w w w. ca p i ta l- wat c h . c o m
CapitalWatch VOL. 5 NO. 5
inside Senate Democrats provide budget and job creation plan to Gov. Corbett PAGE 4 What’s up with DeWeese’s seat? PAGE 6 House Speaker Sam Smith holds on in close vote PAGE 8 EDITORIAL: A rant for all seasons… PAGE 13
See PAGE 13 for details
MAY 2012
April revenues above estimate; PA revenue shortfall dwindling April revenue collections exceeded expectations by $99 million, pushing year-to-date revenue collections to $23 billion and cutting the year’s current revenue shortfall down to $288.4 million. The good economic news through April also bodes well going forward, says the Pennsylvania Independent Fiscal Office. The office estimates the state will end up with $400 million more during the current fiscal year than Gov. Tom Corbett’s administration estimated in February. The fiscal office projects an additional $400 million in revenue for next year, also available in the 2012-13 fiscal year. The Corbett administration based its 2012-13 proposed state budget on the commonwealth having a revenue shortfall, when the current fiscal year ends on June 30, of $719 million. In February, the IFO projected the state would end the fiscal year with a shortfall of about $500 million. Now they have cut that estimate by another $200 million, to a shortfall just over $300 million. “If you’re comparing to the numbers that were released and the economic situation six months ago, we think that things look a little better,” said IFO Director Matthew Knittel during a May 1 briefing about the IFO’s initial revenue estimates. “The labor market looks a little better, the housing market even looks a little better, so we do think the recovery is continuing in Pennsylvania, and nationally as well.” Senate Democrats think final fiscal year revenues will be even better than the IFO predicts and predict that the year-end shortfall will likely
fall below $200 million. In April, personal income tax collection led the way, yielding $1.68 billion in revenue for the month. However, that total was $26.4 million below Department of Revenue projections for the month. For the year, PIT collections are nearly $9 billion, or approximately $224.5 million short of expectations. Sales and use tax collections continued to beat Revenue Department projections last month. The consumption tax performed $35.7 million ahead of estimates, pulling in a total of $777.3 million. To date, sales tax collections total about $7.28 billion, or $74.1 million more than
anticipated. Other consumption tax collections – such as those on cigarettes and liquor – totaled $116.1 million in April, or more than $1.1 million under estimate. Also performing better than expectations last month was the Corporation Tax. Collections for April totaled $587.2 million, or $68.7 million more than projected. For the year, collections of that tax are nearly $4.2 billion, or approximately $122.3 million below estimates. Non tax revenue for last month - from such things as liquor store profits, fees and fines - totaled $160.2 million, or $23.7 million above estimate. The year-to-date total for those
revenues is $358 million, or $7.4 million, above expectations. Knittel said the overall revenue shortfall should remain fairly unchanged during the next six weeks before his office releases its official revenue estimates for FY2011-12 and FY2012-13 on June 15. “The economic forecast we put into our model should not change much during the next month,” said Knittel, who noted a few items – such as consumer spending levels and changes in the labor market – could affect the final totals, but not by much. “I wouldn’t think it would change too much,” said Knittel. CW
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MAY 2012 CAPITAL WATCH
CapitalWatch www.capital-watch.com PUBLISHER/AD DIRECTOR Jim Laverty (717) 233-0109, ext. 122 EDITORIAL Editor-in-chief Jacqueline G. Goodwin, Ed.D. goodwinpin@comcast.net (717) 418-3366 Contributing Writers Chris Comisac Peter L. DeCoursey Markeshia Wolfe Kevin Zwick News Service Capitolwire Graphic Design Lisette Magaro Production Shawn Skvarna Capital Watch is published every month. Reproduction of this publication in whole or part is prohibited except with the written permission of the publisher. Capital Watch is non ideological and nonpartisan.
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Gov. Corbett says he’s getting mixed signals on transportation funding bill By Kevin Zwick, Capitolwire
After House Transportation Committee Chairman Rick Geist, R-Blair, held a press conference in the Capitol Rotunda to urge passage of a new transportation funding package, Gov. Tom Corbett said he had yet to get clear signals on what would pass. “I have been talking to a number of leaders” to try to find out what could pass the House and Senate, Gov. Tom Corbett said in response to House Transportation Committee Chairman Rick Geist’s, R-Blair April 16 press conference to urge passage of a new transportation funding package. “When gas prices are at $3.95 [a gallon] - $3.99.5 across the street from the governor’s mansion - it makes it hard to raise anything at the pump,” Corbett said, referring to various proposals to raise gas fees or taxes that he fears may be passed to drivers at the pump. Geist and various Senate GOP leaders have been saying the votes are there in their chambers to pass a bill to raise billions of dollars for transportation
Govenor Tom Corbett
funding before roads and bridges become even more problematic. House Democratic leaders have made the same claim while calling for the doctor to talk to them as he forms his plan.
Senate Appropriation Committee Chairman Jake Corman, R-Centre, like House Democrats, has sponsored a bill that contains the recommendation of the Governor’s Transportation Advisory Commission. Referring to legislators and legislative leaders saying the votes are there, Corbett said: “While some members are saying one thing, others are saying something else.” House Democratic spokesman Bill Patton responded: “Any solution on transportation funding requires bipartisan support. The governor indicates that he talked with a wide range of leaders but he had no conversations this year about transportation funding with House Democratic leaders. “The absence of dialogue is curious because Reps. Mike Hanna and Dan Frankel introduced bills to implement the very suggestions that the governor’s commission put forth nine months ago, including key recommendations that would have no impact on prices at the pump. “Part of being governor is setting goals and doing the heavy lifting to get things done. The governor needs to engage and talk to more people. Without a committed effort by the governor, conditions will continue to deteriorate. House Democrats look forward to his greater involvement in this urgent public safety and jobs issue.” “We have terrible transportation problems,” said Geist, who stressed something needs to be done before the commonwealth experiences a tragedy because of a failed road or bridge. “Without a reliable, effective and safe transportation infrastructure, Pennsylvania will falter,” added Sean Good, a lobbyist for the Pennsylvania Chamber of Business and Industry, during the news conference. CW
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MAY 2012 CAPITAL WATCH
MSC releases first recommended practice for responsible natural gas development Since its founding in 2008, the Marcellus Shale Coalition (MSC) has worked collaboratively with key stakeholders to achieve a set of common goals: enhance the region’s economy, responsibly develop natural gas, and advocate for increased use of this clean-burning energy source. The MSC’s Guiding Principles make this commitment clear while also committing the coalition and its members to continuous improvement and transparency across all operations, engaging in a fact-based dialogue with the community, and the implementation of state-of-the-art environmental controls at well sites and compressor stations. It’s within that organizational structure and context that the MSC, through the work of its nearly two dozen standing committees, will release a number of recommended practices (RP) in the coming months that are designed to provide general guidance for each subject addressed. Ranging in topics from well construction to
site restoration, air quality and water management, the MSC’s RPs will assist industry professionals operating in the Appalachian basin in improving their effectiveness in all stages of responsible natural gas exploration and production.
