Capital Watch October 2011

w w w. ca p i ta l- wat c h . c o m

CapitalWatch VOL. 4 NO. 10

inside Group backing Pileggi electoral proposal plans to spend $300,000 or more PAGE 6 Gov. Corbett mulls using gas royalties to repay borrowed transportation funding PAGE 8 Big political names, donors picked for Corbett’s privatization panel PAGE 10 Editorial: An ambitious agenda; realistic goals PAGE 14 Who owns shale gas?

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OCTOBER 2011

Sen. Piccola, Rep. Grell sponsor state takeover bill Pennsylvania lawmakers on Sept. 27 announced a plan that would make possible a state takeover of the capital of Harrisburg where local officials have failed to resolve a $300 million debt crisis.

State Senator Jeff Piccola and Representative Glen Grell said the deal would allow Governor Tom Corbett to declare a state of fiscal emergency in Harrisburg and develop an emergency action plan to provide for the city’s vital services.

The Harrisburg City Council will have one month to adopt a plan to “bring the city on the path to recovery,” the lawmakers said in a statement.

If it fails, Corbett can petition a judge to appoint a receiver, who will have the ability to create and implement a final long-term recovery plan for the city.

“The city, and for that matter the entire region, cannot afford to have more delay,” said Grell.

“Harrisburg’s fiscal condition impacts us all.”

Harrisburg’s troubles stem from a complicated financing

Rep. Glen Grell and Sen. Jeff Piccola join forces at a news conference held to explain their proposed takeover legislation.

The bill could go before the two houses of the Republicancontrolled state legislature as early as this week. A spokesman for the Republican governor

ful of cities that have considered filing for a rare municipal bankruptcy as a way to address fiscal difficulties in the wake of the recession.

“The city, and for that matter the entire region, cannot afford to have more delay,” said Grell.

“Harrisburg’s fiscal condition impacts us all.” scheme used to fund a state-ofthe-art revamping of its trashburning incinerator, which left the city saddled with debt.

would not immediately comment on whether Corbett would sign it if passed.

Harrisburg is one of a hand-

Corbett and some lawmakers have opposed such a move for Harrisburg, saying the city would be better off in a rescue

plan under the state’s program for distressed cities.

In July, the Harrisburg City Council rejected a stateapproved rescue plan, which called on it to renegotiate labor deals, cut jobs and sell or lease its most valuable assets, including the incinerator and parking garages.

Last month, the council rejected a similar plan that had been crafted by Mayor Linda Thompson, saying that both plans were overly burdensome for Harrisburg residents and did not ask enough of the county, bond holders and the bond insurer. CW

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OCTOBER 2011 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 Peter L. DeCoursey Kevin Zwick News Service Capitolwire Graphic Design Lisette Magaro Production Shawn Skvarna Capital Watch is published every month.

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GOP congressmen ask legislative leaders to sideline electoral bill Most of the state’s Republican congressional delegation met with top state House and Senate leaders backing colleagues who want to sideline a controversial bill: a Senate-proposed electoral college change bill.

Eleven members of the state’s 12-member congressional Republican delegation met with Senate leaders, while 10 of the same group meeting with state House GOP leaders, attendees confirmed. The meeting with senators was at the Hilton, Harrisburg & Towers and lasted about 45 minutes.

Rep. Lou Barletta, R-Hazleton, missed the morning meeting, his colleagues said. U.S. Rep. Mike Kelly, R-Butler, missed both.

Since the Senate is perceived to be more likely to pass the electoral reform bill, the congressmen centered their discussion of that bill with that chamber.

The discussion with the House more concerned their proposed Voter ID bill.

It would require all voters to show identification every time they voted.

“There were a lot of questions about that,” said one state House GOP leader.

“We have concerns about that, and how it will look and how it could make the party and all of us look,” said one member of the state’s GOP congressional delegation.

But during the meeting, attendees said, members of congress expressed only support for the bill, and asked how quickly it could be passed?

