2008 Budget Hearings
Highlights and Summaries
Thursday, March 6, 2008
Monday, February 25, 2008
Tuesday, February 26, 2008
Wednesday, February 27, 2008
Thursday, February 28, 2008
Monday,
March 3, 2008
Tuesday,
March 4, 2008
Wednesday, March 5, 2008
Hearings
listed alphabetically
here
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This page will be updated frequently.
Department of Public Welfare Department of Public Welfare -
Summary Senator John Rafferty, 44th District, and several Appropriations Committee members expressed opposition to the “carve out” excluding pharmaceutical benefits from the rebidding for state contracts to provide services to Medical Assistance patients. He asked why payment for pharmacy services was not included in the Healthy Choices rebidding process. Department of Public Welfare Secretary Estelle Richman said the change was to save money and told the senator that about $1 billion out of DPW’s $23 billion combined state/federal budget is for pharmaceuticals. Senator Rafferty later suggested that the rebidding could have taken place along two tracks – with and without including payment for pharmaceutical benefits. Senator Rafferty asked if the DPW’s Pharmaceutical and Therapeutics Committee was conducting its meetings in compliance with the state Sunshine Law. Secretary Richman said the meetings are abiding by the law. Senator Rafferty said there have been complaints in his district about administration of the Low Income Home Energy Assistance Program (LIHEAP) related to delayed callbacks and fuel delivery and asked the Secretary to look into it. Senator Bob Regola, 39th District, said he also opposes the pharmacy “carve out”, and asked the Secretary if she considered the change significant. Secretary Richman replied that the change is more about claims processing and that users will not notice a change. The senator urged DPW to delay implementation until the Senate Public Health and Welfare Committee has a chance to hold a public hearing on the matter. Senator Regola noted that spending for home and community based services has been increased in recent years, but the promised savings have not been seen, as the number of nursing home residents has not gone down. Proposed assessments to be levied on hospitals in Philadelphia and Allegheny County raised concerns from Senator Pat Browne, 16th District. The senator said the assessments don’t take into account a facility’s current financial circumstance and amounts to taxing health care services, while allowing counties and the state to use that revenue for non-health care needs. Senator Browne noted that while the number of welfare cash assistance recipients has gone down, the number moving on to work has remained flat. The Secretary said that as the number of cash assistance recipients comes down, the people remaining are harder to employ than those who previously moved into jobs. Senator Browne also advocated additional funding for nurse-family partnerships. Senator John Gordner, 27th District, was among several members to call for a cost-of-living adjustment for community care providers. The senator noted that the AFSCME contract negotiated by the Administration provided raises for Commonwealth employees, but nothing for direct-care providers. When the Secretary noted she had tried to find the $100 million needed to fund a provider COLA, Senator Gordner said the Governor could scrap his “gimmick” to provide a one-time tax rebate to Pennsylvanians who pay no income taxes and use some of the $130 million cost for a COLA. Senator Gordner also expressed concerns over possible changes in medical assistance transportation in rural areas. The Secretary said DPW has only solicited information on improving the system to save money. Senator Mary Jo White, 21st District, noted that a new federal funding formula increases the county share of funding for child support enforcement, but Secretary Richman said the state’s policy has been to not step in and make up the difference caused by federal funding reductions. Senator White noted that county, state and federal taxpayers are essentially the same people and the state would be better suited to pick up the shortfall. Pennsylvania law allows the state to intercept lottery winnings over a certain amount if the winner owes child support, and Senator White asked if the same precedent applies to slots parlors. The Secretary said legislation is pending that would do that. Senator Pat Vance, 31st District, asked about the independent review panel that oversees how domestic violence funds are distributed and whether new money for domestic violence would go primarily to Philadelphia, as it did last year. Secretary Richman said she traditionally does not override the panel’s recommendation unless it is way out of line. She added that the Philadelphia allocation was a one-time payment. Senator Vance said she was concerned about flat funding for county medical assistance, noting that many nursing home residents are on medical assistance. She said it amounts to a funding cut since counties are facing higher costs. Questioned about the creation of 19 new DPW positions, Deputy Secretary Mike Hall said they were necessary to implement Senator Vance’s legislation licensing long-term living facilities in the state. Senator Robert Tomlinson, 6th District, said counties are bracing for a new centralized, statewide payment system for mental retardation services. The Secretary acknowledged that it’s a major change, shifting authority from counties to the state, but Pennsylvania must submit a centralization plan if it wants to continue receiving federal waivers to fund services. She said counties will still administer services and that the state will find a way to make up financial losses tied to the change. Senator Tomlinson asked why early intervention services for birth-to-age-3 receive less funding than programs aimed at children age 3 to 5. It was explained that the birth-to-3 initiatives are run by DPW, while programs for older children are administered by the Department of Education, which must fund COLAs for service providers. Senate Appropriations Committee Chairman Senator Gib Armstrong, 13th District, questioned an $8.8 million request for Facilities and Service Enhancement. The Secretary said it is part of negotiations that have been going on for more than a year with hospitals looking for a different way to deal with rates. Senator Armstrong said he was surprised that it had not been discussed in the last budget either, and that no one could give an explanation for a $500,000 contract with the Philadelphia Treasurer’s Office. He requested further detailed information on the spending. Senator Jake Corman, 34th District, noted that the “carve out” issue had been negotiated out of the budget last year, and that the Secretary could wait until the issue is