Daily Budget Roundup – June 29, 2012
By PA Independent Staff
New fiscal code language blocks drilling for untapped gas reserves in southeast PA
An eleventh-hour addition to a budget-related bill would put a moratorium on certain new drilling operations in parts of southeastern Pennsylvania.
The language was added to the state’s fiscal code in response to a newly-issued report from the U.S. Geological Survey.
That report assessed undiscovered oil and gas resources on the east coast, and deduced there’s around 876 billion cubic feet of natural gas resources in the South Newark Basin, which extends from New Jersey into southeastern Pennsylvania.
Under the new language, those resources in the basin could not be tapped until a study is completed by the Department of Conversation and Natural Resources examining environmental and fiscal effects of drilling operations.
State Rep. Kathy Watson, R-Bucks, said the moratorium is a responsible approach to the recent discovery. At this point, it’s not certain if the resources would allow for hydraulic fracturing as it’s currently processed, she said.
Regardless, understanding the area is key before moving forward, she said.
“We need to study it and understand that, and geologists agree with that, so I think it’s incumbent on us to it that way,” she said.
But some question the language of the moratorium, saying it’s too vague. State Rep. Matthew Bradford, D-Montgomery, questioned the bill during the House Appropriations Committee meeting during discussion on the fiscal code.
The moratorium expires at the start of 2018, though there is no deadline for DCNR to complete its report. It would also require legislation in place that leaves it up to counties whether or not to impose a fee on gas unconventional gas wells.
“It’s not clear, and that’s part of the problem with the whole problem of doing this in the fiscal code with no notice,” Bradford said following the meeting. “It’s a symptom of a process that’s been rushed and without consultation.”
Bradford said he would have liked to see a public hearing or addressing communities on the matter, instead of ending up with something “hastily drafted.”
This is an update from 10:20 p.m
Senate passes cracker tax credit, teacher evaluations; question remain on charter school reform
HARRISBURG – The state Senate sent a series of accompanying budget bills to the House on Friday evening, but there is still no final budget package with a little more than 24 hours before the budget deadline hits.
Among the measures passed was a proposal to create a new $67 million annual tax credit for ethanol production, which is part of an economic development package intended to bring up to 20,000 jobs associated with a new natural gas facility in Beaver County.
The state House will vote Saturday on that bill and on a proposal to change the way public school teachers are evaluated.
Another measure passed by the Senate on Friday night would create a pilot program for county-level human services block grants.
However, one expected vote did not take place on a bill that would have expanded the existing Educational Improvement Tax Credit, or EITC, program to $100 million and added a new $50 million component aimed at getting poor students out of the state’s worst-performing school districts.
There is also work to be done on a charter school reform package that would change how those schools are authorized at the state level and would implement a series of financial accountability measures.
“A few lingering, ongoing discussions, but nothing that gives us any concern,” said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Chester. “We have an agreement with the House. We’re very confident that agreement will be honored.”
Members from both the state Senate and state House characterized the EITC portion as “solid” though issues on charter schools needed to be worked out.
“There’s a misunderstanding at the moment about where people are, and some interest groups are overplaying their hands,” said state Rep. Tony Payton, D-Philadelphia, a pro-EITC Democrat who was not party to the closed door discussions on the measures that took place Friday evening between Republican legislative leaders.
Both chambers will reconvene at 9 a.m. on Saturday, the last day of the current fiscal year.
This is an update from 10:10 p.m.
Bipartisan support from state Senate sends $27.656 budget to Corbett’s desk
HARRISBURG – The first, and most important, piece of the state budget is on its way to Gov. Tom Corbett after the state Senate voted 32-17 to approve a $27.656 billion spending plan that contains no tax increases.
Remaining pieces of the budget are being debated by the General Assembly on Friday evening, with all parts on schedule to reach Corbett before the end of the day on Saturday.
State Sen. Jake Corman, R-Centre, said the final spending plan that increased the budget’s total by $500 million over Corbett’s initial proposal was grounded in fiscal reality.
“This budget reflects spending the amount of money that we have,” Corman said. “Just as every family and every business has to do, they have to make a budget based on what they have.”
State Sen. Jay Costa, D-Allegheny, praised the final budget for increasing spending in basic education, higher education, human services and a variety of other areas compared to the initial proposal from Corbett.
Other Democrats were not impressed with the spending plan.
