Capital Watch July 2013

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VOL. 6 NO. 7

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INSIDE What does the future hold for liquor privatization, transportation funding bills?

PAGE 3 2013-14 state budget analysis PAGE 4 GOP poll shows majority favors Medicaid expansion PAGE 5 Litz enters Democratic fray for governor PAGE 8 Op Ed: Defending unconstitutional GOP policies wastes taxpayer funds PAGE 9 OP Ed: Keeping electricity reliable and affordable PAGE 11

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JULY 2013

Corbett ON signs budget TIME Gov. Tom Corbett, surrounded by 29 House Republicans and several members of his administration, signed a $28.375 billion state budget bill into law June 30.

“For a third year in a row, I have the honor to sign a budget that is balanced, that is on-time and that honors the promises I made to the citizens of Pennsylvania,” said Corbett just before he signed the general appropriations bill at 10:15 p.m.

“This budget once again provides record levels of state funding for basic education, while meeting our obligations to those in need, ensuring the safety of our citizens and supporting our job creators,’’ Corbett said.

The bill’s spend total is an increase of $645 million – 2.3 percent - over the current budget year. It’s also $64 million less than what the governor’s budget request in February - 2.3 percent compared to the current fiscal year’s state spending plan.

The state House of Representatives, after nearly four hours of debate, delivered a final, party-line vote – 111-92 - on House Bill 1437 just before 9 p.m. The Senate voted 33-17 to send the bill to the House earlier in the day.

“There has to be a certification from the Secretary of the Budget and from the Revenue Department that we have enough money on hand going into the next year; I’ve signed those certifications” and they’ve been endorsed, “so yes, we’re on time,” said Corbett.

During the day’s legislative debate, plenty was said about HB 1437’s provisions.

“This year’s budget reaffirms our commitment to fiscal restraint

Governor Corbett signs his third straight budget.

and fiscal responsibility by investing in key areas such as education and public safety, while also keeping spending in line,” said Senate Appropriations Majority Chairman Jake Corman, R-Centre. “I think a lot of good is going to come out of this budget because it equally recognizes the burden of government spending on taxpayers.”

Urging House members to vote for the budget bill, House Majority Leader Mike Turzai, R-Allegheny, said the bill represented his philosophy that he “will take the opportunity every time to say I want to govern responsibly, I want to meet my constitutional obligation, I want to be compassionate and caring, and make sure that every child gets a great opportunity, but I want to do it at the same time thinking of those folks who work hard every day and have money

come out of their paycheck, about those employers that are providing family-sustaining jobs in our communities and about those individuals who have saved their money and are out buying goods to keep this economy going.”

While some Democrats in both chambers expressed approval with certain aspects of the spending bill, many still criticized the measure as representing the wrong priorities.

“While there are some things that I think we could indicate we’re pleased with ... there are some things, I think, on which we have more work to do,” said Senate Minority Leader Jay Costa, D-Allegheny.

Costa, who voted for the bill, singled out distressed school district funding as being inadequate for those districts in need of help from the state.

Five other Senate Democrats joined Costa in supporting the budget bill. It’s believed that support was due to the governor responding to some Senate Democratic priorities.

Senate Appropriations Minority Chairman Vince Hughes, D-Philadelphia, who also said there are some positives in the budget, was less glowing in his assessment.

“Although there are some improvements in this budget document compared to what the governor announced back in February ... although there are some improvements in this document compared to what the House sent us ... it really, in many respects, falls far short of where it really is we can be, where we should be,“ said Hughes, who voted against the bill. continued on page 5

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What does the future hold for liquor privatization, transportation funding bills?

By now, most everyone knows the liquor privatization and transportation funding bills stalled in the General Assembly.

But while Gov. Tom Corbett says he believes there’s still time to get both bills to his desk, others are not so confident the Legislature will move on them when they return to session in September.

Prospects appear bleak for enactment of liquor privatization and a transportation bill in the fall, analysts say. And according to political analysts interviewed by the Pittsburgh Tribune-Review, the governor’s third priority, pension reform, also received little substanative attention from lawmakers and probably will not advance.

“I don’t think any will pass this fall,” said J. Wesley Leckrone, a political science professor at Widener University. “If any are approved, it would be transportation,” Leckrone told the Tribune-Review.

The notion of Republican leaders from two chambers and a GOP governor fail-

ing to agree is theater of the absurd, said Joe DiSarro, chairman of the political science department at Washington & Jefferson College.

It’s really unusual, in my opinion, said Moe Coleman, director emeritus of the Institute of Politics at the University of Pittsburgh.

However, Corbett continues to express optimism that lawmakers will pass transportation and liquor reform, and he is encouraged that the House and Senate each have passed versions of the liquor privatization bill.

“We are this close. This needs to be done

by November of 2014. This is a two-year legislative session,” Corbett said July 3.

Coleman told the Tribune-Review that he believes Corbett has a shot at getting a transportation bill through in the fall because it is legislation “that affects everybody.”

DiSarro thinks Corbett has a slim chance

of getting his agenda approved because lawmakers haven’t agreed with the governor on anything beyond a budget.

“It would to me be very surprising,” DiSarro said. “The horse is already out of the barn.”

But the three analysts also say that bills to raise money for bridges, highways and mass transit become harder to push through the closer it gets to an election.

“By October, it’ll be impossible,” DiSarro predicts. Lifting the cap on the wholesale gasoline tax to generate revenue is a tax increase, he told the newspaper.

“It is necessary, and the political fallout probably would not be significant,” he said,” but lawmakers will look ahead to 2014 campaigns starting in January and, for many, voting for tax increases would be out of the question.”

Liquor privatization and transportation were unofficially linked in the waning hours of both sessions. The idea was that the Senate, which wanted to boost transportation funding but did not particularly want liquor reform, would support a modest liquor bill if the House approved a transportation bill.

An amendment to expand private liquor sales did win Senate approval, but it was not brought up for a full Senate vote.

A $2 billion transportation bill won committee approval but didn’t make it to the House floor.

Both then crashed.

“They need to uncoupled, House Majority Leader Mike Turzai told the TribuneReview.

“Transportation needs to be in its own silo,” Turzai said. “We could be very close to a negotiated product, with respect to the sale of wine and spirits.”

Gov. Corbett had hailed passage of the Senate amendment, saying he would sign it if it came to his desk.

Liquor privatization, sought by four previous governors, made it further through the legislative process than any time before.

The House passed a Turzai-sponsored bill in March, tilted more toward privatization than the recent Senate bill.

Coleman told the Tribune-Review: “The Senate bill is significantly different. Turzai seems to want to get rid of the state stores.

The Senate bill fudges that.”

Added Coleman: “Those differences seem too vast to be resolved in a few months.” CW

4

NEWS

JULY 2013 CAPITAL WATCH

2013-14 state budget analysis The Pennsylvania Legislature has approved and the Governor has signed a 2013-14 state budget (amended into HB 1437) that spends $28.375 billion, roughly $645 million (or 2.3 percent) more than in the current fiscal year.

Below are the highlights of the 2013-14 spending plan.

Education

The 2013-14 budget plan adds $22.5 million in funding to the basic education subsidy line over the House proposal and $32.5 million over what Governor Corbett proposed in February.

The basic education subsidy will increase by 2 percent to $5.526 billion. Overall, the plan retains 81 percent of the cuts to public school classrooms enacted two years ago.

Funding for Accountability Block Grants (providing support for pre-kindergarten and full-day kindergarten programs, class size reduction, and tutoring) remains flat at $100 million, still well below the 2010-11 levels of $254.5 million.

Special education remains flat at $1.027 billion, although a commission to review the special education formula has been established and is expected to issue a report late in the fall.

