Pennsylvania State budget

Penn State #1 . . . But this time it’s not for a good reason

How important are college rankings?  How much store do you put in the annual US News & World Report college rankings?  Well, you might be interested in this ranking – Penn State, University Park campus is number one on this list, but this time it’s not for a good reason. 

The US Department of Education has released on a report on college cost comparisons and Penn State heads the list for the state schools.  Penn State is #1 on the list and the only state school with a yearly tuition over $15,000! For comparison purposes, the national average for 4-year state schools is $6,397.

You probably would assume that attending one of our state schools rather than attending a private school or venturing beyond the state’s boundaries would save students thousands of dollars.  Does not look like that may any longer be the case for Pennsylvania residents — Penn State University is the most expensive public school in America.

In case you are wondering about the cheapest 4-year public universities – Kansas’s Haskell Indian Nations University has the lowest annual tuition ($403) and Dine College in Arizona is in second place with an annual tuition of $805.

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Supporting Corbett’s Budget, Rep Kampf claims it a “Victory for All Taxpayers”

I received an official email from Rep Warren Kampf supporting the newly approved state budget and claiming that it a “victory for all taxpayers”. Included in the email was a YouTube video of Kampf’s remarks presented last night in Harrisburg.  The 4 min. video contains something for everyone . . . I encourage you to watch it and look forward to your comments.

Hear my Floor Remarks from Last Night’s Budget Vote

I heard you.
Last night was a victory for all taxpayers because after eight years of uncontrolled spending and borrowing, we have brought fiscal discipline back to state government.?

View my remarks

This budget recognizes the financial burdens we’ve placed on our families and reverses these trends by reducing spending and rejecting tax increases when people can least afford them.

I also knew we could do a better job prioritizing spending than the governor did in his proposal, and we have. Local schools will receive millions of dollars more than proposed. For example, we were able to restore $1.276 million to the Tredyffrin-Easttown School District alone.

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Expecting Good News for Public and Higher Education in House GOP Budget Next Week . . . Welfare Programs Not so Lucky

According to John Micek of the Morning Call, www.morningcall.com  the state House will introduce a $27.3 billion budget plan next week that contains good news for public and higher education but the state’s public welfare programs are not so lucky.

Here are some noteworthy items expected in the House GOP budget unveiling next week:

  • The budget will trim $470 million from public welfare programs. Social service programs aid veterans, abused children, the elderly and the mentally ill. Taking funding from the welfare programs but restoring some of the public and higher education funding is a bit like “robbing Peter to pay Paul”; a reshuffle of the allocations.
  • $43 million to help school districts meet their Social Security payments.
  • Increase state public education funding by $210 million for kindergarten through 12th grade.  The budget funding should restore school district funding to the 2008-09 level (pre-stimulus money).
  • $100 million appropriated for ‘Accountability Block Grants’ which school districts use to fund after-school tutoring. (The program was eliminated in Corbett’s proposed budget)  This could be good news for T/E school district . . . after-school tutoring (value $85K) was on the budget strategy list.  In fact, FLITE has been working on fundraising to keep the program.
  • It is expected that next week’s budget announcement will include restoring some of the funding to the state’s higher education – If you recall Corbett’s proposed budget slashed higher education funding by 50 percent.  Apparently, there has been a change of heart in Harrisburg and higher education will see an increase of funding of $380 million in next week’s budget.  There is good news expected for Temple, Lincoln, Pitt and Penn State Universities when the budget is unveiled; these four universities will see their funding going up and they should receive 75 percent of their current level.  

I am going to be curious to see how the better-than-expected general fund collection surplus plays in to the budget.  The fiscal-year information released this week indicates the current surplus at $506 million. In the remaining two months in the state’s fiscal year, the surplus could grow even further – some are suggesting the surplus may grow to nearly $600 million. 

How will Harrisburg use the unexpected $500+ million surplus?  I would like to see some of this ‘found’ money help restore public education funding cut by Corbett’s proposed budget . . . making education a priority in Pennsylvania.  It appears that Corbett and some of the top leadership of his own party is at odds over what to do with the surplus in the current fiscal year.  Corbett wants to place the $500 million surplus in reserve and continue with the proposed cuts.  However, the majority of the Senate Republicans disagrees and wants at least some of the surplus to restore cuts in the budget proposal, including public education.