“Continuous improvement is at the core of the natural gas industry,” said MSC chair Dave Spigelmyer of Chesapeake Energy. “At the direction of our board of directors, the coalition’s staff and committee leadership set out to develop a set of recommended practices
that make sense both operationally and from an environmental standpoint. These content-rich guidance documents represent a level of detail and transparency derived from many sources which will be updated and refined as development continues.” “This site planning, development and restoration RP is the culmination of countless hours of work by our land affairs committee to develop a sound document that would be useful not only to operators, but also landowners and other organizations. From site identification, to safety, communications, landowner engagement and eventual reclamation, this guidance document is the first of many that the coalition will release in the coming months – all of which are designed to increase awareness and share ideas and practices that work while continuing to raise the bar on responsible natural gas development across the region,” said MSC president Kathryn Z. Klaber. CW
Senate Democrats provide budget and job creation plan to Gov. Corbett Senate Democratic leaders have provided their 2012-13 budget priorities to Gov. Tom Corbett in anticipation of deliberations on the final state spending plan. “Senate Democrats have been assured that we will be a part of this year’s budget negotiations,” said Senate Democratic Appropriations Chair Vincent Hughes. “In that spirit, we are providing what we believe to be the top budget priorities in Pennsylvania, highlighting our number one issue – job creation.
“It is imperative that Senate Democrats have an active role in crafting the state spending plan and it is my hope that the governor will review these priorities carefully so that we can work toward a bright economic future for Pennsylvania.” The Senate Democratic Budget Plan recognizes the numerous resources available to fund critical state programs and focuses on leveraging critical dollars without raising current taxes or creating new taxes.
The $1.1 billion reinvestment plan would provide: • $200 million for new jobs investment • $250 million to restore funds for education • $168 million for human service programs • $150 million for the disabled, women and children • $100 million for hospitals, and long term care • $100 million for local property tax relief • $40 million for criminal justice reform; and • $25 million for veterans assistance The Senate Democrats also provided their infrastructure plan to the governor. The plan provides creative new solutions to leverage existing federal, state and private equity sources to support $2.8 billion in new infrastructure investment needs, including: • • • •
GARVEE bonds to fund a $1 billion short term transportation plan Create new $1.5 billion Infrastructure Investment Tax Credit Program PA Infrastructure Investment Bank - $167 million Restore CURE program to invest $60 million through PA’s major
research institutions for life science research and development
“As I indicated when we announced our budget priorities, the Senate Democratic plan is balanced and fair because it does not contain general tax increases, yet it provides for new investments in job creation, education, social safety net programs and property tax reductions,” said Senate Democratic Leader Jay Costa, D-Allegheny. CW
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MAY 2012 CAPITAL WATCH
May 2012 CAPITAL WATCH advertorial
Policy Roundtable Spotlight The PBC Policy Roundtable, like its national counterpart in Washington, is a forum in which CEOs meet on a peer-to-peer basis to formulate public policy proposals to the most pressing issues of competitiveness. The Policy Roundtable provides senior managers the opportunity to interact extensively with policymakers, policy experts, media, and other stakeholders; participate in policy evaluation; decide upon long-term public policy strategy; and guide policy education/advocacy efforts. Corporate Chairpersons, CEOs, COOs, CFOs, and Presidents are invited to become members of the PBC Policy Roundtable. For more, see: www.pabusinesscouncil.org.
CW: What’s the “elevator pitch” for the Pennsylvania Business Council?
David W. Patti
President & CEO Pennsylvania Business Council David W. Patti is President and CEO of the Pennsylvania Business Council (PBC) leading the organization’s three components: the Policy Roundtable, PEG PAC, and PBC Education Foundation. Mr. Patti brings to PBC more than 25 years of government, political and public affairs experience. Mr. Patti joined Pennsylvanians for Effective Government as its President and CEO in January of 2002 and served there through the formation of PBC in 2007. Mr. Patti served in the Ridge Administration as the Chief Operating Officer of TeamPA. Mr. Patti was the first fulltime President and CEO of the PA Chemical Industry Council – the state’s major trade association for chemical manufacturers – representing about 80 percent of the chemical industry’s presence in PA. He led PCIC from 1990 1999. Mr. Patti also served on the American Chemistry Council’s Issue Management Team and was the first national chair of the Responsible Care® Partnership Council. Mr. Patti served previously in the Senate of PA in two roles: as the Executive Director of the Local Government Committee and as a policy analyst for economic development. In the mid-1980s, Mr. Patti served as the Communications Director of the PA Republican State Committee. From 2000 - 2002 Mr. Patti worked as an executive in an internet software firm. Mr. Patti is a frequent speaker, college lecturer, and media guest. He authored a whitepaper on content syndication presented at an international internet conference and made presentations at international environmental conferences. Mr. Patti is frequently contacted by national media and is a contributor to many academic political writers. He is a regul ar columnist for the Central Pennsylvania Business Journal. Mr. Patti, earned a MS in Public Management & Public Policy Analysis from the Heinz College, Carnegie-Mellon University; and a BS in Political Science from Millersville University. Mr. Patti completed the Yale University Corporate Environmental Leadership Seminar and the coursework required for a Ph.D. in Public Administration at the Pennsylvania State University.
DWP: PBC envisions a Commonwealth in which residents enjoy a very high quality of life in sustainable communities, where those who are seeking employment find high quality jobs with good compensation, and where those who invest their capital and hard work can grow firms that flourish and are profitable. In order to create and renew this vision of PA, PBC works aggressively to define key long-term public policy strategies and solutions that make the state more competitive; and to elect candidates for office who offer the best capacity to create and sustain a better PA. We believe that most business organizations do very well reading the nearly 5,000 pieces of legislation introduced in each two-year session and all of the regulations, asking “What does this do to our members?” “How should we respond?” PBC, however, flips the normal business organization paradigm and asks the CEOs who make up the Policy Roundtable “What are the four or five things PA could do so you’d locate your next facility in the state, or expand your current PA facilities?” Then we work proactively with the state’s top policymakers to design and implement those policy changes. We also work politically to put in place, officeholders who will work to achieve the necessary policies. CW: When and how did you join the organization? DWP: It wasn’t so much an event as a process. The formation of PBC was truly a team process. There were discussions spanning several years that began shortly after I became CEO of Pennsylvanians for Effective Government (PEG) . The “big bang” moment was a meeting between former EQT Chairman & CEO Murry Gerber, who was then chairman of the PA Business Roundtable (PaBRT) and me in June 2007. I had long believed that PEG’s political activities should be welded to the PaBRT’s CEO-driven policy development and advocacy. Murry and I shared the belief that there are too many business organizations — that the business community divides and conquers itself in matters of politics and public policy. We envisioned an organization that would try to unify
the many voices in business associations without threatening the sovereignty or distinctiveness of any existing organizations. Our goal was and remains to maximize collaboration. The boards of directors of PEG and PaBRT each approved the model Murry and I built and, by the end of the summer, PBC was created with me as the first President & CEO. This was just a natural progression for me. I have been doing what could be characterized as “start-ups and turn-arounds” since I left the legislative staff in 1990. CW: How has the attempt to unify the business community progressed? DWP: Very well. But again, it’s a team process. It’s not PBC going it alone. We collaborate very closely with the PA Chamber, the PA Manufacturers Association, the National Federation of Independent Businesses, the Associated PA Constructors, Marcellus Shale Coalition, PA Institute of CPAs, the PA Food Merchants, and the Association of Builders & Contractors. Over the years, we have pulled together meetings of more than 30 other business associations to cooperate on the many public policy issues that cross all business interests and organizations — topics like legal reform, infrastructure, and state spending. Each organization has it’s unique niche and member needs. And each organization is uniquely qualified to achieve that special mission. By cooperating on the “big issues,” each organization actually has more time and resources to devote to its specialty and so members and the business community as a whole are better served. CW: It’s an election year. What are the political goals of PBC? DWP: PBC’s affiliated political action committee — PEG PAC — is celebrating its 40th anniversary this year. For four decades we have met with candidates for state office to assess their views on business issues and their electability. PEG PAC provides direct and in-kind contributions to candidates our members believe can make PA more job-friendly and more competitive. This year we are particularly looking for candidates who embrace legal reforms — efforts to make the state’s legal system fairer for plaintiffs and defendants, more predictable, and more aligned with public policy in other states and even other nations.