Funding for Pre-K Counts is increased by $5 million (6 percent) from 2012-13 to $87.3 million, and the Head Start Supplemental gets a $2 million (5.4 percent) increase to $39.2 million – consistent with the Governor’s proposal.

Career and technical education is flat funded at $62 million, while family and adult literacy gets a slight boost to just over $12 million. The budget plan retains $3 million added by the House for an equipment fund for technical high schools. And for the first time in years, adult literacy programs get a small funding increase of $500,000.

The budget budget spends $63 million less on public school employee pension benefits and $49.5 million less on school employees’ Social Security than the Governor proposed. These savings are the result of deep cuts to education that have reduced the ranks of teachers, reading specialists, counselors and other school staff.

Higher Education

The commonwealth’s higher education institutions — including the 14 campuses of the state system, Penn State and the state-related institutions — saw their funding slashed by 19 percent in 2011-12. Funding remained at that level in the 2012-13 budget.

State-related universities get modest increases in the 2013-14 budget. The four state-related institutions – Penn State, University of Pittsburgh, Temple and Lincoln University – and the University of Pennsylvania’s veterinary and infectious disease programs will get $4.3 million, or 0.8 percent, in additional funding. The Governor’s proposal funded these institutions at the same level as in 2012-13.

Penn State and Lincoln each receive $2 million in additional funding, with smaller increases for Pitt and Penn. Temple’s appropriation was not increased.

The State System of Higher Education universities are flat funded at $412.7 million. The Pennsylvania Higher Education Assistance Agency (PHEAA), which offers financial assistance to students in the form of grants, scholarships and work-study awards, is essentially flat funded at $386.5 million.

Health and Public Welfare

The biggest change in the final budget from the Governor’s February plan is an increase in Medicaid Capitation payments, which funds the managed care providers. The plan allocates $3.935 billion, $104.8 million (3 percent) more than the Governor’s proposal and $154.3 million (4 percent) more than 2012-13.

The Capitation line has grown as the commonwealth completes its shift to mandatory managed care this year.

Medical Assistance – Outpatient, funded at $310.6 million, is $140.3 million (31.1 percent) less than 2012-13 and $58.7 million (15.9 percent) less than the Governor proposed. Medical Assistance – Inpatient is funded at $124.1 million, less than half the appropriation in the current year.

Funding for Medical Assistance – Long-term care is down slightly from what the Governor proposed but $67.6 million (8.8 percent) more that 2012-13, rising to $838.5 million.

Autism intervention and services retains the Governor’s proposed $2.6 million (20 percent) boost to $15.6 million.

The plan also restores $10.8 million (58 percent) cut by the Governor for Medical Assistance for Workers with Disabilities (MAWD). The $29.4 million allocated for MAWD is still $4.1 million (12%) less than 201213. The increase is likely due to the Commonwealth Court decision in the adultBasic lawsuit, which held that the commonwealth had to allocate 30 percent of Tobacco Settlement dollars to adult health insurance programs as stipulated in Act 77.

Child care services for low-income working families is increased by $7.2 million (5 percent) over the Governor’s proposal to $155.7 million, a 10 percent increase over 2012-13.

Funding for county child welfare is down from the Governor’s proposed $1.063 billion but $15 million (1.4 percent) over 2012-13, rising to $1.055 billion.

A 10 percent funding cut enacted last year to county human services, including mental and behavior health services, homeless assistance, and the Human Services Development Fund, remain intact in this budget.

County assistance offices are provided a $30 million (12.2 percent) increase over 2012-13 to $275 million.

Funding for cash grants decreases by $4 million (6.6 percent) from 2012-13 to $56.7 million.

The allocation for Services to Persons with Disabilities, at $221.1 million, is $6.7 million (3 percent) below what the Governor proposed but $1.7 million (2 percent) above 2012-13. Attendant Care funding at $113 million, is $2 million (2 percent) less than the Governor proposed.

Funding for domestic violence and rape crisis services is increased modestly. Funding for legal services is flat.

Other Health Programs

The budget plan includes a $9.5 million increase for the Children’s Health Insurance Program (CHIP) and a $3.8 million increase for CHIP administration. The Governor had sought a $13.5 million increase for CHIP to enroll an additional 9,330 children in the program and adjust for a reduction in federal matching funds.

The budget allocates $111 million, $4 million less than the Governor’s proposal.

Public health programs get an increase of $5.6 million (2.9 percent) from 2012-13 to $195.5 million.

Public Safety and Corrections

The Attorney General’s Office will see a $9 million increase (11.7 percent) to $87.3 million, including a newly appropriated $2.5 million for a mobile street crimes unit and additional funds for Child Predator Interception Units.

Funding for state correctional institutions, at $1.643 billion, is up $63 million (4 percent) from 2012-13 and $13.9 million (1 percent) from the Governor’s proposal.

The State Police, which also derives funding from the Motor Vehicle License Fund, gets $210 million in General Fund dollars, an increase of $14.8 million (8 percent) from 2012-13.

Funding for Probation and Parole is up $9.9 million (7.5 percent) from 2012-13 to $141.5 million.

The Pennsylvania Emergency Management Agency is funded at $17.1 million in the budget, a significant decrease ($46.5 million, or 73 percent) from 2012-13.

The previous year’s budget saw increased funding levels as a result of a string of costly natural disaster relief efforts.

State Parks and the Environment

The budget plan reduces General Fund dollars for state park operations by $20 million and state forest operations by $5 million. Those costs will be shifted to special funds – either the Marcellus Shale Legacy Fund or the Oil and Gas Lease Fund, although that is not yet clear.

Funding for the Department of Environmental Protection (DEP) is up $2.9 million (2.3 percent) from 2012-13 to $127.7 million. Environmental protection funding has seen a series of cuts over the last several years. While there have been increases in environmental funding from other state funds, these have not been able to make up for the General Fund cuts — meaning fewer dollars for state parks and forests, decreases in air and water testing, and less ability to protect our environment.

Agriculture

Funding for agricultural programs is down $5.8 million (4.4 percent) from 2012-13 to $123.8 million.

While this is a significant decrease in funding, it is less than the 9 percent cut sought by the Governor.

Community and Economic Development

Programs administrated by the Department of Community and Economic Development get a $6.9 million (3 percent) funding increase over 2012-13 in this plan. The increase mostly is to increase funding for Pennsylvania First, a job creation grant program, although a number of other programs see funding increases and decreases.

Legislature, Courts, and Governor’s Office

Funding for the General Assembly increases by $4.1 million (1.5 percent) from 2012-13 to $277.6 million.

Funding for the courts is up $8.1 million (2.6 percent) from 2012-13 to $317.4 million.

The Governor’s Office was essentially flat funded at $6.5 million, while funding for the Executive Offices is increased by $16 million (10.2 percent) from 2012-13 to $172.9 million.

Source: Pennsylvania Budget and Policy Center.

NEWS 5

JULY 2013 CAPITAL WATCH

GOP poll shows majority favors Medicaid expansion

BY PETER L. DECOURSEY, CAPITOLWIRE

What’s in a name? When it comes to Medicaid expansion, a name is worth one voter in 10.

According to the new Harper Poll, by longtime GOP pollster/consultant Brock McCleary, that is what happens when you ask about Medicaid expansion.

They split their 813 poll respondents into two nearly equal groups, and asked each about Medicaid expansion.

The first group was asked if “the state of Pennsylvania should expand Medicaid coverage for low-income individuals, as called for under the new health care law known as the Affordable Care Act?” Thirty-five percent strongly agreed with expansion, 23 percent somewhat agreed,

26 percent strongly disagreed and 10 percent somewhat disagreed. That was 58-36 for agreement.