Rep. Daryl Metcalfe, R-Butler, said he is working towards a compromise with Sen. Chuck McIlhinney, R-Bucks, on a bill both chambers can pass.

“We had a good discussion on a bunch of issues with the leaders, and everyone got their point of view across,” said U.S. Rep. Patrick Meehan, R-Delaware.

The congressmen also voiced opposition in both meetings to Senate Majority Leader Dominic Pileggi’s proposal to split up the state’s 20 electoral votes by congressional district, in 2012. Pileggi,

But when asked if they had swayed him, Pileggi said the points they made were “nothing new, the same things we have heard. … They wanted us to understand the impact of this on congressional elections and I think we do.”

Pileggi has repeatedly said those considerations are less important to him than giving a voice to voters who might cast up to 50 percent of the vote in a presidential election, but watch the winner take all of the electoral votes.

Senate President Pro Tem Joe Scarnati, R-Jefferson, who also attended the meeting, said during a Pennsylvania Press Club luncheon question-and-answer session that he supported the bill because his district’s

“Senate and House members who want to run for Congress someday also seek to influence that map.”

R-Delaware, heard out comments against his proposal from U.S. Reps. Bill Shuster, R-Blair, Tim Murphy, R-Allegheny, Jim Gerlach, R-Chester, Charlie Dent, R-Lehigh and Meehan.

All stressed the negative impact this could have by making swing U.S. House districts more competitive, and more expensive.

loyal and heavy vote for Republican candidates merely made the size of the prize Democrats have won since 1992 bigger.

Both Scarnati and Pileggi said it was good to meet face to face with the congressmen on these issues, and both said, as they have before, that hearings starting Oct. 4 on the electoral bill will be key to its future.

Murphy said: “I made it very clear we should look at states like Nebraska, and see the effect this has had there,” of multiplying the cost of an election and turning a safe GOP district into a swing district in presidential years.

“It does give voters more representation of their view in the statewide result for president, but it will be a problem for a lot of voters in what it does with their representation in Congress,” he said.

State House and Senate leaders also both urged the GOP congressional delegation to come up with a joint proposal for how the state’s congressional districts should be re-drawn, as the whole U.S. House delegation drops from 19 to 18.

Leaders in both state chambers remain frustrated that the eastern GOP U.S. House delegation remains split on how to draw that region of the state in reapportionment. But Scarnati and Pileggi said they feel confident the GOP delegation will present a map so the process can be done in a timely matter.

Someone familiar with the state House GOP leader’s meeting with the congressional delegation said: “Everyone had their own map. All 10 of them. And they were told what the schedule was, and if they wanted us to look at their map, they better get moving or we can draw it ourselves, with the Senate.”

Scarnati noted in his Press Club remarks that not only congressmen like to have input, but “Senate and House members” who want to run for Congress someday also seek to influence that map. CW

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NEWS

OCTOBER 2011 CAPITAL WATCH

Former presidential candidate, former governor, billionaire philanthropist agree: National Popular Vote plan will cure what ails electoral college Eight of the state’s 50 senators and 35 of its 203 state representatives already are co-sponsoring a plan to ensure that the Presidential candidate who gets the most popular votes nationally wins the Electoral College vote. Now, Pennsylvanians know the proposal has the backing of a former Republican Presidential candidate, the former GOP governor of the fifth largest state and one of the nation’s true billionaires.

Sitting at a news conference in Harrisburg, former Tennessee Sen. Fred Thompson, a candidate in the 2008 Presidential sweepstakes, former Gov. Jim Edgar of Illinois and philanthropist and New York state Republican-turnedindependent Tom Golisano all agreed that the most important change to be made in the Electoral College process would be to ensure that the winner of the popular vote nationally always wins the Electoral College vote.