CW: What’s changed in 40 years? DWP: For nearly the first 10 years, PEG was the only pro-business PAC. Then PACs became mandatory for political giving and PEG spent years helping firms and associations start their own PACs. For the first 25 years, PEG was the single source for Pennsylvania political information and data, then newsletters were created, followed quickly by fax reports, then rapidly replaced by email, Internet websites, podcasts, text messaging, blogs, and Twitter. PBC and PEG PAC still provide high quality information through a variety of channels, but we understand we’re not the only source of news. We don’t emphasize being first and we are definitely not the loudest or most strident. We try to make sure we are accurate. The difference is that we put “boots on the ground.” Not just staff, but also members interview candidates. We put “interns” in the field in major races. We visit with candidates and campaigns frequently. And, we spend time in a district just quietly listening to local conversations. Technology is great, but “old school” wins the day. CW: You use politics to achieve the policy goal of a “more competitive business climate.” What does that mean? DWP: A well-educated and welltrained workforce; fair and predictable legal and regulatory systems, safe and adequate public infrastructure, affordable and accessible natural resources and energy, globally competitive taxes, and a great quality of life in safe communities. CW: What’s next for you and the Pennsylvania Business Council ? DWP: Change. I don’t know what the change will be, but I hate to stand still and I don’t like the organizations that I run to stand still. Whatever we’re doing has already been done … so it’s time to do it better, do it differently, do it faster, and do more. Organizations get stale and complacent. I like to shake them up. It’s what academics call the “Hawthorne Effect.” People respond better when they know leaders care enough to make changes.
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MAY 2012 CAPITAL WATCH
Don’t blame the state for rising school taxes If you are mad at rising school taxes don’t blame the state. Demand answers and wiser spending from your school board. That was the message told to reporters in Lancaster on April 26 by Gov. Tom Corbett, who also used the occasion to pitch his $27 billion budget proposal. Asked about rising school property taxes, the governor said, “I really think that when we’re talking about the funding of K through 12 education, the people in the school districts, the voters in the districts, get more involved when the school district is making that decision, rather than just say, ‘Well, we’re going to have the state send us more money.’ It’s taxpayers’ money no matter where, but there’s a greater impact at the local school district when the people can pay attention to it,” the governor said. Gov. Corbett said his proposal, which cuts spending and keeps personal income taxes in check, is modeled after the type of budgeting that businesses and households are forced to confront every day. “You spend no more than you have,” he said.
The state Democratic Party, which has been critical of Corbett’s budget proposal, responded to the governor’s remarks by saying his plan will result in taxpayers paying more anyway — at the local level.
“Homeowners will pay higher taxes because of Tom Corbett’s budget, and families will pay more for college because of Tom Corbett’s budget,” Democratic Party Chairman Jim Burn said in a prepared statement after Corbett’s appearance.
“Schools will be forced to lay off teachers and valuable programs that serve children and seniors will be drastically scaled back or ended.” Corbett, however, defended the state’s level of education spending by saying the largest portion of every taxpayer dollar appropriated — 40.3 cents — goes to K-through-12 and higher education. “I understand when people say, ‘Well, Governor Corbett has to make education a priority.’ And my answer to people when they say that is, ‘I think you will agree with me that where you spend the most money in the budget is your priority,’” Corbett said. “That’s the priority.” Facing calls for more education spending, though, the governor has refused to budge on his 2010 campaign promise to not raise taxes. “I believe that when it comes to that funding, when our funds are limited, the local township residents should be talking to the school district. They’re the ones that should make the decision,” Corbett said. “They’re making the decision. It’s a business decision to them, just like it’s a business decision to us,” he said. CW
What’s up with DeWeese’s seat? The 50th Legislative District could very well have a caretaker legislator representing it through Nov. 30 if House Speaker Sam Smith decides to call for a special election this summer. Smith’s decision will be predicated on responses he receives from leaders of both parties in Greene, Washington and Fayette, the three counties included in the 50th District, regarding the timing and expense of holding such an election. The uncertainty of representation in the 50th came about last week when Bill DeWeese of Waynesburg resigned prior to being sentenced to 21/2 to 5 years in prison for theft and other political corruption charges. He is to report to prison May 14 to begin serving his sentence. In an interview with the ObserverReporter, House Parliamentarian Clancy Myer stated, “I have been here for 30 years, and I have never seen anything like this.” DeWeese served in the Legislature for nearly 36 years and was in leadership for a good portion of that time, including serving as House speaker, as well as leader of the House Democratic Caucus. While no one seems to know what systems are in place from now until the Nov. 6 general election there is a consensus, however, as to the procedure if a special
Bill DeWeese
election is called for by Smith. The Observer-Reporter article states that Democrat and Republican party chairmen from the three counties would select a candidate from their respective parties and then submit their recommendation to the state Democratic and Republican committees. The winner of that special election would serve until Nov. 30, which is the end of DeWeese’s current term. “And if a special election is held this summer, the cost would be about $150,000, most of which would be borne by Greene County,” said Steve Miskin, a spokesman for Smith. But what will happen on the Nov. 6 general election? “From all indications, it appears DeWeese’s name will appear on the ballot, despite contentions from some
Greene County officials, who opted to remain anonymous, that either some member of the 50th District electorate or some member of the State Democratic Committee could petition the courts to have DeWeese’s name removed from the general election ballot,” the newspaper reported. According to Myer, that will not happen. “The process to strike DeWeese’s name from the ballot was settled in February when Commonwealth Court denied a challenge to DeWeese’s nominating petitions,” Myer told the Observer-Reporter, adding “The language in the court’s ruling, as well as in the state Constitution, is clear: Nothing prohibited DeWeese from running, but as a convicted felon, he is barred from serving.” The state Supreme Court subsequently agreed. The ruling by the courts specifically addressed the April 24 primary, but Myer believes the decision extends to the general election as well. According to Myer, if another challenge is brought before the court, that could change because the first challenge was filed prior to sentencing, and since DeWeese is now classified as a convicted felon, that interpretation could be viewed differently by the court.