The second group was asked the same question except the “as called for” part said “under President Obama’s new health care law?”

While strong agreement rose to this question to 38 percent, the softer ‘somewhat agree” contingent shrunk to 14 percent. Strong disagreers rose to 30 percent, and somewhat disagreed was at 12 percent.

So with Obama’s name attached to it, expansion poll ratings shrunk to 52-42.

A 22-point lead for Medicaid expansion shrinks to 10 points if it is linked to Obama.

To be fair, that is well within the error

Corbett signs budget on time He said the budget fails to properly fund education, fund job creation, stimulate economic development, properly tax Marcellus Shale drilling, and close corporate tax loopholes.

House Democrats offered a harsher take on the spending bill.

“The only thing you have to know is a oneword description for this budget: failure,” said House Appropriations Minority Chairman Joe Markosek, D-Allegheny. “This budget is a failure to the people of Pennsylvania.”

“The major things that affect families and the people of Pennsylvania have not been properly cared for in this budget ... we could have done a lot better,” said Markosek.

Rep. Steve Santarsiero, D-York, ran off a list of allegations against the governor, his policies and the past budgets he has signed: basic education underfunding and local school district tax increases, higher education funding cuts and higher college tuitions, and “corporate welfare” and stagnant job growth.

“This budget doesn’t balance because the priorities of the people of this commonwealth are not being taken into consideration,” said Santarsiero.

Some of the more notable components of the budget are: • The budget contains an increase in funding for basic education funding.

Pennsylvania’s public schools will see an increase to $5.52 billion in the coming year, a $122.5 million increase over the current year’s spending. That total is $32.5 million above the governor’s initial request; • It increases spending for law enforcement and public safety programs, including a nearly $15 million increase for the Pennsylvania State Police to train approximately 290 new cadets, and a more than $9 million increase for the Attorney General’s Office to hike the funding for the office’s child predator unit and create a new mobile street crimes unit; • It provides level funding to the Pennsylvania State System of Higher Education schools ($412.7 million) and

margin of two surveys of 400 voters each.

In other findings, 33 percent of voters praised Corbett for his education budget increase of $120 million – he proposed $90 million and GOP leaders proposed the rest – and 37 percent said the education increase

“is not enough to make up for the previous cuts to education over the last few years.”

Corbett is also pushing hard to put new state employees and state elected officials – once they win retention or re-election – into a 401-k pension plan.

Sixty percent support that – 42 percent strongly support and 18 percent somewhat support it – and 20 percent oppose it, 11 percent somewhat opposed, 9 percent strongly opposed.

And Reese’s Peanut Butter Cups topped a list of favorite candy bars, at 43 percent. It was followed by York Peppermint Patties, 17 percent, Hershey Chocolate Bars, 16 percent, and Kit-Kat and Hershey’s Kisses at 12 percent each. CW

continued from page 1

community colleges ($212 million), and a slight increase - $4.3 million in total - in funding for the state-related higher education institutions (Penn State University, the University of Pittsburgh, the University of Pennsylvania, and Lincoln University).

The other state-related institution -Temple University - received no additional funds;

• It increases funding by $20 million for Pennsylvanian with physical disabilities, and another $20 million to further reduce the waiting lists for persons with intellectual challenges; • It raises total funding, to $445 million, for the state’s Children’s Health Insurance Program (CHIP);

• A total of $4 million to create the Community-Based Health Care Program to bring health care to people who live in areas without easy access to hospitals and clinics; and • An additional $50 million for programs for older Pennsylvanians, such as home and community-based service and prescription drug financial assistance. CW

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6 NEWS

JULY 2013 CAPITAL WATCH

Education spending is a popular topic during budget debate

BY CHRIS COMISAC, CAPITOLWIRE

During the General Assembly’s consideration of the state budget on June 30, legislative Democrats focused much of their criticisms of the general appropriations bill not on what was in the bill, but what they said was missing: namely $1 billion for basic education funding.

“Two years ago they slashed and burned basic education by a total of $1 billion or so,” House Appropriations Minority Chairman Joe Markosek, D-Allegheny.

“And the next two years they quibbled about ‘that wasn’t state money’ or ‘that was federal money’ ... who cares, they’ve done very, very little to restore that funding.”

Republicans offered a different perspective.

“If I had a nickel for every time they [the Democrats] said we cut education by $1 billion, I’d have at least $2 billion to put into education,” said Rep. Tom Killion, R-Delaware. “The fact of the matter is we did not cut funding for education.

“The last three years of the Rendell administration the state spend ... for those last three years he [Rendell] cut it and he made it up with federal stimulus money, above and beyond the previous year’s spend – so yes, they were spending increases,” said Killion.

“The Rendell administration cut it [state spending on education], then went back to Philadelphia, and left us holding the bag,” added Killion.

Gov. Tom Corbett and legislative Republicans also assert, backed by budget figures, that state basic education spending, when spending on school employee pensions is included, is the highest it has ever been in Pennsylvania history.

The budget approved by the General Assembly contains an increase in funding for basic education. Pennsylvania’s public schools will see an increase to $5.52 billion in the coming year, a $122.5 million increase over the current year’s spending.

That total is $32.5 million above the governor’s initial request. About two-thirds of that increase was earmarked by Senate Republicans for “stressed school districts.”

Education funding was also the one topic on which the Senate’s state budget floor debate offered the only bit of drama during that chamber’s final consideration of the budget bill.

Senate Education Committee Minority Chairman Andy Dinniman, D-Chester, during his initial remarks on the budget bill, complained that the chamber’s Democrats

should not be asked to vote on the bill without knowing what the specific impacts of the measure’s basic education funding would be on individual school districts.

Dinniman was told that having such information was up to his own caucus to provide to Democratic members.

Later, Dinniman spoke again on the bill, arguing that since his caucus had only recently received the language of the Public School Code bill, in which the spending of the basic education funding appropriated in the budget bill is specified.

He said given the lack of time to review the School Code bill, “we don’t know how this will impact our school districts.”

It was his second set of comments that prompted Senate Majority Leader Dominic Pileggi, R-Delaware, to suggest Dinniman’s comments were out of order, since the bill under discussion was the state budget bill and not the Education Code bill.

“The gentleman’s comments are more properly directed to the School Code bill that will be on the floor of Senate for debate later today,” said Pileggi. “His comments and questions are not on point and not relevant to the matter under discussion now.”

Although his microphone was not on, Dinniman continued to express his concerns, and then Senate Minority Leader Jay Costa, D-Allegheny, sought to challenge Pileggi’s assertion that Dinniman’s remarks were out of order.

Senate President Pro Tem Joe Scarnati, R-Jefferson, presiding over the Senate debate, indicated he believed the remarks were out of order, cautioned Dinniman to stay on point, and then allowed the Chester Democrat to continue his comments.

Dinniman continued, his remarks again straying into specific basic education expenditures, prompting an even more stern warning from Scarnati.

Following that exchange, Scarnati allowed Dinniman some latitude to finish his remarks.

“There are those who argue that education funding has been increased,” said Dinniman. “The truth of the matter is that most of that funding goes into paying the pensions that are involved with schools, and when you take that out, the total education funding has not been increased.”

“We rise to question this budget and its expenditures in education ... the difficulty for us –and I don’t think this is a matter of being out of order – is we need the information in order to vote, Mr. President, on how it impacts each of our districts.”

“Each and every student of this commonwealth is equal, that we cannot create a system of education that is separate and unequal, simply based on a zip code or who happens to represent that particular [school] district,” Dinniman said in closing his remarks Some of Dinniman’s remarks were referenced later during the floor debate by Senate Appropriations Majority Chairman Jake Corman, R-Centre.

