August 10, 2012 | By | Posted in General News

Week in Review: Lawmakers look ahead to Medicaid, pension reform

By PA Independent Staff

HARRISBURG — The dog days of August have policymakers looking ahead to challenges on the horizon.

They come in many shapes: increasing costs from Medicaid, potential resolutions to the state pension crisis and problems in the solar energy market. This is the week in review.

Legislators begin to tackle potential Medicaid expansion

Majority Whip Rep. Stan Saylor, R-York, said he plans to introduce a bill that would block the controversial expansion of Medicaid under the federal Patient Protection and Affordable Care Act.

“Expanding Medicaid is the wrong course of action and is a disaster in the making. Adding more people to Medicaid is not something we should aspire to nor celebrate,” said Saylor in a memo circulated to House legislators this week. “It is not the way to address the uninsured population.”

In June, the U.S. Supreme Court ruled a portion of ACA unconstitutional that said any state that did not expand coverage would lose its entire federal Medicaid funding. The ruling allows states to decide whether to participate in expansion without penalty.

Supporters of the federal legislation say it would benefit about 800,000 Pennsylvanians.

Minority Caucus Chairman Rep. Dan Frankel, D-Allegheny, sponsored legislation that would enable the Medicaid expansion. If the state opts out, Pennsylvanians who pay federal taxes will end up paying for benefits in other states, he said.

“It is a moral imperative, it makes financial sense for the state of Pennsylvania and not doing so is penalizing Pennsylvania taxpayers who will be subsidizing other states who do opt into it,” Frankel said.

Meanwhile, policy experts continue to shake out the cost of the act. This week, a national health-care expert from the Coalition to Protect Patients’ Rights came to Harrisburg to explain how the system will strap doctors and consumers alike.

Report: Red light cameras likely not worth the cost in Philly suburbs

A state report examining the cost benefits of operating red light cameras in small municipalities warned it might not be profitable.

While Philadelphia has generated more than enough money from violations to cover the $6 million price tag of their camera system, a report from the state Transportation Advisory Commission warns that smaller municipalities would not make enough money to pay for a similar program.

Each camera has to generate more than 300 violations per month to cover its costs, according to the report.

Legislation passed in June would allow Pittsburgh and about a dozen municipalities in the Philadelphia suburbs to use red light cameras. The municipalities would be required to pay for the program and transfer any excess revenue to the state Department of Transportation to fund traffic safety initiatives statewide.

“According to PennDOT calculations, only the City of Pittsburgh would have the traffic environment necessary to make (red light cameras) a sustainable program,” the commission wrote.

Pension reforms to get first vetting

Turning eyes to pension reform, next week lawmakers will hold a joint hearing of the House State Government Committee and House Finance Committee on Tuesday to begin the process of reforming state pension systems.

Nine bills are on the agenda, but no votes are expected during a session that is likely to focus on building consensus on how to address the $40 billion — and growing — public pension liability.

Two proposals by state Rep. Warren Kampf, R-Chester, are expected to highlight Tuesday’s meeting.

Kampf wants to create a system modeled after the 401(k) plans more commonly found in the private sector.

The state government has demonstrated its inability to properly manage a pension fund,” he told PA Independent on Thursday. “We are significantly underfunded not just because the economy is down, but because very generous benefits were granted in 2001 and then really not adequately funded anywhere near where they should have been.”

State incentives fuel solar energy industry market collapse

After state investment helped swell Pennsylvania’s solar energy industry to the point of overproduction, solar industry insiders pushed for a legislative fix, but critics say the industry has had its share of government intervention, and any new regulations would increase costs to consumers.

A bill sponsored by state Rep. Chris Ross, R-Chester, would alter solar power requirements for utility companies, boosting the market in the short term.

Ross’ bill has gone nowhere since it stalled after a House Consumer Affairs Committee hearing in January. And with less than two weeks of scheduled session days this fall, it would be difficult to get the bill passed, Ross said.

Andrew Kleeman is senior vice president of new markets for solar energy installer company Mercury Solar Systems. He said he estimates Pennsylvania’s solar industry has lost about half the jobs it created. Without a legislative change, the other half is in danger, he said.

Unemployment debt cleared as PA refinances with Citibank

Pennsylvania successfully refinanced more than $3 billion in unemployment debt with the federal government last week, a move that the state says will save businesses an estimated $12 million in taxes and penalties over the next seven years.

Because the state was more than $3 billion in debt to the federal government after borrowing repeatedly to cover unemployment compensation payments during the economic downturn, businesses would have had to pay a 1.1 percent effective rate on payroll taxes, instead of the normal effective rate of 0.8 percent.

The increased rate would have cost employers $110 million this year alone, according to an analysis by the Senate Appropriations Committee.

“It was something that really needed to be done,” said Samuel Denisco, vice president of the Pennsylvania Chamber of Business and Industry, which represents businesses in the state. “This was a win for the business community.”

State workers caught with hands in the cookie jar

As the state looks for ways to crack down on public assistance recipients who abuse the system, two of its own workers are accused of taking some $300,000 in taxpayer dollars.

A grand jury indicted the former workers for the Department of Public Welfare after an investigation by the Attorney General’s Office.

The Delaware County Assistance Office workers are accused of obtaining benefit money via state-issued electronic benefit transfer cards, used for programs such as Supplemental Nutritional Assistance Program, also known as food stamps. Both are accused of using department computers to issue unauthorized benefits, court records say.

Cynthia Lewis, 47, of Lansdowne, is charged with faking six public assistance accounts, accruing more than $254,000 from 2007 to 2011. Lewis, an 11-year employee with the department, authorized the accounts to receive SNAP benefits, medical benefits and “special cash allowances,” according to the Attorney General’s Office.

In a separate case, Ivan Jones, 43, of Philadelphia, is accused of using the names and identities of welfare recipients to open new cases. Jones had EBT cards for those accounts sent to Delaware County locations, including his own address, court records say.  Jones is accused of taking nearly $39,000 from  2007 to 2011.

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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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