So as it stands now, DeWeese and Republican winner, Mark Fischer, will go head-to-head in the general election, unless: • DeWeese voluntarily withdraws his name as a candidate by Aug. 13, or • Myer is incorrect and the courts, acting on petitions, can strike DeWeese’s name from the ballot. If DeWeese is not on the ballot, Democratic Party chairmen would pick a candidate to run Nov. 6. Assuming none of these occur, here are some other possible scenarios: • Fischer defeats DeWeese and is sworn into office in January for a two-year term. • DeWeese wins the election, which, if his appeals are not resolved in his favor by this time, another special election will have to be held sometime in early 2013 because DeWeese would be ineligible to hold the office. And if a special selection is held in 2013, the Democratic and Republican party chairmen would select candidates. Stay tuned. CW
advertorial
Why Governor Corbett’s Attack on the Equine Industry is Bad for Pennsylvania Governor Tom Corbett has proposed diverting more than $72 million each year from the Race Horse Development Fund, which funds purses and breeder incentives in Pennsylvania. In the 2012-2013 fiscal year, these and other cuts would leave the fund nearly 30 percent below the lowest projections of what it would receive when Act 71 was adopted by the Legislature in 2004.
Lost Investment Loss of up to 15,000 Jobs These proposed cuts are projected to cost Pennsylvania 10,000 to 15,000 jobs, including horse trainers, stable hands, veterinarians, blacksmiths, farmers that produce feed, equipment suppliers, and other businesses supporting the equine industry in Pennsylvania. Jockey Dana Whitney (lower right, above with his family) is one of thousands who had new job opportunities created in PA by Act 71. Dana bought a house and moved his family here in 2009. His kids love their schools and the last thing he or his wife wants is to have to move. These cuts may leave Dana and thousands of other Pennsylvania families little choice but to move to other states with more competitive purses.
Lost Opportunities
In December 2011, the Cotillion Stakes at Parx Racing in Bensalem was upgraded to a Grade I Stakes -- the first time in history that Pennsylvania has been home to a Grade I Race. The highest ranking in thoroughbred racing, this is a distinction reserved for the most important races in the country -- which attract a high quality field of horses. These cuts will jeopardize Pennsylvania’s status in the equine industry and could result in the loss of this and other graded stakes races. View our video at www.youtube.com/PaEquineCoalition
Mike Jester’s Penn Ridge Farms outside of Harrisburg is proof that Act 71 is working as intended. Thanks to Act 71, Mike and many other business owners have invested tens of millions of dollars in the Pennsylvania economy, acquiring land, horses, equipment and hiring new employees. Following the passage of Act 71, Jester purchased the 130 acre farm, which was once home to a cattle operation. If Pennsylvania cuts funds for the Race Horse Development Fund, we could see investment in the equine agricultural industry end. Many Pennsylvanians may be forced to leave to work or race their horses in other states offering more competitive purses.
Lost Open Space
Tens of thousands of acres of farmland and open space in Pennsylvania are currently operated as breeding or equine boarding facilities directly related to the racing industry. An additional one million acres of farmland are used to produce hay, grain, straw and other essential products used by the horse industry. If breeders and horse owners move their horses to other states, this land could be placed on the market. To avoid development, state and local governments may be forced to invest significant resources to acquire this land. The equine industry not only protects jobs, it also protects our open space. Paid for by the Pennsylvania Equine Coalition
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MAY 2012 CAPITAL WATCH
Democrats pick up one seat in special elections The 112-91 House GOP advantage shrunk to 111-92 after six House special elections were held on Tuesday, with Democrats holding four seats and winning one that has been in Republican hands for 34 years in Northeast Philadelphia. Democrats easily held onto three seats to fill vacancies in Philadelphia and Pittsburgh. Three other seats were vigorously contested by both parties. House Republican Campaign Committee Chairman Rep. David Reed, R-Indiana,
predicted his party would sweep all three, while his Democratic counterpart, Rep. Brendan Boyle, made the opposite prediction. After the votes were cast, Democrats held a hotly-contested Montgomery County district vacated by Rep. Josh Shapiro, D-Montgomery. Democrat Madeleine Dean defeated Republican Nick Mattiacci, 5,206 to 4,009, according to unofficial returns. An even more hotly-contested seat previously held by former House Speaker
Denny O’Brien, R-Philadelphia, went to Democrat Ed Neilson, who vied with former O’Brien chief of staff David Kralle for the post. Neilson garnered 3,453 votes to 2,941 for Kralle. Republicans won a Lehigh Valley special election to fill the seat of Lehigh Judge Doug Reichley, where Ryan McKenzie won handily over Patrick Slattery: 6,057 votes to 4,052. “We won five of six overall and two of three competitive races,” said Boyle. “The overall theme of all the races has been
total Republican control of state government has been bad for Pennsylvania, and put a bigger burden on middle class Pennsylvanians. “We need to pick up 11 seats to take over the majority so tonight put us one seat closer.” Reed said, “In totality, we kept our incumbents except Rick Geist, and in the specials, we won the Lehigh County seat, and lost a Philadelphia seat most people thought we would lose. And that seat is moving to York County in 2014 anyway.” CW
Baggage may have cost two Scranton-area legislators their seats By Kevin Zwick, Capitolwire
Marty Flynn, a former corrections officer, ousted Rep. Kevin Murphy, D-Scranton, 4,306 to 4,065, according to unofficial results. The 113th district represents North Scranton, the city’s Westside, and parts of some neighboring boroughs to the north and northwest. Kevin Haggerty, a former county government administrator, defeated Rep. Ken Smith, D-Dunmore, 3,641 to 3,370, according to unofficial results. The 112th district represents East Scranton, the city’s Southside and downtown district, as well as the neighboring borough of Dunmore and rural municipalities to the southeast of the city. With no Republican challengers on the ballot, the Flynn and Haggerty victories all but guarantee them seats in the Legislature next year. Some say the well-documented personal issues of both incumbents led to
their downfall. Murphy, who was elected to office in 2008, earned a spot on the front page of the Scranton Times-Tribune on Saturday. The paper ran a story on Murphy’s claim he had a Bachelor of Science degree in criminal science from the University of Scranton since 1989. The University said he had no degree, failing to turn in an essay about his internship. Flynn has a legal studies degree from Marywood University in Scranton, the school told the TimesTribune. On Monday, Murphy turned in to the university a 49-page portfolio highlighting his legislative work on Zachary’s Law, which imposes a 13-year minimum sentence for third-degree murder of a child. The University of Scranton said Murphy’s portfolio would need to be evaluated before he receives credit
toward his degree, the Times-Tribune reported. John Murray, chairman of the Scranton Democratic Party, said the late-breaking news on the weekend before the primary election tipped the scales against Murphy. “Mostly, they agreed on all the issues that were in front of them for the district,” Murray said. “Not taking anything away from the hard work Marty put in, but if it didn’t come out that Kevin Murphy didn’t have his degree four days before the election, Murphy wins,” said one Democratic operative based in Scranton. Smith’s problem stemmed from a family restaurant, Smith’s Restaurant, which closed in 2010. Smith owes $250,000 in unpaid taxes, state liens and debt to private lenders, according to a TimesTribune report.