“This one change would cure a host of problems and help ensure that our Republic, challenged as it is these days by

Former political candidates Tom Golisano, Fred Thompson and Jim Edgar explain why they support the National Popular Vote initiative.

hyper-partisanship, can thrive in the coming decades,” said Thompson, recently designated as a national co-champion of the National Popular Vote initiative.

“We’re pleased that problems with the Electoral College are being discussed vigorously in Pennsylvania in recent

weeks,” said Edgar, who served two terms as Illinois governor in the 1990s.

“We’re here to call attention to what is not only the best plan but the only one that will work all the time and every time.” Like Thompson, Edgar, too, is an NPV co-champion.

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Golisano, founder of Paychex, one of the nation’s largest private payroll processors and himself a three-time independent candidate for governor in New York, said, “The National Popular Vote initiative is already a grass roots movement. The NPV compact has been adopted in eight states and the District of Columbia. It’s the one plan that is able to garner broad support nationwide from Republicans, Democrats and independents.”

In Pennsylvania, he noted, identical compact bills have been introduced in both the Senate (SB 1116) and House (HB 1270) with substantial bipartisan support.

The Senate bill, introduced by Sen. Richard Alloway of Chambersburg, has eight co-sponsors. The House bill, introduced by Rep. Tom Creighton of Manheim, has 35 co-sponsors.

“They’re not outliers,” Golisano said.

“Nationwide, more than 2,000 legislators have signed on to identical legislation.

It’s already by approved in states representing 132 of the 270 votes need for the interstate compact to take effect.”

Thompson stressed that NPV not only is constitutional, it is in keeping with the intent of the founding fathers who delivered the authority on how the Electoral College should operate to the individual states. “The National Popular Vote movement is the individual states acting in concert to ensure that the winner of the national popular vote is seated as President. Neither the current system nor any other reform can guarantee that and without that guarantee we can end up putting tremendous strain on our republican form of government.”

Edgar noted that his state was one of eight already approving the national popular vote compact. “We’re not unlike Pennsylvania in that we have some major urban areas like Chicago and East St. Louis but we also have some extremely rural areas. Under NPV, each vote counts the same whether it is cast in the Gold Coast of Chicago in Sangamon County or in Peoria. That’s empowering to people and it will help legitimately to boost turnout if people know their votes always can make a difference in the outcome of an election.”

Thompson said NPV would do nothing to diminish Pennsylvania as a battleground state. “If anything, it should help boost turnout in counties where one part or another has a large voter registration advantage. Every GOP vote will count the same whether it is cast in Erie or Philadelphia. Every Democratic vote will count the same whether it is cast in Punxsutawney or Azuza, California.” CW

NEWS 7 5 news

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William Shipley CEO Shipley Energy

William Shipley III (Bill) is president and CEO of the Shipley Energy in York, Pennsylvania and the operator of companies that serve people and businesses in fifteen counties in central Pennsylvania. The Shipley business has averaged 30% annual growth in sales since Bill became president in 1992.

Shipley Energy is a provider of heating oil, natural gas, propane, and electricity; as well as installation and service of heating, ventilation and air conditioning equipment, and offers indoor air quality service. Shipley Energy hauls bulk liquids as a common carrier in the trucking business. The business is also comprised of Tom’s travel centers, Arby’s restaurants, Sweet Arrow Spring water, Coffee Break and Solar Secured Solutions.

Shipley’s career started as a store manager for 7-Eleven in Delaware. After two years, he joined his father’s business in 1982 as an administrative assistant. After working his way up the management ladder, he is the fourth generation of the Shipley family to lead the family business. During his prior academic career he earned a degree in history from Emory University and masters in business administration from Penn State.

He has been active in the York community as past Chairman of the board of the YMCA of York and York County. He is also past board president of York Area Sports Night, Martin Library, Wyndham Hills Property Owners Association, and the Society of Independent Gasoline Marketers of America.

