Senate Appropriations Committee
Budget Hearings
FY 2011-2012

Attorney General | Watch Listen

During testimony on the proposed budget for the Attorney General's Office, senators raised concerns about growing prison populations and the cost of the Corrections Department's budget. They told Acting Attorney General William Ryan that steps need to be taken to address the issue of prison costs, including alternative sentencing for non-violent offenders, drug courts and drug and alcohol education programs. Other areas of questioning covered: 

• The success of the department's Child Predator Unit
• The status of the new home improvement contractor law
• Concern about the increased sale of bath salts and synthetic marijuana
• Mandatory pre-trial DNA testing
• Enforcement of the gaming industry
• Efforts to reduce recidivism

Auditor General | Watch Listen

During a budget hearing with Auditor General Jack Wagner, Senate Appropriations Committee members focused on how the state can save money by reducing fraud in the Department of Public Welfare. Other issues discussed during the hearing included:

• Possible reforms to the Delaware River Port Authority.
• Contracting and procurement in the Department of General Services.
• Prosecution of Medicaid fraud among providers.
• Staffing and funding increases for the Board of Claims.

Department of Aging | Watch Listen

Testimony from Acting Aging Secretary Brian Duke focused on the need to fund and encourage the use of home and community care programs, which can be as much as 85 percent less expensive than nursing home care.

Committee members said these programs allow seniors to "age in place" as long as possible and save the state money.  Senators also noted that the department is now funded solely by the state Lottery, and had concerns because sales are leveling with the advent of casino gambling in Pennsylvania. 

Department of Agriculture | Watch Listen

Members of the Senate Appropriations Committee questioned if proposed funding for the Department of Agriculture would be adequate to maintain standards of food safety and animal health during a budget hearing with Acting Secretary of Agriculture George Greig. Other topics covered during the hearing included: 

• Facilitating direct sales of raw milk from farmers to consumers and ensuring dairy farmers receive over-order premiums paid by consumers.
• Funding for agriculture research, crop insurance and the Animal Health and Diagnostic Commission.
• Helping producers enact best management practices to improve water quality and reduce pollution.
• The department's jurisdiction over the state Dog Law.
• Opportunities for farmers to profit from alternative fuels.
• Farmland preservation efforts and the price of farmland.

Department of Community & Economic Development and PA Housing Finance Agency | Watch Listen

During a budget hearing with Department of Community and Economic Development Acting Secretary Alan Walker and Pennsylvania Housing Finance Agency Executive Director Brian Hudson, members of the Senate Appropriations Committee urged DCED to streamline the permit review process to help spur job growth. Other topics discussed during the hearing included:

• The consolidation of programs intended to help downtown areas.
• Maintaining the Governor's Action Team.
• Funding for projects through the H2O PA program.
• Venture capital for future investments.
• State matching funds for Small Business Development Centers.
• Impact of the Marcellus Shale industry on housing in the northeast.
• The use of LIHEAP funding for weatherization.

Department of Conservation & Natural Resources | Watch Listen

Acting DCNR Secretary Cindy Dunn assured members that, unlike in previous budget processes, DCNR is not threatening to close state parks. Other topics discussed included: 

• Funding for the Keystone Recreation, Park and Conservation Fund, Growing Greener and Heritage Parks.
• The number of gas wells on state forest land includes 575 approved and 47 producing gas and royalties between 12% 18% to the state.
• The administration's decision to rescind the policy of reviewing the impacts of drilling on state land.
• The level of staffing to inspect Marcellus Shale and whether more is needed, and the infrastructure involved in drilling, including roads, pipelines and electricity.
• The decline in the gypsy moth population.
• Development of ATV trails, and shooting ranges being shut down because of the presence of lead pellets.

Department of Corrections and Probation & Parole | Watch Listen

Acting State Corrections Secretary John Wetzel said Pennsylvania should better define who should be considered as a "non-violent offender." Other issues discussed during the Senate Appropriations Committee budget hearing on the Department of Corrections and Probation and Parole included:

• Increasing numbers of inmates in state prisons, and Pennsylvania inmates housed in other states.
• Discrepancies in the numbers of individuals eligible for parole hearings and those who receive them, as well as parole violations and prison overcrowding.
• Salaries for corrections employees and supervisors, and re-bidding of the construction project for Graterford State Correctional Institution.
• Costs of medical care and free postage for inmates.
• Overtime costs created by the department's sick and leave time policies.
• Parolees who are working, electronic monitoring of offenders, and job training programs.
• Drug testing of offenders, and in-house drug and alcohol treatment programs.
• Reintegration of sex-offenders into communities, and community corrections programs.
• Reduction of paperwork in the parole system, and the possible merger of the Department of Corrections and Probation and Parole.    

