Key Points from Senate Budget Hearings with Department of Labor and Industry, Department of Military and Veterans Affairs

HARRISBURG – During a public hearing today, members of the Senate Appropriations Committee raised questions about the need for tens of millions of dollars in additional spending for Unemployment Compensation (UC) services when the state is experiencing a period of historically low unemployment.

Department of Labor and Industry

Much like the governor’s overall budget, proposed spending for the Department of Labor and Industry significantly underestimates expenses over the next five years and fails to take into consideration realistic growth.

Secretary Nancy Walker was questioned about her request to increase department staffing to COVID-era levels despite Pennsylvania experiencing low levels of unemployment.

Walker told the committee that $70 million in fraudulent unemployment compensation claims were sent out in 2023, and committee members sought details on how the department was trying to recoup the money.

Members also sought details on the new Career Pathways program, which appears to duplicate the services provided by PA CareerLink.

Full Hearing

Committee Chair Sen. Scott Martin on creating job opportunities for Pennsylvanians, job training, apprenticeship programs, workforce development, skills-based hiring, and more

Video Highlights

The governor’s budget included an additional $68 million for the Service and Infrastructure Improvement Fund to improve UC services, despite the current period of low unemployment.

The state’s UC system paid $70 million worth of fraudulent claims in 2023.

Job classification issues could threaten Pennsylvania’s ability to make full use of federal dollars to expand broadband to unserved and underserved communities.

The department is aiming to get wait times down for UC calls to 15 minutes, but they have not yet achieved that goal.

Questions were raised regarding the use of funding for the Career Pathways initiative and how it is different from the services already offered through PA CareerLink.

Concerns were expressed about the increased costs of certain prevailing wage requirements.

Pennsylvania ranks slightly below the national average in terms of labor force participation.

The department was encouraged to continue to improve efforts to provide a broader range of apprenticeship programs to help connect more Pennsylvanians to quality jobs.

Approximately 80% of department employees work from home on at least a part-time basis.

A recent Commonwealth Court ruling pertaining to prescription drug costs for Workers’ Compensation participants could create severe financial challenges.

Concerns were raised regarding the current situation in the Department of Corrections in which some corrections officers are working 70-80 hour weeks on a weekly basis.

Department of Military and Veterans Affairs

Lawmakers discussed what the Pennsylvania National Guard would need to increase support at the U.S. border in Texas during a budget hearing with Adjutant General Maj. Gen. Mark J. Schindler.

Committee members also explored what the department was doing to ensure Pennsylvania’s 700,000 veterans know about benefits available to them and their families and offer assistance in applying.

The status of Veterans Treatment Courts – which help veterans charged with crimes and struggling with addiction or mental illness – was discussed, as well as homeless veterans.

Full Hearing

Sen. Martin on providing necessary resources to veterans, Veteran Service Officer Days, outreach to veterans, protecting the border, and more

Video Highlights

Numerous bills championed by Senate Republicans to support Pennsylvania’s veterans and military families were highlighted. Approximately a dozen bills have been approved by the Senate and await action in the House of Representatives.

The importance of codifying the state’s VetConnect program was discussed to ensure services are accessible for veterans and their families. Increased outreach and marketing for the program was also suggested.

Staffing at Pennsylvania Veterans Homes continues to pose a challenge.

The department operates 25 Veterans Treatment Courts throughout the state with plans to add another early this year.

The possibility of deploying the National Guard to support border security and reduce the flow of deadly fentanyl into the U.S. was discussed.

The committee received an update on National Guard members currently deployed and potential challenges in terms of outreach to veterans.

The department was encouraged to explore new solutions to help address veteran homelessness.

Concerns were shared about the potential impact of regional cell phone outages if National Guard members need to be recalled.

You can find recaps and video from every Senate budget hearing at PASenateGOP.com.

CONTACT: Jason Thompson

Key Points from Senate Budget Hearings with PA State System of Higher Education, Department of Community and Economic Development

HARRISBURG – No new details were made available regarding Governor Shapiro’s plans to merge the Pennsylvania State System of Higher Education (PASSHE) with the community college system and reduce tuition for some students during a Senate Appropriations Committee budget hearing with PASSHE Chancellor Dan Greenstein today.

PA State System of Higher Education

Committee members sought details about how the new governance model for PASSHE and community colleges would be structured and when the transition would take place but received little information. The Shapiro Administration did not ask Chancellor Greenstein to participate in the work group that is planning the merger, which raised numerous concerns from Democrats and Republicans alike.

Regarding the governor’s proposal to limit tuition to $1,000 for students from families making under $70,000, Chancellor Greenstein said he could not provide details about how many students would benefit or what the cost would be to other students or taxpayers.

Total enrollment in the state higher education system is down 30.8% from 2010, with another 2.2% drop this fall, and committee members discussed what PASSHE is doing to reverse enrollment decline.

Full Hearing

Senator Martin on the importance of workforce development, improving pathways to careers, attracting more students to Pennsylvania, keeping young people in Pennsylvania after graduation, and more

Video Highlights

PASSHE confirmed there was a lack of communication between the state system and the administration regarding the governor’s plans.