Today Bill is on the board of directors of Martin Library, York County Community Foundation, York Country Day School, and York College of Pennsylvania. Bill and his lovely wife Michelle are the parents of Erin, Sarah, and Benjamin. For relaxation, Bill enjoys reading, music, golf, boating, skiing, and juggling.

CW: What are your firm’s major products/services?

Yes, it’s a cliché, and it is also true that our people are our biggest asset.

WS: We are primarily suppliers of energy. Shipley Energy supplies heating oil, motor fuels, propane, natural gas, and electricity to homes and businesses.

We also transport liquid fuels and provide heating and air conditioning service. Our non-energy businesses are Tom’s Travel Centers, Arby’s, Solar Security Solutions, Sweet Arrow Spring water, and Coffee Break.

Shipley Energy’s long term goal is to continue to grow and serve an ever expanding customer base. There are tremendous opportunities for growth in the business of helping people find energy savings. We live in the communities we serve, allowing us to invest deeply in these areas, as well grow outward with new customers and employees.

CW: When did you join the firm?

WS: My first job with Shipley was in 1972 at the age of 15. It was a summer job, working in the tire, battery, and accessories warehouse, which no longer exists. I started full-time 10 years later in 1982. At first, I was hired as an administrative assistant to research diversification opportunities. Within a year, I became the sales manager for heating and air conditioning. I held various management positions until becoming president in 1992. I am the fourth generation family leader of the Shipley business.

CW: What are your near-term and long-term goals for the firm?

WS: Near term, our goal is to continue to be more convenient for our customers, providing energy solutions, and legendary service. Every day more of our customers are enjoying the convenience of doing business with us online.

Today 22% of our customers receive invoices from Shipley Energy via e-mail and nearly that many make payments without envelopes and stamps. The degree to which we are committed to the convenience of electronic commerce sets us apart from alternative energy suppliers.

We are always looking for new ways to provide energy for less. For example, we have installed ground source heat pumps for many homeowners, thus providing them with an endless supply of inexpensive home comfort. We have also developed sophisticated methods of buying energy allowing us to pass the savings on to our customers. In these times of volatile energy prices, our knowledge and capabilities in buying energy can, at times, afford significant benefit to our customers.

Our people are part of a long tradition of legendary service. The commitment to take care of customers no matter what the challenges (and despite any type of weather) is a core strength that we look forward to proving again and again.

CW: Are your customers local, regional, national or global?

WS: We serve a regional customer base.

Our primary market area is 15 counties in PA and Maryland. We have aspirations to be a Mid-Atlantic energy supplier in the future. That’s still a regional customer base – just a bigger multi-state region.

CW: Where else does the firm have business locations?

WS: Our main offices are located in York. We also have locations Glen Rock, Shrewsbury, Hanover, Gettysburg, Chambersburg, Huntington, Clearfield, Milroy, Mifflintown, Port Royal, Newport, Mechanicsburg, Harrisburg, and Tower City.

CW: Would you invest more in PA? What would you do to improve PA’s competitive business climate?

WS: We are investing more in PA as we look to grow our business. Demand for our products has remained fairly strong and our outlook is positive. We are operating in a challenging economic atmosphere; future success requires investment to support growth.

We need to have a vibrant economy in PA in order to attract and retain the next generation of talented people to work in PA. Investing in these talented people through education is a step we proudly support. State government can provide the leadership and vision for a continuously improving business climate in PA. Lower taxes and cogent regulation are the only way to make that happen.

CW: Are there public policy changes your firm is advocating?

WS: We are advocating the improvement in the market for natural gas choice, which is even more important since the discovery of Marcellus Shale.

We have an abundance of gas available and prices should (and probably will for a long time) reflect that.

Electricity markets have become very competitive in PA in a short time. It has been less than two years since the markets opened, and nearly 40% of residential customers are now shopping. It is fairly simple to price electricity, and this adds to the competitive nature of the market.