“I took notice from the senator from Chester County mentioning that a lot of this [basic education] money is going to go to paying pensions to our teachers,” said Corman. “There’s no question about that, it absolutely is.

“Salaries and benefits are the driving costs of our school districts, obviously, so we have to pay those salaries and benefits.”

Corman noted that Corbett and some legislators proposed ways to address the “escalating costs of the pension system,” but those efforts fell short due to opposition from interest groups as well as state lawmakers.

“I would just say to the gentleman from Chester County that I am anxiously awaiting his proposal to reform the pension system so we can alleviates the cost to school districts or the state revenue, the tax, that he’s going to propose to pay for them, because those are the only two things we can do to alleviate those costs,” said Corman.

“Maybe we can incorporate it into next year’s state budget,” he added. CW

NEWS 7

JULY 2013 CAPITAL WATCH

Senate rejects House Fiscal Code for misrepresenting Pileggi’s stance on payday lending

BY PETER L. DECOURSEY, CAPITOLWIRE

The state Senate voted 49-0 on June 30 to bounce a key part of the state budget back to the House.

That vote to strip a House “payday lending” amendment from the state Fiscal Code came after the Senate leaders said they never agreed to the proposal.

Now the House will have to return to session. Senate Majority Leader Dominic Pileggi, R-Delaware, predicted they will approve the Fiscal Code bill in the near future.

House GOP spokesman Steve Miskin said House leaders would confer with the governor’s staff to see if they had to return to session this summer to pass the Fiscal Code legislation or if it could wait until the late September House session. July 15 is a likely possible voting session date, House members and staff said.

The legislation needs to be approved swiftly to implement various enabling provisions of the state budget contained in the Fiscal Code, including $45 million for the Philadelphia School District bailout, said Budget Secretary Charles Zogby.

Gov. Tom Corbett scolded both chambers: “The legislative leaders need to resolve their differences and act responsibly to send the Fiscal Code to my desk for approval as soon as possible.”

Zogby said: “Should the legislature fail to promptly pass the Fiscal Code, it could have significant implications on commonwealth spending and revenues.

“If left to languish, it will reduce this year’s available funding by $235 million, potentially forcing cuts to higher education and will impact our ability to further fund Philadelphia schools.”

House Democrats agreed.

“The failure to put a Fiscal Code in place jeopardizes a number of important items,” House Democratic spokesman Bill Patton said.

Miskin, in 2010, said the passage of a Fiscal Code and other budget-related bills after June 30, 2010, meant that former Gov. Ed Rendell’s budget was “late.” But he asserted the budget bill was not late this year, despite the same circumstances occurring.

The unusual rejection by the Senate of the Fiscal Code bill came after the House added an obscurely-worded provision to the bill on Monday.

That provision, which only referred obscurely to amending a 76-year-old law, said the Senate and House majority leaders agreed to vote by the end of October on a new bill to legalize and regulate short-term, high-interest loans, better known as “payday lending.”

When Pileggi faced his caucus today, many of them were angry both that the wording was inserted into the Fiscal Code legislation secretly at the last minute, and

that the language stated Pileggi consented to it.

Asked specifically if he had agreed to that language, Pileggi said: “Absolutely not.”

Miskin said the language did not say that Pileggi had agreed, but instead predicted he would agree.

was reason to vote “no” on the whole bill, and make the House do it again, without the provision.

Sen. Tony Williams, D-Philadelphia, who has worked with Browne on the bill, said of the House amendment on payday lending: “To do this frankly has set that process back. It gives those of us who

Zogby said: “Should the legislature fail to promptly pass the Fiscal Code, it could have significant implications on commonwealth spending and revenues.”

“From the way they voted, they clearly did not agree,” he said.

That language was not binding, but the bill was still sent back to the House by an angry group of senators. Even Sen. Pat Browne, R-Lehigh, who has been working to pass similar legislation, said the way the House inserted it into the Fiscal Code bill

trusted the people who advanced this” new concerns about their “credibility.”

Asked why non-binding language would now hold up the Fiscal Code language until the House passed it again, Pileggi said it misrepresented his and the Senate’s position and he added, “words are important.”

The language was inserted at the behest of Speaker Sam Smith, R-Punxsutawney, although senators explained their rejection of it as revenge on House Republicans over the transportation bill and Medicaid expansion package.

Miskin said Smith was disappointed “the payday lending language was removed from the bill.”

House Majority Leader Mike Turzai, R-Allegheny, said Monday that the Senate GOP leaders had pre-agreed to concur if the House excised the Medicaid expansion from the welfare code bill, which also surprised and upset some of the 17 GOP senators who had just voted for it. He also said Pileggi knew the governor would veto that bill before the Senate voted on it.

Asked if he had made that agreement, Pileggi told reporters: “That’s not an accurate statement.” But he declined to answer any further questions on that topic.

Miskin responded: “A number of that people at that meeting,” at which Pileggi was present, “heard the governor say he would veto the language.” CW

8 NEWS

JULY 2013 CAPITAL WATCH

Litz enters Democratic fray for governor

BY KEVIN ZWICK, CAPITOLWIRE

Lebanon County Commissioner Jo Ellen Litz has entered the Democratic list of candidates hoping for the chance to knock Gov. Tom Corbett out of office next year.

Litz, a self-described political moderate, spoke on the Capitol steps on July 3 for about a half hour, accompanied by a handful of supporters.

“I have a network of friends and colleagues across the state,” she said, noting her duties with a statewide county commissioners organization. “And not that I’m well known, but I think that I have a shot at this. My heart is telling me to do it.”

She faces a tough climb trying to launch a campaign from one of the most Republican counties in the state. Franklin Delano Roosevelt’s victory in 1936 was the last time a Democrat for president carried the county. Lebanon County also was one of four in Pennsylvania carried by the GOP’s Barry Goldwater when he was thumped by Lyndon Baines Johnson in ’64.

She touts her local government experience, and points to her four terms on the Lebanon County commission. As president of the County Commissioners Association of Pennsylvania, she frequented the Capitol last legislative session and played a key role

in supporting the Corbett administration’s push for a county human services block grant pilot program.

But that may be where her and the governor’s agreement on public policy ends.

“I disagree with Gov. Corbett on issues.

I respect the position. I respect him as a man, but I have a right to disagree with him on issues,” she said.

Perhaps one of her sharpest criticisms of the governor was aimed at the investigation of Jerry Sandusky, a former Penn State football coach convicted of raping young boys.

“I think our children were let down,” she said. “I think Gov. Corbett was in a position that he could have done something as the attorney general, as well as on the board of Penn State. I haven’t seen where he’s made a difference in that venue. And that’s why I’m so disappointed and that really weighs heavy on my heart.”

Corbett has repeatedly defended how he handled the state’s investigation of Sandusky and has strongly denied accusations that politics played a role in the investigation, a line waged by Democrats – most famously during the 2012 election by now-Attorney General Kathleen Kane.

Lebanon County Commissioner Jo Ellen Litz adds her name to the list of Gov. Tom Corbett’s challengers.

Litz now faces U.S. Rep. Allyson Schwartz, former Revenue Secretary Tom Wolf, former DEP secretaries Katie McGinty and John Hanger, Cumberland

County minister Max Myers, and likely State Treasurer Rob McCord.

Aside from some elbow-rubbing at the party’s summer meeting, the well-known names in the Democratic race for governor are sitting tight, raising money, and generally staying out of the news.

Lesser-known candidates, however, are on the stump, trying to build name recognition.