Department of Education | Watch Listen

The committee questioned Acting Education Secretary Ronald Tomalis about proposed funding and the need for further reforms to reduce costs for school districts. Topics covered included:

• The feasibility of a statewide teachers' contract and health care plan to contain costs.
• Funding for community colleges and state-related universities.
• The reasoning behind eliminating Intermediate Units funding, the need to reform the special education funding formula and the effect of multiple testing requirements on school budgets.
• The need to change the "hold harmless" provision so that funding reflects decreases in student district populations.
• The governor's call for school employees to accept a one-year pay freeze, and the need to eliminate Act 1 exemptions to further limit local tax increases.
• The effects of cutting school district reimbursements for Social Security and charter school costs.
• In many school districts, eliminating teacher seniority and allowing furloughs for economic reasons would provide more benefits than a funding increase.

Department of Environmental Protection | Watch Listen

Acting DEP Secretary Michael Krancer discussed hiring staff to inspect Marcellus Shale drilling sites, noting that permit revenue will pay for 85 workers to inspect a projected 7,000 wells this year. Other issues committee members brought up included: 

• In-stream monitors installed to study the effects of drilling, including Naturally Occurring Radioactive Material.
• "Friction-free permitting" and applying regulations more efficiently, as well as the need to balance environmental and economic impacts in DEP permitting process.
• Reviewing the previous administration policy to stop using conservation districts for the permitting process.
• Due to 30 different funding sources, DEP personnel spend an inordinate amount of time administering grants instead of doing environmental work.
• Cuts to acid mine abatement and possible furloughing of flood control staff, and progress on scrap tire remediation.
• Recent discussion of a Marcellus Shale tax versus a local impact fee.
• Educating the public about TCE/DCE and riparian buffers, as well as the H2O program and stormwater/sewer grant funding for aging systems.
• The distinction between "significant" and "technical" permit violations, and the need for a web site allowing citizens to see wells in their area, and related reports on them.
• Chesapeake Bay Watershed's increasingly strict regulations.
• Commonwealth solar credits being used by out-of-state electric generation, and the possibility of using Clean Water Fund money for West Nile Virus eradication.

Department of General Services | Watch Listen

During a hearing on the Department of General Services' proposed budget, senators questioned Acting Secretary Sheri Phillips about potential cost-savings initiatives, including reducing the state's vehicle fleet, as well as using green energy and investing in Pennsylvania products. Other areas of questioning focused on:

• Locating state buildings in downtown areas to encourage economic development.
• Cutting energy costs in state buildings to save money.
• Using excess land at Graterford State Prison for other purposes.
• Exempting municipalities from the prevailing wage in certain construction projects.

Department of Health | Watch Listen

Acting Health Secretary Eli Avila told members of the Senate Appropriations Committee that his department had taken swift action to prevent criminal activities such as those that were uncovered at a Philadelphia abortion clinic earlier this year.  Senators wanted assurances that such clinics will be carefully monitored and regulated to prevent further abuses.  Senators also raised the following issues:

• Finding ways to attract more primary care physicians to the state and to keep doctors here.
• The growing use of "urgent care" clinics and their ability to meet the needs of health care consumers.
• Enforcement of the Clean Indoor Air Act, including the introduction of legislation to close loopholes.
• The need to more successfully diagnose and treat Lyme disease.
• The importance of the state's childhood hearing screening program.
• Funding rural and regional cancer initiatives to increase prevention and detection.
• Providing greater access to vital statistics online.

Department of Insurance | Watch Listen

Acting State Insurance Commissioner Michael Consedine told the committee Pennsylvania is studying how it might comply with the federal health care mandate, if the law is deemed constitutional by the courts. Other issues discussed included:

• PA FairCare, CHIP and the discontinuation of the adultBasic program.
• Health care exchanges and ways to control health care costs.
• The phasing out of the MCARE program.
• Highmark Blue Cross funding for social and charitable endeavors.
• Insurance companies "steering" customers to "preferred" auto body repair shops.

