June 30, 2012 | By | Posted in General News

Budget Roundup: Corbett says budget is about the future of Pennsylvania; pension crisis looms in next year (VIDEO)

Daily Budget Roundup – June 30, 2012

By PA Independent Staff

Corbett: Budget is about the future of Pennsylvania; pension crisis looms in next year

HARRISBURG – Gov. Tom Corbett signed an on-time budget – barely – for the second year in a row gave a preview of what is to come in next year’s budget battle during brief remarks after midnight on Sunday morning.

Gov. Tom Corbett signs the state budget on Saturday night.

Corbett said the budget passed during the final days of June was about creating a better future for Pennsylvania.  He pointed to a second consecutive no-tax-increase budget and accompanying bills that focused on luring a major new industry to the state and giving poor students in financially struggling school districts a scholarship to attend nonpublic schools.

We need to continue to follow a course of reform, restraint and responsibility,” Corbett said. “We must continue our course of changing the culture of state government from tax-and-spend to build-and-save.

But the governor also offered a preview of struggles to come – as the state is expected to face a $500 million increase in state pension payments in next year following an equally large increase this year.

We’re going to have to deal with it.  Otherwise you’re going to see other programs continue to find less and less funding,” Corbett said.

State contributions to the State Employees Retirement System, or SERS, and the Public School Employees Retirement System, or PSERS, are due to increase from $1.1 billion in the recently-ended fiscal year to more than $4 billion by 2016.

Throughout the recent budget process, lawmakers said they expected to begin addressing the pension issue when the General Assembly returns to the Capitol in the fall.

Corbett said he did not view the pension issue as a partisan one, and promised to reach across the aisle for support.

Click here for video of Corbett’s remarks, and here for his answers to reporters’ questions.

This is an update from 1:35 a.m.

Red light camera expansion proposal headed to governor’s desk after rushing through General Assembly

HARRISBURG – Motorists in 14 Pennsylvania municipalities could face $100 fines from red light cameras after the state House blew through its own red light on Saturday night in order to expand the camera program.

A few minutes after 1 a.m. on Sunday, the state House voted 113-72 to extend the existing Philadelphia red light camera program for another five years and to expand the number of municipalities allowed to use red light cameras, sending the bill to Gov. Tom Corbett’s desk.

In order to get it done, they suspended a normally sacrosanct rule that forbids voting on legislation after 11 p.m.

The bill continues the use of red light cameras in Philadelphia and allows Pittsburgh and several of the larger municipalities in the counties bordering Philadelphia to use the cameras.  The municipalities eligible for the cameras would have to exceed 20,000 residents and have full-time police forces accredited by the Pennsylvania Chiefs of Police Association.

It was passed in the state Senate without debate or discussion on Thursday and was approved by that chamber with a 35-14 vote on Friday afternoon.

The state House voted to suspend their 11 p.m. cutoff rule on Friday night and eventually passed the red light camera bill after 1 a.m. on Sunday morning.

“The time to deal with this is not one in the morning,” said state Rep. Greg Vitali, D-Delaware.

Senate Majority Leader Dominic Pileggi, R-Chester, who sponsored the amendment expanding the municipalities which can chose to install the cameras – with approval from the state Department of Transportation – said the number of municipalities was so small that he was not concerned about a lack of appropriate notice on the changes.

When asked, House Majority Leader Mike Turzai, R-Allegheny, said the bill had been discussed adequately.

This is an update from 1:15 a.m.

Fiscal code bill contains bankruptcy prohibition for Harrisburg, drilling moratorium for southeast counties

HARRISBURGThe state’s fiscal code carries some provisions that will dictate future municipal policies.

The fiscal passed both chambers on Saturday, heading to the governor’s desk alongside the general appropriations bill. The fiscal code is something of an operating guide for the state budget, providing instructions.

Pennsylvania's fiscally-troubled capital city of Harrisburg is prohibited from declaring bankruptcy by state budget bill

As part of the code update, financially distressed third-class cities under Act 47– including the state capital – will be forbidden from filing for bankruptcy until Nov. 30. Doing so would result in losing all state funding.

The bankruptcy ban already existed, but was set to expire July 1.