While PA was a leader in natural gas deregulation over a decade ago, only 8% of residential customers shop for competitive prices in natural gas today. It is possible for the natural gas market to be more vibrant. Like with electricity, we want to make competition and choice and shopping easier so that more Pennsylvanians can save money on natural gas. Effective competition among natural gas suppliers will create a long term advantage for PA households and businesses.

On a separate note, Shipley Energy is an advocate for investment in the next generation of Pennsylvanians. Better schools, libraries and youth organizations are essential to healthy communities. We live where we work and so we have multiple interests in advocating for investment in future PA citizens.

CW: What did you think of the recent political changes and their impact on business?

WS: I believe that Marcellus Shale development has the potential to be the single biggest economic event of this coming generation. It is encouraging to know that PA’s Governor and majority legislators are supportive of the safe development of natural gas in the Marcellus Shale region. Development, production, and transport of this natural resource will be a very good thing in terms of job creation and wealth growth for Pennsylvanians.

We are literally sitting on the opportunity to be the source for all of our domestic energy needs and eliminating all imported oil.

The timing is good for leadership in PA that is supportive of business. It’s really pretty simple: there will be more jobs when businesses hire more.

We have the opportunity to put PA ahead of most states (let’s say, in the top quartile) with policy that is welcoming and accommodating for businesses with growth plans. If we seize that opportunity now and in the next year or two, the effects will be lasting for decades to come.

6 NEWS

OCTOBER 2011 CAPITAL WATCH

Poll says voters want to keep Electoral College system as is A new Quinnipiac University Poll shows Pennsylvania Republicans narrowly favor a proposal to award the state’s electoral vote by congressional district.

Others oppose it by notable margins.

Voters overall said by a margin of 52-40 that they “want to continue the state’s current winner-take-all Electoral College system, rather than switch,” according to a Quinnipiac University Poll memo by Tim Malloy, assistant poll director.

Democrats oppose that change proposed by Senate Majority Leader Dominic Pileggi, R-Delaware, 63-30, independents 53-43, while Republicans are “split,” Malloy said, 48 percent favoring it and 44 percent opposed.

The survey of 1,370 registered voters was conducted from Sept. 21 to Sept.

26. Its results carry an error margin of plus or minus 2.7 percentage points. Its Republican results carry an error margin of plus or minus 4.2 percentage points.

By a 57-32 percent margin, voters say “Republicans in the State Legislature

want to switch to a district-by-district count to help Republican presidential candidates, rather than to better reflect the will of the voters,” the polling memo reported.

Democrats agreed with that by a 78-14 count, while independent voters registered 61-30 in support of that view.

Republicans said it would better reflect the will of voters, 57-29.

By a 51-38 margin, voters said “that the switch will diminish Pennsylvania’s importance as a key presidential swing state,” Malloy reported.

“Pennsylvania voters say stick to the winner-take-all formula used in most states: Whoever gets the most popular votes, wins all of the state’s Electoral College votes,” he said. “The survey, not surprisingly, comes down along party lines. With 20 electoral votes at stake in a state that hasn’t voted for a Republican presidential candidate since 1988, Republicans see an advantage in having electoral votes divided between candidates based on the individual congressional districts they win.”

“Democrats especially are opposed, while independent voters side with them.

Strangely, Republicans are not strongly in favor of the change,” Malloy added.

“Pennsylvania voters think abandoning the traditional Electoral College formula would reduce the state’s swing state clout.

“Overall, most Pennsylvanians think the proposal is being presented to give partisan advantage to Republicans. By large margins, Democrats and independent voters are not buying that ‘will of the voters’ argument.”

Men support keeping the current system 56-39 while women support it 49-41.

Only two regions of the state are essentially tied on the question, northwestern Pennsylvania, where the change is favored 49-48, and central Pennsylvania, where it is 47-44. Alleghenians oppose the change 55-36, Northeastern Pennsylvanians 51-39, Southwestern Pennsylvanians 50-45, Southeasterners 62-34 and Philadelphians 59-29.