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How Can PA Legislature Increase their Payroll by 22%, Cut Healthcare & Public Education Funding & Sit on $189 Million Reserve . . . Because they can!

Although much of the state’s government has fallen victim to Gov. Tom Corbett’s ax swinging proposed budget, there does appear to be one area that is seemingly ‘hands-off’ to receive any significant cuts . . . the legislature’s payroll!

On one side of his budget-cutting measures, Corbett suggests that public workers take 4% salary cuts but on the other side, we learn that since 2005 the General Assembly’s payroll has grown at almost double the rate of inflation.  During this period, the legislature’s payroll has soared 22% to $119.5 million. Now, remember during the same time that Harrisburg salaries are climbing . . . the state (and the country!) is feeling the effects of the recession and that Pennsylvania’s unemployment rate hit a 26-year high of 8.8 percent in the first quarter of 2011. 

What is wrong with this picture? Pennsylvanians are out-of-work and the payroll is ever-increasing in Harrisburg. Here is an interesting statistic . . . legislative staffers with salaries over $100,000/yr. rose from 36 in 2005 to 69 in 2011.  The highest paid member of Corbett’s staff is the executive director of the House Appropriations Committee, Edward Nolan, who makes $192K/yr.  Corbett’s salary is $14K less; $178,000/yr.

Where is the oversight for legislature salaries?  Did you know that Pennsylvania’s General Assembly is the largest full-time legislature in the country – and comes with a $300 million annual price tag?  There are 253 state legislators; each has a base salary of $79,646 and automatic cost of living increases.  The General Assembly employs 2,650 staff members, which makes Pennsylvania one of the largest government employers in the nation.

The Pittsburgh Tribune-Review, www.pittsburghlive.com conducted an interesting 6-year comparison of legislative staff and salaries from 2005 – 2011 with surprising results.  Their review found:

  • The number of House employees grew from 1,714 to 1,812, and payroll increased by $17.3 million from $59.4 million to $76.7 million.
  • The House payroll includes “lounge attendant” Lynn Bias, paid $37,300 annually for duties that include cutting members’ hair. In a “Members Only” room, Bias “takes care of members’ needs and grooming” because they are away from home for long periods and make public appearances.
  • Though the number of Senate employees declined from 905 to 835, the payroll grew $4 million to $42.7 million this year. The Senate pays staffers Robert Nagle and Chris Miller $37,384 and $45,888, respectively, to cook meals and clean the room where members dine at their own cost on Senate session days. The employees have other duties on non-session days, such as moving furniture, cleaning carpets, changing light bulbs, sweeping high ceilings and chandeliers for cobwebs, running errands and delivering ice to Senate offices.
  • Pennsylvania was the only large state with legislative staff growth — 8 percent — from 1996 through 2009. Ohio, New York, Michigan, Florida, Texas and California reduced staffs from 1 percent to 31 percent.

It appears there is a double standard in Harrisburg.  The legislature salaries continue to rise; the number of staff members in Pennsylvania is one of the highest in the country, yet the proposed state budget targets health care, public education and the lowest-earning public workers.  Again, I ask what is wrong with this picture.  How does ‘fairness’ factor in . . . what about everyone ‘feeling the pain’?  Why are some exempt from the pain; is this a case of it’s ‘who you know’ in Harrisburg?

This brings me to more questions. With the looming $4 billion deficit in the state budget, why is that the legislature is sitting on a $189 million reserve? Why can’t some of that money go towards the mega-billion dollar deficit?  Why not transfer some of this money into the General Fund?  This $189 million surplus is taxpayer’s money – so why not take some of this money and help the people in the state that need it.  What makes this situation any different from a school district dipping into their fund balance to help with their budget deficit? 

Someone will need to explain to me why the legislature needs to keep a reserve cushion of $189 million yet the proposed budget calls for state funding for higher education to be cut in half.  I do not understand how this equates.

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Pennsylvania is Still #1 in the Country . . . Worst Bridges in America!

