On the budget, Democratic priorities and the cuts to education spending.
By Eric Boehm | PA Independent
State Sen. Vincent Hughes, D-Philadelphia, is the minority chair of the Senate Appropriations Committee, which will take center stage in the coming weeks following Gov. Tom Corbett’s budget address Tuesday.
The committee will deal with a variety of fiscal issues between now and the end of the budget year on June 30. Chief among those concerns will be balancing a state budget with an anticipated $5 billion shortfall while maintaining funding for critical programs. The committee also will have to deal with departments being downsized by Corbett’s budget, which proposes to cut state spending in several areas.
Earlier this week, Hughes sat down with PA Independent to discuss the proposed budget, the cuts in education spending and the Democrat’s priorities as budget negotiations begin.
First of all I want to get your general reaction to the governor’s proposed spending figure ($27.3 billion general fund, $63 billion operating budget). Did you expect a lower figure?
Right now, I’m not focused on the overall spending number. What I’m focused on are some misplaced priorities in terms of how the budget was put together. It seems the architecture of the budget was drawn around programs that really are balancing it on the backs of working families and children.
In higher education, it’s really a frightening reality with the 50 percent cut. Those are some huge numbers, and what they do is they put a huge pressure on the universities to increase tuition 20 percent to 25 percent, which essentially make them out of reach to most of Pennsylvania’s college-going students.
We get the fact that we need to have a balanced budget. We get the fact that we have to try to rein in spending and tighten things up a little bit. And we get that the conversation about taxes is a difficult one to have.
You mention the cuts to higher education, which have gotten a lot of attention this week. However, when you go back and look at the actual numbers, the 50 percent cut in state funding for Penn State works out to a 4 percent cut to the university’s budget. Isn’t the rhetoric on those cuts a little blown out of proportion?
I don’t consider that rhetoric after having met with those guys and had hearings with those guys for a number of years.
I sit on the Board of Governors (of the State System of Higher Education) and it’s clear to me that state support is tied directly to tuition level and to tuition increases.
And community colleges are taking a 10 percent hit, and these are the places that are overflowing because of the recession. Everybody is going back to community colleges to learn a new trade or a new skill set. If there is anything in higher education that deserves a little juicing up, it’s them.
You’re obviously displeased with Corbett’s budget. If Democrats were in charge of both chambers and you could set the budget, how would you balance it and account for a $5 billion deficit?
The first thing we’re going to do is go through the budget hearings line-by-line, see what the governor is suggesting, talk to the department heads and see if there are any other options out there.
Secondly, we’re going to start calling on some technical expertise to find out if there are other ways to pull dollars together without having to raise taxes that might help to fill this hole.
Thirdly, we also believe the governor’s growth projections are far too conservative. The Federal Reserve a week ago predicted the economy would be growing at a 3.9 percent clip. That’s the feds, that’s not us.
(Editor’s note: Corbett’s budget projects 4 percent growth in fiscal year 2011-12)
The truth of the matter is that Pennsylvania’s economic picture looks a lot better than most states in the nation. Our unemployment rate is half a point lower than the national rate, and Moody’s projects Pennsylvania will get back to pre-recessionary numbers in 2012.
We have to build on that and use that as a foundation going forward. That’s why I’m cautious about some of the cuts going forward. How can you cut the mortgage foreclosure prevention program when you’ve got so many people in foreclosure and about to go into foreclosure?
So, we’re going to do the line-by-line analysis and see if there are any creative ways to find the dollars to fill the hole. We would not come out of the box with a $200 million tax cut, and we would put the brakes on the phase out of the capital stock and franchise tax and we would get something out of Marcellus shale, I can tell you that.
Those things – with the exception of the Marcellus shale tax – don’t really help fill in the deficit.
Sure it does. The $200 million tax break to accelerate depreciation the governor did last week dug the hole deeper. So not doing that makes the trip shorter.
Fine, but it doesn’t fill the hole in. If you have a severance tax, the highest projection I’ve seen is $300 million from the severance tax. But we have a $5 billion deficit. What else can you do to fill that in? Would there have to be tax increase?
I don’t think so. I think we’d be more optimistic in the growth number and that could be $700 million right there. And then you start getting into the ballpark and get into the game.
