crimes Unit.
- Plans for boosting the number of Medicaid fraud investigators.
- Efforts to combat Pennsylvaniaís heroin epidemic.
- Defense of local gun ordinance preemption and referral to the Office of
- Updated staffing levels and vacancies in the office.
- Reimbursements to counties for full-time district attorneys.
- The need to update the Older Adult Protective Services Act to target
financial fraud against older Pennsylvanians.
- The problem of drug gangs from Mexico operating in Pennsylvania.
- The need to provide documentation of outside legal counsel.
- The role of the office in defending the Administration in the case of
Right to Office director.
- Reciprocity with neighboring states regarding licenses to carry
- Consumer complaints about misleading gas royalty payments.
- How to legally prevent drillers from passing on to landowners the
proposed Marcellus Shale tax increase.
- The legality of the governorís death penalty moratorium.
- Gaming enforcement with the Pennsylvania State Police.
- The budget impact of requests for more staffing.
- Disbursement of the mortgage fraud settlement with Standard & Poor's.
||Senator Mensch discusses the need to update the Older Adult Protective
Services Act to combat financial fraud against older Pennsylvanians, and asks
the Attorney General about the ongoing problem of drug gangs from Mexico
operating in Pennsylvania.
Representatives of the Pennsylvania Treasury Department highlighted the
importance of addressing the public employee pension crisis and the impact of
the stateís bond rating downgrade.
Other topics discussed during the hearing included:
- The potential effect of additional borrowing in Governor Wolfís budget.
- Funding levels for the PA 529 College Savings Program.ēThe rate of
return on Treasury investments.
- Improvements to the Unclaimed Property program.
- Information technology upgrades.
- Interest on securities.
- The cost of outside legal services.
Auditor General Eugene DePasquale repeatedly stressed the need for public
pension reform and the impact that the costs are having on Pennsylvaniaís
municipalities. Other topics discussed during the hearing included:
- Personnel, union contract and IT issues.
- Board of Claims cost increases.
- The frequency of state audits for public school districts and charter
schools and the problems found during those audits.
- Previous finds of fraud, waste and abuse in the Department of Public
Welfare (now known as the Department of Human Services).
- Capital expenditures by school districts and prevailing wage.
- Costs incurred for state vehicles.
- Efforts to reform the Delaware River Port Authority.
- Active versus passive investment strategies.
- Unencumbered fund balances in state agencies.
- The need for accountability measures for Department of Community and
Economic Development programs.
||Senator Mensch questions Auditor General Eugene DePasquale about the
health of municipal pensions and the threat of municipal bankruptcies.
Wednesday, March 18
The committee discussed the budget requests of the Unified Judicial System of
Pennsylvania with a panel including Supreme Court justices Michael Eakin, Max
Baer and Correale Stevens. Topics covered included:
- Proposed level funding for the system in 2015-16.
- The results of the systemís cost-cutting efforts.
- The problem of pension contributions, medical benefits and COLAS driving
- The success of problem-solving courts across Pennsylvania.
- Increased revenue to courts system through the collection of fines.
- Effects of reducing the number of local magistrates.
- Spending on summer interns.
- The possibility of tying the number of local judges to population
- The cost of incarceration versus house arrest and recidivism rates.
- The number of support staff in the system.
- Calculating whether fines are keeping up with court costs.
- The cost of COLAS that donít correspond to inflation and posting
complete salary information online.
- The Judiciaryís compliance with the Right to Know Act.
- Justices paying more for health care costs and eliminating automatic
COLAs for judicial branches.
- The backlog of cases before the Judicial Conduct Board.
- Request for funds to expand court technology.
- The need for public officials to sacrifice financially during difficult
- The elimination of Philadelphia Traffic Court.
- The need to promote early staff retirements to control court pension
State Police/Homeland Security
Committee members recognized the loss of fallen State Troopers and commended
State Police for the successful Eric Frein manhunt. Acting State Police
Commissioner Col. Marcus Brown and Lt. Col. George Bivens answered questions
- Funding for 350 additional cadets and current State Police complement.