Based on a new Transportation of America report, Pennsylvanians had better face it; we need all the luck we can get.  Cross your fingers, carry a rabbit’s foot, rub a lucky penny . . .  keep your lucky charm handy the next time you cross a bridge in the Commonwealth.

With 25,000 state-owned bridges, Pennsylvania is on the list in third place for the largest number of bridges in the nation. However, according to the new report, Pennsylvania leads the nation in largest percentage of structurally deficient bridges. The bridge deficiency number should not come as a shock to state residents, as Pennsylvania has led the nation in troubled bridges every year since 2007. Leading the nation for ‘worst bridges in America’ is a title I would rather Pennsylvania not claim!  The average age of bridges on the state system is 50 years old and approximately 6,000 are structurally deficient.

What exactly does ‘structurally deficient bridge’ mean?  According to the Pennsylvania Department of Transportation website, “A structurally deficient bridge is safe, but in need of costly repairs or replacement to bring it to current standards.”

Transportation for America considers a bridge “structurally deficient” if at least one of three components – the deck, substructure, or superstructure – has been rated “poor” by inspectors. The deck is the roadway surface of a bridge, while the superstructure refers to beams and other components that support the deck. The substructure includes piers, abutments and other parts of a bridge’s foundation.

What remains to be seen is where the state will get the necessary funding to fix its bridges and roads. One option discussed is to sell the states 620 liquor stores and use the revenue for bridge and road projects.  However, as we know, the topic of ‘selling’ state stores is still only in the talking stage. Complicating the transportation-funding question is the fact that the federal stimulus funds are drying up.

Other than potential revenue from the sale of state liquor stores, what are some other creative funding sources?  With Pennsylvania suffering from budget gaps, the problem is not likely to be solved in the near future.

How is Pennsylvania going to repair its aging infrastructure; how will the state pay for repair of its bad roads and needy bridges?  

And do I dare suggest the ‘T’ word . . . Tolling?

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TESD School Board Meeting . . . Senate & House Hearings re School Budgets Continue

Monday’s Public Hearing on the land development authority and decision for final authority to remain with the Planning Commission took up much of the conversation yesterday on Community Matters.  However, there was also a T/E School Board meeting on Monday night.  Ray Clarke attended the meeting and sent along his comments which are posted below.  As always, I am grateful for Ray and his coverage of school board related issues.  At the upcoming Finance Committee on Monday, March 28, we will look for serious budget talk from school board members re expenses, programming and out-sourcing options.

March T/E Board Talk – video TESD has a new T/E Board Talk video available online.  In the 9 min. video, school board member Dr. Pete Motel provides an overview of the T/E School District’s long-range facilities plan from the Facilities Committee meeting of February 14.  The Facilities Committee meetings are not generally telecast so I highly recommend that you take the time to watch the very informative video clip from the meeting.  Click here to watch the podcast.

Monday’s School Board meeting was most notable for the legislative update from Dr. Rich Brake:

  1. Senate and House Committee Budget hearings will continue through next week (the 31st, I think).  The School District has a form letter on its website that you can modify and send to your representatives. (Click here for the sample letter.)  Community Matters readers will likely want to add their own flavor to the letter.
  2. Our own Senator Dinniman and Senator Jeffrey Piccola are working with their Senate Education Committee to come up with relief from the infamous state mandates (to which the form letter, above, refers).  Apparently there will be a press release on Tuesday.  (Update:  To add to Ray’s comments here, there was a State Education Committee meeting yesterday and I will have separate remarks on that topic later today.)
  3. The Senate has a version of the furloughs-allowed-to-solve deficits bill (SB 612, I think).  There will be (Education Committee?) hearings on this in early April.

In response to my question about a reaction to the PSEA statement encouraging local discussions about salary freezes and other cost saving measures, the Board stated that they “are in continual discussions with the union”.  If the direction from the union leadership can be translated into more than a one year expense deferral (present value at today’s zero interest rates = zero), it has the potential for a significant budget impact, so hopefully there will be something to report at next week’s workshop.

Perplexingly, Kevin Buraks reported that the Policy Committee decided to retain two consultants to tell them how to take advantage of opportunities to sell advertising rights (say, at Teamer).