Last year, city of Harrisburg officials attempted to file for bankruptcy, but this provision precludes city officials from another attempt.

When a reporter asked if the provision takes away a tool from the city of Harrisburg’s receiver as a way to deal with the debt, House Majority Leader Mike Turzai, R-Allegheny, said he didn’t think so.

“I think the continuation of the receiver approach is the right approach,” Turzai said.

Another piece of the fiscal code would put a six-year moratorium on drilling in the South Newark Basin, which crosses Bucks and Montgomery counties.

The language was added late this week, citing a recent U.S. Geological Survey report that confirmed 870 billion cubic feet of undiscovered natural gas in the region. Supporters of the language said it was a way to proceed responsibly with new information, but some objected to the concept and how it was achieved.

Rep. Jesse White, D-Allegheny, Beaver, said that the drilling ban opens up Pandora’s Box. He also said that when drilling was authorized in the Marcellus Shale region, it was a different process.

“Four months after we took this giant step in the name of uniformity and consistency, and put the puzzle together, we’re going to break it apart into a million pieces,” he said. “It makes absolutely no sense.”

Turzai said the language was inserted into the fiscal code at the behest of the Senate. But the region, he said, is different than the Marcellus Shale. There hasn’t been the same “research or attention” to the basin as there has to Marcellus, he said.

This is an update from 12:15 a.m.

Tax credit for natural gas production, nonpublic schools heading to Corbett’s desk as part of budget package

HARRISBURG – The combination of a new program targeting poor kids in Pennsylvania’s worst-performing public schools and a new tax credit aimed at drawing an ethanol plant to the Keystone State might seem like a odd mix, but the magic of

The two new items were near the top of Gov. Tom Corbett’s agenda for this year’s budget season, and they both reached his desk on Saturday night as parts of the state’s tax code bill, a part of the overall state budget package.

The state House voted 140-56 in support of the tax code bill around 10:40 p.m. and the state Senate followed suit with a unanimous vote at about 11:30 p.m. to complete the last piece of the state budget puzzle.

On the educational front, the tax code expands the existing Educational Improvement Tax Credit, or EITC, from $75 million to $100 million.  The program is funded with business contributions that fund scholarships for students from families that make less than $72,000 per year.

A similar program, dubbed the Educational Improvement Scholarship Credit, or EISC, will be funded in the same manner and will be restricted to students who live in the 15 percent of worst-performing school districts in the state and come from families making less than $30,000 annually.

“Pennsylvania is home to a diverse student population and a one-size-fits-all approach to basic education does not work for everyone,” said state Rep. Tom Quigley, R-Montgomery, one of the sponsors of the EITC expansion. “The EITC is about allowing businesses to partner with parents, public schools and other educational institutions to provide options to students and families.”

Opponents of the program said the bill would take money out of the basic education funding stream and would allow nonpublic schools to handpick which students they would accept with the new scholarships.

“It’s not about choice. It’s about a nonpublic school bailout costing taxpayers $50 million,” said state Rep. James Roebuck, D-Philadelphia, minority chairman of the House Education Committee.

The other new tax credit in the bill – the one aimed at Shell Oil, not kids in poorly-performing schools – is part of an overall package that Corbett negotiated with the legislature in the hope of attracting a new ethanol producing facility in Beaver County.

The administration is touting the possibility of 20,000 construction and manufacturing jobs in western Pennsylvania if Shell decides to build the plant there.

This is an update from 11:40 p.m.

Private-public partnership bill approved in state House, goes to governor

HARRISBURG – The state budget does not cut to the heart of Pennsylvania’s transportation infrastructure problem, but proponents of a bill passed to Gov. Tom Corbett’s desk on Saturday night believe it may be one tool to be used.

The state House gave the final approval to H.B. 3, which allows for Pennsylvania to enter into public-private partnerships for transportation projects, with a vote of 117-79.

State Rep. Rick Geist, R-Blair

The state Senate had approved the bill with a unanimous vote earlier on Saturday.

Those partnerships, also known as “P3s,” allow for the state to lease a highway to a private company, which is allowed to place tolls on the highway in order to fund the construction and maintenance of the highway.