- Increased workload from covering municipalities that dissolve local
- The level of State Police training capabilities.
- Pension reform and excluding State Police from pension benefits
- Costs associated with the Eric Frein manhunt and the performance of
equipment during the search.
- Performance of new State Police vehicles.
- The Acting Commissionerís stance on local police radar.
- The number of troopers assigned to casinos and projections of future
- Overtime costs and projected retirements.
- Cost of statewide radio system and progress on implementation.
- The cost of legislative affairs personnel within State Police.
- Gaming enforcement troopers paid by casinos.
- Costs of mandatory background checks and fingerprinting.
- The possibility of using county 911 centers to dispatch state police.
- Giving municipalities the ability to pay for State Police coverage.
- Federal lawsuit on standards for female State Police applicants, and
diversity hiring efforts.
- State Police investigations under the state Clean Indoor Air Act.
- Coordinating federal and interstate efforts to battle heroin epidemic.
- The Acting Commissionerís support for the Second Amendment.
- Legislation to combat underage drinking and binge drinking.
- The effect of the Administrationís long-term economic policy on the
ability to fund essential services such as State Police.
||Senator Mensch discusses the need to complete the delayed statewide radio
system and what Pennsylvania can learn from other states regarding state and
Department of Drug and Alcohol Programs
Members questioned Pennsylvania Secretary of Drug and Alcohol Programs Gary
Tennis regarding programs and allocation of funding to combat the stateís heroin
Other topics of discussion included:
- Current and future personnel costs and staffing needs.
- The departmentís position on the legalization of medical cannabis.
- Measures to address prescription drug abuse.
- Use of funds for drug and alcohol abuse education.
- Coordination with law enforcement to distribute overdose prevention
- The growth in compulsive gambling disorders.
- Continuing treatment of overdose survivors.
Thursday, March 19
Gaming Control Board
Pennsylvania Gaming Control Board Chairman William Ryan answered questions
regarding the health of the gaming industry and potential avenues to increase
Other topics of discussion included:
- The impact of recent Atlantic City casino closures on Pennsylvaniaís
- How the industry would be affected by the tax increases in the
governorís budget proposal.
- The potential approval of new kinds of table games and online gaming.
- The effect of casinos on the horse racing industry.
- Competition from neighboring states that have legalized casino gambling.
- Measures to prevent underage and prohibited individuals from playing in
- Recent suggestions by casino owners to enact 24-hour alcohol laws at
- State Police presence in casinos and the effect on crime.
- Saturation in the Philadelphia market.
State System of Higher Education
Chancellor Frank Brogan and representatives of several schools in the State
System of Higher Education discussed declining enrollment and its effect on
Other questions discussed during the hearing included:
- Programs and approaches to help non-traditional students.
- The need for additional job training and technical programs.
- Trends in the number of students requiring remedial education.
- Attracting out-of-state students and international students.
- Changes in graduation rates.
- Articulation agreements with community colleges.
- Campus safety issues.
- Tuition reimbursement and other programs for members of the military.
- Encouraging civic involvement in universities and host communities.
- Grant assistance for low- and middle-income students.
- Online education.
||Senator Mensch asks about contract negotiations with SSHE unions in light
of skyrocketing pension costs.
Questions about state funding for community colleges from members of the
Appropriations Committee were fielded by a panel consisting of Elizabeth Bolden,
president of the Pennsylvania Commission for Community Colleges, Nick Neupauer,
chairman of the Pennsylvania Commission for Community Colleges, and Ann Bieber,
president of Lehigh Carbon Community College. Topics discussed during the
- Partnerships with State System of Higher Education schools.
- Workforce development programs.
- State support as a ratio of community collegesí total funding.
- Capital funding.
- Local sponsorships.
- Affordability and availability of training programs for EMS and
- The popularity of online courses.
- Dual enrollment.
- Retirement plan options for staff and faculty.
- Trends in remedial/developmental education.
- The governorís proposal to tax textbooks and student fees.
||Senator Mensch discusses the need to reevaluate the funding formula for
community colleges, noting that the 24th Senatorial District is home
to three community colleges and students are picking up a larger share of the
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