Department of Labor and Industry | Watch Listen

The high cost of prevailing wage and concerns about the Unemployment Compensation Trust Fund were among issues discussed during a hearing on the Department of Labor and Industry's proposed budget. Senators questioned how businesses will be affected because they must pay back interest on the federal unemployment compensation loan. They also had concerns about the economic impact of the state's prevailing wage law, which they said is often much higher than the average local wage. That could costs local jobs and hurt economic growth, according to several members of the panel. Other areas of testimony focused on:

• The Uniform Construction Code and a costly sprinkler requirement for new construction.
• The importance of Workplace Safety Committees.
• A lack of enforcement – including fines and penalties – for contractors who violate Pennsylvania's One Call requirement.
• Taking steps to reduce welfare fraud.
• The vital role of the Pennsylvania Conservation Corps.

Department of Military and Veterans Affairs | Watch Listen

Acting State Adjutant General Major General Wesley Craig said about 140 Pennsylvania Air National Guard members are currently deployed in support of the no-fly zone activities in Libya. Other issues discussed during the budget hearing on the Department of Military and Veterans Affairs included:

• The breakdown of federal- and state-funded positions in the department, the deployment of 3,000 guard members next year for one year of duty in Kuwait, and the fact that of 36,000 total deployments, less than 3 percent of those returning guard members have filed complaints about problems regaining their civilian jobs upon return.
• The educational assistance program, waiting lists for veterans' homes and strategies to assist the 1,500 to 3,500 homeless veterans in Pennsylvania.
• Security at Fort Indiantown Gap, the future of Willow Grove Air Base, the status of the now-closed Scotland School for Veterans Children property and funding for the Civil Air Patrol.
• Mental health services for veterans, reductions in funding for veterans service organizations, and the Military Emergency Relief Program.

Department of Public Welfare | Watch Listen

Committee members told Acting Public Welfare Secretary Gary Alexander they are concerned about the rapid growth in the department's costs – which now exceed those of the Department of Education – and the need to improve efficiency.  Specifically, committee members discussed: 

• Fraud in county assistant offices and lack of oversight, as well as the need for incentives to weed out waste and fraud within DPW.
• State reimbursements for pharmacies and consolidating prescription drug programs to save money.
• Private Intermediate Care Facilities for the Mentally Retarded (ICFs/MR) are less costly than public facilities and the state should move more clients to private to serve more citizens.
• The high cost of transporting welfare recipients to methadone clinics for treatment – in some cases to out of state facilities.
• The status of the Medicaid "global waiver" application from the Centers for Medicare and Medicaid Services and Office of Developmental Programs waivers.
• How many are served and the possibility of a cap on enrollment in the Living Independently for Elders (LIFE) program.
• The status of regulations for adult protective services and what is being done with complaints.
• Hospitals losing $330 million in funding when fed dollars are included, and elimination of Human Services Development Fund.
• Support for rural health care facilities and the "carve-out" for behavioral health services.

Department of Revenue | Watch Listen

Acting Revenue Secretary Dan Meuser said the state can expect to end the current fiscal year with an $80 million surplus as projected by the Governor. Other topics discussed during the budget hearing on the Department of Revenue included:

• Staffing levels in the department, trends in and costs of electronic tax filing, and the $23 million in technology upgrades.
• Indicators of the condition of Pennsylvania's economy, and the new independent fiscal office and revenue estimates.
• Privatization of the state store system, a sales tax on online transactions, and the impact of the tax amnesty program.
• The Delaware Loophole, the phase-out of the Capital Stock and Franchise Tax, a projected increase in real estate transfer tax revenues, and the local impact of the Pennsylvania Film Tax Credit. 
• Tax payments related to Marcellus Shale drilling operations.
• The 150,000 increase (to 600,000) in the number of people benefiting from the Property Tax/Rent Rebate program, and the impact of gaming on the Lottery Fund.
• The potential for local property tax increases to offset reductions in state funding for education, as well as the amount of money provided to school districts from gaming.

Department of State | Watch Listen

During a budget hearing on the Department of State, committee members asked Acting Secretary Carol Aichele about a number of areas in which the department has oversight, including campaign finance reporting, licensing practitioners and voter registration and elections.   Topics included:

• Enabling the department to conduct random inspections of medical facilities.
• Using a national practitioner database to obtain licensing information about doctors.
• Sharing information with other departments when complaints are received.
• Real-time reporting of campaign contributions to improve disclosure and transparency.
• Establishing a data base to record continuing education credits.