Asked if it would hurt the state’s

importance as a key swing state, Alleghenians said yes, 54-37, Philadelphians 60-28, southeasterners 56-39, northwesterners 60-32. Essentially tied were northeasterns, 44-40 that it would hurt, southwesterners 46-44 and central Pennsylvanians, 45-40.

If the proposal had been in effect in 2008, President Barack Obama’s 21-0 Electoral College victory would have shrunk to 11-10. A total of 270 electoral votes are needed to win the presidency.

Every region of the state told the survey the bill was politically motivated to help the GOP presidential candidate, except for Northwestern Pennsylvania, where 47 percent said it was motivated

by GOP gain, 45 percent said it was a matter of voter fairness.

In the rest of the state: Allegheny, 66-26 said it was motivated to help the GOP presidential candidate, Philadelphia, 72-17, Northeast, 52-30, Southeast 64-28, Southwest, 48-41, Central, 50-38.

Among men, 59-32 said it was politically motivated by the GOP, among women, 55-32. CW

Group backing Pileggi electoral proposal plans to spend $300,000 or more The group which planted the seeds that led to swift, early high-level GOP support for Senate Majority Leader Dominic Pileggi’s proposal to allot Pennsylvania’s presidential electoral votes by congressional district, is poised to help it move forward.

All Votes Matter has spent about $180,000 so far on its effort to back Pileggi’s bill, said Charles Gerow, spokesman for them, including $77,000 reported as of June 30.

At least another $100,000 will be spend in the year’s final quarter by the group, more if they need to mount a broadcast ad support campaign for the plan, Gerow said. Gerow said he did not yet know if such a public campaign would be mounted or needed. The group’s roughly $300,000 budget for this year would mostly pay for lobbying and communications to pass the bill through the Legislature.

In addition to Gerow’s Quantum Communications, two firms with close Senate GOP ties are lobbying for All Votes Matter: Long-Nyquist and former Senate President Pro Tem Robert Jubelirer and his firm, Obermayer-Rebmann.

The group is a non-profit corporation that has raised its money from “civic-

minded citizens” and relied on individual donations for the most part, Gerow said.

He declined to reveal its donors, as the state law permits.

“My sense is that the majority of donors are from Pennsylvania,” he said.

The group currently has three board members: attorney John P. Krill, a longtime outside counsel for the Senate GOP, William Sloane, former House Democratic Caucus counsel, and James Broussard, a long-time Lebanon Valley College history professor and head of Citizens Against Higher Taxes.

Two more board members, a prominent Democrat and a prominent Republican, would soon be added to the board, Gerow said.

Sen. Daylin Leach, D-Montgomery, an outspoken opponent of the plan, said on an issue like this, donors should be revealed.

“People should know who is paying for an effort to change the way Pennsylvania’s votes for president are cast,” he said.

Gerow responded that Leach is a supporter of an alternative reform, the National Popular Vote Compact, and that group doesn’t reveal its donors, either.

“So my comment to Sen. Leach, is

‘physician, heal thyself and then worry about us,’” Gerow said.

Tony May, spokesman for the Pennsylvania NPV campaign, said that group has released donor information, but could not be reached for further information Thursday night.

Leach rallied a group of government reform leaders who largely endorsed the compact and said the Pileggi bill was unfair.

“There is a real debate going on,” Gerow said. “And you know this is a tough state when it comes to changing things and this is a major, major change. … You’re going to continue to see a very spirited debate and discussion about it.

And the reason the reaction keeps mushrooming is because it’s a big change and people do think it is going to happen.”

Leach and other bill opponents including Eric Epstein and Tim Potts said the bill was “vote-rigging,” borrowing a phrase used by a Washington Postpublished commentary.

Pileggi said that it simply meant that rather than having the votes of each congressional district going to the statewide winner, under his system, each congressional district could express their view.

Under the current system, he said, the

size of the win in two Philadelphia congressional districts drowns out the votes of voters in other congressional districts.

