Budget Talks Begin in Harrisburg, State Roundup

By PA Independent Staff

HARRISBURG — Budget hearings continued this week, with reports from state departments on their funding requests for next year. But instead of the annual allocations, much of the discussion has focused on the major proposals Gov. Tom Corbett has outlined as his to-do list: pension reform, liquor privatization and transportation.

And so far, none are sailing ahead without discrepancies between lawmakers, including other Republicans.

Pennsylvania is also drawing some national attention as a state with a Republican proposal to re-distribute Electoral College votes — and as a state that could still potentially expand Medicaid under the Affordable Care Act.

Corbett’s pension plan under scrutiny

One way or another, something must be done to address the state’s $41 billion in pension system liabilities. But the proposal on the table right now doesn’t go far enough to address those plans, in the eyes of some.

Gov. Tom Corbett wants to reduce payments into the pension system for the next five years to free up dollars for other areas of the state budget. He has proposed tying that plan to long-term cost savings that would reduce future benefits for employees and would move all future hires into a 401(k)-style pension system to shift the investment risk from taxpayers to employees. Simultaneously, the state would reduce in the short-term the state’s contributions to its pension system.

As officials pointed out this week during budget hearings, that $41 billion has to get paid.

“If everyone is looking for a way to avoid paying, that is just not going to happen,” Jeff Clay, executive director of PSERS, told members of the General Assembly this week. ”It’s about figuring out how to pay it.”

According to numbers obtained by the Associated Press, the Corbett administration plan would save $12 billion over the next 30 years by reducing benefits.

But the short-term reductions in payments are a concern, Clay said.

Pennsylvania Treasurer Rob McCord blasted the administration’s proposal, said Corbett’s proposal would only make the problem worse.

“Fundamentally, what this does is make a big problem worse and fail to do the difficult work of talking about how to fund a real liability,” McCord said.

Electoral College reform introduced

Senate Majority Leader Dominic Pileggi, R-Delaware, this week formally introduced his legislation to redistribute Pennsylvania’s electoral votes based proportionally, instead of a winner-take-all system.

Pileggi’s legislation is one of several Republican-proposed Electoral College changes nationwide. Proposals have been offered in other swing states that went for President Obama but have Republican governors, such as Michigan and Wisconsin.

Such plans are called out as GOP plots to rig the Electoral College. But lost in the partisanship is whether the system truly needs a makeover.

Pileggi said he does not plan on introducing the bill before the state budget is passed by the June 30 deadline. He also said his aim is to start discussion on whether the system is fair.

House Minority Leader Frank Dermody, D-Allegheny, and state Rep. Michael Hanna, R-Clinton, wrote this week in an opinion column the Senate Republican plan is “sour grapes,” and advocated for a direct election concept instead.

Lawmakers press Liquor Control Board amid privatization proposals

Both the House and Senate appropriations committees held budget hearings for the Pennsylvania Liquor Control Board this week.

The backdrop for these hearings was the looming proposal to privatize wine and spirit sales in Pennsylvania, by getting rid of state stores and changing licensing laws to allow alcohol to be sold in more retail environments.

But some lawmakers are expressing an interest in changing, or “modernizing,” the existing liquor system instead of abolishing it. Such changes could include how products are priced to expanding Sunday hours, bringing in as much as $100 million more a year according to Senate estimates.

Board Chariman Joseph “Skip” Brion said he does not believe the state should be in the liquor business, but modernization laws would help.

“My attitude is if we are going to have a liquor business, make it the most profitable and best that you possibly can,” Brion said.

Questioning also turned to profitability of state-stores and the inner-workings of PLCB, like its private label wine TableLeaf.

State Sen. Pat Vance, R-Cumberland, said she had a problem with the PLCB competing with the private sector.

“Government tax dollars competing with private dollars, there is no excuse for doing that,” Vance said.

TableLeaf often is criticized as government-buoyed competition to private wine retailers. And it’s been criticized for using a California winemaker, Brono Wine Co., to make the wine. But the PLCB maintains its delivering consumers what they want, and earning money.

Electronic campaign finance up for discussion again

Pennsylvania is in the minority of states that doesn’t require candidates for state elections to file their finance reports electronically.

Once again, though, lawmakers are introducing measures to replace mail-in filings with all electronic forms.

This switch would save the state relative pennies in the annual budget — about $100,000 a year in the $27 billion state budget. What’s more important is the move would more quickly make campaign finance reports available for public review.

Senate Majority Leader Dominic Pileggi, R-Delaware, introduced legislation to require an electronic system in the past but such measures have failed.

“It is more efficient, it is less expensive and it has the added advantage of allowing more timely public disclosure of campaign finance contributions,” Pileggi said.

Pileggi said he thinks any misgivings lawmakers might have about filing electronically are waning.

Some Republicans call for end to prevailing wage in transportation discussion

If the state is going to spend $1.8 billion on new roads and bridges, it should get the most bang for those big bucks.

That’s the argument some conservative Republicans in the state House are making with regard to Gov. Tom Corbett’s proposed transportation funding initiative. They say they want to make changes to the state’s prevailing wage law to be included in the transportation funding package that the General Assembly is expected to work on during the spring.

Pennsylvania’s prevailing-wage law sets standard wages and benefits for all government-funded construction projects that cost more than $25,000.The wages are determined on a county-by-county basis and vary widely across the state, but they generally result in wages at least 10 percent higher than on non-prevailing wage projects in the same area, according to data from local government groups.

“If state government moves forward with a plan to fix roads and bridges through taxing more at the pump, we must work the spending side through enacting long-overdue reforms to the prevailing wage system,” said state Rep. Gordon Denlinger, R-Lancaster.

Denlinger is the prime sponsor of legislation in the state House that would do away with the prevailing wage entirely. He said Friday that he will push for the inclusion of prevailing wage reforms in final transportation plan as well.

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