2009 Pennsylvania Senate Budget Hearings

Week 1 Summaries - (PDF)
Week 2 Summaries - (PDF)
Senate GOP Budget Page

3/10/09 - Senate Consumer Protection and Professional Licensure Committee Hearing on PUC Budget
- 1 hour 33 minutes

Budget Secretary 2 hours 20 minutes

Senator Jake Corman, chair of the Senate Appropriations Committee, reminds the Administration that one-time Federal Stimulus dollars should not be earmarked to fund permanent state programs.

Senator Pat Browne (R-16) raises concerns about tax increases in difficult economic conditions to Acting Secretary of Revenue, Stephen Stetler.

Senator Lloyd Smucker (R-13) comments on the need to curb state spending and maintain fiscal responsibility during an economic downturn.

Senator Mike Waugh (R-28) questions using a large portion of the state’s Rainy Day Fund to balance this year’s budget.

Senator Mary Jo White (R-21) urges the Administration to continue leasing out small portions of state park land to natural gas developers in the Marcellus Shale Natural Gas field.

Summary

The Senate Appropriations Committee closed its first day of hearings on the Governor's proposed Fiscal Year 2009-10 budget with a session with Budget Secretary Mary Soderberg and Acting Revenue Secretary Stephen Stetler.

Appropriations Committee Chairman Senator Corman opened the hearing by noting that the federal stimulus package has changed -- with more funding for education and less for public safety -- since the Governor unveiled his proposed budget. He asked whether the changes in the federal package would result in alterations in the Governor's proposal for Fiscal Year 2009-10. Senator Corman added that the Appropriations Committee plans to hold follow-up hearings to monitor the changes.

Senate Finance Committee Chairman Senator Browne noted a current balance of $650 million in the Property Tax Relief Fund -- not counting a $100 million reserve balance -- and asked whether the Administration has plans to use that money. "It seems to me to be a little bit too high," he said. Senator Browne also questioned the Administration's proposed tax increases. While the Governor said the increases were not "broad-based," the proposal to allow counties to increase sales taxes would in fact be broad-based if every county imposes it, Senator Browne said.

Senator Rafferty asked about the proposal to fund higher education assistance through legalized video poker. He noted that the chairmen of the two Senate committees that would have oversight over the initiative have not received any details about the proposals. "We have not seen anything or heard anything since the governor's pronouncement," Senator Rafferty said. Senator Rafferty asked Secretary Soderberg to allow "full disclosure" by notifying the legislature if Administration or General Assembly added line items in the budget for "pet projects."

Senator Gordner asked if the Administration factored in the impact of the federal 61 cent-per-pack cigarette tax increase on the Governor's proposal to increase Pennsylvania's cigarette tax by 10 cents-per-pack. Senator Gordner noted that lottery fund revenues are down in counties where gaming is permitted and asked whether the Department of Revenue is monitoring those trends.

Senator Vance read from a Legislative Budget and Finance Committee report showing a clear decline in lottery revenues in counties that have gaming facilities. Senator Vance added that the Administration's projection of a 7.9 increase in lottery sales in the upcoming fiscal year is likely unrealistic. Noting that surviving spouses ages 50 and over are eligible for the Property Tax/Rent Rebate Program, Senator Vance asked whether the Commonwealth should adjust that age requirement.

Senator Jane Orie, 40th District, asked how the Administration monitors "no-bid contracts" and the millions of dollars spent for legal and other services. Senator Orie asked Secretary Soderberg if she has had any discussions with the Governor on reforming the process to provide transparency and eliminate the appearance of impropriety.

Appropriations Committee Vice Chairman Senator Robert Tomlinson, 6th District, asked how the Administration selected a $500 licensing fee for proposed video (poker) lottery terminals. Senator Tomlinson asked whether any of the existing gaming venues would be eligible to receive any refunds of their $50 million licensing fees if the Commonwealth permits video poker.

Senator White asked about the proposal to raise $107 million in revenue from a new severance tax on natural gas extraction. She noted that the current price of natural gas has dropped significantly and reached the lowest level in six years. Senator White also questioned the wisdom of placing a tax on an industry that is just beginning to start up operations in Pennsylvania.

Senator Baker asked if the Administration considered providing local municipalities with benefits from the severance tax on natural gas extraction. Secretary Stetler said the Administration didn't consider local communities when developing the tax. Senator Baker also asked the Administration to make it easier for local emergency responders to take advantage of a new personal income tax credit.

Senator Smucker questioned the 4.6 increase in spending in the proposed Fiscal Year 2009-10 state budget considering the current difficult economic climate. Senator Smucker and Senator Mike Waugh, 28th District, raised concerns about the Administration's proposal to eliminate the 1-percent discount given to retailers for collection of the state sales and use tax. "Don't you think there will be some negative consequences?" Senator Smucker asked.

Senator Waugh noted the Administration's proposal to use 83 percent of the current balance of the Rainy Day Fund to balance the budget. "Is it a prudent move to deplete our Rainy Day Fund and not look ahead?"

Senator Greenleaf noting that eviction for failure to pay property taxes is a problem particularly in Southeastern Pennsylvania, inquired about enrollment in the Property Tax/Rent Rebate Program. Senator Greenleaf asked whether the Department of Revenue is working to raise public awareness about the program.

Senator John Pippy, 37th District, noted the proposed new tax on Other Tobacco Products (36 cents-per-ounce on loose tobacco and 36 cents-per-10 cigars) and asked how the Administration set those rates. Senator Pippy asked for information on similar taxes imposed by other states.

Appropriations Committee Chairman Senator Corman said Pennsylvania must go beyond "treading water" and look toward protecting the fiscal stability of the Commonwealth into the future. Senator Corman said Pennsylvania must be careful in how it invests the federal funding. "Where I get nervous is money being pumped into the general fund for recurring costs. We are going to need some plan to phase ourselves off of it or we will be facing a tremendous (funding) hole."

Department of Aging 1 hour 31 minutes

Senator John Rafferty (R-44) urges Acting Secretary of Aging John Michael Hall to consider the impact legalizing video poker would have on the lottery, which funds numerous programs for seniors.

Senator Lisa Baker (R-20) comments on the importance of qualified caregivers in the Commonwealth.

Summary

Members of the Senate Appropriations Committee questioned Acting Secretary of Aging John Michael Hall on a number of issues, including a proposal to combine the Department of Aging with the Department of Public Welfare and the impact of casinos on lottery revenues.

Citing waiting lists in a number of counties, Senate Appropriations Committee Chairman Senator Jake Corman, 34th District, and Senator Greenleaf, 12th District, asked Acting Secretary Hall if there is sufficient funding to provide nutritional services to seniors who want to remain in their homes and what could be done to reach more people in need.

Senate Aging and Youth Committee Chairman Senator Pat Vance, 31st District, wanted assurances that Area Agencies on Aging would continue to have a strong role in the expanded Department. Under questioning by Senator Lloyd Smucker, 13th District, Acting Secretary Hall said the merger would result in cost savings and improved delivery of services.

Senator John Rafferty, 44th District, said he is concerned about the impact of gaming on lottery revenues and the services that senior citizens receive from lottery funds. He added that the Governor's plan to legalize and tax video poker machines could mean fewer dollars spent on the lottery.

"It seems to me that we keep going after the same dollar, and I think we have to realize that this is a cautionary wind," Senator Rafferty said. "There's just so much water in the well." He urged the Department to study the impact of expanded gambling and how it would impact lottery funding.

Senator John Gordner, 27th District, also urged further study of the issue, citing a study which found that lottery revenues are down in counties where there are casinos and in adjoining counties.

Those concerns were echoed by Senator Jane Orie, 40th District, who said "I hope that you will look and see if gambling is going to detrimentally impact the services that we provide to seniors." Senator Orie also urged the Department to look at ways that technology can be used to provide better health care.

Noting that more people are taking advantage of home and community care, Senator Lisa Baker, 20th District, wanted to know if the Department has sufficient funding and workforce to support seniors who choose to remain in their homes. She also urged the Department to work closely with the veterans' homes to coordinate care or veterans.

Department of Agriculture 1 hour 43 minutes

Speaking to Secretary of Agriculture Dennis Wolff, Senator Mike Brubaker (R-36) expresses disappointment in funding cuts proposed by the Governor, despite the importance of the agriculture industry to the Pennsylvania economy.

Senator Mike Waugh (R-28) addresses the drastic agricultural budget cuts proposed by the Governor.

Senator Lloyd Smucker (R-13) commends Secretary of Agriculture Dennis Wolff on doing more with less, and urges the Administration to do the same.

Senator Lisa Baker (R-20) comments on the difficulties being faced by dairy farmers across the Commonwealth.

Senator Mary Jo White (R-21) addresses problems with the state’s Nutrient Credit Trading Program.

Summary

Senate Appropriations Committee Chairman Senator Jake Corman, 34th District, focused on proposed cuts to vital agricultural programs during the Senate Appropriations Committee budget hearing with Department of Agriculture Secretary Dennis Wolff.

Senate Agriculture and Rural Affairs Committee Chairman Senator Mike Brubaker, 36th District, said the proposed cuts in the Department of Agriculture’s budget were more serious than those made in other areas of the General Fund budget.

Senator Mike Waugh, 28th District, criticized the number of line items that would be reduced or eliminated under the Governor's proposal and urged Appropriations Committee members to consider if the cuts were appropriate in comparison to those made to budgets for other departments.

Senator John Rafferty, 44th District, expressed concerns about funding cuts for conservation districts. Senator Pat Vance, 31st District, asked Secretary Wolff to provide additional information on the possibility of conservation districts losing the ability to provide input on stormwater management.

