By PA Independent Staff
HARRISBURG — Republican lawmakers and Gov. Tom Corbett's administration spent this week discussing various proposals to save taxpayers' money, but cuts in funding and eligibility will have consequences.
The state Department of Public Welfare announced a plan to restrict food stamp eligibility after a 50 percent increase in recipients over the past five years and also said it would be changing some financial services for Medicaid recipients.
Meanwhile, House Republicans are gearing up to make changes to the state's prevailing wage law to help local governments more easily fund road projects.
In other news, the state Supreme Court received challenges to the new state House and Senate district maps, and the Pennsylvania Liquor Control Board announced statewide price increases for some adult beverages.
Legal challenges filed against legislative maps
Pennsylvania district maps came under legal attack this week by voters, local elected officials and Democrats in the state Senate, who believe the new state House and Senate district plans violate the state constitution.
Eleven challenges were filed with the state Supreme Court against the new legislative maps as of Wednesday, the deadline to file. The court is expected to hear oral arguments Jan. 23.
The complaints upon which the petitions are based challenge the legislative maps from various angles. One suggests another set of maps that better reflect the requirements established in the state constitution. Another alleges that boroughs were divided unnecessarily and along racial lines, while a third complaint questions why a Democratic incumbent’s district was moved across the state.
Article II, Section 16 of the Pennsylvania Constitution states that “unless absolutely necessary, no county, city, incorporated town, borough, township or ward shall be divided” when drawing legislative districts.
“By drawing legislative boundaries based on political factors and ignoring criteria in the constitution, legislators are able to pick the people who vote in elections, hindering the ability of voters to pick the legislators,” said Michael Churchill, an attorney with the Philadelphia-based Public Interest Law Center.
Prevailing wage reforms could save $300M for road projects
Roads and bridges in Pennsylvania need repairs, and exempting routine maintenance work from prevailing wage laws could save local governments an estimated $300 million for these projects.
Local governments must maintain more than 60,000 miles of roads in Pennsylvania, which also has the highest number of deficient bridges of any state, according to the state Department of Transportation.
As a result of a 2008 state Supreme Court decision, municipalities have had to pay higher wages for maintenance work, such as resurfacing and repaving. The state’s prevailing wage law is applied to maintenance work, in addition to new construction.
Although, the exact amount varies by location, the state’s prevailing wage requirements add between 5 percent and 20 percent to the cost of those projects, said Bruce Hanson, executive director for state Rep. Ron Miller, R-York, chairman of the House Labor and Industry Committee.
PA biz funding authority cuts red tape, puts taxpayers at risk
Lawmakers want to cut the red tape for businesses seeking tax incentives, but some critics say doing so would expose Pennsylvania taxpayers to financial risks.
Corbett wants to streamline the state's multi-pronged economic development apparatus into a single financing authority he has dubbed the Liberty Financing Authority.
Corbett's plan is presented in Senate Bill 1257, introduced by Senate Committee on Community, Economic and Recreational Development Chairwoman Jane Earll, R-Erie.
However, taxpayer advocates say this financing authority would compromise the taxpayer.
"How can this not affect the taxpayer? Anytime you talk about financing and bonds, it's taxpayer-backed, and the taxpayer is at risk," said Eric Epstein, founder of Rock The Capital, a Harrisburg-based political watchdog group that has come out against Corbett's plan.
The governor’s plan is intended to promote business growth by taking advantage of low-interest bond rates.
"The premise of the fund is the collection of taxpayer funds. The bond is an instrument of collateral and, almost every day, you read about a municipality, a government defaulting on its bonds," Epstein said. "The taxpayer will be caught holding the bag, and the taxpayer has no say."
The new authority could sell up to $1 billion in bonds to investors that would generate revenue and make the funds available for business loans.
Food stamp eligibility faces stricter limits
The state Department of Public Welfare, or DPW, plans to restore stricter eligibility limits for some families.
The changes to the Supplemental Nutritional Assistance Program — better known as food stamps — are among the strictest in the nation and mark a return to a policy the department abandoned in 2008.
The DPW, which administers the program, said the policy changes will ensure benefits go to those households in the greatest need.
But opponents warn that the policy will hurt some needy families and could force more people to seek private food donations, which are stretched thin.
The department’s new asset test will disqualify households with more than $2,000 in “countable resources” from receiving food stamps. The department estimates that the changes could affect 2 percent of the 1.8 million Pennsylvanians receiving food stamps, but the amount of savings is not known.
“With state and federal funding being so tight right now, we want to make sure that those who have the absolute most need are receiving benefits,” said department spokeswoman Anne Bale.
Existing income eligibility guidelines will not be affected, said Bale. Families of four with a monthly income of less than $3,000 are eligible for up to $668 per month.
But the new test may disqualify some households receiving state assistance. Countable resources will include cash-on-hand, bank account assets, lump sum payments, stocks, bonds and trust funds.
PA seeks to tighten Medicaid-related financial services
The DPW has 37 organizations that offer financial management services, but that number could be cut to as few as three as early as April.
But advocates for the elderly and disabled are concerned it will mean disruptions for some Medicaid recipients.
The financial management services, which are used by about 22,000 mostly disabled and elderly recipients, allow Medicaid enrollees to direct their benefits to a company, which manages their financial, payroll, tax withholding and bill paying.
The DPW says this cost-saving measure is needed, and the transition for Medicaid recipients will be seamless, but how much money will be saved and how the transition will occur are not known.
The transition will "primarily impact people with disabilities in a waiver program who use the cash- counseling model," said Kathy Cubit of Philadelphia-based Center for Advocacy For the Rights and Interests of the Elderly, whose mission is improving the quality of life for vulnerable older people.
According to DPW, about 1.9 million Pennsylvanians receive Medicaid, which is jointly funded by the federal and state governments.
Board OKs higher liquor, wine prices
The Pennsylvania Liquor Control Board has approved vendor-requested price hikes on more than 300 products.
"We couldn't continue to turn down the vendors’ requests for price increases, because we would risk losing the opportunity to carry (their) products," board member P.J. Stapleton said Wednesday, adding that vendors are allowed to request price increases four times a year.
The price hikes, which begin Feb. 1, are the first in 18 months after the board put in place a moratorium on vendor increases because of the Great Recession.
The increases are expected to generate about $5 million in state revenue, including about $2 million in sales taxes, said Joe Conti, CEO of the Pennsylvania Liquor Control Board, or PLCB.
The increases also resulted in additional calls to remove the state from the alcohol business.
Privatization, which is backed by Gov. Tom Corbett and other lawmakers including House Majority Leader Mike Turzai, R-Allegheny , would eliminate the PLCB's role in the wines and spirits business.
"If the stores were privatized, and the owners of those particular stores made the decision to increase prices, no one would be in this room," said PLCB Chairman Joseph Brion.