Leach said Pileggi was trying to win through legislation electoral votes he cannot win at the ballot box. Others accused Pileggi of doing this for his own political gain, a charge not even Leach believed.

“He is not doing this for his own political gain,” Leach said. “That just isn’t true. He is doing it for the political gain of his presidential candidates and to give their gerrymandering more power.”

Pileggi said: “I’m disappointed that the people aren’t focusing on the issue.

Usually when people start to talk about motive and personalities, that means they’ve conceded that the issue is not something they can argue about. I’ve tried to focus the conversation on the issue of proportionality and the issue of the disconnect between the popular vote and the electoral college vote.

“There are a lot of people willing to have that discussion and they’re the people I am engaging with on this.

Those people who are looking at conspiracies and motives and personalities aren’t worth my attention or discussion.”

But despite their working on the same Continued on page 7

news 7

OCTOBER 2011 CAPITAL WATCH sponsored by pcua

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Group backing Pileggi electoral proposal plans to spend $300,000 or more Continued from page 7

issue in the same time frame, Pileggi’s efforts have been separate from those of All Votes Matter.

All Votes Matter first began to coalesce shape in April, filed lobbying papers in May and began to spread its message of support for allotting electoral votes by congressional district among legislative leaders and the governor’s office since then.

Part of its genesis was to combat the National Popular Vote Compact, Gerow said, and to provide an alternative to that movement. The compact seeks to bind states to cast their electoral votes for the winner of the national popular vote. Currently states representing 132 electoral college votes – it takes 270 to win the presidency – have joined the compact.

May said of the compact, that it is based on the Supreme Court “one man, one vote” ruling that all votes should be as equal in power and impact as possible.

May wrote in an e-mail: “Allocating electoral votes by Congressional districts supplants one person/one vote with a politically-driven district boundary scheme. Each Congressional district, under the Supreme Court mandate, contains a virtually equal number of residents but NOT an equal number of voters and CERTAINLY not an equal number of Democrats and Republicans.

“Because Congressional redistricting is admittedly a partisan exercise, the outcome is an electoral process which awards electoral votes on a basis with a built-in partisan bias. ... NPV proposes to make every vote count equally, regardless of geographic origin.”

As All Votes Matter began work, Pileggi said he had already begun pushing his office towards the same idea, and he had no contact with All Votes Matter or its officers or lobbyists, he said. Other sources said his staff knew of the work

of All Votes Matter, but that Pileggi’s interest in the bill preceded the work of the group.

But the group helped. Gerow and his close friend, Kevin Harley, press secretary for Corbett, discussed the idea, reported The Morning Call of Allentown. Then Harley set up meetings with staff of Corbett, and eventually, the governor studied it and approved, Harley told The Morning Call.

So by the time Pileggi asked Gov. Tom Corbett and other legislative leaders for support for his bill, All Votes Matter had gone over the idea, in depth, with all of them. So both top House GOP leaders, both top Senate GOP leaders and Corbett all agreed to support it.

All Votes Matter is also working on getting prominent academics and Pennsylvanians to support the Pileggi bill, and perhaps testify on its behalf at an October hearing.

Pileggi and Senate leaders are also supposed to meet with the state congressional delegation on redistricting and this issue in early October.

While many of the state’s congressmen and some of the state’s Republican leaders have opposed the bill and hoped Corbett would let it subside, Corbett and Pileggi are still pushing it forward.

“It’s still getting support every day in our caucus, and certainly an increasing amount of interest has been now directed towards this subject,” Pileggi said. “That conversation is a healthy conversation, one we need to have and I want to keep that conversation going, right through the fall.”