Senator Lloyd Smucker, 13th District, questioned the potential impact of proposed cuts to the Animal Health Commission and the Crop Insurance Program.

Senator Lisa Baker, 20th District, asked for additional information on the state’s efforts to ensure food safety in light of the recent salmonella outbreak linked to peanuts. Senator Mary Jo White, 21^st District, asked how the Governor's Interagency Council on Food and Nutrition was working to eliminate hunger.

Department of Community and Economic Development 1 hour 21 minutes

Senator Mary Jo White (R-21) raises concerns about a lack of funding for tourism and heritage parks across the Commonwealth.

Senator Pat Vance (R-31) questions the Administration’s decision to cut successful, existing tourism and community development programs.

Senator Pat Browne (R-16) comments on Pennsylvania’s strategy for continuing economic development to acting DCED Secretary George Cornelius.

Senator Jake Corman, chair of the Senate Appropriations Committee, comments to Acting DCED Secretary George Cornelius about the need for multiple state agencies to take an active role in the Marcellus Shale Natural Gas field development.

Senator Mike Waugh (R-28) comments on the opportunities presented by this year’s difficult budget situation.

Summary

Members of the Senate Appropriations Committee questioned the Administration’s cuts in funding for tourism and economic development programs during the afternoon budget hearing with Department of Community and Economic Development Acting Secretary George Cornelius.

Noting a 40 percent cut in funding for tourism programs, Senator Mary Jo White, 21st District, asked if those reductions indicated a change of priorities on the part of the Administration. "It seems shortsighted to me to take our number two industry and cut its funding by 40 percent," Senator White said. She expressed concerns about the Administration’s minimal repayments on a $100 million loan from the Underground Storage Tank Indemnification Fund (USTIF).

Senator John Rafferty, 44th District, noted the elimination of state funding for accredited zoos and other programs and commented that the Administration expects the Legislature to restore the funding. "We go through this exercise every year," said Senator Rafferty. He asked if DCED checks tax delinquency files before awarding grants.

Senator Pat Vance, 31st District, expressed concerns about reductions in funding for tourism and other worthwhile programs while providing money for new initiatives. Senator Vance asked if DCED considers the cost-per-job under the state’s film tax credit program.

Senator Lisa Baker, 20th District, asked for an explanation of the cuts in tourism funding. She said it appeared that the funding was shifted from Pennsylvania’s rural areas to urban centers, especially Philadelphia. Senator Baker also asked for an update on the allocation of local share dollars to communities with casinos. Senator Baker wanted an explanation for the cuts in funding to economic development programs with a track history of proven success.

Senator Pat Browne, 16th District, requested an update on the consolidated earned income tax program. Senator Browne asked if the cuts in economic development programs mark a "change in strategy" by DCED. Senator Browne questioned the practice of awarding state money to companies that move within Pennsylvania.

Senator Mike Brubaker, 36th District, questioned a 25 percent cut in a tax credit under the Neighborhood Assistance Program that benefits local food banks. Senator Brubaker noted a practice under which third parties are being used to secure grants, charging a commission, and sending the balance to the ultimate recipient.

Senator Mike Waugh, 28th District, also supported restoration of state funding for tourism programs. Senator Waugh asked what grant programs were available under DCED to upgrade municipal wastewater treatment plants. He also wanted to know if grants under the H2O PA program would be need-based.

Senator Stewart Greenleaf, 12th District, requested an update on the awarding of grants under the H2O PA program. Senator Greenleaf asked if the Department matches applications it receives against the list of all available grant programs.

Appropriations Committee Chairman Senator Jake Corman, 34th District, wanted to know if DCED was involved in the development of Marcellus Shale natural gas extraction in Pennsylvania. "This is a once in a lifetime opportunity for job growth in Pennsylvania," Senator Corman said. Senator Corman asked whether Pennsylvania would be better off if it eliminated state economic development programs and reduced taxes. Senator Corman said the Appropriations Committee would be looking for an analysis of the programs under DCED.

Department of Conservation and Natural Resources 1 hour 36 minutes

Senator Pat Vance (R-31) comments on the value and importance of Heritage Parks in the Commonwealth to Secretary of Conservation and Natural Resources Michael DiBerardinis.

Senator Mary Jo White (R-21) calls on the Administration to consider the placement of more cell phone towers in rural areas of the state.

Senator Lloyd Smucker (R-13) questions DCNR Secretary Michael DiBerardinis about funding for the Pennsylvania Heritage Area Program.

Summary

Senator Mary Jo White, 21st District, who chairs the Senate Environmental Resources and Energy Committee, asked Department of Conservation and Natural Resources (DCNR) Secretary Michael DiBerardinis for an update on Marcellus Shale field leases. The Secretary said 74,000 acres of land have brought in $190 million in leases, or about $2,500 per-acre. (The Secretary later cautioned that gas prices have declined and that the average lease is now between $300 and $900 per acre.) As for remaining property, Secretary DiBerardinis said 666,000 acres of state-owned land remain available for drilling, of which the state controls surface and subsurface rights on 370,000 acres. An additional 180,000 acres are set aside for wildlife habitat.

Senator White noted that the Governor's proposed budget is balanced with a severance tax on drilling, which hasn't passed the Legislature. She said that while the greatest revenues to the state will come from future royalties on drilling, lease payments can be collected immediately.

The Senator asked for an update on Act 129, which authorized the hiring of consultants on carbon sequestration. Secretary DiBerardinis said bids have gone out. On the reported increase in DCNR fee revenue, the Secretary said it was due to small hikes in fees for camping and cabin rentals.

Senator White noted that Growing Greener legislation enacted in 2005 included a $90 million block grant for counties to use at their discretion. Secretary DiBerardinis said he was apprehensive with that approach at first, but it has worked well, with most counties using the funds to disperse community grants. Senator White also urged DCNR to reconsider the moratorium on cell towers on DCNR property, pointing out that some rural areas have "dead zones" for cell phone reception, which affect tourism and public safety.

Senator Lloyd Smucker, 13th District, asked the Secretary to provide a written breakdown of DCNR land in the Marcellus Shale field and wondered why land had been set aside for non-use. The Secretary said the Department is trying to maintain the 100-year forest growth cycle that is the national standard. Regarding future leases, the Secretary reported that DCNR expects to secure leases on additional acres over the next nine months.

The de-funding of Heritage Regions was a concern for Senator Mike Brubaker, 36th District, and several other Appropriations Committee members. The Secretary said DCNR contributed $1.9 million to the 12 designated areas and encouraged them to apply for grants to help weather the budget cuts. Senator Brubaker also noted the removal of funds for the PA Map program, which is producing digitized maps of the state. The Secretary said he hopes federal "stimulus" dollars will free up state funds to keep the $6 million program operating.

On the de-funding of Heritage Regions, Senator John Rafferty, 44th District, asked if that means that Heritage sites will receive priority when applying for Growing Greener or Key '93 funds. Senator Rafferty said Heritage sites teach conservation and attract tourism and economic development and should be a priority in funding decisions.

Senator Lisa Baker, 20th District, said rural Heritage sites rely on state funds for operating revenue, and without funding they will find it difficult to keep their doors open. Senator Baker said those sites should receive priority funding over larger sites. She then asked about the maintenance backlog in state parks. The Secretary said there are always infrastructure needs, but that the Administration has invested $418 million in those projects.

Senator Pat Vance, 31st District, asked if DCNR's projected $15 million drop in realty transfer tax revenue for the Key '93 Fund was realistic. Deputy Secretary James Grace said it was. On Heritage Parks, Senator Vance urged DCNR to spread the "pain" of funding cuts equally.

Beyond securing leases, DCNR must ensure the safety of drilling in the Marcellus Shale field, said Senate Appropriations Committee Vice Chairman Senator Tommy Tomlinson, 6th District. He inquired about safety issues regarding gathering lines, the load on the lines, and who oversees safety. The Secretary said there are few existing pipelines in eastern Pennsylvania, so most will have to be built with a host of companies handling the work.

Noting that the Lehigh River Gorge has produced numerous economic benefits, Senator Stewart Greenleaf, 12th District, urged DCNR to continue supporting whitewater recreation. The Senator also expressed support for the Rails-to-Trails initiative. Deputy Secretary Cindy Dunn said the Department works with PennDOT to support local efforts and they are trying to better integrate the trails with surrounding landscapes to expand the economic benefit to "trail towns" and "river towns."

Senator Jake Corman, 34th District and Chairman of the Senate Appropriations Committee, asked for an update on the development of a state park Nature Inn in his district. The Secretary said the lodge will be similar to a bed and breakfast. Groundbreaking was in the fall, with a scheduled opening in the spring of 2010.

Department of Corrections 1 hour 51 minutes

Senator Lloyd Smucker (R-13) discusses concerns with the growing Department of Corrections budget with Corrections Secretary Jeffrey Beard.

Senator Jane Orie (R-40) discusses her proposed legislation to expand Alternative Courts with Secretary of Corrections Jeffrey Beard.

Summary

Pennsylvania's recidivism rate and the costs of incarcerating illegal aliens were among the issues raised by the Senate Appropriations Committee during a Tuesday afternoon budget hearing with state Corrections Secretary Jeffrey A. Beard.

Appropriations Committee Chairman Senator Corman, 34th District, said the Committee is considering the effectiveness of state programs across the board. Senator Corman said that Pennsylvania's recidivism rate is a measurement of the effectiveness of the Department of Corrections' programs. He specifically asked about the effectiveness of training programs such as Operation Outward Reach, which provides training in construction skills. Funding for Operation Outward Reach was eliminated from the Department of Corrections' proposed budget for Fiscal Year 2009-10.