On Tuesday, Hanger was in his wheelhouse following closely behind Corbett on a natural gas drilling moratorium issue.

The federally organized, multi-state Delaware River Basin Commission has halted drilling in the area for three years and continues its moratorium while regulatory rules are drafted and approved.

Hanger, a former DEP secretary under Gov. Ed Rendell, sent a letter to the commission, which monitors drinking water for millions of residents, saying the commission should have “no confidence” that the Corbett administration would provide the proper amount of regulatory oversight.

Corbett sent a letter asking the DRBC to lift its moratorium, saying it is stifling economic development and job growth in the northeast. CW

House calls for Disabilities Act Awareness Day The Pennsylvania House of Representatives has declared Friday, July 26, 2013, as Americans with Disabilities Act Awareness (ADA) Day, marking the 23rd anniversary of passage of the landmark federal legislation.

Authored by state Rep. Kevin Haggerty of Lackawanna County, the House resolution notes than an estimated 475,000 of Pennsylvania’s 12.8 million residents live with a disability and enjoy the protections offered under ADA.

“We appreciate that Rep. Haggerty and the members of the state House of Representatives understand the importance of ADA to so many Pennsylvanians whose lives it touches on a daily basis,” said Lynn Keltz, executive director of the Pennsylvania Mental Health Consumers Association (PMHCA) and director of the Stigma Project, a project of the Pennsylvania Developmental Disabilities Council (DDC) aimed at increasing public awareness and

acceptance of people with disabilities.

“While the Americans with Disabilities Act clearly prohibits discrimination against people with disabilities in the areas of employment, public accommodations, telecommunications and access, we know we have a way to go towards full acceptance in the community.”

Keltz noted that while federal statistics identify only about 5 percent of Pennsylvanians as living with a disability, a recent random statewide survey by the

Stigma Project indicated that 23 percent self-identify themselves as having lived with a long-term disability and another 28 percent said that a member of their immediate family has lived with a disability.

“Physical, mental or intellectual disabilities touch us all on a daily basis,” Keltz said. “The Americans with Disabilities Act has made it possible for millions to live life more fully but there’s more to be done.

Awareness is the first step.” CW

Tax Code sent to governor’s desk

BY KEVIN ZWICK, CAPITOLWIRE

The Senate overwhelmingly approved changes made by the House to the Tax Code, sending another key budget component to Gov. Tom Corbett’s desk on July 3.

The code contains tax changes and language aimed at preventing use of the so-called Delaware Loophole, which some corporations use to avoid paying Pennsylvania’s corporate net income tax.

Senate passage also means a new tax credit aimed at funding technology jobs, which was set at $175 million by the Senate, will remain at the reduced amount of $100 million set by the House.

The Innovate in PA tax credit program would allow insurance companies

to purchase tax credits against its insurance premiums tax liability. The committee’s reduction drops the cap for the total program from $175 million to $100 million. It also reduced the amount that could be applied in a single fiscal year from $35 million to $20 million, starting in 2017.

Of the capital raised through the sale of the credits, 55 percent would go toward the Ben Franklin Technology Partners Program, 40 percent toward the Venture Investment Program, and 5 percent for Life Sciences Greenhouses.

The credit was added to the Tax Code in the Senate at the insistence of Sen. John

Gordner, R-Columbia, who dropped his opposition to a Senate GOP liquor privatization amendment after discussions with Gov. Tom Corbett’s staff and legislative leaders secured inclusion of the credit program in the Tax Code.

The deal frosted many House Republicans, who objected to how the tax credit was included. The proposal was similar to a plan by Rep. Warren Kampf, R-Chester, and Sen. John Blake, D-Lackawanna, also had a similar proposal.

“We just thought that at this time the reduction in the total amount of tax credit was the proper thing to do,” said House

Appropriations Committee chairman Bill Adolph, R-Delaware. When asked if the reduction had to do with pushback from members over the process of its inclusion, Adolph said: “It has nothing to do with that. Nothing at all.”

The code delays the phase-out of the Capital Stock and Franchise Tax, a tax on business assets, calling for its elimination in 2016 instead of 2014. It also continues the $60 million Film Tax Credit, closes a realty transfer tax loophole, enacts a new tax exemption on aircraft maintenance, and extends Philadelphia’s local sales to provide funding for its school district, among other things. CW

OPINION 9

JULY 2013 CAPITAL WATCH

Defending unconstitutional GOP policies wastes taxpayer funds

Finally, Tinnitus Relief

BY REP. MIKE STURLA

June was a month of historic court decisions – and not just in Washington.

Overshadowed by the annual Harrisburg ritual of approving a state budget, another of the governor’s landmark policies was determined by the Commonwealth Court to violate the state Constitution. This time it was the Human Services Block Grant program.

The 2012 pilot program, described by GOP leaders as giving counties “flexibility” to spend human services money where they believe it is most needed (with the added bonus of having their budgets slashed 10 percent), evidently was so flexible in its interpretation of state law that it went outside the bounds of the constitution.

Court reviews of laws backed by Gov. Tom Corbett and House Republican leaders have become commonplace over the past two and half years. In addition to the block grant program: Voter ID; Act 13, which stripped municipalities of the ability to establish their own zoning regulations; the elimination of adultBasic, the health care program for working Pennsylvanians and partially paid for from tobacco settlement funds; and the GOP’s first attempt at legislative reapportionment were all found unconstitutional by the courts.

But there’s more. The governor’s lawsuit against the NCAA was dismissed by a federal judge, as well as his plan to privatize the state Lottery being rejected by the attorney general.

The truth is these unconstitutional and illegal measures are consuming taxpayer resources to defend. The governor’s office is spending unspecified millions, reported to be at least $2.85 million, on Baltimore and New York law and consulting firms to

Did You Know?

Rep. Sturla

work on the Lottery issue alone. All of this at a time when our schools, communities and taxpayers are being shortchanged in consecutive state budgets.

The time and legal costs could be avoided if the House Republicans would allow a fair debate in the House chamber. During both the Act 13 and Voter ID debates, Democrats brought up the issue of constitutionality but were ignored and systematically shut down.

If Gov. Corbett and the House Republican leaders manage to convince enough lawmakers to go along with their liquor privatization and pension schemes to get them to the governor’s desk, I predict they’ll end up in the courts as well with similar consequences. Perhaps a better use of the governor’s time and our state’s resources would be a refresher constitutional law class. CW Rep. Mike Sturla is Chairman of the House Democratic Policy Committee.

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10 NEWS

JULY 2013 CAPITAL WATCH

Senate sends Welfare Code bill to governor without Medicaid expansion provisions

BY CHRIS COMISAC, CAPITOLWIRE

If supporters of Medicaid expansion want to continue to pursue their goal, they’ll have to find another vehicle. And not let the state House Republican caucus stall it out again.

After giving Senate Democrats plenty of time to criticize the removal of Medicaid expansion provisions from a Public Welfare Code bill containing budget-related items, the chamber voted 27-22, along party lines to send the bill to the governor without those provisions. The provisions were stripped from the bill by the House GOP, whose leaders said Gov. Tom Corbett would veto it.

“When it left here, it was a good piece of work,” said Senate Appropriations Committee Minority Chairman Vince Hughes, D-Philadelphia. “Now that it’s back, it’s far less than what it was.”

Hughes and several of his Democratic colleagues stated, as they have for months, that Medicaid expansion will end up delivering health insurance to hundreds of thousands of uninsured people at the same time that it produces economic growth due and state budget savings to at least $3

billion coming from the federal government annually.

But that provision is not in the bill, even though Senate Democrats tried to reinstate the language during the Senate Rules Committee meeting and then again during consideration of the bill on the Senate floor, an effort that was defeated on a 27-22 vote.