“Haggerty didn’t surprise me, Smith’s problems were well documented,” Murray said. Smith was seeking a third term in the House and his unpaid taxes were also an issue in 2010, although then it didn’t cost him the election. “I certainly think that the tax and loan issue had an impact on the race. I think that people are out there everyday trying to pay their bills, and as much as they can appreciate the seniority, there was also a wave of anti-incumbency. The voters will give you a pass, as they did last time, but … I think that was a huge issue,” said one Democratic state committeeperson from Lackawanna County. Smith hasn’t officially conceded the race, but requested an impound of the results, the Times-Tribune reported. Haggerty ran against Smith in the 2010 primary. CW
House Speaker Sam Smith holds on in close vote By Peter L. DeCoursey, Capitolwire
House Speaker Sam Smith, R-Punxsutawney, narrowly won an unexpectedly close re-election against a strong challenge by GOP rival Cris Dush. House Republican Campaign Committee Chairman David Reed said Smith won “because of his strong effort in Indiana County. That is where he won it.” Reed also confirmed House Transportation Committee Chairman Rick Geist, R-Blair, lost his primary to college professor John McGinnis (See related story on page 9). Smith lost his home county, Jefferson, but
held on by winning Indiana County by 476 votes, winning overall by close to 448 votes. As in the past, Smith’s allies, once he had a primary foe, recruited a third candidate into the race, Republican James Mark Brown. According to unofficial totals, Smith led with 3,133 votes, Dush at 2,685 and Brown at 573, more than the difference between Dush and Smith. Dush, from Brookville, campaigned saying Smith had been there for 26 years and that was long enough. He also criticized Smith for quarterbacking the laterrepealed 2005 pay-raise and for voting
for the 2001 pension hike. He also tied Smith to the Bonusgate scandals, some of which occurred while Smith was in Republican leadership. Smith has neither been charged nor accused of wrongdoing by authorities. During the campaign, Smith touted his reform agenda, including a bill he guided through the House to cut the House to 153 districts from 203, and from 50 Senate districts to 38. Neither Dush nor Smith could be reached for comment. After the campaigns had seen the final
primary results, Dave Thomas, Smith’s legal counsel, said, “Sam worked hard and took this seriously and he won. It was close, but he won.” Smith lost Jefferson County - the native county for him and Senate President Pro Tem Joe Scarnati, R-Jefferson - with 2382 votes for Smith, 2445 for Dush and 438 for Brown. Smith got 689 votes in Indiana County, while Dush got 213 and Brown received 126. One precinct, located in Armstrong County, tallied 62 votes for Smith, 17 for Dush, 9 for Brown. CW
NEWS 9
MAY 2012 CAPITAL WATCH
Former aide defeats Rep. Preston Ed Gainey now has his old boss’ job in the 24th Legislative District. He unseated the man he once worked for as an aide, State Rep. Joseph Preston, Jr. of East Liberty, who has been at the state House since 1983. The 24th Legislative District area includes Homewood, East Liberty, Wilkinsburg and Lincoln-Lemington. Gainey previously worked as an aide to Preston and this is the third time he is running against the incumbent, according to the Pittsburgh Post-Gazette. Gainey serves as chairman of the Pittsburgh City Democratic Committee. Gainey’s website states the following: “Ed Gainey most recently worked as the Community Development Specialist for the City of Pittsburgh, where he had implemented several initiatives such as Business Seminars, Minority Media Initiative, Diversity Education for the Pittsburgh Bureau of Police, and The 52 Weeks of Peace Initiative. “Ed collaborated with Building Bridges and Allegheny County of Minority, Women, and Disadvantaged Business Enterprises (MWDBE) to host several business seminars such as “How to Start a Business,” and “Business with Google.” “In addition, Ed hosted with the City of Pittsburgh’s Equal Opportunity Review Commission and Allegheny County MWDBE, two seminars that focused on City and County Demolition, Service, and Professional Service contracts. Gainey collaborated with Minority Media to create the Minority Media Initiative (Initiative). This Initiative focused on building effective relationships between the Mayor’s office and Minority Media Vendors. The goals of the Initiative were, access to the City’s leadership, support minority media busi-
Rep. Joseph Preston, Jr.
ness development, support efforts to build sustainable relationships with Minority Media Vendors, the Greater Pittsburgh Business and Nonprofit communities.” CW
McGinnis unseats incumbent Geist Penn State Altoona finance professor John D. McGinnis has won the Republican nomination in the 79th District by beating 34-year incumbent Rep. Rick Geist. Preliminary numbers released by the Blair County Elections Office on April 27 showed that Democrat Richard Flarend received 306 write in votes to Rick Geist’s 172. Flarend entered the race late and mounted a write-in campaign for the Democratic nomination. He needed to secure 300 write-in votes to appear on the ballot this fall. Absentee ballots cast during the race showed that Rep. Geist received 81 votes to McGinnis’s 68. But Rep. Geist didn’t secure enough absentee support to change the outcome of the Republican nomination. Unofficial numbers show McGinnis secured a total of 2,718 votes to Geist’s 2,535, just 183 votes separating the two. CW
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10 news
MAY 2012 CAPITAL WATCH
Rep. Josephs concedes defeat in Democratic primary By Chris Comisac , Capitolwire
Being one of the state Legislature’s most outspoken liberal members wasn’t enough to win the Democratic primary in one of the state’s most liberal legislative districts. No stranger to Democratic primary challengers, Rep. Babette Josephs, D-Philadelphia, conceded defeat to Brian Sims, an openly gay attorney who had been Josephs campaign treasurer during her 2010 re-election effort. “My congratulations go out to the Democratic Nominee Brian Sims and all of his supporters,” Josephs said in a news release. “Throughout many difficult, but successful races in my long service, I have consistently said that the voters are always right. I cannot change my tune now.” Since 1985, Josephs has represented the 182nd Legislative District in Center City and South Philadelphia, but Sims said she had become an increasingly ineffective, “politics as usual” lawmaker. Josephs’ Democratic primary challengers have, for more than a decade, made that same argument, but unsuccessfully. During his campaign, Sims argued Josephs, after 27 years in the state House, had become one of those lawmakers that believes “they can say or do whatever they want and alter facts about their voting behavior, regardless of reality.” During the last month or so of the 2012 primary, Josephs participated in several public events and has made public statements regarding what have become high-
the Legislature could supprofile election issues for port such legislation, wonliberal constituencies: abordered if such female lawtion ultrasounds, Voter ID, makers are “women or are the Castle Doctrine, and gay they men with breasts?” marriage. She also helped Josephs has questioned to generate a firestorm surher GOP female colleagues’ rounding a resolution – legcommitment to issues vital islation lacking any real legal to women in the past, too, authority – for which she although not as harshly. voted and then denounced: In 2006 when questionthe measure would have recing GOP opposition to an ognized 2012 as “the year of increase of the state minithe Bible.” Rep. Babette Josephs mum wage, Josephs asked, It was that last one that “How really committed Sims seized upon in an attempt to paint Josephs as a “say any- to women’s issues are my Republican women colleagues when they vote to keep thing to stay in office” politician. “Voters do not want their representa- working women in poverty?” She also generated a fair bit of contive to vacillate between either clumsily defending a vote or ineffectually walking troversy during the 2010 primary when back from it,” said Sims in a Feb. 16 cam- she accused her Democratic opponent, paign press release. “Legislators should Gregg Kravitz, of lying about his sexual not be casting votes on resolutions they orientation to curry favor with the 182nd haven’t thoroughly read or which they Legislative District’s significant lesbian, aren’t certain they fully understand. Nor gay and transgender population. “I outed him as a straight person,” should legislators hold press conferences claiming they’ve made a mistake after Josephs said during a campaign appearthey have already put out correspon- ance, disputing Kravtiz’s professed dence vehemently defending their vote.” bisexuality, a comment for which she However, Josephs’ most memorable took some heat, but it ultimately didn’t recent comments came during a March help Kravitz who lost by 1,961 votes, 26 rally against proposed legislation that garnering 3,677 votes to Josephs’ 5,683. But while Josephs was talking the talk would require women seeking an abortion to receive an ultrasound 24 hours while in the Legislature, it wasn’t translating into progressive action, argued prior to the procedure. Josephs, questioning how women in Sims during the campaign.