Secretary Beard said those training courses are usually successful, in part because "better inmates take advantage of those programs."

Senate Judiciary Committee Chairman Senator Stewart Greenleaf, 12th District, asked whether recent incidents of violent crime in Philadelphia and Southeastern Pennsylvania could be attributed to "technical parole violators" and an insufficient complement of parole officers. Senator Greenleaf asked whether the violent incidents -- especially those targeting police officers -- were being perpetrated by "radical Muslims."

Senator Jane Orie, 40th District, requested documentation on illegal immigrants in state custody, including the number of inmates, the cost of incarceration and the amount of reimbursement from the federal government for holding those prisoners. Secretary Beard expressed support for Senator Orie's legislation for alternative courts (mental health and drug courts) as expeditious and cost-effective options for criminal justice. Senator Orie also requested an update on State Correctional Institution (SCI) Pittsburgh and the use of state vehicles by the Department.

Senator John Rafferty, 44th District, asked Secretary Beard to detail physical plant improvements as well as staff and management programs that will be used at the new SCI Graterford – a new facility that will replace the existing maximum security facility at that site. Senator Rafferty asked how the Department treats inmates with serious medical conditions.

Responding to Senator John Pippy, 37th District, Secretary Beard said it costs $33,000 a year to incarcerate a prisoner in a SCI. Senator Pippy asked whether the Department is considering other more cost-effective measures for handling non-violent offenders.

Senator Pat Vance, 31st District, noted an increase in medical care costs and asked why the Department solicited separate contracts for physical health care, mental health care and pharmaceutical services. Responding to Senator Vance, Secretary Beard said the Department is holding about 300 to 400 violent predators or sexually violent predators who have served their time, but remain incarcerated because they cannot be placed in a halfway house or other appropriate facility.

Senator Lloyd Smucker, 13th District, asked about crime trends and whether there is a noticeable increase in violent crime. Senator Smucker wanted to know how the Department monitors the effectiveness of its rehabilitation programs.

Senator Mary Jo White, 21st District, asked whether passage of legislation to address non-violent individuals (parole and sentencing reform) would reduce the inmate population enough to allow the Commonwealth to hold off on building one new prison. Senator White also asked about the costs of incarcerating older individuals (8,100 over age 50) and those with medical problems.

Senator John Gordner, 27th District, asked whether the withholding of a COLA ($4.2 million) and a freeze on step increases ($1.6 million) for non-union employees was reflected in the proposed budget for Fiscal Year 2009-10. Senator Gordner also asked whether a new law banning mandatory overtime was increasing the Department's costs.

Senator Mike Brubaker, 36th District, noted that 49,000 individuals are currently incarcerated in a system with a total capacity of just over 41,500. He asked whether that (7,000) overcapacity is in violation of any federal laws or guidelines. Senator Brubaker also asked how Pennsylvania's recidivism rate matches up the national average, adding that he is not satisfied with Pennsylvania's current recidivism rate.

Senator Lisa Baker, 20th District, discussed public awareness issues and concerns about illegal aliens in State Correctional Institutions, especially SCI Waymart in her district. She asked about the Department's efforts to deport those inmates and return them to their homelands. Senator Baker also requested information about the state and federal resources available to assist military veterans and the proper allocation of funding for services provided to those individuals.

Senator Pat Browne, 16th District, asked about a Department pilot program to assist prisoners in reentering society. Secretary Beard said it was not effective.
Noting that Bucks County taxpayers are paying $5 million to house state prisoners in county facilities, Appropriations Committee Vice Chairman Senator Robert Tomlinson, 6th District, asked Secretary Beard about the efforts being made to address that issue.

Department of Education (Basic Education K-12) 2 hours

Senator Lisa Baker (R-20) questions Secretary of Education Gerald Zahorchak about the Administration's proposal to close the Scranton State School for the Deaf.

Senator John Rafferty (R-44) calls on the Administration to continue working with the Legislature to control rising property taxes.

Senator Mary Jo White (R-21) questions the judgment of the Administration’s decision to eliminate funding for the popular and successful Science in Motion program.

Senator Jane Orie (R-40) raises concerns to Secretary of Education Gerald Zahorchak about the proposed new graduation assessment test.

Senator John Pippy (R-37) comments on the challenges of funding growing special education programs.

Senator Stewart Greenleaf (R-12) comments on the percentages of state funding for education in various regions of the Commonwealth.

Senator Jake Corman, chair of the Senate Appropriations Committee, urges Secretary of Education Gerald Zahorchak to take the long view with regards to education funding to avoid serious shortfalls in the future.

Summary

Senate Appropriations Committee Chairman Jake Corman, 34th District, questioned the Administration's scrapping of its pledge to keep in an education "lock box" the $300 million in planned state Basic Education Subsidy funding that was supplanted by federal "stimulus" dollars.

State Education Secretary Gerald L. Zahorchak said the state had other budget needs to be addressed. Senator Corman noted that the "stimulus" funds last for only two years, leaving the state to pick up the tab for $1.5 billion to meet costing-out study obligations, in addition to billions of dollars in new costs for welfare and pension obligations. "The economy will not grow that much," Senator Corman said. He called on the Administration to prepare a minimum five-year plan to transition from "stimulus" money.

Senator Corman also requested the Secretary provide the Committee with three areas of information: the process of measuring results of various education programs; details of a proposed change in the cyberschool funding formula; and all information related to the decision to close the Scranton State School for the Deaf.

Senator Lisa Baker, 20th District, noted the presence of students from the Scranton State School for the Deaf and challenged the Administration's decision to close the school. Secretary Zahorchak said talk of closing the school spanned two Administrations. He said services could be provided through Intermediate Units and that most states educate deaf students with private schools. Senator Baker said parents deserved more notice than a letter and that the school submitted a cost-savings plan a year ago, but never heard back from the Department.

Senator John Rafferty, 44th District, asked if the Administration offered a plan to cap school district administrators and other cost-saving moves before proposing a consolidation of school districts. The Senator said the Legislature could have drafted such measures as an interim step before consolidation. Senator Rafferty said he is drafting legislation to secure additional property tax relief funding for Southeastern Pennsylvania.

Senator Mary Jo White, 21st District, noted that the Administration is forging ahead with a $22 million plan to supply laptops in schools despite the findings of a federal study that showed no difference between students supplied with school laptops and those who were not. The Secretary said other studies showed computers made teachers and students more "engaged." Senator White asked that the Department provide those studies.

Senator White questioned why the Administration scrapped the Science in Motion program, which provides science education to 180 school districts for $2.4 million in favor of Science: It's Elementary, which reaches only 141 schools at a cost of $13.6 million.

Senator Lloyd Smucker, 13th District, asked for a breakdown of federal "stimulus" dollars in the education budget. Secretary Zahorchak said the state will receive $1.9 billion to use over two years with 81 percent to be used for direct education. The first year includes $779 million, fully funding the recommendations of the costing-out study, the Secretary said.

Senator Pat Vance, 31st District, asked how the Commonwealth could sustain education funding, without a tax increase, after the "stimulus" money runs out in two years. The Secretary insisted it could be achieved with revenues supplied by a healthy economy. When Senator Vance asked if there were studies that showed school district consolidation saved money in the long run, the Secretary suggested she look at other states with county school districts, their test scores and their costs-per-student. When asked about the request for more money for Pre-K Counts, the Secretary cited a report that showed a spinoff of $2.10 for every dollar spent on pre-kindergarten education.

Senator Mike Brubaker, 36th District, noted that the state covers 16 percent of local special education costs regardless of the number of special education students in each district. He asked if the Department would work with him to develop a pro-rated formula. The Secretary said he would, but insisted that more pre-K programs will ultimately reduce the number of special education students and costs. Senator Brubaker asked about oversight of federal "stimulus" dollars for education. The Secretary said it's mostly formula driven, with monitored Title I programs receiving the bulk of the funds. Senator Brubaker asked if Pennsylvania ever funded 50 percent of local education costs. Secretary Zahorchak said the state provides about 44 percent and the 50 percent goal never existed in practice.

Following up on earlier concerns, Senator Jane Orie, 40th District, noted that federal "stimulus" funds will run out in two years, and after the current Governor and Education Secretary leave office, the Legislature will be left trying to close the funding gap. Senator Orie noted that while other states are holding the line on new spending in tough economic times, Pennsylvania's Education Department is embarking on new programs such as Graduation Competency Assessments.

Senator Orie said it was hard to believe that 56,000 Pennsylvania graduates last year were "not competent" to graduate. She also criticized the Secretary for not acting sooner, noting that he has been Deputy Secretary or Secretary since 2002 and could have compared local assessments to PSSA scores sooner.

On the school district consolidation proposal, Senator John Pippy, 37th District, asked how the Administration came up with 100 districts as a goal. The Secretary said they started with the concept of county-based districts, but that the number was not as important as the process. He said the Legislature would come up with an optimal size for districts and draw new district lines. Senator Pippy noted that he chairs the Legislative Budget and Finance Committee, which already conducted a similar study.

Senator Robert Tomlinson, 6th District, said the Department acknowledged two years ago that many students are identified as "special ed" who should not have been and asked if that has been corrected. Senator Tomlinson noted that the two-year "stimulus" funding will provide some relief, but that the special education funding formula remains faulty and needs to be fixed.

Senator Stewart Greenleaf, 12th District, told the Secretary that the Basic Education Subsidy formula is not fair, noting that seven of the school districts in his district are receiving a 2 percent increase in funding, with the state funding share totaling only 15.3 percent. While his districts are gaining students, other districts that are losing students have state revenues accounting for up to 75 percent of their funding. The Secretary said that it costs more to educate poor children and students who don't speak English.