“We are not debating a bill to expand Medicaid,” said Senate Majority Leader Dominic Pileggi, R-Delaware, during floor debate on House Bill 1075. “We’re debating a bill that contains many important features, but does not include a provision to expand Medicaid.

“And while I understand the disappointment of those who wish this bill did include that provision, that’s not the case, that’s not in front of us.”

“This bill does, however, have important provisions, that if we fail to send this bill to the governor, it will have harm to the Commonwealth,” said Pileggi, noting that hundreds of millions of dollars of funding for hospitals, as well as funding for other health care providers, would be jeopardized.

“Delay on this bill would put those dollars at risk,” said Pileggi.

Senate Democrats argued there was enough time to work on those matters during the summer and get them done in the fall.

Senate Republicans pointed to concerns about funding raised by the Hospital and Health system Association of Pennsylvania (HAP) as evidence HB1075 needed to be approved now. Senate Democrats criticized HAP for urging the Senate’s approval of the legislation without Medicaid expansion, given that HAP has also been a vocal supporter of Medicaid expansion.

In a press release, HAP President and CEO Andy Carter said, “From day one, Pennsylvania hospitals have unequivocally and forcefully supported Medicaid expansion, and our support for expansion is unwavering.”

After stating his organization’s plan to work with the state Senate to pursue expansion, Carter said: “House Bill 1075 also included provisions that affected Medicaid funding and payment for hospitals, nursing homes, and facilities that serve individual

with intellectual disabilities. Jeopardizing that funding by postponing action to the fall would have created access to care problems for Pennsylvania’s most vulnerable citizens.”

In the Senate Rules Committee, Pileggi described the situation surrounding the bill as “an impasse” between the Senate and the House and Gov. Tom Corbett. He said with House Republicans and the governor opposed to the Medicaid expansion language, a Public Welfare Code bill, containing important budget-related language, won’t be approved if it also contained the Medicaid expansion provisions.

“The correct course is to send these other important provisions to the governor and continue to work separately on Medicaid expansion under the leadership of ... Sen.Vance,” said Pileggi, who earlier during the Rules Committee meeting noted there are 18 month remaining in the current legislative session.

“This is not the end of the journey on this issue,” said Pileggi.

Senate Public Health and Welfare Committee Majority Chairwoman Pat Vance, R-Cumberland, said on the Senate floor that HB1075 without Medicaid expansion was a “lost opportunity,” but committed to working to move stand-alone expansion legislation forward in fall.

The Senate approved the bill, on a 40-10 vote, with 17 Republicans joining the chamber’s 23 Democrats in sending the bill to the House. The House, in committee, removed the Medicaid expansion provisions and language that would have changed the name of the Department of Public Welfare. Later, the House voted 108-94 to reject an attempt at reinserting the language stripped form the bill. Then the chamber voted 108-94 to send the bill back to the Senate.

HB1075 contained provisions that would have required the state to expand its Medicaid program as directed by the federal Affordable Care Act and the U.S. Department of Health and Human Services. The governor would have been given until July 1, 2014 to negotiate with federal officials regarding possible changes to the state’s Medicaid program – listed within the legislation - before being required to enter into an agreement to expand the welfare program on July 1, 2014.

On July 3, the Senate Rules and Executive Nominations Committee, on party-line 11-6 votes, rejected two efforts to return the removed language to the bill.

The committee reported the bill to the full Senate on another 11-6 party-line vote, with all Republican members supporting the bill without the removed language. CW

OPINION 11

JULY 2013 CAPITAL WATCH

Keeping electricity reliable and affordable

BY JOHN PIPPY

As any economist or business person knows, affordable and reliable electric power is a prerequisite to sustained economic growth and energy security. The use of coal is critical in ensuring an inexpensive and reliable supply of electricity.

Unfortunately, President Obama’s carbon reduction proposal would transform America’s energy use away from coal as a source of electricity. This is a short-sighted and costly proposition that will, at best, result in marginal reductions of worldwide greenhouse gas emissions while eliminating jobs, increasing utility rates and causing significant damage to our economy.

Pennsylvania has a strong, diverse power generation portfolio, which is based on a true all-of-the-above energy strategy that maximizes the use of the Commonwealth’s natural resources in an environmental manner to produce affordable and reliable electricity for Pennsylvanians.

This strategy is working. Collectively, 96 percent of Pennsylvania’s total electric power came from these three homegrown fuel sources in 2012: coal, 42 percent; nuclear power, 35 percent; and natural gas, 19 percent.

As a result, Pennsylvania’s electric rates are competitive, the supply of electricity is reliable, and we have a net surplus that allows us to export electricity to other states. In short, because our generation mix is dependent on affordable and reliable energy sources, Pennsylvania operates from a position of strength.

Moreover, coal has become an increasingly cleaner source of electricity.

According to Pennsylvania Department of Environmental Protection data, electric generating units in Pennsylvania slashed their emissions of sulfur dioxide by 58 percent and nitrogen oxide by 41 percent from 2000 to 2010. These reductions result from the investment in and the application of pollution control technologies.

In addition, through a workable, marketbased approach, the nation’s greenhouse gas emissions have returned to 1994 levels, a remarkable accomplishment. Continued technological advancement will further reduce emissions.

The global demand for coal-based electricity is soaring. Some 1,200 new coal plants are slated to be built— threequarters of them in China and India.

Within the next three to four years, coal will surpass oil as the world’s leading energy source.

The economic consequences of the President’s plan would be substantial. It would force the shutdown of 225 of the nation’s coal plants, about half of our coalgenerating capacity.

In Pennsylvania, thousands of the 41,500 residents who draw their paychecks directly or indirectly from the coal industry could lose their jobs.

To make matters worse, the cost of

electricity would rise, affecting residents and business, and increasing the cost of consumer goods. It also would give a competitive leg up to China, India and other developing countries who are increasing their use of coal.

Our leadership in clean coal technology is a competitive advantage – one we turn our backs on if we ignore the value of coal as part of our overall energy mix. The President’s proposal would do just that.

our ability to secure our energy future and restore economic prosperity.

To be sure, there are environmental and pricing challenges inherent with using any existing energy source. But if we shy away from using any of our domestic resources merely because they pose such challenges, we will soon find ourselves with fewer, more expensive and less reliable energy options.

The true path toward energy security and economic prosperity is a balanced

Our leadership in clean coal technology is a competitive advantage – one we turn our backs on if we ignore the value of coal as part of our overall energy mix.

Ironically, phasing out coal plants in the U.S. will have minimal impact on global carbon emission levels. Any go-it-alone strategy by the U.S. to constrain its coal use as a means to reduce worldwide greenhouse gas emissions is folly – tantamount to unilateral economic disarmament.

A policy that summarily jettisons coal from the nation’s generation mix simply does not make sense, either environmentally or economically, and would only impede

energy policy that wisely utilizes all our indigenous resources through market driven choices to satisfy demand.

Rather than this unilateral economic disarmament, the federal government should work collaboratively with all energy stakeholders to encourage the development of even more effective clean-coal technologies. The win-win result would move us toward zero emissions, while taking advantage of coal’s abundance, reli-

John Pippy

ability and affordability and maintaining economic competitiveness.

Sound energy policy is about finding a way to produce cleaner, more efficient power while maintaining jobs and economic competitiveness. Our policies need be aligned with those goals in securing our energy future. CW John Pippy is CEO of the Pennsylvania Coal Alliance, which represents bituminous coal mining operators, their employees and industry suppliers and seeks to educate the public and policymakers about the coal industry in Pennsylvania.

