June 15, 2012 | By | Posted in General News

PA Week in Review: Budget, privatization plans stalling

Unemployment remains flat from April
By Staff Reports | PA Independent
HARRISBURG — A busy week at the Pennsylvania statehouse started off with a late night, when House lawmakers stayed until 10:30 p.m. Monday debating the pros and cons of privatizing the state's liquor sales, only to refrain from voting.

But the next day, state business continued with news of potential lottery privatization, as well as plans to change the state's pension system for future employees. Lawmakers also are negotiating the final details of the state budget, which must be passed by the end of June.
No matter the business, a new poll shows Pennsylvanian voters are watching this administration, with approval ratings for Gov. Tom Corbett hitting an all-time low.
Budget talks continue as June 30 deadline looms
Lawmakers gave few details about the issues at the center of their negotiations amongst themselves and with the Corbett administration, but said a final spending figure had not been agreed upon.
“It will probably be a few days until we meet with” Corbett, said House Speaker Sam Smith, R-Jefferson, as he left a meeting with GOP House and Senate leaders Wednesday afternoon.
State Sen. Pat Browne, R-Lehigh, said the situation was too fluid to make a guess at when the final package might be ready.
“We’re still putting together a final amendment that we can present to the governor,” Browne said.
Corbett proposed a budget of $27.1 billion in February, but the state Senate upped that total to $27.6 billion with its version of the budget last month. 
Democrats were shut out of the closed-door meeting, but have been calling for an increase in state spending on public education, higher education and social services at the county level.
Unemployment rate remains flat from April
Pennsylvania’s seasonally adjusted unemployment rate remained at 7.4 percent in May, unchanged from April, according to figures from the Department of Labor and Industry.
For more than four years, Pennsylvania’s jobless rate has remained below the national rate, which was 8.2 percent in May.
The number of people working or looking for work in the state increased to 6.45 million, up 23,000 from April.
The sector with the largest job growth in May was the professional and business services industry, with a gain of 1,800 jobs. Leisure and hospitality lost 4,300 jobs, the largest drop for any industry in May.
Liquor privatization vote postponed until Monday, maybe longer
Speculation on when lawmakers will vote on a plan to privatize liquor sales continues after hours of House floor debate ended Monday without a vote.
The vote on a measure proposed by House Majority Leader Mike Turzai, R-Allegheny, also failed to show in Tuesday and Wednesday sessions, but Turzai said it could happen Monday.
Meanwhile, union opposition to the bill remains strong, though members protesting the bill at the Capitol refused to claim victory Wednesday.
“It may be an anachronism, but it works for Pennsylvania,” said United Food and Commercial Workers member Richard Granger of the state-owned and operated liquor store system.
The Pennsylvania AFL-CIO, one of the largest labor unions in the state, among others, sent notices to members asking them to call lawmakers about the liquor privatization bill.
PA lottery privatization plans move ahead
This week, the state’s Department of Revenue announced the Corbett administration is making headway on plans to privatize the Pennsylvania Lottery.
The department received responses for a request for qualifications to explore a private management agreement. The next step in the sealed bidding process will last three to four months, according to a news release from the Department of Revenue.
“We’ve determined it’s appropriate to take the next steps and move into a due diligence phase of the project, where qualified bidders and the commonwealth will interact to learn about each other’s business, explore ideas on improving operations and maximizing Lottery profit, and determine what a private management agreement for the Pennsylvania Lottery might look like,” said Department of Revenue Secretary Dan Meuser in the news release.
The company that provides the state with gaming systems and instant games, Scientific Games, has agreed to be involved in the conversation as plans for privatization continue.
House passes amendments to Wiretap Act
The state House passed House Bill 2400 on Wednesday afternoon with a 145-to-52 vote.
The bill amends Act 18, commonly known as the Wiretap Act, by broadening the legal circumstances under which civilians can record oral communication without consent, and how recordings can be used as evidence in the criminal court system, among around a dozen new provisions and updates.
Despite some provisions designed to help law enforcement agencies do their jobs, Democratic and Republican legislators voiced concern about how additional changes in the act could lead to problems down the road.
But those who support the bill say it will help law enforcement use modern technology to track criminals and obtain evidence.
“Our laws fail to reflect the current technology to their advantage,” said the bill’s sponsor, state Rep. Ron Marsico, R-Dauphin. “Technology has made advances that law enforcement is not able to keep up with."
Tax credit school choice plan may replace vouchers
 The plan would mirror the Education Improvement Tax Credit program, which directs business contributions to scholarship accounts for students from families who make less than $75,000 annually.
The new plan would be called the Education Improvement Scholarship Credit.
The EITC would remain on schedule to increase to $200 million next year, but Christiana’s proposed program would be capped at $100 million the first year and grow to $200 million by the third year, he said Monday.
“It’s an attractive program for those who want to get students out of violent, failing schools,” Christiana said.
Corbett and Senate Republicans spent most of last year pressing for a voucher program that would direct some state tax dollars from public schools to scholarships for low-income students in failing schools.
Voter poll shows Corbett disapproval rating grew
A meager 36 percent of voters approve of the way the first-term governor and former Pennsylvania attorney general is doing his job, compared with 47 percent who disapprove, according to a Quinnipiac University poll released Tuesday. 
Corbett's approval rating is down from an all-time high of 50 percent based on a September Quinnipiac poll.
But these figures don’t bother Corbett — he doesn’t read polls, he said. 
Of the Democrats polled, 68 percent disapprove of Corbett's time in office compared with 26 percent of Republicans and 45 percent of independents. Corbett also has a better reputation with men, with 40 percent approving, compared with 32 percent of women approving.
VIDEO: Corbett signs unemployment compensation reform bill
The bill, passed by both chambers last week, allows Pennsylvania to refinance the debt it owes to the federal government’s Unemployment Trust Fund by borrowing a $4.5 billion bond, which has a lower interest rate.
The bill also includes eligibility tweaks that will save the state millions in unemployment benefits by limiting access to around 50,000 workers.
Corbett described the debt payoff as an economic stimulus, since businesses have paid extra taxes to cover the debt and associated interest. Now, Corbett said, they can put those funds toward hiring people.
 GOP pension plan would give incentive for current workers to leave state system
A group of Republican lawmakers want to move all future state employees into a new retirement plans as a way to stop the increasing unfunded liability that is becoming a lead weight around Pennsylvania's budgetary neck.
The proposal contained in House Bills 2452 and 2453, which state Rep. Warren Kampf, R-Chester, introduced Tuesday in the state House, will not reduce the unfunded liability in the state's two major pension systems, but promises long-term savings by moving employees out of the unsustainable pension systems.
According to the bill, all new employees would be entered into a defined contribution plan, similar to 401(k) plans used in the private sector where each employee can make their own decisions about investing and saving for retirement.
All employees would receive a 4 percent employer contribution to a retirement account and would have to make at least a 4 percent contribution on their own. Existing employees would not be required to change plans, but if they voluntarily moved to the new plan, they would receive a 7 percent employer contribution as an incentive.
Taken together, the State Employees Retirement System and Public School Employees Retirement System are facing nearly $40 billion in unfunded liabilities, and contributions to the systems by the state and school districts will nearly triple in the next four years — from $1.6 billion to $4 billion.
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