On special education funding, Senator Greenleaf said each new special education student can cost a school district $200,000, with the federal government never coming through with promised funding. He asked why the state does not take over funding. Secretary Zahorchak said the funding formula deserves more discussion.

Department of Education (Higher Education) 1 hour 54 minutes

Senator Jake Corman, chair of the Senate Appropriations Committee, comments on the lack of a funding commitment to Higher Education by the Rendell Administration.

Senator John Rafferty (R-44) comments on the growth and importance of community colleges across the Commonwealth.

Senator Mary Jo White (R-21) calls on the Administration to avoid forcing the Legislature to "buy back" successful programs in the budget.

Summary

Senate Appropriations Chairman Senator Jake Corman, 34th District, questioned the Administration's commitment to higher education during the afternoon budget hearing with state Education Secretary Gerald L. Zahorchak.

Senator Corman pointed out that since Governor Rendell took office, the education budget has grown more than 43 percent. However, the State System of Higher Education has received a funding increase of just 10 percent during the Governor's tenure and state-related universities have suffered an overall funding reduction under the current Administration.

Responding to a question from Senator Mike Brubaker, 36th District, Secretary Zahorchak said that if the Governor's expanded gaming proposal receives legislative approval, video poker machines could be in bars and taverns by this fall. Senator John Rafferty, 44th District, voiced concerns that the Administration's expanded gaming proposal would not be in place in time to provide any assistance to students who are counting on additional state assistance this year.

Senator Lloyd Smucker, 13th District, cited a proposed 20 percent reduction in funding to the Thaddeus Stevens School of Technology and asked why funding would be cut for a proven educational institution while other unproven programs receive an increase.

Senator Mary Jo White, 21st District, asked if the Department of Education has held hearings on the costing-out study and expressed concerns about the increased cost of transporting students to schools in rural areas.

Senator Lisa Baker, 20th District, echoed Senator White's concerns about the cost of transporting students in rural districts and urged the Department to put a mechanism in place to help rural school districts with transportation costs.

Senator Pat Vance, 31st District, asked why student achievement hasn't seen a dramatic improvement in light of the steep increases in education spending.

Senator Stewart Greenleaf, 12th District, expressed concerns that many senior citizens in his district would be exposed to further property tax increases based on the Administration's basic education funding formula.

Senator Mike Waugh, 28th District, asked the Department to improve the process for school design and construction to reduce costs to taxpayers.

Following up on her questions about Graduation Competency Assessments from this morning's hearing, Senator Jane Orie, 40th District, cited a recent report by Achieve, Inc. in which the organization distanced itself from graduation tests. Senator Orie pointed out that the Governor is a member of the Achieve, Inc. Board of Directors.

Appropriations Committee Chairman Senator Corman pointed out the Administration's practice of masking the true size of the state budget by cutting vital line items that the General Assembly would be expected to restore. Senator Corman and several committee members repeated requests for the Administration to submit a budget that is a more honest reflection of the Administration's spending priorities.

Department of Environmental Protection 1 hour 53 minutes

Senator Jake Corman, chair of the Senate Appropriations Committee, urges Acting DEP Secretary John Hanger to streamline the drilling permit process for the Marcellus Shale Natural Gas field.

Senator John Rafferty (R-44) urges restraint on projections for state revenues from taxation of the Marcellus Shale Natural Gas field.

Senator Mike Waugh (R-28) calls on the Administration to treat all the River Basin Commissions across the state equally, with regards to budget cuts.

Senator Mary Jo White (R-21) questions the decision-making of the Administration with regards to board appointments and involvement of DEP in electricity rate mitigation.

Summary

Senate Environmental Resources and Energy Committee Chairman Senator Mary Jo White, 21st District, asked why applications are not currently available for $10 million in consumer energy grants and loans (the enabling legislation was enacted eight months ago) and noted that draft guidelines for the program were "significantly changed" from the finalized legislation.

Department of Environmental Protection Acting Secretary John Hanger said applications will be available beginning March 2, and that he met with Senate Majority Leader Dominic Pileggi, 9th District, and the Department will restore the "solid fuel" omission to the guidelines.

Senator White said the requirement that consumers conduct "whole house energy audits" to qualify for the assistance is costly and onerous. The Acting Secretary said four of the six options do not require an audit, and the remaining two would change the home substantially, making an audit prudent.

On Act 70, the Pennsylvania Climate Change Act, the Senator noted a cost/benefit analysis is due April 9, but the sole bidder to conduct it has yet to sign a contract. Acting Secretary Hanger said the firm is well-respected nationwide, and while the deadline will be difficult to meet, he doesn't see a need to extend it yet.

On the Marcellus Shale natural gas fields, the Acting Secretary reported that no drilling has begun on state forest land, but he was not sure if permits had been issued for such properties.

Senator White noted that Acting Secretary Hanger was serving as Budget Secretary Mary Soderberg's designee to the Commonwealth Financing Authority even though the Legislature did not authorize the DEP Secretary to serve on that board and urged him to reconsider the decision.

Senator Jane Orie, 40th District, asked why DEP halted payments to municipalities seeking reimbursement for the costs of septic system inspections. Acting Secretary Hanger said the need for the program exceeds its budget and in such cases the money is spent until gone and remaining projects are put on a waiting list.

On federal "stimulus" funds, the Acting Secretary admitted that there are strings attached for Pennsylvania to access those monies, including spending the money within one year. The Senator urged DEP to give priority to municipalities working cooperatively.

Senator John Gordner, 27th District, noted that more than 800 applications have been received for H20 PA water/wastewater infrastructure grants, and wanted to know whether Chesapeake Bay municipalities facing federal mandates would have a better chance at approval. Acting Secretary Hanger said municipalities under consent order agreements and facing federal obligations such as those in the watershed would be given priority status.

Senator Gordner asked why the Recycling Fund was reduced significantly, and the Acting Secretary said that a decline in trash was generating less revenue from tipping fees. He added that the program is due to sunset in three years, which also impacts funding. Acting Secretary Hanger said he supports reauthorizing the program.

Noting that the heart of the Marcellus Shale field was in her district, Senator Lisa Baker, 20th District, said she was hearing concerns from drillers who say the application process is lengthy and burdensome. The Acting Secretary said DEP is working with other agencies involved – such as the Susquehanna River Basin Commission – to streamline the process. On the proposed hike in permit fees, the Acting Secretary said the increase for smaller wells covers inflation and the larger drillers, while not happy about the increase, have not actively opposed them. The new fees will support 37 new employees to handle permits. The Senator expressed her concerns that funding for conservation districts are reduced in the budget and that the impact on local governments should be considered.

Senator John Rafferty, 44th District, urged the Administration to practice caution when projecting $107 million in revenue from a 5-percent Marcellus Shale severance tax, noting that people are using less energy and the projection should not be used to balance the budget. The Senator noted new federal and state funds for water and sewer infrastructure and asked how much more funding would be necessary to meet the needs. Acting Secretary Hanger said that there is a $30 billion gap over 20 years.

Senator Pat Browne, 16th District, said the budget projects that electricity use in the Commonwealth will remain flat through 2014, while conservation efforts would suggest a decline. The Acting Secretary noted that use has traditionally gone up each year and a leveling off would mark an improvement. The Senator asked when DEP would issue its rating process for high-hazard dams applying for H20 PA funding, and was told that money will begin being dispersed in May. On the proposed Marcellus Shale severance tax, the Senator stated that the only thing the tax can do is hurt economic opportunity. Senator Browne added that Pennsylvania must be competitive with other states.

Senator Pat Vance, 31st District, said she learned that DEP is telling county conservation districts to stop local review of stormwater plans. The Acting Secretary said that that DEP is trying to streamline the permitting process. The Senator noted that delays in permit processing are most often caused by DEP, not the conservation districts. The Senator urged support for nutrient credit trading, and the Acting Secretary said he is fully supports the concept.

Senator Lloyd Smucker, 13th District, requested more information on how the 5-percent Marcellus Shale severance tax was arrived at, noting that the price of natural gas has declined since the number was set. The Senator said the real income potential is in royalties from land leased for drilling, and that DEP must consider two questions: 1. Does it even make sense to impose a severance tax at some point; and 2. When is the right time when a fledgling industry is at stake and could the state wait a few years? The Acting Secretary said the tax should be imposed this year, adding that Pennsylvania's gas reserve is attractive because much of it is "pipeline ready" and exists in large volumes.

Senator Mike Brubaker, 36th District, urged the Acting Secretary to reconsider proposed cuts to conservation district funding, noting that they are a cost-effective technical partner with the state. The Senator also urged support for the CREP program. He also noted the ongoing challenge of getting the Chesapeake Bay watershed into state compliance. The Acting Secretary said DEP was committed to working with the Senator and others in setting new, achievable milestones regarding the Chesapeake, perhaps as early as May.

Noting that the purpose of federal "stimulus" money is to create jobs, Senator Stewart Greenleaf, 12th District, asked if the funding clashed with the priority of state environmental programs, which are supposed to protect the environment. Acting Secretary Hanger said the state will follow state and federal statutes in using the funds, but that they could have both economic and environmental benefits. On waste tire piles, the Acting Secretary told the Senator that DEP cleaned up one of the biggest piles this year, with about one million tires to go statewide.

Senator Mike Waugh, 28th District, asked if it would be better to have conservation districts funded through one agency instead of two: DEP and the Department of Agriculture. The Acting Secretary said he would have to look into it first. The Senator noted that proposed cuts in funding to basin commissions are uneven, with the Susquehanna River Basin Commission facing a 32-percent cut and the Delaware River Basin Commission facing a much smaller reduction. The Acting Secretary said the proposed cuts were the start of budget negotiations.