“It doesn’t matter how passionately you talk about ideology, it matters how much legislation you pass,” said Sims. “And Joseph’s hasn’t passed any legislation since 1996.” During this current legislative session, Josephs, as the minority chairwoman of the House State Government Committee, has repeatedly engaged in verbal battles with the committee’s majority chairman, Rep. Daryl Metcalfe, R-Butler. Since the beginning of the 2011-12 legislative session, Josephs and Metcalfe - probably the most conservative member of the Legislature - have locked horns during just about every meeting held by the committee, with notable engagements regarding government reform initiatives, illegal immigration – not once but twice - about legislative redistricting and controlling state spending. Even regarding an issue on which they both voted the same way – against the federal REAL ID program - Josephs took a shot at one of Metcalfe’s stated reasons for his vote. Even when Josephs was the majority chairwoman of the committee - during the 2007-08 and 2009-11 legislative sessions when Democrats controlled the House - she regularly butted heads with legislators on the committee. Several lawmakers – mostly Republican – considered her committee a place where legislation was sent “to die.” Josephs admitted she ignored bills with which she didn’t agree.. CW
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OPINION 11
MAY 2012 CAPITAL WATCH
Penn Vet appropriation critical to human and animal health
By Joan C. Hendricks, VMD, PhD
Three times a day, more than 12.7 million Pennsylvanians sit down to a meal, confident that the food before them is safe and nutritious. Every morning, tens of thousands of Pennsylvania farmers begin their workday with the assurance that their livestock is free from infectious diseases and that the dairy products, eggs and meat they produce are wholesome. Every payday, hundreds of thousands of Pennsylvanians bring home a paycheck, with the comfort of knowing that the $61 billion agriculture and agribusiness industry in which they work will continue to help support them, their families, their neighbors and their communities. They can do so because of the vital role the University of Pennsylvania School of Veterinary Medicine plays in protecting our food supply. Penn Vet has graduated more than 6,000 veterinarians since its first graduating class of 1887. The vast majority of Pennsylvania’s practicing veterinarians are Penn Vet grads, and their most vital tasks include ensuring food safety and providing critical research and care to our animal agriculture industry.
Penn Vet and the veterinarians it trains protect the health and well being of livestock, diagnosing and curbing many infectious diseases that are communicable between animal and man, such as Avian / Swine Influenza, West Nile Virus, Lyme disease, Salmonellosis, Listeriosis and E Coli. In 2001, surveillance technology developed by Penn Vet provided the ability to stem an outbreak of avian influenza in the commonwealth – almost immediately. Penn Vet faculty, working with the Department of Agriculture and Penn State, was able to stem a potentially devastating outbreak within one month at a cost of only $400,000. A similar outbreak in Virginia at approximately the same time cost that state $100 million. Penn Vet researchers recently developed a detection kit to test for Salmonella in poultry eggs that provides an approximate 10-fold reduction in waiting time for accurate results. This faster turnaround time helps egg producers comply with newer stringent federal requirements and help ensure public safety while safeguarding an area of the agricultural economy worth in excess of $644 million annually.
Pay Less with Our recent research efforts established both the frequency and severity of the E. coli infections in birds that lay eggs for human consumption, and Penn Vet is involved in studying the feasibility of a vaccine against Salmonella enteritidis for egg-laying poultry. Penn Vet provides essential treatment and consultation to the state’s horse racing industry and is a leader in equine health. Our successful treatment of Neville Bardos, severely injured in a barn fire in West Grove nearly a year ago, will enable the horse to compete in the Summer Olympics. Penn Vet’s research transcends the animal world, advancing basic understanding in the areas of cancer, infectious diseases, regenerative medicine and neuroscience and working to apply that new knowledge to design better treatments for diseases of animals and people alike. The school is a global leader in research that links animal science to human welfare, advances food safety, and provides vital defense from bioterrorism and global pandemics. In these difficult times, Penn Vet certainly understands the need to tighten its belt. Following the loss of 30 percent of our state funding over the last two years, along with the additional loss of clinical revenue due to the economy, Penn Vet has eliminated 150 faculty and staff positions, freezing and, in some cases, reducing salaries. The proposed 2012-13 fiscal year budget includes a $26.75 million appropriation for Penn Vet, which will enable us to continue our role in assuring and protecting the good health of humans and animals alike, and to support the agriculture and agribusiness industries that are essential to our economic vitality. CW Joan C. Hendricks, VMD, PhD, is dean of the University of Pennsylvania School of Veterinary Medicine. She is founding director of the Veterinary Clinical Investigation Center (VCIC) at the school.
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12 OPINION
MAY 2012 CAPITAL WATCH
Cuts translate into greater burden for all By Amanda Brinson, M.D. and Garrett Sparks, M.D.
Governor Corbett’s recently proposed cuts in the state’s General Assistance program, ostensibly intended to save tax dollars, will unquestionably wind up placing a greater burden on taxpayers, human service providers and – ultimately – all Pennsylvanians. Many of the nearly 68,000 Pennsylvanians on General Assistance have significant behavioral health issues but haven’t been declared disabled enough to be placed in Social Security Disability Insurance, which includes federal support. Instead, they receive monthly grants of approximately $200, which provide for very modest living arrangements, and Medicaid coverage that meets some of their health needs. Both would end under the Commonwealth’s proposed 2012-13 fiscal year budget, resulting in major stress not only for the clients, but for shelters, hospital emergency rooms and jails.