Department of Transportation | Watch Listen

Members of the Senate Appropriations Committee examined proposed transportation funding reforms during a budget hearing with Acting Secretary of Transportation Barry Schoch. Topics discussed during the hearing included: 

• Resources needed to repair roads and bridges, public/private partnerships, and the possibility of using the Motor Vehicle License Fund for road repairs.
• Funding for the Rail Freight Assistance Program and airports.
• The Administration's position on flexing federal highway funds for mass transit.
• Updating regulations restricting the transportation of agricultural equipment.
• The effects of increased truck traffic on state roads, and bonding for roads that are damaged due to Marcellus Shale traffic.

Gaming Control Board | Watch Listen

During a budget hearing with Pennsylvania Gaming Control Board Chairman Greg Fajt, the Senate Appropriations Committee requested additional information on property tax relief the state should expect in the future from gaming revenue. Other topics discussed during the hearing included: 

• The status of the second casino license for Philadelphia.
• How to help promote the equine industry to ensure future growth.
• How Pennsylvania gaming revenues rank against other states that have legalized gambling.
• The effect of the gaming industry on businesses located near casinos.
• Security issues and the use of State Police officers at casinos.

Governor's Budget Office/Executive Offices/Office of the Governor | Watch Listen

Budget Secretary Charles Zogby said the proposed 2011-12 budget upheld Governor Corbett's promise to present a balanced budget without raising taxes. Other topics discussed included:

• Revenue projections and an erosion of the current $243 million budget surplus.
• The 50 percent reduction in funding for the State System of Higher Education; a proposed elimination of the exemptions for K-12 schools in Act 1; funding for state-related universities; and the 10 percent reduction in funding for community colleges.
• The defunding of the Office of Health Care Reform; the cap on the Film Tax Credit; the diversion of Tobacco Fund money; and the elimination of 1,500 state positions.
• The consolidation of programs in the Department of Community and Economic Development; a reduction in workforce development funding; the status of pending RCAP funding; a proposed Liberty Loan Fund and the allocation of federal stimulus funding for state programs.
• The statewide radio system; the administration's Marcellus Shale policies; and the increase in funding to the Department of Public Welfare.

Judiciary | Watch Listen

Committee members questioned state Supreme Court Chief Justice Ronald Castille and Justice Debra Todd about the Judiciary's $324 million funding request and the governor's $276 million proposal, and methods for saving money while administering the court system. The panel also discussed:

• Act 49 filing fees and whether expanded implementation would produce adequate funds.
• How the Unified Judicial System redistricts and eliminates certain Magisterial District Justice seats, and why district justice education funding is up 35 percent despite a reduction in district judges.
• Steps the Unified Judicial System is taking to reduce personnel costs, including pay freezes and the need to implement employee contributions to health care plans, along with news reports of judges attending conferences in exotic locales.
• The implementation of Veterans Courts, and whether medical malpractice courts could help to move such cases along.
• The possibility of the Unified Judicial System absorbing county clerk of courts and prothonotaries into the state system.
• An update on implementation of recommendations by the Interbranch Commission on Juvenile Justice to prevent further cases of corruption in county juvenile courts.
• Existing, but underused, alternative sentencing programs for non-violent inmates that could save tax dollars.

Liquor Control Board | Watch Listen

The issue of privatizing state stores highlighted a public hearing on the proposed budget of the Pennsylvania Liquor Control Board (PLCB).   PLCB Chairman  P.J. Stapleton also answered questions about pricing, procurement and personnel.   Committee members also asked for more information on: 

• Transferring funds from the PLCB to the state's General Fund.
• Consumer choice, particularly in rural areas.
• Issues with implementing wine kiosks.
• Liquor code enforcement by state police.
• Sunday sales and other efforts to make stores more consumer friendly.

PEMA/Homeland Security | Watch Listen

Pennsylvania Emergency Management Agency Director Glenn Cannon explained the decision to cancel plans to build a new agency headquarters at Fort Indiantown Gap and to remain in the Harrisburg area. Other issues discussed included:  

• The natural and nuclear disasters in Japan and Pennsylvania's plans for responding to a domestic nuclear disaster.
• Training of volunteer firefighters and EMS personnel in Marcellus Shale regions.
• The $25 million state grant program for volunteer departments and federal funding.
• The implementation of the recommendations in Senate Resolution 60 report to improve funding and recruitment.
• Wireless E-911 service, the statewide 800 megahertz radio system and the PA One Call system.
• Pennsylvania's response to winter storms.