Appropriations Committee Chairman Senator Jake Corman, 34th District, made it clear to the Acting Secretary that the Committee will not consider the 5-percent severance tax on Marcellus Shale drilling until the permitting process is settled, so that companies can be successful and the environment is protected.

Department of General Services 1 hour 33 minutes

Senator Jake Corman, chair of the Senate Appropriations Committee, comments on the concept of DGS using contracts with rental car companies rather than reimburse state employees for mileage on long trips made in state vehicles.

Senator Lloyd Smucker (R-13) discusses the results of a recent DGS audit report with Secretary Jim Creedon.

Summary

During testimony on the proposed budget for the Department of General Services, several members of the Senate Appropriations Committee expressed concerns about the size, cost and oversight of the state's vehicle fleet.

On the issue of cost-savings, Appropriations Committee Chairman Senator Jake Corman, 34th District, told DGS Secretary James Creedon that it might be more cost effective to rent cars in some areas of the state rather than reimburse mileage.

Senator Lloyd Smucker, 13th District, wanted to know if DGS has studied the practices of other states when it comes to state-issued vehicles.

Senator John Rafferty, 44th District, noted that while there are many checks and balances involving state cars and their use by the legislative branch, that practice does not extend to the judicial branch of state government. He wanted to know why judicial fleets are independent of other state vehicles and their usage is not tracked or available for public scrutiny.

Noting that $800 million is proposed to be spent on prison construction this year, Senator Mary Jo White, 21st District, raised the point that only $130 million is proposed for construction projects at state-owned universities. She said the state must do more to provide intermediate treatment for non-violent offenders, rather than increasing the population at state prisons.

Building allocations and improvements for state universities were a main concern for Senator Lisa Baker, 20th District, who asked the Secretary, "How do you go about improving the state schools and how is it decided which one will be improved and what projects will be taken on?"

Senator John Gordner, 27th District, asked Secretary Creedon about the COSTARS program, which allows local governments to obtain more competitive prices on certain products by piggybacking on state contracts. Senator Gordner asked why several municipalities that ran out of road salt last winter were unable to secure additional quantities at an affordable price.

Department of Public Welfare Part 1 - 2 hours | Part 2 - 42 minutes |

Senator John Gordner (R-27) discusses the use of federal stimulus dollars with DPW Secretary Estelle Richman.

Senator Lisa Baker (R-20) raises concern about proposed budget cuts to critical access hospitals in rural Pennsylvania.

Senator John Pippy (R-37) urges DPW Secretary Estelle Richman to make sure potential funding cuts to hospitals are made fairly across the state.

Senator Jake Corman, chair of the Senate Appropriations Committee, cautions against the Administration’s proposal to implement a 2 percent assessment tax on all managed care organizations in the state.

Summary

During Monday's hearing with Department of Public Welfare Secretary Estelle Richman, Senate Appropriations Committee Chairman Jake Corman, 34^th District, and several members of the Committee expressed concerns about the Governor's proposed $20 million cut in funding to hospitals.

Senator Jane Orie, 40th District, asked why hospitals were singled out for reductions in the Governor's budget proposal. Senator Corman asked for a breakdown of how the Governor's proposed cut in funding to hospitals would affect individual facilities. Senator Stewart Greenleaf, 12th District, voiced concerns about the cuts due to the importance of health care to the state's economy.

Senator Lisa Baker, 20th District, criticized the proposed cuts to critical access hospitals, pointing out that some rural residents would have to travel up to an hour to receive critical services. Senator John Pippy, 37th District, urged the Department to ensure that any funding cuts would be shared equally among all hospitals that serve similar areas. Senator John Gordner, 27th District, urged the Secretary to consider restoring the cuts to hospitals with federal stimulus dollars.

Senator Corman expressed concerns that the Governor's proposed 2 percent tax on managed care organizations would increase the cost of health insurance premiums.

Senator Pat Vance, 31st District, pointed out that the Department had received its first payment from the federal economic stimulus program and asked what conditions were placed on the money by the federal government. Senator Pat Browne, 16th District, asked how much the Department would receive from the federal stimulus package for Medical Assistance and questioned if the entire amount would be needed to support the program. Senator Orie expressed concerns that some of the strings attached to the federal funding would have negative consequences for Medical Assistance recipients.

Senator Gordner asked how the Department would respond to the recent Auditor General's report that 14 percent of Medical Assistance recipients were not eligible for the program. Senator Mike Brubaker, 36th District, asked if the Department would support tighter oversight of the Medical Assistance program to ensure that all recipients are eligible.

Senator Mary Jo White, 21st District, asked if the Department would be supportive of legislation that would provide assistance to grandparents who are raising grandchildren. Senator White also asked for information on how the Department would ensure that this program would not be abused by parents.

Senator Greenleaf and Senator Vance expressed concerns about the cuts to mental health programs. Senator Corman asked if the 2 percent cut for community mental health programs would be an across-the-board cut, or if any programs would be excluded from the reduction.

Department of Transportation 1 hour 54 minutes

Senator Rob Wonderling (R-24), chair of the Senate Transportation Committee, updates the Appropriations Committee on issues during the budget hearing for the Department of Transportation.

Senator Pat Browne (R-16) expresses concern to Secretary of Transportation Allen Biehler about continued state reliance on gas tax revenues for transportation infrastructure projects.

Senator John Rafferty (R-44) urges the Administration to look at expanding mass transit service to growing suburban areas.

Senator Lisa Baker (R-20) comments on the importance of implementing the 511 Traveler Information service statewide.

Senator Stewart Greenleaf (R-12) comments on the need to rethink the way mass transit and regional rail lines are structured to better suit the expansion of suburban areas.

Senator Mary Jo White (R-21) questions Transportation Secretary Allen Biehler about the impact Marcellus Shale exploration could have on rural highways.

Summary

Members of the Senate Appropriations Committee questioned plans for using $1.026 billion in federal "stimulus" funds and other transportation issues during the afternoon budget hearing with Secretary of Transportation Allen D. Biehler.

Senate Appropriations Committee Chairman Senator Jake Corman, 34th District, asked if there is a sunset date for the proposal to lease the Pennsylvania Turnpike.

Senator Robert Wonderling, 24th District and Chairman of the Senate Transportation Committee, said the General Assembly has worked in a bipartisan and bicameral manner with Secretary Biehler to determine how to maximize the use of the one-time federal "stimulus" funding. Senator Wonderling added that legislators are working with PennDOT to speed up transportation projects.

Senator Pat Vance, 31st District, asked Secretary Biehler how much input PennDOT has in the Shared Ride program. Senator Vance asked if a proposed 4 percent growth in Motor License Fund revenues is unrealistic considering the current economic climate.

Noting traffic problems on Interstate 78 during Monday's snowstorm, Senator Pat Browne, 16th District, chided PennDOT for a recurring failure to make proactive decisions "to save people from being injured and inconvenienced." Senator Browne said the state's gas tax is not a sustainable source for funding road and bridge projects.

Senator John Rafferty, 44th District, asked if PennDOT is assessing all possible alternatives for efficiently using its funding. Specifically, Senator Rafferty wanted to know if PennDOT was considering any consolidation initiatives.

Senator Mary Jo White, 21st District, asked whether it was worthwhile for Pennsylvania to reapply for tolling Interstate 80 since the original application was rejected by the federal government. Senator White also asked why interest has waned in public-private partnerships for transportation projects. She also stated her solid opposition to mileage-based taxes.

Senator Lisa Baker, 20th District, complimented PennDOT for its work on the Marshall's Creek Bypass project in Monroe County. Senator Baker said 100 bridges in her senatorial district are closed and urged PennDOT to focus on reopening those spans. She asked if PennDOT has plans to close driver's licensing centers.

Senator Lloyd Smucker, 13th District, asked about PennDOT's plans to spend $1.026 billion in federal "stimulus" money.

Senator John Gordner, 27th District, asked about the implementation of Real ID in Pennsylvania. Senator Gordner asked about a fluctuation in revenues from littering fines in the budget. That line item was $103,000 in the Fiscal Year 2007-08 budget, down to $9,000 in Fiscal Year 2008-09 budget and is projected to go back up to $100,000 in the proposed Fiscal Year 2009-10 budget. Senator Gordner also asked for a response to a letter regarding project labor agreements involving the Pennsylvania Turnpike.

Senate Appropriations Committee Vice Chairman Senator Tommy Tomlinson asked if the federal "stimulus" money provided funding for the Interstate 95/Pennsylvania Turnpike Interchange project. He said that project is essential to relieve traffic congestion in the area.

Senator Stewart Greenleaf, 12th District, agreed that traffic congestion is a major issue in Southeastern Pennsylvania. He said that pressure could be relieved by expanding and interconnecting passenger/light rail service in the suburban Philadelphia region.

Senator Mike Waugh, 28th District, noted a 134 percent increase in funding for the Rail Freight Assistance program for Fiscal Year 2009-10 and asked how the money would be used. Senator Waugh urged PennDOT to push public-private partnerships. He asked if any federal "stimulus" funding would be available to address congestion caused by Baltimore and Washington, D.C. commuters.

Senator John Pippy, 37th District, asked if PennDOT is looking at ways to improve efficiency in mass transit as a way to better utilize funding for those services. He also asked if PennDOT is considering tax breaks for the use of biofuels.

Senator Corman, asking a question on behalf of Senator Mike Brubaker, 36th District, inquired whether PennDOT is open to working with farmers to develop rules and regulations to improve safety on rural roads.

Senator Corman said a ruling regarding prevailing wage is negatively impacting the ability of communities to use liquid fuels funding. He asked if PennDOT is working to address that issue. Senator Corman suggested redirecting money currently allocated to mass transit for licensing of transit vehicles to local communities to pave roads.