The County Intermediate Unit gave a rather too slick presentation about its budget for next year, and the Board asked some good questions.  Whether those can translate to any cost avoidance is maybe doubtful.

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Community Matters in Pittsburgh . . . Concerns about Pennsylvania’s budget and the fate of our teachers

I received the following email from Patricia Connelly of Pittsburgh.  Rather than offering a personal response to Patricia, I thought it would be interesting for Community Matters readers to respond.  Any thoughts or words of encouragement to offer . . . it is apparent that the budget and concern for public education spending cuts is not isolated to our part of the state.

Hello,

I just came across your site and want to ask a question about our State Legislators. Does Pennsylvania have what Wisconsin has and that is the right to repeal an elected official? If the Governor’s budget gets passed, and it will, as someone who has lived a lifetime (66 yrs) in Pa, I believe that budget will ruin our state.

Education, please, what education? No new taxes, except for voters who will pay higher property taxes and not be able to sell their homes because the taxes will go through the roof and their local schools will be overcrowded. Today’s teachers are treated horrible and get blamed for their state’s deficit.  My son is a teacher.

Anyway, is there an answer to this or do we not live in a democracy any longer?

Sincerely,
Patricia Connelly
Patricia Connelly from the Pittsburgh Area

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Some Pennsylvania School Districts Look at Early Retirement Incentive Plans to Help Budget Deficits . . . Could this be a less-painful option?

It is interesting to note how other school districts are exploring different options internally to reduce expenses. 

Apparently, Tredyffrin Easttown School District joins the ranks of Bucks County’s Morrisville School District to consider outsourcing custodial services in addition to an early retirement plan to its teachers.

According to a recent article in www.phillyBurbs.com  Morrisville School District’s school board suggests that these measures are required due to “out of control spending due to increases in salaries, benefits and pensions.”

Although Morrisville School District is ‘only’ facing a $2.5 million deficit, they are facing some of the same problems as TESD.  This district is offering a special ‘early retirement incentive plan’ to teachers as a way to reduce costs.  Teachers have until March 31 to decide whether to take this option.

Has TESD considered some form of an early retirement incentive plan for teachers?  It is possible that I missed this discussion in school district.  For those that have followed the school district closely, any information on this topic is appreciated. As school districts across the state are struggling to balance their budget deficits, I find it of interest to look at options that other school districts have explored.

Looking beyond Morrisville School District, I wondered if other school districts were exploring an early retirement incentive option as a cost-saving measure.  Middletown Area School District (MASD) in Dauphine County, www.raiderweb.org  (10 miles from Harrisburg) is also offering a retirement incentive plan to teachers in an effort to reduce their gaping deficit. For those teachers that qualify, they have until March 21 to decide on this option.

The MASD early retirement incentive is available to full-time employees covered by the teacher union collective bargaining agreement who have at least 30 years of district service by June 30, 2011 and incur no more than one additional year of service under the state employees retirement system (PSER) after retiring from the district. Employees 55 or older with 20 years of service by June 30 also can retire under the same conditions.

Benefits of MASD’s retirement incentive include a $20K one-time contribution into employees’ 403(b) accounts that won’t be included when computing their annual salaries for retirement benefits.  Health care benefits under terms of their current teacher union contract which expires June 30, 2012 will also be made available if a “sufficient number” of eligible employees retire under the incentive.

Could an early retirement incentive plan be a ‘less-painful’ way of reductions of costs for school districts in budget crisis?  In Morrisville School District and Middletown Area School District, their 2011-12 budgets will be ‘tweeked’ based on how many teachers take advantage of the retirement incentive. These kind of early retirement incentive plans  are similar to models often seen in private industry for employees.  Understandably, it is too late to enact an early retirement incentive plan for the 2011-12 school district budget in TESD, but what about for the following year’s budget? 

 Any discussion of an early retirement incentive plan would take cooperation between school districts and teacher unions.  However, with talk swirling in Harrisburg of teacher furlough legislation, I would think the conversation of early retirement incentive plans would be a conversation that teacher union leaders might welcome.