12 NEWS

JULY 2013 CAPITAL WATCH

Pennsylvanians go oh-for-28.4 billion

BY REP. STEPHEN KINSEY

Rep. Kinsey

As the dust settles on another Republican budget for Pennsylvania, headlines across the commonwealth cry, ‘oh-for-3 goes Gov. Tom Corbett.’ But he won’t win a tear from me.

As far as I’m concerned, Pennsylvanians fared far worse at 0-for-28.4 billion.

The governor’s three pet projects, liquor privatization, pension reform and transportation funding, were so rife with bad politics and poor leadership that it was virtually impossible to tell where one platform began and another ended. Thanks to a not-sosecret handshake between the Senate and House majorities, if we House Democrats had voted for a watered-down transportation plan that underfunded SEPTA, then liquor privatization would have advanced in the Senate. That would have meant the proliferation of alcohol in our communities and the loss of more than 5,000 jobs in our Wine and Spirit Shoppes, two things I vehemently oppose.

Pension reform was Corbett’s third failure, but his risky proposal was always a nonstarter for me.

Another poison-pill courtesy of Corbett and Co. involved the paltry $145-million aid package for our schools tucked in the budget’s accompanying school-code bill.

Let me be clear: it mostly relies on higher taxes in Philadelphia and enough borrowing to damage our credit rating. The $45 million from the state is a one-time offer and comes from nothing more than a handshake from the federal government.

To make matters worse, it was wrapped in enough anti-union language that a “yes” vote meant hanging teachers’ collectivebargaining rights out to dry, while a “no” vote meant turning away money that our students desperately need, even as little as it ended up being.

By the time Sunday night came around, I was sick to my stomach.

See, beside the stomach bug that found me after an eighth night stuck in the Capitol watching all this unfold, the most nauseating feeling I was left with was how this can pass as leadership in Pennsylvania.

Suffice it to say, I have no sympathy for Gov. Corbett, only the 13 million people he failed to represent. CW Rep. Stephen Kinsey, D-Philadelphia, represents the 201st Legislative District.

OPINION 13

JULY 2013 CAPITAL WATCH

GOP poll shows Corbett re-election at historic low of 24 percent

BY PETER L. DECOURSEY, CAPITOLWIRE

In the spring of 2009, U.S. Sen. Arlen Specter got his latest surveys in, and his campaign’s survey showed that only 27 percent of Republican primary voters thought he deserved re-election.

A Franklin & Marshall Poll in April that year showed virtually the same result: 29 percent of Republican voters thought the 30-year veteran deserved a sixth term in the U.S. Senate, with 60 percent saying it was time for a change.

Realizing that having a bit over onequarter of the relevant primary electorate still for him was a disaster, Specter switched parties because he realized he could no longer persuade enough Republicans to vote for him.

So what move does Gov. Tom Corbett make now after well-regarded Harper Polling, run by GOP veteran Brock McCleary, came out of the field with a poll that shows him in Specter territory? I am not sure moving to Ohio or West Virginia would help.

The new Harper Poll shows that 24 percent of likely fall voters say Corbett deserves re-election while 56 percent say he does not.

That is right. This governor is in worse shape with likely voters now than Specter was in hot water with Republicans in 2009 when a clear majority of the GOP was in Tea Party Mode.

Even among GOP voters, the Harper Poll shows only 42 percent of Republicans think a governor who has fought tax hikes and contained state spending at historic lows deserves re-election.

Let’s put this in perspective: It used to be if voters thought incumbents were below 50 percent in deserving to be reelected, they lost. Specter was one of the first to register in the 40s and win anyway.

Now the line is around 37-38 percent and at those rates, winning re-election is possible but very unusual.

The most notable case in our state was when Gov. Ed Rendell was in the high 30s in 2005 before his 2006 re-election, and he ended up out-spending Republican Lynn Swann and winning re-election with nearly 61 percent of the vote.

But I could not find a consultant, and I asked a dozen, representing hundreds of candidates over the last decade, who saw someone under 37 percent in that question go on to win re-election.

Basically if you start with enough votes so you are two-thirds of the way, say at 35 percent, you can just nuke your opponent to a cinder and win.

But Corbett isn’t even halfway to 50 percent.

How bad is it? This poll asked the same pool of voters if they would “prefer” to vote for a Republican or Democrat? 40 percent chose the GOP, 41 percent wanted the Democrat.

Chew that one over: 40 percent want a Republican nominee, basically the same number as those who want a Democrat.

But only 24 percent want that Republican to be incumbent Gov. Tom Corbett.

Put it another way: out of each 10 voters who prefer a Republican governor, only six want the one they have now, Tom Corbett.

And the weird part is that voters told the pollsters that a third no-tax increase budget was important to them, 79 percent to 16 percent. And that it was important to pass an on-time budget, 86 percent to 6 percent.

The Harper Poll surveyed 814 voters on July 1 and 2, and its results carry an error margin of plus or minus 3.44 percent.

While the GOP’s leading anti-tax-hike watchdogs would disagree that Corbett has stuck to his no-tax-hike pledge, Corbett has certainly held down taxes below the levels sought by even Senate Republicans.

And he prides himself on his on-time budgets, even though he has changed his tune.

When he ran for governor, Corbett said Rendell had none. But using the standard that allows Corbett to claim three in a row – passing the general appropriations bill but not some of the key companion measures

that actually allow the state to spend money – Rendell qualifies as having had two.

The only good news for Corbett is that only 29 percent think the economy is getting better, but 43 percent think it is getting worse. If the economy keeps improving over the next year, as most economists predict, then those numbers could flip.

But at 24 percent for re-election, it is not clear that would even help Corbett.

If the public actually cares about keeping taxes down and on-timier budgets, and that hasn’t helped him, it is not clear that an improving economy is the cure for a 24-percent re-elect.

How bad is that? Similar numbers persuaded former Sen. Vince Fumo not to run for re-election when the Philadelphia Democrat faced federal corruption charges but had not yet been convicted.

House Speaker John Perzel, R-Philadelphia, had better poll ratings than Corbett among his district’s voters and his Republicans, in 2010. And that was after Corbett charged him with crimes that put him in prison.

Basically, Corbett has the re-election ratings not of a man of convictions, but of a guy who is about to be convicted. Heck, former House Speakers Perzel and Bill DeWeese, both now imprisoned, never got this unpopular in the polls.

Consultants I talk to don’t even know how you win, starting at a 24 percent reelect. Of course, they know what you do: you blister the other guys and define them negatively. And Harper Polling’s findings are not much out of line with those of other polls.

After Corbett spent 30 months earning a 24 percent re-election rating, it would make history if the governor won re-election now. CW

2013

Step Up To The Plate This Summer!

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14 OPINION

JULY 2013 CAPITAL WATCH

Should Pennsylvanians elect a Lieutenant Governor?

YES

NO

The usual question is, “Should we or should we not have a Lieutenant Governor?”

Longtime TV partners, Tony May and Charlie Gerow provide commentary and analysis on political matters every Sunday on WHPTV-CBS 21’s program, “Face the State,” in addition to being regularly featured on the Pennsylvania Cable Network (PCN). In their other lives, May is a partner at Triad Strategies, and Gerow is CEO of Quantum Communications.

Vice President John Nance Garner once observed that the office he held “wasn’t worth a bucket of warm spit.”

BY TONY MAY

BY CHARLIE GEROW

The more practical question is, from a government reform perspective, “What does a Lieutenant Governor do and are we getting our money’s worth?”

The secondary question would be, “How should the Lieutenant Governor be chosen?”