Gaming Control Board Part 1 - 1 hour 59 minutes Part 2 - 28 minutes 2 hours 28 minutes

Senator Jane Orie (R-40) questions the operating expenses and the mission of the Gaming Control Board.

Senator John Rafferty (R-44) expresses his disappointment in the performance of the Gaming Control Board to PGCB Chair, Mary DiGiacomo Colins.

Senator Tommy Tomlinson (R-6) raises concerns to PGCB Chair Mary DiGiacomo Colins about the impact of granting smaller gaming licenses to bars and restaurants in Philadelphia.

Senator Jake Corman, chair of the Senate Appropriations Committee, urges PGCB Chair Mary DiGiacomo Colins to provide an opinion on the Governor’s proposal to permit video poker machines in bars and restaurants.

Senator Pat Browne (R-16) raises concerns about the recent Gaming Board approval of roulette slot machines.

Senator Lloyd Smucker (R-13) raises concerns about problem gambling in Pennsylvania.

Summary

Senate Appropriations Committee Chairman Jake Corman, 34^th District, and several committee members questioned Pennsylvania Gaming Control Board (PGCB) Chairman Mary DiGiacomo Colins about the Administration’s plan to legalize video poker machines. Chairman Colins said the PCGB has not looked into the impact that the Governor’s proposal would have on slots revenue. Senator Corman said legislators are looking to the PGCB for that analysis and that the panel should draft one soon.

Senator Robert Tomlinson, 6^th District, said video poker will put “at great risk” the revenue from slot machines that pay for property tax relief and other initiatives. Senator Tomlinson wanted assurances that the PGCB asks applicants if they were involved in any illegal activity and asked if such activity would be a reason for denial.

Citing a study indicating that Pennsylvania has the highest regulatory costs for gaming in the nation, Senator Jane Orie, 40^th District, took issue with the PGCB’s request for a budget increase.

“You are the most expensive gaming board in the country. I don’t think you can justify the need for the increase when the study shows you are clearly out of synch and should be downsizing,” Senator Orie said. She noted that 15 percent of the PGCB staff makes more than $100,000. “This is a red flag to me. People are making lateral moves and doubling their salaries – it’s offensive and wrong,” Senator Orie said. “You are charged to protect the taxpayers.”

Senator Orie was also concerned about the “revolving door” syndrome where attorneys leave the PGCB and immediately seek outside employment with the casinos that they were previously regulating. She said the board should require lawyers to sign a contract to prohibit this practice. She criticized a hefty severance package given to a former gaming official and condemned a decision by the board to issue licenses to vendors with felony convictions.

Senator John Rafferty, 44^th District, raised the issue of convicted felons and those with expunged records applying for licenses. “Doesn’t that bother you at all? Doesn’t this rise to some level of concern before awarding these licenses?” he asked Chairman Colins. “I hope that we can work together to rectify some of these situations. I’d like to see us tighten up the law and reform the law.”

Senator Rafferty and Senator Mike Waugh, 28^th District, wanted to know why local agencies are not going after local law enforcement grants, which help to crack down on illegal video poker operations. Chairman Colins conceded that only 20 percent of the funds are being utilized and the remainder is being held by the PGCB.

Senator Lloyd Smucker, 13^th District, had concerns about how the expansion of gambling will impact the number of compulsive gamblers. “Revenue raised is often done so at the expense of those who are least able to afford it. So it is a regressive tax,” Smucker said “What demographic data do we have on compulsive gaming? As we are discussing expanding gambling through video poker, that information would be helpful to those of us making decisions.”

On that same issue, Senator Pat Vance, 31^st District, asked why the PGCB spent only $18,000 on compulsive gaming programs, while paying the two staff people who administer them more than $150,000. Senator Vance also called it a “contradiction” that people age 18 and older can work in the casino and serve alcohol, but cannot gamble.

Senator Stewart Greenleaf, 12^th District, had questions about smoking in casinos, noting that in many cases, non-smoking areas are relegated to areas far away from the greatest activity and most popular games. In one case, smoking was only allowed on the third floor of a facility and non-smoking areas are not clearly marked.

Senator Pat Browne, 16^th District, questioned the approval of roulette machines for Pennsylvania casinos. The Senator noted that the defense of adding the machines – that they are “profitable and marketable” – is not stipulated in statute as a reason for putting such machines in casinos.

Senator Corman closed the hearing by noting that, while he opposed the legalization of slot machines in Pennsylvania, they are probably here to stay and the state must do all it can to ensure that the system is cost efficient and free of corruption.

Governor's Office 1 hour 23 minutes

Senator Mary Jo White (R-21) questions members of the Governor’s executive offices about the need for expanded cell phone coverage in rural areas of the Commonwealth.

Senator John Rafferty (R-44) urges the members of the Governor’s executive offices to alert the Legislature to any new items added to the budget by the Administration through the negotiation process.

Summary

Concerns about Pennsylvania’s statewide radio system and the appearance of impropriety in “no-bid” contracts were among the issues raised by the Senate Appropriations Committee during a Thursday afternoon budget hearing with Secretary of the Budget Mary Soderberg and Secretary of Administration Naomi Wyatt.

Senator Mary Jo White, 21st District, noted the delays, glitches and cost overruns that have plagued the development of the statewide radio system. Senator White particularly criticized the lack of coverage in northwestern Pennsylvania.

Senator Lisa Baker, 20th District and Chairman of the Senate Veterans Affairs and Emergency Preparedness Committee, said she was pleased to hear that progress has been made in implementing the statewide radio system, but added that she is concerned about the increasing costs of the system and interoperability issues. Senator Baker added that the State Police have informed her of problems with “dead zones” in several areas of her Senatorial District, including on interstate highways.

Senate Appropriations Committee Chairman Senator Jake Corman, 34th District, requested a list of state and federal funds used for the statewide radio program.

Senator John Rafferty, 44th District and Chairman of the Senate Law and Justice Committee, said he does not share the Administration’s optimism about the progress of the statewide radio system and asked if Secretary Wyatt if she would participate in a hearing by his committee on the issue.

Senator Lloyd Smucker, 13th District, asked about the capability of the statewide radio system to interoperate with systems used by county and local agencies. He noted problems with radio signals in several areas of Lancaster County. Senator Smucker asked whether the Office of Administration tracks reports of coverage problems.

Noting the millions of dollars spent by the Commonwealth for “no-bid” contracts for legal and other professional services, Senator Jane Orie, 40th District, asked Secretary Wyatt and Secretary Soderberg how the Administration tracks and monitors those deals. “There is an appearance, whether we like it or not, of impropriety,” Senator Orie said. Senator Orie is pushing legislation to increase transparency and accountability in the bidding process.

Senator Stewart Greenleaf, 12th District, asked, “What is most effective and productive cost-saving item? Was it personnel? Are you looking at attrition as opposed to layoffs?” He asked if the Administration has determined how many jobs would be eliminated under the proposed Fiscal Year 2009-10 budget.

Senator Pat Vance, 31st District, said she was distressed about a cut in funding for public television. Senator Vance asked about the hiring of about 200 new employees -- several earning over $100,000 – that have taken place since the Governor instituted a hiring freeze on September 17, 2008.

Noting the elimination of funding for the Governor’s School for Excellence, Senator Mike Brubaker, 36th District, asked whether the Administration considered looking for partial funding from applicants for the school and/or their families. Senator Brubaker asked if there is a check and balance system in place to ensure that federal stimulus funding is properly invested. He asked if Secretary Soderberg and Secretary Wyatt would be accountable for the proper use of that money.

Citing a $25,000 reduction in state funding for the Advisory Council on Rural Affairs, Senator Mike Waugh, 28th District, said rural Pennsylvania was “taking it on the nose” from the Governor’s proposed budget cuts.

Senator Pat Browne, 16th District, noted significant cuts in funding for law enforcement programs in the Administration budget and asked for the rationale for making those reductions. Senator Browne asked if performance measures and evaluations were used in determining which areas of the budget would see funding reductions. Senator Browne added that he would like to see the Legislature have a greater say in developing performance standards.

Citing testimony provided by state Treasurer Rob McCord from Wednesday, Senator Corman asked why the Governor did not provide the funding needed to replace the Treasury Department’s antiquated computer system.

Labor & Industry 1 hour 48 minutes

Senator Jake Corman, chair of the Senate Appropriations Committee, comments on the need to thoroughly examine the usage of the Federal Stimulus monies on a department-by-department basis.

Senator Mary Jo White (R-21) urges Acting Secretary of Labor & Industry Sandi Vito to work with the Legislature on the prevailing wage issue.

Senator Pat Browne (R-16) addresses the financial status of the Pennsylvania Unemployment Compensation Fund.

Senator John Rafferty (R-44) addresses concerns about an educated workforce in the manufacturing sector.

Summary

During today's budget hearing with Acting Labor and Industry Secretary Sandy Vito, Appropriations Committee Chairman Senator Jake Corman, 34th District, and other committee members questioned how economic stimulus money from the federal government would be used to improve the job climate in Pennsylvania.

Senator John Gordner, 27th District and Chairman of the Senate Labor and Industry Committee, asked if the federal stimulus dollars would cover the increased costs to provide unemployment benefits to a larger number of individuals for a longer period of time. Senator Stewart Greenleaf, 12th District, asked what sectors of employment are suffering the greatest job losses and asked how the Department would use federal stimulus money to help create jobs. Senator Gordner also raised concerns about the solvency of the state Unemployment Compensation Trust Fund.