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“Don’t Read my Lips; Read my Budget” . . . so said Gov. Corbett at today’s Budget Address

 Gov. Tom Corbett delivered his budget speech at midday to a joint assembly of the House and Senate, suggesting “Don’t read my lips; read my budget.” For a full text of his speech, click here:
http://www.scribd.com/doc/50290282/Corbett-Budget-Speech

In his opening remarks, Corbett’s presented an overview of his budget including  “ . . The substance of this budget is built on four core principles: Fiscal discipline, limited government, free enterprise and reform. . . ”  Corbett’s fiscal year 2011-12 budget totals $27.3 billion, but no new taxes.

There has been much discussion concerning the economic woes facing school districts across the state.  In his budget address, the Governor supports letting the taxpayers decide . . .

” . . . Now, we all know that there’s an elephant in the room when it comes to education funding: The property tax. Too often we have seen school boards raise property taxes to avoid hard and necessary choices. It’s human nature. When you’re spending someone else’s money it’s easier to say yes than no. I believe any new property tax increases beyond inflation should be put on the ballot. If school boards can’t say no, maybe the taxpayers will. Let’s listen to the taxpayers on this one. . . “

The governor takes on the teacher unions with teacher furlough remarks,

” . . . At the same time we need to give school boards some breathing room. There are too many mandates that tie the hands of local school boards. This administration is committed to curbing these mandates, including one that violates every law of economics: the inability to furlough employees when there isn’t the money to pay them. It puts the entire enterprise of public education at risk. . . “

Specifically, how did the Department of Education fair in Corbett’s budget? A quick review indicates that education will receive an expected major cut in funding. The proposed cuts to education include a 10 percent cut in basic education (K-12), which is a loss of $550 million across the state.  The budget also eliminates all $260 million in grants that are being given this year to school districts to invest in learning, including pre-K, full-day kindergarten and class-size reduction in kindergarten through third grade.

In his speech, Corbett asked public school officials to consider pay freezes; calculating that each year of this cost-saving measure would save school districts $400 million.  Corbett said that he was returning the state education funding to the pre-stimulus funding level.

Addressing the state workers, unions, pensions and collective bargaining, Corbett’s approach was direct –

” . . . In Pennsylvania, we will be looking for salary roll backs and freezes from state employees as well as asking them to increase their contributions for healthcare benefits. We also need to start the conversation about the necessary repairs to our public retirement system.

I want to be clear about this to our union leaders. Collective bargaining doesn’t mean some ill-defined middle ground. It means finding the spot where things work. In this case it is going to have to work to the good of the taxpayer or it’s not going to work at all. Let’s find that place and meet there. Let’s keep things working. Neither side need lose for the taxpayers to win. We need to act on our financial challenges now, before they act on us. . . “

Although Corbett did not use the word, ‘voucher’ in his budget address, he was specific about his desire for school choice . . .

” . . . Pennsylvania needs to re-think how best to educate our children. We simply can’t work within a  broken system. We need to change the whole system. We need a new set of priorities: child, parent, and teacher – and in that order. What we have now in too many places are schools that don’t work. Families are trapped in failing schools, or schools that are a bad fit. We need to develop a system of portable education funding; something a student can take with him or her to the school that best fits their needs. One size does not fit all. But as it now stands, not all get to choose. Let’s give them school choice. . . “

During his budget address, the Governor referred to the ‘Budget Dashboard’ available online.  The dashboard is on the state website, is user-friendly and provides an easy access for information of individual state agencies.  Here is a link to that reference:

http://www.portal.state.pa.us/imageserver/budget2011/GBD_2011.html

If you are interested, here is a link to the entire budget — all 1,182 pages.  If you decide up upload the file, remember this is very large file and suggest patience.
http://www.scribd.com/doc/50277977/2011-12-Budget-Document

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Latest Interesting News from Harrisburg . . . Proposed Moratorium on 1.7% Raise, Rendell’s $1 Billion Spending Proposal & Carol Aichele on Corbett’s Transition Team

Here’s some interesting news from Harrisburg over the last couple of days.