There’s one option on the table to expand managed care for Medicaid recipients statewide. Right now, it’s in about three regions across the state, but if you expand it statewide, projections are another $150 million in savings. We already have a revenue surplus right now in the current fiscal year of $243 million, and we think that number can grow to $300 million or $400 million by June 30, so the new budget year starts off with that money in the bank.
And then you start putting all those other little pieces together and you do the line-by-line analysis, and we think we can find something. But not forcing an environment with 20 percent tuition increases, or an environment when there will have to be property tax increases because of the cuts to basic education.
Republicans in the House seem a little more willing to play hardball with this proposal, but the Senate has historically been a body of compromise. What are you going to try to get changed?
I think Republicans (Tuesday) were being polite. I’m not going to put anybody on the spot, but if you do an analysis of the cuts, you ask yourself who is happy and who is not happy. The cuts (Corbett) suggested are an impact on Democrat and Republican districts.
What about the cuts to state workers? Corbett said 1,500 positions will be cut, but most of them are empty already.
Pennsylvania has the lowest per capita ratio of state workers to state population in the country, mostly because of attrition. So he’s basically saying we’re going to keep the attrition going.
You have to figure out when we have reached the bottom end so we can have an effective government operation. For example, to do an effective oversight of the shale drilling, you have to have people who work in that business for the Commonwealth of Pennsylvania. The governor has just opened up more land for drilling, so you have to have people who can do the oversight.
At a certain point, the question is, when do you lose effectiveness? When do you lose the ability to effectively run the government that people need to have run?
Do you think we’re there now?
We may be getting close to that.
One part of the budget some members of your caucus approved of was the cutting of the discretionary legislative grants (otherwise known as WAMS). They have been cut out before, and they always seem to come back during the negotiations. Can you go on the record saying they will not be part of the budget?
I’m not going to go on the record saying that.
So there’s a place for them in the budget?
Absolutely. I don’t view them as evil funding streams. The volunteer fire department, the nursing home, the senior citizens residences that need some support, I think we need to have a way to help them out. Maybe there needs to be reform in the process, which I’d be open to, but we have to figure out ways to get help to folks and organizations that need support that do not have the capacity to go out and do big-ticket fundraisers.
You said Tuesday this budget will force local governments to raise taxes to make up for state-level funding cuts. If I’m a taxpayer in Pennsylvania – which I am – what is better for me, to be paying taxes at the state level or at the local level?
I think the state should do its fair share. Historically, the state is supposed to be a 50-50 match between state and local support for the funding of public education. For decades, the state never met its obligation, but the last eight years we trended up in that area.
We focused on smaller class size, we focused on tutorial programs and after-school programs. It wasn’t just willy-nilly and it wasn’t a blank check. It was specifically on things that are recorded, not just nationally but internationally, to have an impact. And it had a response, it had a positive impact. So I think the state has to do its fair share.
That doesn’t mean local school districts don’t have to do some belt tightening, I think that’s reasonable. We all have to do some belt-tightening, but I think the state has an obligation to do its fair share.
Is there one thing you’re going into the negotiations absolutely determined to change?
We are clearly committed to funding for education, both basic education and higher education. Clearly, absolutely committed to making sure that education is funded at a much more appropriate level than what the governor has suggested.
We believe education is not just a short-term investment but a long-term gain for this Commonwealth. We consider spending in education to be investments. The governor said yesterday “we’re going to spend in education,” but we look at it differently because we look at it as an investment.
Remember, as excited as all of us were (Tuesday), that was just a proposal for us to consider. We’re going to consider it, and we’re going to offer up some suggestions and either the new administration will take it and it will pass the House and the Senate, or it won’t. But it’s just the beginning of the process, we understand that, we accept that, and we respect that.
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Factfile: State Sen. Vincent Hughes
Affiliation: Democratic
District: 7 (Parts of Philadelphia and Montgomery counties)
First elected: 1994 (currently serving fifth term; previously served four terms in state House of Representaives)
Date of Birth: October 26, 1956 (in Philadelphia)
Website: http://www.senatorhughes.com/
Ballotpedia: http://ballotpedia.org/wiki/index.php/Vincent_Hughes
