By PA Independent Staff
HARRISBURG — Pennsylvania’s full-time Legislature still is in the thick of its summer session break, with a short fall session scheduled for Sept. 24 inching ever closer.
But this year’s passage of the state’s voter ID law remains at the forefront of Harrisburg headlines, with a challenge to the law wrapping up in Commonwealth Court this week.
And while the GOP attempts to privatize the state’s liquor business failed earlier this year, a close look at the board’s spending shows the Pennsylvania Liquor Control Board may be dipping deep into its pockets to pay the state.
Meanwhile, late summer and early fall could see some changes on the local government front. State legislators plan to examine taxpayer-funded borrowing by examining quasi-government authorities, and will at the expanse of state laws that dictate municipal spending.
Voter ID testimony, trial wraps up
In about two weeks, Pennsylvanians will find out the decision of Commonwealth Court Judge Robert Simpson on the constitutionality of the state’s controversial voter ID law.
But an appeal from either side — the state or the plaintiffs — is likely, pushing the case up the ladder to the state Supreme Court.
Closing arguments wrapped up on Thursday. During the trial, testimony revealed that state employees may be giving out incorrect information as would-be voters attempt to obtain the proper identification.
The lawsuit was filed by several interest groups and 10 Pennsylvanians who said they would be negatively affected by the law and unable to vote in this year’s election.
The law requires voters to show an approved photo ID before casting a ballot. State-issued licenses, passports and some college IDs and acceptable under the law. The state estimates that some 750,000 residents do not have a state-issued license.
Plaintiffs are pushing for an injunction to stop the law before Election Day.
Patrick Cawley, senior deputy attorney general, said during closing arguments that state officials are working “to ensure no one will be ignorant of the law’s requirements by Election Day.”
The law, he said, adds integrity to the voting process to ensure one person gets one vote.
Regardless of the case’s outcome in Pennsylvania state courts, the feds also may get their say. The Justice Department is examining whether the law disenfranchises minorities.
Earlier this year, the department struck down a voter ID law in Texas, because a disproportionate number of Hispanics did not have proper identification and would be ineligible to vote.
PLCB not as profitable as state claims
A PA Independent analysis of Pennsylvania Liquor Control Board financial statements shows how between the three fiscal years of 2008-09 and 2010-11, the Governor’s Budget Office and Legislature under former Gov. Ed Rendell, overestimated by $49.2 million the profits that Pennsylvania’s 600 liquor stores could transfer to the state Treasury.
In FY 2009-10 alone the state overshot its $105 million profit estimate by $32.4 million.
When that happens, PLCB uses previously left-over profits (equity) and cash to make up the difference.
But despite the state’s consistent overestimates, the liquor board still managed to reach deep into its pockets to hand over the $49.2 million in hard cash that it did not bring in through operations in those three years.
But that equity can’t last forever and has in fact dipped into negative territory. That means that until the board replenishes its negative equity (-$32.2 million at the end of FY 2010-11), it will have to rely on its cash flows to satisfy the state government.
According to Wayne Guay, a professor of accounting at the University of Pennsylvania’s Wharton School of Business, the liquor board is indeed raking in cash — just not enough to endlessly withstand the government’s overestimation of the board’s profits.
“If the current level of income persists for the PLCB in the future,” Guay said, “The state will have to revise downward the amount that it can siphon off.”
Liquor board spokeswoman Stacey Witalec confirmed that if the board’s profits are consistently less than what the state demands, “something would have to change.”
Harrisburg’s incinerator to see Senate panel probe
The Senate Local Government Committee will hold a public hearing on Aug. 29, zeroing in on the financial decisions behind Harrisburg’s debt-laden incinerator project.
The city, in its efforts to retrofit a waste-to-energy plant, incurred more than $300 million in debt during the past decade. a juggernaut behind why the state’s capital city is on the list of financially distressed municipalities.
Committee chairman and state Sen. John Eichelberger, R-Blair, said that in this case, officials might not have followed state borrowing laws. Or, the laws were not clear enough to dictate responsible bargaining, he added.
“You’re trying to help the ratepayers in the authority and the taxpayers in the county and in the city, and adding to their debt load? I can’t see where that’s a good thing for the people that live in that area,” Eichelberger said.
The panel will examine how the debt of a municipal authority — in this case, the Harrisburg Authority — is tied to the financial distress of a city. After the hearing, the committee could craft legislation to prevent future infringements, such as creating a new approval process for borrowing money for projects or limiting the types of financing allowed when bonding a project.
Eichelberger also said investigations will include a cursory review of the state Department of Community and Economic Development, which is charged with signing off on bonded projects like those used for the incinerator.
It’s a bipartisan issue – Sen. John Blake, D-Lackawanna, co-chair of the Senate Local Government Committee also said he supports looking at authority debt laws. And when PA Independent asked House Minority Frank Dermody, D-Allegheny about potential fixes to millions in authority debt, he said it’s something lawmakers “ought to take a look at.”
Municipalities could get relief from costly state mandates
This October, the state Senate will hear proposed reforms from the Local Government Commission’s Mandate Study Task Force, a group made up of state lawmakers and municipal representatives.
E.J. Knittel, senior director of education and sustainability for the Pennsylvania State Association of Boroughs and a member of the task force, said legislators, before passing laws, should consider where they’re placing costs.
“When you’ve got 2,500 different municipal governments out there, not counting school districts, you end (up) with a large impact on a little item,” he said.