Public Utility Commission | Watch Listen

The Senate Appropriations Committee questioned PUC Chairman Robert Powelson and commissioners about implementation of Act 129 of 2008 and efforts to streamline costs. Others issues discussed included:

• Response to recent natural gas explosions and aging pipelines.
• An update on electricity rates now that all rate caps have expired, including Pennsylvania retail rates compared to surrounding states.
• The status of area codes facing splits or overlays, including 814.
• Pennsylvania's pay-in to the federal Universal Service Fund to expand broadband access.
• The implementation of new standards mandating increased use of solar power.

SERS/PSERS | Watch Listen

Committee members questioned panels from the Pennsylvania School Employees' Retirement System and the State Employees' Retirement System on the long-term health of the plans as well as recent investment returns, which have climbed since collapsing in 2008. The committee also discussed:

• Act 120 of 2010, the pension reform plan, which smoothed out future pension costs but did not eliminate them.
• The fact that Gov. Corbett's proposed budget fully funds the pension plans, unlike the previous administration.
• The large number of investment managers from New York and the lack of Western Pennsylvania managers, as well as the lack of available information on the returns posted by investment managers.
• Moving from defined contribution to defined benefit plans, and the legal restrictions on altering the benefits of current retirees.
• The slight budget increase requested by PSERS and the reduced budget sought by SERS.
• In actual dollars, taxpayer-funded employer contributions to the plans are less than they were 30 years ago.

State Police | Watch Listen

Acting Pennsylvania State Police Commissioner Frank Noonan said the additional cadet training classes provided under the governor's budget would help address shortages of troopers in some barracks and the possible retirements of up to 1,200 additional members.

Other topics discussed during the budget hearing included: 

• Responses to incidents in Marcellus Shale regions, an increase in the number of municipalities using the State Police as their primary police force, and problem drinking in college towns.
• Liquor control enforcement activities and costs, efforts to close nuisance bars and an increase in the number of troopers assigned to the gaming control activities.
• The statewide radio system and communication problems, recruitment trends and training costs.
• The phase out of the Ford Crown Victoria police cruiser and plans for its replacement with a new Ford Taurus, and the use of unmarked cruisers for traffic control.
• The turnaround time for non-criminal fingerprint checks, an increase in gun transfers processed by the State Police and DNA processing backlogs.
• Homeland security challenges, synthetic marijuana and the abuse of bath salts.
• Potential legislation on texting while driving, the increase in DUI arrests and use of radar by local police.

State-Related Universities | Watch Listen

Members of the Senate Appropriations Committee questioned how proposed cuts to Pennsylvania's four state-related universities would affect students, parents and faculty during a budget hearing with Pennsylvania State University President Graham Spanier, University of Pittsburgh Chancellor Mark Nordenberg, Lincoln University President Ivory Nelson and Temple University President Ann Weaver Hart. Senators also requested additional information concerning:

• How state funds are appropriated to different university programs, the effect of additional cuts to university medical schools, trauma centers and agricultural research programs, and economic development programs that are funded by each university.
• Student loan obligations for university graduates, overall educational costs to students, loan and grant practices of the Pennsylvania Higher Education Assistance Agency (PHEAA) and the average length of time for students to earn a degree.
• Possible tuition increases, current and projected enrollment numbers, possible closing of branch campuses and pay freezes and staffing adjustments for university faculty and staff.

State System of Higher Education | Watch Listen

During a hearing on the State System of Higher Education's proposed budget, SSHE Chancellor John Cavanaugh said a reduction in funding by almost 50 percent would have a significant negative impact on programs and tuition. Senators raised concerns that higher tuition rates could impact middle class families' ability to send their children to college. They said that while they understood the need for cuts given the state's economic situation, they were caught off guard by the size. Senators said that they would work to restore a portion of funding that has been cut and also raised questions about:

• Reductions in PHEAA's appropriation and its impact on student loans.
• Using private fundraising to open up the possibility for raising additional funds.
• The impact of increased energy costs, due to electric deregulation.
• The challenge of campus capacity as a result of increasing enrollment rates.
• The correlation between tuition increases and overall costs.
• Cost containment measures that have been implemented to try to hold down tuition rates.
• The growing number of online students and their inability to receive PHEAA grants.
• Allowing students to use e-books rather than more expensive textbooks.
• Working with community colleges to provide workforce development opportunities.

Treasury Department | Watch Listen

State Treasurer Rob McCord said Pennsylvania's tuition account program is currently healthy, but the guaranteed savings plan would be dramatically impacted by steep hikes in tuition rates. Other issues discussed at the hearing included:

• State investments, the unclaimed property program and technology improvements for the department.
• Public pension reform and accessing public contracts under the Open Records Law.