PASSHE could not answer detailed questions about the new governance model for the proposed merger with community colleges, nor what would happen with existing endowments and local funding streams.

PASSHE did not have details to share about the governor’s plan to reduce tuition for families making below the state median income.

PASSHE could not answer whether collective bargaining agreements and project labor agreements would be maintained after the governor’s proposed merger.

PASSHE could not quantify the savings realized since six system schools were consolidated into two institutions more than a year ago. Enrollment at the consolidated schools has continued to decline.

Tuition freezes championed by Senate Republicans over the past six years have helped to boost enrollment systemwide.

Closer alignment of higher education programs with workforce needs was suggested as a priority for PASSHE going forward.

Department of Community and Economic Development

Committee members questioned Secretary Rick Siger about the negative impacts of Pennsylvania’s burdensome permit process and tax penalties on startup businesses that don’t turn an immediate profit. These issues are not addressed in the governor’s budget proposal.

Members also noted Gov. Shapiro wants to fund his proposed Main Street Matters program at more than four times the amount of a similar program that already exists and sought justification for the redundancy.

In addition, the secretary was questioned about the administration’s proposal to use $500 million in bond proceeds for the PA Sites program, which will cost taxpayers a total of $900 million.

Full Hearing

Senator Martin on growing our economy, competing with other states, meeting workforce needs, creating new job opportunities, supporting affordable housing, and more

Video Highlights

Other states continue to reap the rewards of investing more and investing strategically in economic development, while Gov. Shapiro’s budget proposes to cut funding for these programs.

The governor’s economic development plan does not appear to include solutions to permitting delays that consistently chase away jobs and investment.

DCED plans to spend up to $300 million of the $500 million from its site development initiative in the first year. The secretary declined to list sites under consideration.

Additional accountability measures were suggested to ensure tax dollars are not wasted on programs that do not provide a return on investment.

Tourism is a key industry in Pennsylvania and continued investment should keep pace with marketing in sister states. Concerns were raised about smaller organizations not receiving timely funding from DCED for tourism projects.

Gov. Shapiro’s budget calls for continued funding for historically disadvantaged businesses, but funding allocated in the current year’s budget has not been sent out. Questions were raised about why veteran-owned businesses are not eligible.

Supporting advanced manufacturing remains a priority for both the General Assembly and the Shapiro administration.

Questions were raised regarding the rationale for the governor’s plan to replace the successful Keystone Communities program with a new initiative.

DCED was temporarily affected by the data loss that impacted the Office of Administration.

You can find recaps and video from every Senate budget hearing at PASenateGOP.com.

CONTACT: Jason Thompson

Rothman and Vogel Introduce Bills to Address Crop Damage, Expand Hunting Opportunities

HARRISBURG- In response to sustained, documented increases in agricultural crop damage as well as calls from sportsmen to open up more hunting opportunities, Sens. Greg Rothman (R-34) and Elder Vogel, Jr. (R-47) introduced a package of four bills aimed at addressing both issues.  The “Ag Freedom Package” would give agricultural producers more freedom to mitigate crop damage on their farms by eliminating burdensome regulations.  The package of bills would also increase hunting opportunities for sportsmen while protecting private property rights, which makes this legislation a win for all involved.

The Ag Freedom Package is comprised of four bills:

  1. SB 1086 seeks to provide common-sense procedural relief for farmers registered in crop deprivation programs, allowing them to transport animals to processors, thereby saving time, reducing waste, and maximizing donations to charitable feeding programs.
  2. SB 1087 would stiffen penalties for trespassing on private property.
  3. SB 1088 would establish an optional, non-public “Ag Access List” for those seeking more hunting opportunities. The list would be shared only with farmers requesting crop damage assistance from hunters.
  4. SB 1089 would add a tenth seat to the Game Commission Board from the agriculture community. Most deer in Pennsylvania are harvested on private lands, many of which are farms.

As chair of the Senate Game and Fisheries Committee, Rothman has heard from both sportsmen and farmers alike on the need for the changes proposed in The Ag Freedom Package.  “A recent hearing shed light on increasing crop damage by wildlife and the negative impact that damage has on Pennsylvania farmers,” Rothman explained.  “The good news is farmers and hunters can both be part of the solution. These bills help farmers more effectively address crop damage, while increasing hunting opportunities for sportsmen. A true win-win.”

As a farmer himself, Vogel, who chairs the Senate Agriculture and Rural Affairs Committee, knows the effects of crop damage firsthand as he has witnessed the damage wildlife has caused to his own crops.  “Wildlife-caused crop damage is a multifaceted issue that continues to affect our farmers and their bottom lines due to the amount of bushels lost each year because of the damage caused by deer in their area,” said Vogel. “I’m glad to be partnering with Senator Rothman on this legislative package and know these bills will benefit both Pennsylvania farmers and hunters alike.”

The Ag Freedom Package has been referred to the Senate Game and Fisheries Committee.