Many of the individuals receiving this benefit are recovering from severe and persistent mental illness and depend upon this assistance for survival. The $200 provided by the General Assistance program often goes straight to the cost of renting a room or other similarly basic needs. As psychiatrists working in mental health settings throughout Pennsylvania’s system of care, we have seen the increased emergency room visits, increased inpatient psychiatric hospitalizations, increased utilization of crisis services, and increased burden on homeless services associated with increasing financial instability. With the elimination of this funding, many of our clients, already struggling, will be forced into the streets. The Commonwealth of Pennsylvania cannot afford an increase in its homeless population. If the alternative to a rented room is
a shelter, the cost would be between $10 and $55 per night, according to a study by the Lewin Group – at least one and a half times the monthly grants. Moreover, forcing patients to seek treatment in emergency rooms could cost an average $1,200 per visit or more. In other words, one visit would cost Medicaid (and taxpayers) more than one month’s General Assistance supplement. If the patient is uninsured, the entire cost of that visit will either be paid for by government “uncompensated care” funds and/or cost-shifted to other hospital patients. Medicaid is a significantly more efficient alternative. Finally, because people on General Assistance are at an increased risk for substance abuse and committing crimes, in the worst case they may end up being incarcerated. According to the Department of Corrections, incarceration expenses are $35,000 per year per inmate, nearly 15 times the cost of a
H.B. 2150 won’t close tax loopholes The Pennsylvania House has taken up House Bill 2150 which couples a halfhearted attempt to close corporate tax loopholes with nearly a billion dollars in business tax cuts by the end of the decade. These tax cuts will do little to boost the economy but will drain needed resources for education, hospitals and infrastructure in Pennsylvania. Corporate tax loopholes are a costly problem for Pennsylvania, and House Bill 2150, sponsored by Rep. Dave Reed, is an important acknowledgement of that problem. The state Department of Revenue has estimated that loopholes cost the state more than $500 million a year. Responsible tax reform should be a priority for lawmakers, but this bill restructures the state’s tax system in a way that Pennsylvania cannot afford. It would enact nearly $1 billion in tax cuts by the end of the decade – offset, at best, by $250 million or so in new revenue from closing loopholes. The full House is expected to debate and vote on amendments to the bill Tuesday, May 1. Both House and Senate leaders have signaled displeasure with the Governor’s proposed 2012-13 budget, which includes cuts to higher education, county human services, Accountability Block Grants and the General Assistance program, and provides no relief for school district funding cuts enacted last year. The slow economic recovery, aging population, higher pension costs, and rising health care costs will continue to exert pressure on the state budget for several years. Given this set of long-term fiscal pressures, lawmakers need to act prudently on both the revenue and expenditure side of
the budget. House Bill 2150 leans more toward reckless than prudent, promising long-term tax reductions during a period when the commonwealth is likely to face great difficulty paying its bills.
Corporate Tax Loopholes a Costly Problem
Corporate tax avoidance has come under increased scrutiny at the federal and state level as governments have sought to close budget gaps and avoid service cuts. The cost is significant: a study by the Pennsylvania Department of Revenue using available taxpayer data pegged the cost of state loopholes at $550 million. The most visible of the corporate tax avoidance strategies is the Delaware loophole, which House Bill 2150 purports to close. Here is how it works. A parent corporation transfers ownership of trademarks, logos, and other valuable intangible business property to a whollyowned subsidiary to “hold” the intangible property. The parent company then pays a fee to the subsidiary for the rights to use the trademarks. These fees are a means to transfer profits earned in Pennsylvania to the out-of-state subsidiary, where income is either not taxed or taxed at a far lower rate. Delaware and Nevada don’t tax royalty income, so subsidiaries are often established in these states.
The Bill Would Not Close the Delaware Loophole
House Bill 2150 would require companies to “add back” to Pennsylvania taxable income the costs they have paid to
subsidiaries for these intangible expenses. Several states have grappled with this issue recently. There are good statutes and bad ones – those that set clear standards and are difficult to circumvent, and those that set fuzzy standards that are easy to skirt. Unfortunately, this bill falls in the latter category. A strong bill is not out of the question. New Jersey enacted a strong addback bill in 2002, and the Governor of Mississippi proposed a good bill this year. Thirtyfive of the 45 states that levy corporate income taxes have taken steps to crack down on tax loopholes, through addback rules or unitary combined reporting. The chief flaw in House Bill 2150 is an exception to the addback rule for a transaction “related to a valid business purpose.” The language does not offer a clear standard for companies to comply with, leaves room for a great deal of avoidance, and would be difficult for the Department of Revenue to enforce.
The Bill Enacts Costly New Tax Cuts
The bill’s sponsors have stated their intent to enact revenue-neutral business tax reform, applying revenue from closing loopholes to reductions in business tax rates. This bill is anything but revenue neutral. Instead, tax cuts costing close to $1 billion are offset by, at best, $250 million or so in new revenue. Large tax rate reductions required by statute will likely be paid for with further reductions in spending that will undermine rather than strengthen Pennsylvania’s economy. The availability of skilled and trainable workers, sup-
monthly grant. While we are not economists, we expect that the increased utilization of health care resources and increased cost to the criminal justice system would vastly exceed the cost of a room. For a state faced with a budget crisis, treating clients with severe mental illness who have the resources to meet their basic needs is an absolute bargain. We recognize that the General Assembly faces difficult decisions about how to allocate increasingly scarce resources. At the same time, we are concerned that the proposed cuts will have disastrous, costly, unintended consequences for the individuals we serve and for all residents of the commonwealth. CW The authors are members of the Pennsylvania Psychiatric Leadership Council, a network of stakeholders involved in community mental health throughout the state, including clinicians, administrators, consumers and families.
By Sharon Ward
ported with job training, robust transportation and other infrastructure, and a good quality of life are vital to economic growth and critical to Pennsylvania’s communities. All of these will be undermined by an approach that focuses only on tax rates. The bill also ties the General Assembly’s hands by putting the tax reductions in statute. The General Assembly should vote each year on tax rates as they do on spending, weighing the cost of the tax cut expenditure with available revenue and making choices that are affordable and reflect that year’s priorities. Proponents would argue that business tax cuts are necessary to create jobs in this sluggish economy. Most economic analysis suggests that tax cuts are ineffective as economic stimulus, costing much more than they generate and creating fewer jobs than direct public investments. Tax cuts that result in reductions in public spending, especially for education, public safety and transportation, can hurt economic growth. Rep. Dave Reed has made an important contribution by acknowledging that corporate tax loopholes are a problem that needs to be addressed. Like spending increases, tax cuts must serve some public purpose and be affordable. Legislation to close corporate tax loopholes should, at the very least, do no harm. This legislation does not even meet that modest test. CW Sharon Ward is Director of the Pennsylvania Budget and Policy Center, a non-partisan policy research project that provides independent, credible analysis on state tax, budget and related policy matters, with attention to the impact of current or proposed policies on working families.