Several committee members expressed concerns about the funding cuts in the Governor's budget proposal. Senator Mary Jo White, 21st District, asked if the proposed reductions would impact the ability to help Pennsylvanians who rely on the Department's services. Senator Lisa Baker, 20th District, questioned the Administration's decision to eliminate the New Choices/New Options program.

Citing the proposed reduction in funding to Thaddeus Stevens College of Technology, Senator Lloyd Smucker, 13th District, asked what percentage of the Department's budget was devoted to workforce development. Secretary Vito agreed to provide that information to the Committee. Senator John Rafferty, 44th District, asked if the Department was coordinating with the Department of Education to ensure that small businesses would have access to a qualified and educated workforce.

Senator Pat Browne, 16th District, asked if the state would meet the federal standards for vocational rehabilitation and expressed concerns that the Department would not meet its projections due to proposed cuts in funding. Responding to questions from Senator Pat Vance, 31st District, Secretary Vito said that she would welcome a legislative review of the proposed Consumer Workforce Council.

Appropriations Committee Chairman Senator Corman called on the Senate Labor and Industry Committee to hold subsequent hearings to ensure that federal stimulus dollars would provide the maximum benefit to state residents.

Office of Open Records 54 minutes

Senator Pat Vance (R-31) comments on the need to strike a balance between family privacy and making autopsy reports available to the public, particularly to the media.

Summary

Executive Director Terry Mutchler reported that the office has 100 pending "legitimate" appeals and has issued six final determinations. The office is seeking a $1.3 million budget (up from $1.01 million) for a staff of 10, including three full-time attorneys.

Senator Gordner stressed that the office must be independent and asked if the Office of Open Records' budget was developed by the Administration. The executive director said the office drafted its own budget, with some help from the Department of Community and Economic Development. Senator Gordner asked if the Office could outsource some legal expense. The Executive Director said it could hire hearing officers, but wants to use the hearing process sparingly and make as many decisions as possible based on submitted paperwork.

Senator Rafferty asked whether the Open Records Law needs to be amended to allow smaller municipalities with limited staff more time to comply with document requests. Executive Director Mutchler indicated she'd rather see how the situation played out over a year, adding that the law allows local governments to invoke a 30-day extension. Senator Rafferty encouraged the office to keep an open dialogue with small municipalities.

Senator Pat Vance, 31st District, asked who pays the costs of a court challenge if a local government refuses to release a document as directed by the office. The Executive Director said the citizens pay the costs initially, but agreed with the Senator that the office could enter the legal dispute as a "Friend of the Court" to assist the citizen. Senator Vance noted that she was concerned that the courts deem autopsy reports to be covered by Open Records requests, and hopes the media will respect family privacy and not exploit those items in the name of morbid curiosity.

Director Mutchler reported to Senator Greenleaf that the Office has conducted 80 training sessions in Harrisburg and statewide. Senator Greenleaf said he was concerned that some letters he receives from constituents contain sensitive information and -- if forwarded to a state agency to resolve a problem -- they could be considered a public record and subject to release. The Executive Director said forwarded letters would be subject to the law, but depending on their content, could fall under one of the 38 exceptions the law provides.

Responding to Senator Greenleaf's concern about fees charged for copying documents, the Executive Director agreed that high copying fees are often used by local governments to deny access. Courts have ruled that 25 cents per copy is "not unreasonable," but the Executive Director said it seems high and noted that governments often tack on "redaction fees" which inflate costs further.

Senator Browne asked if computer technology will eventually reduce the cost of the Open Records Office by making more documents available online. The Executive Director said the Office would reduce costs as it reduces the number of right-to-know requests. Senator Browne asked which standards the Office would use to measure its performance. Executive Director Mutchler said the Office should be judged on how well it does its required tasks: conducting training, providing useful request forms and web assistance, and processing requests. She noted that the Office must provide annual reports to the legislature.

As a former township supervisor, Senator Smucker said he was concerned about the ability of local governments to comply with the requirements of the law. The Executive Director said there has been some confusion, "growing pains" and lack of understanding about the rule requiring that a response to a request be provided in five business days. She said the Office is conducting training and providing ready-made forms local governments can use for either approval of denial of document requests, adding that municipalities can foster goodwill by simply responding to the request in a professional manner.

Appropriations Committee Chairman Senator Corman closed the hearing by agreeing with the Executive Director that it is too soon to think about amending the new law, and that it is important to "see how it works in the real world."

PA Commission on Crime and Delinquency 1 hour 13 minutes

Senator Mary Jo White (R-21) comments on the need to control the rising prison population through other rehabilitation techniques to Michael Kane, Executive Director of the PA Commission on Crime & Delinquency.

Summary

During a hearing on the proposed Fiscal Year 2009-10 budget for the Pennsylvania Commission on Crime and Delinquency (PCCD), Senate Appropriations Committee members questioned PCCD Executive Director Michael Kane on a variety of issues including efforts to stop underage drinking, help juvenile offenders with "re-entry" after incarceration, and cut Pennsylvania's recidivism rate.

Senate Judiciary Committee Chairman Senator Greenleaf, 12th District, said that faith-based organizations can be a major resource in helping young people who have been incarcerated to assimilate back into society.

Senator Mary Jo White, 21st District, applauded the PCCD for its efforts to help juveniles re-enter society. She said the state must look for more intermediate sentencing options for non-violent offenders, rather than placing them in state correctional institutions which are extremely costly to taxpayers.

Senator Lloyd Smucker, 13th District, echoed that concern, noting that the state's prison population is expected to increase by 32 percent, while population levels in Pennsylvania will rise by a fraction of that. "Not only is that unsustainable, it's depressing," Senator Smucker said.

Noting that the Attorney General's Office has been in the forefront of efforts to stop identity theft, Senator Jane Orie, 40th District, asked if PCCD consulted with the Attorney General's Office when developing its new website for victims of identity theft.

Senator Mike Brubaker, 36th District, wanted more information on Pennsylvania's recidivism rate – which Executive Director Kane said is currently around 50 percent.
"We are looking to hold the program to high levels of results, but there are different definitions of recidivism rates," Senator Brubaker said. He said that many non-for-profit organizations in his district are doing parallel work to help with prevention and intervention and asked if PCCD is collaborating with them on delinquency prevention efforts.

Several Senators had questions about the state's "Weed and Seed Program" which seeks to stop juvenile crime. Senator Rafferty and Senator Browne wanted to see measurable results on its effectiveness in stopping recidivism and promoting community safety.

SERS/PSERS 1 hour 37 minutes

Senator Jane Orie (R-40) questions the awarding of incentive bonuses to fund managers during the budget hearing for SERS/PSERS.

Senator Lloyd Smucker (R-13) raises concerns about the cost of the looming spike in state pensions that is coming in the next few years.

Senator Jake Corman, chair of the Senate Appropriations Committee, asks members of the SERS/PSERS board about the impact of one-time Federal Stimulus monies would have on the looming pension spike.

Senator Pat Browne (R-16) comments on the dramatic downturn in the financial markets over the past 12 months during the budget hearing for SERS/PSERS.

Summary

Appropriations Committee Chairman Senator Jake Corman, 34th District, outlined the recent history that led to the current challenges facing state pensions. In the early part of the decade, the Public School Employees’ Retirement System (PSERS) and State Employees’ Retirement System (SERS) were fully funded, allowing Act 9 to increase benefits with increases in contribution rates.

The recession that followed the 9/11 attacks brought about Act 40, which deferred some costs until 2012, with the calculated risk that market returns would cover the costs. The approach was working until the recent recession. PSERS and SERS officials agreed with the assessment.

Senator Corman said the pension funds should qualify for a one-time infusion of federal "stimulus" funds, although the Governor is using it for new spending. He asked the boards to submit to the Senate Appropriations Committee an estimate of how much "stimulus" aid would be needed to have an impact on the projected spike in employer contributions.

Senator Pat Browne, 16th District and Chairman of the Senate Finance Committee, asked SERS and PSERS officials for their latest financial figures. SERS Executive Director Leonard Knepp said SERS started 2008 with $35 billion in assets and ended the year with $24 billion. He said the system projects a 28 percent spike in employer pension obligations in 2012 if the system meets returns of 8.5 percent. He said SERS is focusing on conserving assets and maintaining liquidity and will meet its $2.5 billion in pension obligations this year.

PSERS Executive Director Jeffrey Clay said the system started 2008 with $67.4 billion in assets and ended the year with $45.4 billion, a 29.7 percent negative return. It paid out $4.5 billion in benefits. School districts are facing a 29 percent spike in contributions in 2012. He said there are limited options, including increasing employer contributions. He said increasing employee contributions would have minimal immediate impact, since that would only apply to new employees. As for increasing investment returns, they would have to reach 35 percent returns over three years to eliminate the liability.

Senator John Rafferty, 44th District, asked PSERS to justify $800,000 in employee incentives and bonuses approved in August 2007 even as market returns were declining. Executive Director Clay said the board has offered incentive compensation since the mid-1990s to produce growth on returns and attract and retain professionals. He said the payments were terminated in December 2008.

Senator Rafferty said the employees should return the bonuses and noted that with massive layoffs in the financial markets, many professionals would take a job without incentives. He added that many government retirees are demanding a Cost of Living Adjustment. Executive Director Clay said such a spending decision is the role of the Legislature. SERS Chairman Nick Maiale said his system could not afford it.

Incentive compensation was also a concern of Senator Jane Orie, 40th District, who said the public is already upset about Wall Street firms using federal bailout money inappropriately. She said PSERS needs to "get in touch with reality" and stop the bonuses. When asked which law compounded the challenge facing the systems more, Act 9 or Act 40, officials from both systems agreed it was Act 40. Senator Orie asked about a meeting the Governor set up between SERS and the owners of two Philadelphia newspapers to consider bailing out the struggling outlets. Chairman Maiale said they listened, but did not act on anything. He told Senator Orie that the Governor has occasionally scheduled similar meetings with struggling entities if it was "an economic concern" of the Commonwealth.

