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Pennsylvania Legislators Flying a Too-Friendly Sky?
Taxpayers pick up tab for conferences in California, union meetings
AUGUST 16, 2010 | Investigative Report by DARWYYN DEYO
Between 2007 and 2009, Pennsylvania’s state legislators spent $52,564.80 on flights within the state and to special legislative conferences and presentations around the country. Some waited until the day beforehand to book their flights, and some lacked receipts for flights costing hundreds of dollars. Of the 59 state legislators who r
Barnes Foundation Moving with RACP Funds
Concerns over national heritage site status persist
JULY 13, 2010 | News Release by DARWYYN DEYO
The art collection of the Barnes Foundation, valued between $25 billion and $30 billion, is being moved to Philadelphia from Lower Merion Township with the use of taxpayer dollars, even while opponents argue the current location, over 80 years old, is eligible for national heritage status. “They're starting to build a replica of the Ba
WAMs Are Still Part of “Bare Bones” Budget
No one knows where the $65M came from
JULY 1, 2010 | Investigative Report by DARWYYN DEYO
Over $65.5 million for special community and development grants, though removed from last year’s budget, are included as part of Pennsylvania’s 2010-2011 appropriations bill, passed Wednesday. The line items, all for the state Department of Community and Economic Development (DCED), are marked as funding for local economic
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Budget Cuts, Natural Gas Tax Will Close Budget Deficit
Spending total reduced to last year's level for General Fund
AUGUST 18, 2010 | by ERIC BOEHM
A new tax, a much reduced number of layoffs, and a series of budget cuts will close Pennsylvania's $280 million deficit, Gov. Ed Rendell announced on Wednesday.
Mr. Rendell said he will move ahead with his plan to cut discretionary budgets by 1.9 percent, creating $212 million in savings to be placed in a budgetary reserve. Another $70 million will come from a new tax on natural gas extraction the state General Assembly has agreed to pass before the end of the year. As part of the budget cuts, the state's subsidy to school districts will be trimmed by $50 million, but the cut is more than made up for with $380 million in education funding included in the federal state aid package.
The total layoffs fall is far short of the 12,000 jobs Mr. Rendell threatened would have to be cut before the federal funds were passed by Congress. He said higher than expected numbers of retirements and the on-going hiring freeze limited the layoffs needed to close the gap to 100 jobs.
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With $212 million cut from the budget, the Pennsylvania's General Fund spending total for this fiscal year will be $27.8 billion, the same amount the state spent last year.
During budget negotiations, legislative leaders agreed to pass a new tax on natural gas extraction by October 1, to go into effect by January 1, 2011. They did not agree on any details of the tax, such as a rate or who will benefit from the revenues.
If the tax bill is not passed on time, another adjustment to the budget would be necessary, said Mr. Rendell.
The plan Mr. Rendell will enact is identical to the proposal he outlined last week.
Senate Republicans suggested some changes, including a plan to move $200 million from the education budget to the state's troubled public pension funds, but Mr. Rendell brushed the idea aside.
More Info:Schools to Get Funding Windfall in Rendell's Plan (8/11/10) State Reps to Rendell: Cut The WAMs (8/11/10) Education Subsidy Could Help Troubled Pension Plans (8/13/10) |
Instead, he suggested Senate Republicans should pass a pension reform bill passed earlier in the year by the state House if they were serious about correcting the public pensions, or they should contribute $200 million from their own legislative accounts.
"The $200 million is a drop in the bucket compared to the benefits of passing [the pension reform bill]," said Mr. Rendell.
"It is disappointing that Gov. Rendell does not share our view that we should use the opportunity presented by this unanticipated federal education funding to help address Pennsylvania's pension crisis," said Erik Arneson, a spokesperson for Senate Majority Leader Dominic Pileggi (R-Delaware).
Mr. Arneson said the issue will have to be reviewed by the new governor who will take office in January.
A group of House Republicans also wrote to Mr. Rendell to recommend he cut discretionary grant programs, called WAMs, from the budget to close the deficit. On Wednesday, Mr. Rendell said those programs would be subject to the 1.9 percent budget cuts, but doing away with them would be bad for the state.
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None of the other legislative caucuses offered substantial changes to the plan.
The state budget for this fiscal year was passed with the inclusion of $850 million in assumed revenues from federal stimulus funds yet to have been passed. When Congress acted to pass the package of stimulus funding for states, it included only 70 percent of the expected amount, leaving Pennsylvania with only $600 million of what was anticipated and a $250 million deficit.
Increasing costs to Medicaid have also created an additional $30 million deficit, and rather than address the shortfall separately with budget cuts elsewhere, the governor's Budget Office decided to roll the two shortfalls together.
Mr. Rendell said he will unilaterally move 1.9 percent of the appropriated budget from the executive agencies into a budgetary reserve fund to prevent those funds from being spent. He has sent a letter to eight administrative agencies - which the governor does not have budgetary control over - asking them to make the same cut.
Gary Tuma, Mr. Rendell's spokesperson, said the funds moved into budgetary reserve can be written off at the end of the year. Although the funds have been appropriated, there is no money to be spent, so the budgetary reserve is the equivalent of an empty bank account.
Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com
State Education Subsidy Could Help Troubled Public Pension Plans
Senate Republicans respond to Rendell’s plan
AUGUST 13, 2010 | by ERIC BOEHM
Senate Republicans are looking at $380 million in extra education funding from the federal government as an opportunity to address the state's public pension crisis without cutting funding to school districts.
Leaders of the Senate's majority caucus formally responded Friday to Gov. Ed Rendell's plan for allocating the more than $600 million Pennsylvania will receive from the federal government as part of the stimulus extension package passed earlier this week. On Tuesday, Mr. Rendell proposed using $380 million of the new funds for basic education, while cutting $50 million from the state's education funding and $160 million from elsewhere in the budget to help fill the state's $280 million deficit. A new tax on natural gas would also help close the budget hole.
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In this year's budget, basic education subsides from the state to local school districts were boosted by $250 million, a major priority of the governor during budget negotiations in June.
In their response on Friday, Senate Republican leadership suggested maintaining the cuts proposed by the governor, but with one addition.
"We believe that the most responsible course of action for the taxpayers, the Commonwealth, and school districts is to redirect the remaining $200 million in state funds to help meet the state's pension obligations," wrote the Senate Republican leaders.
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Since the extended federal funding will provide $380 million for education, school districts in Pennsylvania will end up with a total of $130 million more than they had received in the original budget, even with the senators' proposed cuts.
"In these difficult economic times, that is an extraordinary outcome," wrote the senators.
A spokesperson for Mr. Rendell's office said the governor was waiting for responses from the other three legislative caucuses before commenting.
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Senate Response to Rendell 081310The letter - signed by Senate President Joseph Scarnati (R-Warren), Majority Leader Dominic Pileggi (R-Delaware), and Appropriations Committee Chair Jake Corman (R-Centre) - called attention to Mr. Rendell's own statements on the need for state pension reform.
"You properly noted that we would be ‘sticking our heads firmly in the sand' if we do not address the pension crisis. No matter what pension reforms are adopted legislatively, everyone recognizes the great need for additional funding in both the Public School Employees' Retirement System (PSERS) and the State Employees' Retirement System (SERS)," wrote the senators.
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The state pension plans have been underfunded for much of the past decade and suffered major investment losses during the recent economic downturn. A major "spike" in pension payment rates to make up for the low contributions made by the state as a part of a 2001 law realigning pension contributions is scheduled for 2012. By some estimates, the state may need to infuse the pension plans with as much as $5 billion per year for more than 20 years to properly fund the plans - meaning tax increases at the state and local level of as much as $1,500 per household.
Rick Dreyfuss, a retired actuary and pension expert with the Commonwealth Foundation, a Harrisburg think tank, said the pension plans need more than $200 million to fix their problems.
"This amount will have little impact given the magnitude of the deficits, although it is certainly better than not contributing the $200 million," said Mr. Dreyfuss. He also wondered why the Senate Republicans were now proposing pension reforms after all four caucuses chose to cut PSERS and SERS funding during budget negotiations.
"Where was all this principled thinking on properly funding our pension plans back in June?" he asked.
Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com
State Reps to Rendell: Cut the WAMs
Claim $100 million could be saved
AUGUST 11, 2010 | by ERIC BOEHM
Note: This story has been updated from its original form. See bottom of story for details.
The same day that Gov. Ed Rendell unveiled his plan for dealing with a $280 million state budget deficit, state Rep. Curt Schroder led a group of 27 House Republicans who sent a letter to the governor calling for pork projects, called WAMs, to be cut.
"Use your Executive authority to eliminate all discretionary grant programs, sometimes referred to as WAMs," wrote the representatives. They provided the governor with a list of 14 grant programs they believe should be trimmed from the budget, saving the state $100 million.
WAMs, or Walking Around Money, is a nickname given by some legislators to the discretionary grant programs operated by various state agencies. Individuals, businesses, and other organizations can apply through the executive branch to receive funding from those programs.
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"Certainly Rep. Schroder is entitled to his opinion, but just because he or any elected official refers to a program as a WAM does not make it so," said Johnna Pro, a spokesperson for state Rep. Dwight Evans (D-Philadelphia) the House Appropriations Chair.
Ms. Pro said the spending by the state is frequently "in the eye of the beholder." Communities and organizations which receive funding through the grant programs would be hurt by cutting them, she said, pointing to one grant which provided $10,000 to an ambulance association.
Mr. Evans flatly denied the existence of WAMs in the budget when he was asked about it shortly before the budget passed in the House.
"While some line items have names reflecting economic development for these troubled times, let's not engage in semantical discourse about the nature of these funds. They are to be used in a discretionary fashion and are therefore WAMS," reads a portion of the Republican representatives' letter.
The authors of the letter noted the budget line items they targeted were either not funded in the fiscal year 2009-2010 budget or they were not funded as part of the original budget proposal made by the governor in February.
State Rep. Jerry Stern (R-Blair) was the only one to sign the letter who had also voted for final passage of this year's budget, which included the discretionary grants in the first place.
Correction: This story originally reported that state Reps. Matt Gabler (R-Clearfield) and Randy Vulakovich (R-Allegheny) voted for final passage of the budget on June 30. They voted against it. PA Independent regrets the error.
Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com