If you recall last week, there was news that newly elected and returning legislators will get a 1.7% cost-of-living pay raise starting December 1, when the new Legislature opens for business, even though they won’t be sworn in until January. Many elections won by candidates based on fiscal conservatism, amid high unemployment numbers and screams to stop the spending, a pay raise discussion at this time was causing quite a stir by tax-payers.

Yesterday, Auditor General Jack Wagner called for a moratorium on the scheduled 1.7% cost of living adjustment for public officials.  He is asking that this be the first action of the new General Assembly in January – putting a moratorium on the 2011 increase.  He further states that the moratorium would save the state $3 million in 2011 and save $12 million over the course of the next 4 years. Hope that our local officials will support the Auditor General on the moratorium.  Every little bit helps and this is the right signal to send to Pennsylvanians!  

Second bit of interesting news from Harrisburg.  Governor-elect Corbett has put together a transition group of more than 400 business leaders, conservative activists (including 2 Tea Party people), veterans of past Republican administrations, legislators and is said to have included even a few Democrats.  The members will serve on 17 transition committees, which will examine 25 departments and agencies in state government.  They will help Corbett choose his Cabinet members.  Why is this interesting to Community Matters?  One of Tredyffrin’s own was named to the transition team.

Malvern resident and Chester County Commissioner Carol Aichele was named as the co-chair of Corbett’s ‘Local Government Committee’ and also as member of the Commonwealth Committee that will look at the Office of Administration and Department of General Services.  Some suggest that by serving on the transition team, members may have an inside track to Cabinet positions.  So, next question – wonder if the next step will have Carol heading to Harrisburg as a Cabinet member?

The third recent item from Harrisburg that caught by eye has to do with Governor Rendell.  Apparently Rendell is planning to issue an additional $1 billion in bonded debt before leaving office!  If Rendell pulls this off, it will be history making as the largest lame duck spending proposal in Pennsylvania’s history.  If approved, the $1 billion new debt will actually cost the state’s taxpayers more than $1.6 billion over the next 20 years in the form of annual debt service payments of $82 million.

However, this proposal would require the approval of both the governor and either the Auditor General (Jack Wagner) or the State Treasurer (Rob McCord).  Based on Wagner’s statement about fiscal responsibility and the moratorium on the 1.7% cost-of-living increase for state officials, it is no surprise that he does not support Rendell’s proposal.  Treasurer McCord is the tie-breaking vote. However, before he makes a decision McCord is asking the advice of Governor-elect Corbett.

The state is facing a $4 billion+ debit next year, so this new proposal would challenge the state further, to more than $9 million.  As a historic reference point, in June 2002, the state held $6.1 billion in debt, which has since increased to $8.4 billion, a 39% increase.  For the record, the new debt would only cover projects which are already in progress or that the state had contractually agreed to complete.  It is possible that if funding were not provided for the contracted projects, developers could bring lawsuits against the state for breach of contract.  

I decided to find out which projects would be funded with the proposed $1 billion in new debt.  I was curious if the planned Paoli Transportation Center was on the list.  Looking at the following list, I don’t see anything that looks like it could include Paoli’s transit center – I’m guessing that it is too soon in the planning and development process for Paoli Transportation Center to be a RACP (Redevelopment Assistance Capital Program) project, correct?  If you are interested, here’s the entire list of projects that would be included in the proposed $1 billion in new debt:

  • $400M public improvement projects (things like new state prisons, flood protection projects, high hazard dam repairs, renovations of state park facilities, renovations to military facilities and veterans homes, renovations to higher education facilities.
  •  $200M in bridge repair projects for structurally deficient bridges across the state.
  • $155M of the proposed $1B is for Redevelopment Assistance Capital Program (RACP) projects. Those RACP projects are for previously approved projects that have gone through the application and contracting process already and are for RACP projects currently under construction.
  • $114M in funding for transportation assistance projects to the local transportation agencies for upgrades and repairs to mass transit, rail freight projects and aviation projects. 
  • $76M for Pennvest grants and loans for repairs and renovations of local water and sewer infrastructure.
  • $30M for Growing Greener II projects for environmental reclamation and preservation projects.
  • $25M for Pennworks grants and loans for repairs and renovations to water supply and wastewater treatment projects at the local level.
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