settled with passage of the 2008-09 budget and then send out bids for the Healthy Choices program. Regarding the lack of COLAs for mental health workers, Senator Corman noted the Governor has proposed many new spending programs, when core needs such as this should be taken care of first. Senator Corman warned that it was risky for DPW to base its budget on the assumption that House Bill 1150 will pass, which would shift the cost of autism services from Medicaid to private health insurance carriers. He also expressed concerns that the insurance mandate would negatively impact premium rates at a time when Pennsylvania is trying to make insurance more affordable. Senator John Pippy, 37th District, echoed Senator Corman’s comments that the Administration should fund COLAs for mental health workers before unveiling new government programs, noting that it is a part of a larger problem in which the Administration cuts good programs because they were legislative initiatives. Senator Pippy urged the Secretary to work with the Legislature on plans to impose new taxes on hospitals in Allegheny County and Philadelphia, saying that more discussion is needed. Responding to a question from Senator Stewart Greenleaf, 12th District, the Secretary said DPW is trying to reduce the size of waiting lists for mental retardation services and is careful that any new policies do not add to the wait. She said it would cost $262 million to eliminate the waiting list. Senator Greenleaf said operators of home health care agencies are overdue for an increase in reimbursement rates. Secretary Richman said DPW is implementing selected increases, but first targeting private duty shift nursing, dentists and primary care physicians. Department of Community and Economic
Development -
During the budget hearing for the Department of Community
and Economic Development, Senator Pat Browne (R-16) comments
on the proposed economic stimulus package. Senator Mary Jo White (R-21) comments on the need to continue
with the phase out of the Capital Stock & Franchise Tax.
Summary Prior to the hearing on the Department of Community and Economic Development, Appropriations Committee Chairman Senator Armstrong recognized and honored Committee Executive Director Tom Starke -- the “Cal Ripken of the Appropriations Committee.” Director Starke is retiring at the end of the year after 23 years with the Appropriations Committee and attending “600 consecutive hearings.” He received an extended standing ovation from the members of the committee. Several Senators voiced their disapproval with the Governor’s proposed cuts to economic development programs during the hearing with Department of Community and Economic Development Secretary Dennis Yablonsky. Senator Pippy said the Legislature was promised a matrix regarding the various programs administered by the Department. He said that listing would help the Legislature make decisions regarding funding for those programs. Senator Pippy also asked who had direct oversight regarding Act 47, specifically as it relates to Pittsburgh. Senator Rafferty asked if the state has any provisions to require successful companies to repay “start up” state funding they received. “If these companies take off, we should be able to recapture some of that money and put it back into economic development and create jobs.” Senator Browne informed Secretary Yablonsky that he has heard that some businesses are not withholding the $1 per week municipal services tax. The Secretary said he would look into the issue. Senator Browne also expressed concerns that Industrial Resource Centers (IRCs) are using state tax money in efforts that are in direct competition with private companies. Senator Browne chided Secretary Yablonsky that the Department is too limited in working to promote economic development. Specifically, he said, the Department is focusing on subsidy stimulus instead of a broad-based approach, using methods such as innovative tax strategies and tax cuts, to get companies to invest in Pennsylvania. Senator Regola commented on a “drastic” $2 million cut in state funding to the St. Vincent Small Business Development Center in Westmoreland County. “To me, that means fewer businesses will be opened and less tax revenue will be coming to the state.” Senator Gordner asked why funding for facilities and infrastructure development grants is not currently being used, yet the Department is asking for additional funding for those efforts in Fiscal Year 2008-09. Senator Gordner noted that the Legislature may consider legislation later this year to extend Keystone Opportunity Zones to promote the development of unused land and potentially expand the program to additional areas. Senator White said senators should be careful in publicly supporting efforts such as PENNTAP and Small Business Development Centers because the Governor then cuts funding for those programs and forces the Legislature to “buy them back.” Senator White also questioned the interdepartmental efforts on issues such as the promotion and funding of alternative fuels in Pennsylvania by both DCED and the Department of Environmental Protection. Senator Roger Madigan, 23rd District, questioned the Department’s role in providing basic infrastructure and utility service to promote and maintain economic development and growth. He cited the case of a kitchen cabinet manufacturing company located near the border with New York. That company, which started eight years ago with 100 employees and is now up to 426 employees, lost two days of production because of a power failure. Senator Madigan also asked if the Department’s targeted investment strategy is making Pennsylvania competitive in the region and internationally. Senator Corman, citing the success of programs like PENNTAP, also stressed the need for the Department to provide a list of priorities. He noted that with additional costs in the proposed FY 2008-09 budget, particularly in personnel expenses, it is “becoming harder and harder to put money back in the budget.” Senator Corman also supported funding for research efforts in Pennsylvania. Senator Mike Waugh, 28th District, asked the Secretary to detail the DCED’s rationale for merging the Machinery and Equipment Loan Fund and the Industrial Development Fund. He also questioned the elimination of funding for emergency responders’ training and municipal code training. Senator Greenleaf discussed with the Secretary what was the investment strategy the Department and Commonwealth pursued when providing funding to start-up businesses, particularly in some high-tech fields. Appropriations Committee Chairman Senator Armstrong agreed that funding venture capital companies can be risky. “When it works out, you’re a hero. When it doesn’t, it’s ‘how could you be so stupid’,” Senator Armstrong said.
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