More information can be found at senatorrothman.com

Key Points from Senate Budget Hearings with Independent Fiscal Office, Department of Corrections

HARRISBURG – Testimony from Pennsylvania’s non-partisan Independent Fiscal Office (IFO) validated Senate Republican concerns about the faulty revenue and expense projections in Gov. Josh Shapiro’s budget proposal and emphasized the important benefits of the state Rainy Day Fund during a budget hearing with the Senate Appropriations Committee today.

The governor’s $48.3 billion plan seeks to boost state spending by more than $3.2 billion, or 7.1% above the current budget.

Independent Fiscal Office 

The IFO’s projected revenues for 2024-25 are $825 million lower than the Shapiro administration’s, and a whopping $8 billion lower over five years, guaranteeing massive tax hikes or sweeping program cuts in the future.

IFO Executive Director Matthew Knittel acknowledged Pennsylvania’s ongoing structural deficit and projected the current fund balance and the Rainy Day Fund – the state’s emergency savings account – would both run out in 2026-27 under the governor’s budget.

Committee Chair Scott Martin (R-13) sought additional analysis from the IFO on the commonwealth’s future financial standing as the cash balance is spent down and the administration spending proposals take effect. Martin said this would provide a more realistic view for Pennsylvanians of the impact of the Shapiro administration’s spending plans.

Full Hearing

Senator Martin on the long-term financial impact of Shapiro’s budget plan and the $14 billion deficit it could create, Shapiro’s overstated revenue and understated expenditure projections, the dangers of using of one-time revenues to fund recurring expenses, and more

Video Highlights

According to the IFO, Pennsylvania’s budgetary reserves are currently in the prudent range of 12-15%, and spending down these reserves could lead to credit rating downgrades. Contrary to Gov. Shapiro’s budget address rhetoric, the IFO is not aware of any rating agencies that think Pennsylvania’s reserves are too high.

The Shapiro administration is assuming the state will receive billions more in revenues over the next five years. In fact, the IFO’s revenue projections are $8 billion lower than the Administration’s projections during the five-year planning period.

The IFO recently revised its economic forecast downward, creating a big difference between the IFO’s revenue outlook and the optimistic assumptions the Shapiro administration used to build its budget.

The IFO projects additional financial challenges for Pennsylvania in the years ahead due to demographic changes, particularly the growth in the aging population while overall population remains flat. At the same time, the K-12 school-age population is expected to decline.

High interest rates continue to have a negative impact on consumers and job creators. As a result, Pennsylvania is beginning to see a slowdown in revenue collections.

Additional analysis of the financial impact of Gov. Shapiro’s proposals on adult use marijuana, games of skill, minimum wage and other issues will be available later in March.

The IFO testified that increasing the minimum wage to $15 an hour would have a disproportionate impact on rural areas. The proposed increase is projected to cost Pennsylvania 20,000 jobs and increase inflationary costs to consumers.

Pennsylvania remains the top exporter of energy in the region, especially as some neighboring states have seen declining generation.

It is unclear whether the state could realize enough revenue from the legalization of adult use marijuana to meet the Shapiro administration’s projections. It does not appear that the Shapiro administration is including additional funding to deal with the societal and financial costs associated with legalization.

Department of Corrections

Gov. Shapiro has proposed new funding for the department totaling $229 million – $74 million more than the department requested for 2024-25. This followed the Department overspending its 2023-24 budget by $100 million.

In addition, projected overtime costs of $143 million for 2023-24 will exceed the budgeted amount of $128 million. Committee members sought answers to these and other spending highlights from Secretary Laurel Harry.

EMS companies waiting two years for reimbursement was also raised by members, who urged more timely action from the department’s vendor. Senators also discussed concerns over lowering the minimum age for corrections officers from 21 to 18, among other issues.

Full Hearing

Senator Martin on reducing long-term Corrections costs, public safety concerns, facility issues, potential impact of legalizing adult use marijuana, and more

Video Highlights

An additional $100 million in supplemental spending was requested by the department above the amount that was appropriated in the current year’s budget. Much of the cost overrun was related to personnel and overtime costs.

Concerns were raised about the rise in the number of corrections officers who are working excessive overtime hours and increasing overall costs, while creating potential safety risks due to exhaustion. Approximately 40 officers earned more than $100,000 last year in overtime pay alone.

Gov. Shapiro included $74 million more in his budget than the Department of Corrections requested.

The recent data loss that impacted the Office of Administration did not affect Corrections information or records, but it did lead to a more thorough review of existing protocols and protections. Department officials struggled to answer where their servers are located.

The department recently instituted a new policy allowing individuals as young as 18 to work as corrections officers, but it is unclear how many have been hired.

Additional measures to identify and treat incarcerated individuals suffering from mental health issues was suggested to reduce recidivism.

EMS providers are not being reimbursed promptly for services related to inmate care, with some emergency service providers waiting two years to be compensated by the department. This places a greater burden on local taxpayers.

The cost to include body cameras for probation and parole officers is included in the department’s budget request.

You can find recaps and video from every Senate budget hearing at PASenateGOP.com.

CONTACT: Jason Thompson

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