Right now, the Lieutenant Governor’s only constitutional duties are to preside over the state Senate and be ready to serve as Governor should the incumbent die or become disabled. In other words, an individual elected as a member of the executive branch also serves as the highest ranking officer of one of the chambers of the legislative branch – a muddling of the separation of powers.

In practice and in law, we have for the past 40 years elected our Governor and Lieutenant Governors as a team representing one of the political parties. In practice, the political parties – in an independent primary – elect the lieutenant governor nominee. Sometimes, the parties end up choosing a lieutenant governor candidate who is endorsed by the winning governor candidate, sometimes not. In other words, it is quite possible that the “team” members don’t want to be or don’t belong on the same team.

In practical terms, that’s resulted in a political gulf between the Governor and Lieutenant Governor’s offices that is far wider than the distance between the South Wing of the Capitol and the Rotunda. Maybe it’s just the realization that the #2 guy’s key job is waiting around for you to croak that sets a Governor’s teeth on edge; but typically, governors tend to keep lite governors at arm’s length. For members of a governor’s inner circle, the distance is even more pronounced. Frequently there is a conscious effort to keep #2 out of the loop.

Frankly, it’s a waste of talent and a wasted opportunity. The Senate tolerates but doesn’t need an outsider as President. The President Pro Tempore has the real power.

Meanwhile, most lieutenant governors end up wandering around the Capitol looking for something worthwhile to do – kind of like another First Lady (or someday soon, a First Guy) without the conjugal benefits.

Everybody knows a lieutenant governor has the capacity to do more. It’s just that virtually all of the jobs worth doing have someone else assigned to perform them who doesn’t want to share. So why not get real and change things for the better.

For sake of discussion, let’s think about how we could create – through a Constitutional amendment, a better system: · Allow the nominee of a political party to name his or her running mate after the Primary or to allow lieutenant governor candidates to run as a team with a gubernatorial candidate in the primary. Run as a team in the spring and then run as a team in the fall. The lieutenant governor would no longer serve as President of the Senate. Then, the winning governor would name his lieutenant governor to a cabinet position of the governor’s choosing (or one could be set forth in law as in some states where the lieutenant governor also serves as Secretary of State). · Or allow the winner of the election for Governor to designate one of his cabinet members as lieutenant governor. In other words, the lieutenant governor would head a cabinet agency.

Sure, these options seem odd and clunky but in practice they would be a great improvement over the current system. And the state would get more bang for the dollar from the talented men and one woman who have occupied the suite of offices between the House and Senate chambers off the Capitol Rotunda. CW

Cleaned up for the history books his quote sums up the feelings of many holders of the second job in the Executive Branch, including Lieutenant Governors.

The office of Lieutenant Governor varies significantly though the fifty states. In most states the governor and lieutenant governor are both elected on a single ticket.

That’s the way we’ve done it in Pennsylvania since the office of Lieutenant Governor was created.

A significant number of states elect their lieutenant governors but separate from the governor. As would be expected, this has led to multiple situations where the governor and lieutenant governor are from different parties. To say that’s “politically untenable” is probably an understatement.

Some states don’t have a lieutenant governor at all. In fact, neighboring New Jersey only recently added the office.

There are only two states that don’t elect their Lieutenant Governor: Tennessee and West Virginia. In both states the Senate President is the de facto Lieutenant Governor.

Recent legislation allowed the President of the West Virginia Senate to add the title “Lieutenant Governor” to his or her nomenclature. Arguably this is still election to the post, since in order to be President of the Senate you must first be elected by the citizenry, albeit not direct election.

This raises the question: “Why in the world would Pennsylvania want to stop electing our Lieutenant Governor?”

The system by which we have elected our Lieutenant Governors has worked well.

Since the office was created through the Constitution of 1873 (Pennsylvania didn’t have a Lieutenant Governor for the first century of our statehood) the functions and duties of the office haven’t changed much. In recent years it has proven to be much more than John Nance Garner thought of the Vice Presidency.

Several Lieutenant Governors have found themselves thrust into the Governor’s chair during their term in office. John Bell became Governor when Governor Edward Martin took a seat in the U.S. Senate. Mark Singel became acting Governor for more than half a year when Governor Robert Casey underwent life sustaining organ transplant surgery.

Most recently, Mark Schweiker became Governor when Governor Tom Ridge was sworn in as the initial Secretary of Homeland Security.

The office of Lieutenant Governor is a significant one. It is not a ministerial function. It is not a department. It is, in addition to the significant duty of presiding over the Senate and casting some tie-breaking votes, a heartbeat or career move away from the Governor’s office.

Our Lieutenant Governor, therefore, should be elected by the people along with the Governor. This assures not only continuity and workability within an Administration but also direct accountability to the citizens whom the Lieutenant Governor serves.

As with the recent question of electing judges, there may be some elitist argument about the superiority of appointed officials, but here “we the people” are and should be in charge.

There are a lot of good reasons to elect the Lieutenant Governor. I can quickly think of 30, beginning with Latta and ending with Cawley. CW

OPINION 15

JULY 2013 CAPITAL WATCH

Defensive Investing

BY SCOTT C. WEAVER, CFP, CFS, CAS

Dieter Zorn, a 53 year old snake handler, died this week of multiple snake bites from an Aspec Viper. The irony of this story is, he was bitten at his “Reptile Show,” which teaches people how to overcome their fear of snakes. The point is, if you handle the snake often enough, you will be bitten. If you get aggressive in this stock market without some kind of defensive strategy, you too may feel excruciating pain.

Some advisors are bullish and believe that even at these levels, the stock market has yet to reach its proper valuation. Others are bearish and continue to believe that once the Federal Reserve halts their bond purchases (QE3), the markets will tank. Whichever side of the economic fence you sit on, it is extremely important you understand the risk and ask yourself, not “what can I win”, but more importantly, “what can I lose”.

Markets do go up over time, but in a lot of cases, it takes a very long time to recover market losses. The question you need to ask yourself is, “do I have enough time to recover those losses?”

This article will help put some science behind market losses. Craig Iraelsen, Brigham Young University Professor of Finance, calls this the “mathematics of portfolio recovery.” Investors time and again suffer major losses as a result of “unexpected” market losses. In 2008, the S&P lost 37%. Consider the chart below. A drop of 35% requires a 54% gain to recover, and a drop of 50% requires a 100% gain.

Scott C. Weaver, CFP, CFS, CAS

As illustrated to the left, market losses can be devastating and can take a very long time to recover. Just like all great sport teams (I said great, not good), teams need a good offense, but championships are won with great defenses.

Happy investing!

Scott C. Weaver

Source: “The Math of Gains and Losses, “Craig L. Israelsen, Ph.D., Brigham Young University, 2010 Craig L. Israelsen’s, “The Math of Gains and Losses,” takes this process forward one more very important step. In our example above, the loss of 35% requires a 54% return to break even. What is the probability of making 54%? Using the chart below, our example portfolio has a zero percent chance of making 54% in Year 1, a 34.2% chance by Year 3, a 61.1% chance in Year 5 and a 93.5% chance

by Year 10. Remember, this is to just break even.

The information contained herein is obtained from sources believed to be reliable but its accuracy and completeness is not guaranteed. Any tax or legal information in this piece is merely a summary of our understanding and interpretation of current laws and regulations and is not exhaustive. Neither NEXT Financial Group, Inc., nor its representatives are qualified to give tax or legal advice.

Securities and investment advisory services offered through NEXT Financial Group, Inc. Member FINRA/SIPC. None of the entities named herein are affiliated with NEXT Financial Group, Inc.

*Probabilities calculated from historical returns of the S&P 500 Index over the past 40 years. Source: “The Math of Gains and Losses,” Craig L. Israelsen, Brigham Young

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