OPINION 13
MAY 2012 CAPITAL WATCH
Editorial
A rant for all seasons …
A lot of people who are very mad at the government today still love the American flag. Go figure. If you don’t show adequate respect for the flag, you’re a socialist or worse, maybe a communist. Pretty much the same group of people – the “flag lovers” – also believe that if you work for or strongly support government-based social services, you are socialist or worse, maybe a communist. The seeming conflict of ideas caused us to reach for our handy-dandy pocket handbook of documents of American freedom for a little refresher course. Follow with us. Here is the text of the Pledge of Allegiance as last amended (in 1954 to insert the words, “under God.”): “I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.” It’s important to note that the Pledge is not simply to the flag, a symbol, but to the government entity it represents. (So, if you pledge allegiance to the flag, you are also pledging support to those hated “government workers” and their enterprises.) Perhaps to the chagrin of “states’ rights” advocates, it also prescribes that we are “one nation” and to those who from time to time discuss secession from the union, it stipulates, “indivisible.” (Texas Gov. Rick Perry take heed.) Next, it states flatly, “with liberty and justice for all.” (Presumably not just one or the other but both, simultaneously.) As a manifesto, the “Pledge” still comes out pretty bland compared to, say, the Preamble to the Constitution, which calls for, in quick succession, a list of aspirations and rights including forming
a “more perfect union,” and establishing “justice and domestic tranquility.” It also calls upon its government to “provide for the common defense, promote the general welfare and secure the blessings of liberty.” That pretty much covers the waterfront and then some in describing most of the various enterprises of government at all levels – federal, state and local. There are some people who believe that government tries to do “too much” and has over reached its role in society. But no program has ever sprung fully formed from the mind of one person. Rather, they all at one time or another have received the explicit or implicit stamp of approval by Congress or some state legislature. Which brings us to the Declaration of Independence. The fervor of Constitution pales when it is set, side-by-side to the “we hold these truths to be self-evident” riff in the Declaration of Independence. The Declaration sets out that you pretty much get the kind of government you ask for – or demand. It’s all about “power to the people.” No where in the great documents of American freedom is it written that government is a gathering of “others.” In the words of the Declaration, “governments are administered among men, deriving their just powers from the consent of the governed.” The government is not “them,” it is “we.” That’s not to say that our local, state or federal governments are without flaw. It’s just that we get tired of people railing against “them,” led on by the incessant babble of broadcast talk show hosts. Our “public servants” aren’t perfect. But they don’t deserve the outright scorn they get from many quarters. CW
14 OPINION
MAY 2012 CAPITAL WATCH
Working together to keep Pennsylvania green By John R. Hanger, Esquire
You have probably seen Hillandale Farms eggs in your local grocery store. But few people know that this forwardthinking Adams County egg producer is working with EnergyWorks BioPower, LLC (EnergyWorks) to create a first of its kind bio-energy project in Tyrone Township, Adams County, Pennsylvania. The Hillandale/EnergyWorks project is a model for how “out-of the-coop” solutions can benefit farms, save money, and reduce both water and air pollution. Hillandale Farms has been operating in Pennsylvania for 14 years. During this time, Hillandale has demonstrated that it is a leader in egg production, technologically and environmentally. Since Hillandale Farms is the largest chicken laying farm in Pennsylvania, the waste produced by millions of layer hens is substantial and must be handled safely. With an eye towards environmental stewardship, Hillandale began to look for solutions. It found EnergyWorks, a full service provider of ecosystem services. Hillandale and EnergyWorks will use
the
gasification technology to transform chicken waste (biomass) to renewable energy. The electric plant will generate about 3.25 MW of electricity, enough for about 2700 homes. The electricity will mainly run the farm and plant, with any excess electricity sold back to the grid. This plant not only will reduce Hillandale’s electricity bills but eliminate over 34,000 tons of CO2 equivalent greenhouse gas annually and recover about 13,000 tons of mineral byproducts, that can be recycled as fertilizer or livestock-feed supplement. Today, all of the farm’s droppings are stored and then spread on land as fertilizer, resulting in potential runoff of nitrogen and phosphorous into our local waters and the Chesapeake Bay. Once the new plant is up and running, the process will contribute toward Pennsylvania’s 2025 target reductions in nutrient loading to the Chesapeake Bay in amounts equivalent to 3.5% of the target for nitrogen and a 4.4% of the target for phosphorus. The Pennsylvania Department of
Environmental Protection (DEP) has certified the plant as a nutrient credit generator with a projected annual capacity of over 1,000,000 nitrogen credits and 53,000 phosphorous credits, making it Pennsylvania’s largest certified credit generator. The plant is expected to be up and running by the end of 2012. This plant wouldn’t have become a reality without support from government and the private sector, however. EnergyWorks received loans from Pennvest, the state program that helps support projects that improve the Commonwealth’s water and sewer infrastructure. The Pennsylvania Public Utility Commission (PUC) was instrumental in creating regulations and policies to foster the development of alternative and renewable energy projects in the Commonwealth generally and eliminated barriers for the Hillandale project. Over 60 percent of the costs to develop and construct the project will go to Pennsylvania companies, providing immediate benefit in terms of manufac-
elegance at hershey
turing and construction jobs. The local utility, Metropolitan Edison, worked with Hillandale and EnergyWorks to put in place the energy sales contract needed to make the plant economically viable. Pennsylvania State University and several of the state’s poultry and livestock feed producers are working with EnergyWorks to qualify the mineral byproducts as commercial feed supplements. This initiative is an important step toward conserving phosphorus as a limited, non-renewable resource. The project may be a model of an agricultural and energy project that could be replicated across the Chesapeake Bay Watershed and possibly America. If so, it could help usher in a whole new era of sustainable animal agriculture. CW John Hanger is special counsel to Eckert Seamans. He served as Secretary of the Department of Environmental Protection and is an expert on energy, environment, green economy, competitive electric markets, and utility regulation.
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OPINION 15
MAY 2012 CAPITAL WATCH
Relax and stay a while at City House B & B By Markeshia Wolfe
Are you seeking a home away from home to escape the noise and frustration of everyday life? Have you been on the hunt for a quiet and cozy spot for a romantic get away? Do you need a quaint and classy place to host a special event? Well look no further. The destination that you desire is not just a fantasy; in fact, it is located right here in your own backyard. Visit City House Bed and Breakfast and you will be impressed from the door… literally. From the handcrafted stain glass windows and well kept lawn to the fire places and newly renovated private bathrooms, the entire place is lavishly decorated in classic contemporary décor. The architectural details are artwork in itself. Originally built in 1925, the structure has a modern touch, but still holds an undeniable historic elegance. The building has forgone renovations since then and it conveniently has four sumptuous rooms. Each room provides: Westin Heavenly king sized beds covered in 400 thread count 100 percent Egyptian cotton sheets, private bathrooms, flat screen TVs with pay-per-view on-demand movie access and high definition TV, Hershey candy, and complimentary Wi-Fi. There is also free parking on the grounds. At City House, every house guest is treated like family! There is no room for
CapitolWatch_HalfPage_04.2012_OUTLINES.indd 1
uneasiness or insecurity. Guests have the freedom to come and go as they please. With keypad entry to the front door and to the rooms, no one is limited to how late they can stay out and they can be certain that their belongings, as well as themselves, will always be safe within the house. While inside, make yourself at home. Guests are given complete access and are invited to utilize the entire house for an “at home” feel. Feel free to leave items such as shampoo, body wash, or garment bags until your next visit. They will be stored and placed within your reach before your return so that you can feel as though you are returning home from home. City House B&B has the perfect atmosphere and location to host fun events. It is situated within walking distance of the
Susquehanna River, the capitol complex, and the State museum. In addition to historic sites, there are also various boutiques, galleries, and eateries to explore nearby, all within walking distance. City House encourages their guests to participate in “3rd in the Burg” where they can spend that third Friday of the month enjoying free performances and exhibits at popular places such as Bricco, Mangia Qui, and the Midtown Scholar. People are not limited to using the bed and breakfast as a sweet escape. It can easily be used to accommodate up to forty people for events that range from bridal showers and bachelorette parties to birthday parties and alumni reunions. One has the option of brining in a caterer or providing their own food and beverages for these events as long as the liquor liability policy
is respected. The establishment does provide a heavy continental breakfast which includes freshly baked goods from local bakeries. Guests are served fresh baked cookies daily. City House Bed and Breakfast has quite a few loyal guests because of the relaxing aura that this retreat exudes. It is especially popular among state legislators and lobbyists for that main reason. Everyone who steps over the threshold immediately becomes family and this is demonstrated by owner, Erica Bryce, with her hospitable actions and innkeeper Bruce Burchfield’s attention to detail. The two make it a habit to memorize their regular guests’ likes, dislikes, meals, and habits. Join the family by visiting at 915 North Front St. Harrisburg, PA. Reservations: 717-903-CITY (2489) or stay@cityhousebb.com CW
3/27/2012 12:48:32 PM