Senator Pat Vance, 31st District, asked what the combination of retirees living longer and the state hiring freeze will have on the unfunded liabilities. Executive Director Clay of PSERS said it will make the situation worse as the number of people paying into the system goes down. Senator Vance asked what percentage of investments was in hedge funds. SERS members said they make up 19 percent of total investments, down 18 percent. PSERS Chief Investment Officer Allan Van Nord said the system has 9 percent of its market funds in such "nontraditional" investments.

Senator Lloyd Smucker, 13th District, said school districts are very concerned about the 2012 spike in their contributions to PSERS, which will have a significant impact on education and property taxes. He said the system and the Legislature must work to mitigate the spikes in the short term and prevent a recurrence over the long term. Senator Smucker said the state Treasurer had mentioned several possible ideas, including taking out bonds to offset some of the immediate costs. Executive Director Clay said that would be relatively risky and could affect the Commonwealth’s bond rating.

Appropriations Committee Vice Chairman Senator Robert Tomlinson, 6th District, said he felt sorry for teachers who retired when salaries were much lower than they 0currently and asked how the last COLA was funded. Executive Director Clay said the system essentially borrowed $1.3 billion from itself, with an 8.5 percent interest rate over 10 years. He also told Senator Tomlinson that Pennsylvania is the only state to offer employees the option of a lump-sum payment upon retirement. He said 88 percent of PSERS members take a lump sum and often roll it into another retirement plan.

Senator Mike Brubaker, 36th District, asked the PSERS and SERS representatives if they had financial expertise. Two of the six did not. Three of six indicated they had no investment expertise. Asked for a breakdown of market returns, PSERS officials reported 13.8 percent yields in calendar year 2007, and a negative 29.7 percent yield in 2008. SERS reported returns of 17.2 percent in 2007 and a negative yield of 28.6 percent in 2008.

Senator Brubaker noted that the systems need a 35 percent on returns over three years to stave off a spike in employer contribution rates, which is not realistic. "We have to take action. The sooner the better," he said.

When Senator Brubaker asked if the systems had learned any lessons from the economic downturn, PSERS Chief Investment Officer Van Nord said they were reducing their market exposure and increasing their cash position. SERS officials reported they were already working on such changes before the market declined.

State Police 1 hour 48 minutes

Senator John Rafferty (R-44) comments on the ever-expanding role of the PA State Police to Col. Frank Pawlowski, PSP Commissioner.

Senator Mary Jo White (R-21) discusses the likelihood of gambling expansion in Pennsylvania with State Police Commissioner Frank Pawlowski.

Senator Pat Browne (R-16) questions the decision-making process of the State Police with regard to I-78 during winter storms, even in the aftermath of the Valentine’s Day Storm of 2007.

Summary

Members of the Senate Appropriations Committee explored a variety of public safety issues during the afternoon budget hearing with Pennsylvania State Police Commissioner Colonel Frank E. Pawlowski.

Senator John Rafferty, 44th District and Chairman of the Senate Law and Justice Committee commended the State Police on its investigation of a series of arson cases in Coatesville. He then asked about the efforts by the State Police to close down certain barracks during overnight hours. "Public safety must be preserved and to me, public safety means those barracks are kept open 24-7," Senator Rafferty said.

Noting that of Pennsylvania's 2,573 municipalities, 1,714 utilize the Pennsylvania State Police as their primary police force, Senator Rafferty asked how the Legislature can ensure that the State Police maintains a sufficient complement of troopers. Senator Rafferty said he is reintroducing legislation to recoup money from fines from municipalities that use the State Police as their primary police force and return that revenue to the State Police.

Appropriations Committee Vice Chairman Robert Tomlinson, 6th District, asked whether the Commissioner supported the legalization of video poker machines in Pennsylvania. Colonel Pawlowski said he supported the proposal primarily because the State Police currently spends a lot of time and resources prosecuting video poker cases.

Senator Mary Jo White, 21st District, expressed concerns about the prosecution of video poker violations "It bothers me that there are 1,700 illegal machines out there and we are not doing anything about it," she said. Senator White also asked about the State Police use of state vehicles and asked for a list of violations at casinos.

Senator Stewart Greenleaf, 12^th District, asked about the expungement of minor offenses, such as disorderly conduct and retail theft, from juvenile records. Noting Pennsylvania's Megan's Law, Senator Greenleaf noted that about 10,000 people are currently listed on the website as sex offenders and 350 are listed as violent sexual predators. He added that special emphasis should be placed on those individuals listed as violent sexual predators.

Senator Lloyd Smucker, 13th District, asked whether the statewide radio system, now under development, is meeting the needs of the State Police. Commissioner Pawlowski said the State Police are using a dual radio system, with the old radio network serving as a backup to the new 800 megahertz network.

Senator Mike Brubaker, 36th District, discussed safety issues related to farm equipment on roads and asked how the State Police response time compares to that of local jurisdictions. Senator Brubaker asked what percentage of the State Police complement is dedicated to service on the Pennsylvania Turnpike.

Senator Lisa Baker, 20th District, requested an update on the efforts by PEMA and the State Police to develop "Fusion Centers" criminal/terrorism intelligence centers. Senator Baker followed up by asking how the state agencies could coordinate those efforts with privately-owned facilities.

Senator Pat Vance, 31st District, asked what impact a proposed 23 percent reduction in funding would have on the State Police fingerprint identification program and on employment background checks. Senator Vance also asked about educational requirements for State Police cadets.

Senator Mike Waugh, 28th District, requested information on a proposed 30 percent increase in funding for the commercial vehicle enforcement unit. Senator Waugh also asked about the staffing and funding for the Fire Marshal and mounted patrol units.

Noting a goal of reducing crime by 10 percent, Senator Pat Browne, 16th District, asked if the State Police was able to meet that objective. Senator Browne asked about the State Police protocols for highway management during inclement weather. Colonel Pawlowski said Interstate 78 again experienced problems during a heavy snowstorm on Monday. Senator Browne said he saw no improvement in the state's response since the infamous "Valentine's Day Massacre" blizzard. "It's the same result every time," Senator Browne said.

Treasury Department 1 hour 26 minutes

Senator Jane Orie (R-40) discusses her legislation to restructure the government contract bidding process with Secretary of the Treasury Rob McCord.

Senator Tommy Tomlinson (R-6) comments on the good value of Pennsylvania’s NowU college tuition savings program.

Senator Pat Browne (R-16) cautions Treasury Secretary Rob McCord about the stability of the municipal bond market.

Summary

Transparency in state contracts and state borrowing were among the issues raised by the Senate Appropriations Committee during a Wednesday afternoon budget hearing with state Treasurer Rob McCord.

Senate Finance Committee Chairman Senator Pat Browne, 16th District, noted a $2 million allocation in the Treasury Department's Fiscal Year 2009-10 budget to replace its antiquated computer system. Treasurer McCord said the $2 million was a down payment toward replacement of the "computer that time forgot."

Citing that state contracts are to be posted on the Treasury web page under Pennsylvania's "Right to Know" law, Senator Jane Orie, 40th District, requested a list of the "no bid contracts" awarded under Governors Ridge, Schweiker and Rendell. Treasurer McCord said that “at first blush” he supported Senator Orie's "Pay-to-play" reform legislation. Under Senator Orie's legislation, the Treasury would use an open bid process for financial and investment contracts, but could select the "most-qualified bidder," which may not necessarily be the lowest bidder.

Senator John Gordner, 27th District, asked how the two options under the nowU college savings program (a guaranteed savings plan managed by the Treasury and an investment plan administered by Vanguard) matched up. Senator Gordner further asked about the projected solvency of the tuition savings and investment program in the future.

Senator John Rafferty, 44th District, discussed the current financial status of Pennsylvania. "Should we be allowing for any more borrowing, or should we live within our means into the future?" Senator Rafferty asked. Treasurer McCord said the Commonwealth should "live within its means," but suggested consideration of issuing bonds now (while the market is favorable) to address an impending spike in pension costs to the state. Senator Rafferty also criticized the issuing of bonuses for investors.

Senator Pat Vance, 31st District, asked if the Commonwealth has invested in mortgage-backed securities. Senator Vance also asked if the Treasury would be pursuing "socially-conscientious" investments in the future. She noted that some investments have high returns, but may not be favored by environmentalists.

Senator Lloyd Smucker, 13th District, asked Treasurer McCord if he has compared the amount of Pennsylvania’s borrowing against that of other states. Treasurer McCord said he would look into this issue, but thought Pennsylvania was about 15th among states.

Responding to a question from Senator Mike Brubaker, 36th District, Treasurer McCord said he did not know the current debt load or debt service level of the Commonwealth. Senator Brubaker also asked Treasurer McCord to determine the accuracy of the Administration's projection of $97.9 million in additional revenue from new tobacco taxes.

Senator Mary Jo White, 21st District, asked if the Treasury used the same "risk assessment tools" for state investments that were used (unsuccessfully) by banks, particularly in mortgage lending.

Appropriations Committee Vice Chairman Senator Robert Tomlinson, 6th District, asked whether the investments of families who purchased guaranteed tuition credits were protected from the impact of the economic downturn on the fund.

Senator Stewart Greenleaf, 12th District, asked if there are additional investment opportunities available to the Commonwealth considering the current economic climate.

2009 Budget Hearings Highlights and Summaries

2009 Budget Hearings
Highlights and Summaries