“This budget neglects to institute a long-term solution for both education and infrastructure investment,” said state Sen. John Yudichak, D-Luzerne.
This is an update from 4:35 p.m.
House approves creation of commission to study property tax reform
HARRISBURG – A select committee established to study and find solutions property taxes is on its way to creation.
On Friday, the House of Representatives passed House Resolution 774 after it was amended and moved from the House Local Government Committee Wednesday.
Rep. Tom Quigley, R-Montgomery, sponsored the bill. He said the General Assembly has yet to reach consensus on a solution to the pressure of property taxes often raised by their constituents.
“This resolution is about providing an opportunity to find an answer about how to fund our public schools and local governments without relying on property owners,” Quigley said in a statement after the resolution was passed.
The resolution charges a committee to review all sources of funding for school districts and local governments with a focus on property taxes. The committee would have until Nov. 30 to draft a report on its findings along with any recommendations for revenue reforms.
The size of the committee was pared down to 13 from 27 in the original resolution. It was also reshaped to include lawmakers who sit on the Environmental Resources and Energy, and Transportation committees.
The resolution will now move the Senate.
This is an update from 3:50 p.m.
Adversaries for months, Corbett and university leaders find common ground
HARRISBURG – The leaders of state and state-related universities joined Gov. Tom Corbett this morning to laud an agreement that could signal a new chapter in the relationship between government and higher education in the commonwealth.
The agreement between state lawmakers and the universities will keep funding flat for next year in exchange for low tuition increases.
Corbett had originally proposed decreased funding for the schools in his draft of the 2012-2013 budget. But increased revenues during the budget process changed things, he said, and now spending figures are flat from the current fiscal year.
“While we are able to restore funding to our universities this year, we must also ask the leaders to be wise about spending taxpayers’ money, “Corbett said. “With that in mind, our state and state-related universities have agreed to keep tuition as low as possible in the coming years.”
The restoration for the four state-related universities – Penn State University, University of Pittsburgh, Temple and Lincoln universities – totals about $147 million over what Corbett proposed in February.
State universities in the State System of Higher Education faced a cut of more than $82.5 million in the proposed budget, but in 2012-2013 funding will remain flat at $412 million.
Some universities are still in the process of setting tuition rates for next year, and while there was no set percentage to stick to, any increase would need to be at rate of inflation or lower, said Senate Appropriations Chairman Sen. Jake Corman, R-Centre.
Penn State President Rodney Erikson said he will propose to the school’s board of trustees and increase of 2.9 percent for in-state residents at University Park, and 1.9 percent for those at the 19 Commonwealth Campuses.
“This allows Penn State to really take a major step in continuing the affordability of education,” he said.
Corman said that the decision make restoring higher education funding a priority over other areas of cuts was because the schools had a decade of flat-funding followed by recent cuts.
“Although this sounds like a lot of money back it’s still a 20 percent cut from two years ago,” he said. “I don’t think there’s any entity that’s done more to help out the state budget than higher education.”
Corman said despite this year’s agreement, he does not see the state setting a precedent of setting tuition “year after year.”
This is an update from 12:30 p.m.
Budget bill could land on Corbett’s desk Friday
HARRISBURG – It takes almost 400 double-pages to craft a nearly $27.7 billion spending plan.
This is the document that has consumed the work of state lawmakers for much of the month of June.
This is the final budget.
The first 199 pages of legislation contain strikethroughs, followed by the final rewrite.
Bound with black tape and close to an inch thick, Senate Bill 1466 is heavy enough to make a nice thumping sound when tossed onto a desk.
By the end of the day Friday, it could land on the most important desk of all – that of Gov. Tom Corbett.
When the Senate Rules Committee received the document Thursday night, the paper stack was in its fifth iteration, printed on Wednesday. Each page contains about 30 lines of legislation, double-spaced for easy reading, or easier in any case.
In this form, the document will set the course for state spending from July 1, 2012 through June 30, 2013.
Some of the senators thumbed through the budget. Others let it sit on the table. One gave a copy to a reporter.
Another left it on the table after the committee voted to move the bill to the floor, where the Senate will vote on it today.
Upon passage, the governor is expected to sign the budget, along with a series of technical code bills that accompany the legislation through the process – each nearly as thickly-bound as the spending bill itself.
And with that, budget season, a months-long process, full of heartened debate, success and failures, strikethroughs and rewrites, will come to a close.
This is an update from 9:45 a.m.