The Keystone State has more than 5,000 bridges labeled as “structurally deficient” and more than 7,000 miles of roads in need of repair, according to the Department of Transportation.

Advocates of the bill believe the public-private partnerships will help the state address those issues in a time when revenue for transportation-specific projects is declining thanks to lower fuel tax revenues.

“While public-private partnerships alone cannot solve that has become an enormous transportation infrastructure funding problem, they certainly are a critical tool for the Commonwealth to have at its disposal,” said state Rep. Rick Geist, R-Blair, chairman of the House Transportation Committee and sponsor of the bill.

The bill would also create a seven-member board to evaluate and approve potential public-private partnerships.

Opponents of the bill said the state was abdicating its responsibility by giving a board the authority to decide what roads potentially could be tolled in the future.

We were elected to make tough decisions in this chamber, and some of those tough decisions are going to be related to finding funding for highways and bridges,” said state Rep. Mike Carroll, D-Luzerne. “It is simply not appropriate for us to hand off that authority, that ability, to an unelected board.”

This is an update from 9:05 p.m.

Senate, House pass charter school reform measures – but not the same package

HARRISBURG – A wide-ranging series of fiscal and academic reforms for charter schools in Pennsylvania was unanimously approved by the state Senate on Saturday afternoon.

About an hour later, the state House passed a similar set of reforms in a different package that included one controversial proposal not contained in the Senate plan.

The Senate language is in H.B. 1330.  It would require all charter school trustees and administrators to adhere to the state’s code of ethics for public official, would require all charter schools to conduct an annual independent audit of their finances and would set a sliding scale limitation on how much money those schools could keep in reserve accounts.

The bill gives the Department of Education the task of developing a performance matrix that will include student test scores, attendance and other criteria to judge the performance of charters.

It also establishes direct payment for charter schools from the state Department of Education, a change that charter school advocates have been fighting for because some school districts have withheld payments from charters.

It would also establish a statewide commission to study funding for charter and cyber charter schools, with a report due to the governor by the end of November.

Everyone will have something through this bill, but no one gets everything, and that’s what a compromise means,” said state Sen. Andrew Dinniman, D-Chester, minority chairman of the Senate Education Committee.

About an hour later, the state House approved a similar charter school reform package.

The key difference in the House bill is a provision that would give the state Charter School Appeal Board the authority to supersede school districts in certain circumstances if those districts block the authorization of a new charter school – a component that charter school advocates have been seeking.

Teachers’ unions and school boards generally oppose giving the state the ability to authorize charter schools.

The state House voted 120-77 to approve their version of charter school reform, which is contained in S.B. 1115.

This is an update from 4:50 p.m.

Teacher evaluation plan heading to Corbett’s desk

HARRISBURG – The state House approved a new system of evaluations for public school teachers and sent the proposal to Gov. Tom Corbett‘s desk on Saturday afternoon with less than 11 hours remaining in the fiscal year.

They also approved a different bill that sets up a pilot program for 20 counties to receive block grants for human services funding.

The teacher evaluation changes were pushed by the Corbett Administration and will create a four-tied system of ratings in place of the current pass/fail system that results in 97 percent of teachers getting the highest score possible.

In the new formula, the student-performance element will be at least 50 of a teacher’s grade will be based on a combination of building-wide test scores, teacher-specific test scores, other student performance criteria to be determined by each individual school district.  The other 50 percent will be based on classroom observation, which previously was the only measure for judging teachers.

“Our teachers are not afraid of being evaluated and being held responsible for students’ success,” said state Rep. Ryan Aument, R-Lancaster. “First and foremost, this legislation is in the best interest of our students and our teachers.”

The Pennsylvania State Education Association, or PSEA, the state’s largest teachers’ union, endorsed the legislation.

“Educators are not afraid of having our performance evaluated,” said Michael Crossey, president of the PSEA, in a statement. “We just want to be certain that our evaluations are based on the wide variety of factors that go into teaching our students.”

The final vote in the state House was 115-82, with 10 Democrats joining the Republican majority in support the measure and four Republicans opposing it.

This is an update from 1:40 pm.

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Eric Boehm is a reporter for PA Independent. He can be reached at or at (717) 350-0963.

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