Asked if that “conversation” still included voting the bill in the Senate this year, Pileggi said that remained his plan, so that it could be passed through the House and signed by Corbett to take effect next year. CW

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news

OCTOBER 2011 CAPITAL WATCH

Gov. Corbett mulls using gas royalties to repay borrowed transportation funding

By Peter L. DeCoursey, Capitolwire

Gov. Tom Corbett told a business group in a Sept. 26 closed-door speech that he will be announcing this fall his proposals for transportation funding, school vouchers and education reform and a natural gas drilling regulatory and legislative package.

“Have patience,” he told the 1,800 attendees at the Pennsylvania Chamber of Business and Industry dinner at Hershey. That group has pushed hard for a major new transportation funding package to help to ensure businesses have the infrastructure they need to thrive.

Sources involved in his transportation proposal said he is planning to back an option considered by his Transportation Advisory Commission but not recommended specifically in their report.

That plan is to dedicate to transportation annual Marcellus Shale natural gas drilling royalties in excess of those needed by the Department of Conservation and Natural Resources. Those additional royalties would be dedicated to repay more than $1 billion in funds borrowed to spend on roads and bridges.

Pennsylvania Transportation Secretary Barry Schoch alluded to this idea as a possibility in an interview with reporters after he testified before a joint hearing of the House and Senate transportation committees. He declined to confirm any such plan.

Schoch also suggested to reporters that Corbett’s upcoming announcement of his Marcellus Shale plan could affect the transportation proposal he makes.

Schoch said if major funding were made available for local road-building and repair, that would reduce the $300 million a year the commission report called for, reducing the overall cost of the transportation plan.

He also alluded to some of the future royalties from current drilling possibly being used for transportation purposes.

Gov. Tom Corbett

They said there was support for a $1.4 billion annual proposal to lift the $1.25 a gallon cap on the oil company franchise tax, to be phased in over five years.

Schoch said that proposal was being carefully weighed by the governor and Budget Secretary Charles Zogby to determine its impact on the economy and jobs, as the state faces a potential “double-dip recession” and “a drop of thousands of points in the stock market.”

Given Corbett’s concern with that proposal, and the legislative pushback on higher driver’s fees, a short-term option of borrowing and repaying with dedicated natural gas royalties is growing in appeal, sources said.

Those royalties are expected to grow exponentially in near future years.

Schoch told the legislative panel he is still hopeful a transportation funding bill can be enacted this year.

But Senate Transportation Committee Chairman John Rafferty, R-Montgom-

“ …None of this money is going into the General Fund.”

Sources familiar with the governor’s forthcoming transportation plan said the royalties would be used to borrow more than $1 billion to invest in repairing roads and bridges, and possibly building new structures.

Legislative sources also said the proposal to hike driver’s license and registration fees will likely be dropped from the proposal, due to lack of House and Senate support.

ery, said: “I think at this point it will be difficult to get it through this year. …

If not this fall, I don’t think we’ll see it until 2013.”

Schoch said he also feared the 2012 election would be a “difficult” time to enact a transportation funding bill.

Schoch told the legislative panel and reporters today that he believes and hopes the governor will soon announce his proposal.

After going over the issues at length, and summarizing why the state needed $3.5 billion in new transportation funding, and Corbett’s Schoch-led commission recommended fee and tax hikes to produce $2.4 billion, Schoch acknowledged the biggest question the Legislature has for him is: “Where’s my boss on this? … He’s deliberating on this. He is a very thoughtful deliberate man, he has asked me a ton of questions,” Schoch told the joint hearing.

House Transportation Committee Chairman Rick Geist, R-Blair, told Schoch, given the challenges he faced and the difficulty in finding funding to address them, “Right now you are captain of the Titanic.”

After the hearing, Schoch laughed about that, saying Geist was a loyal supporter of transportation projects, and suggested a different metaphorical ocean liner he was helming: “It’s like turning the Queen Mary,” and takes a lot of time and preparation to change course.

Schoch said of the governor: “He is evaluating all those balls in the air if you will…He is well aware that you among others are awaiting his decision on this.”

Schoch said proposals to have the general fund take over funding for state police and to use current budget funds to pay for airport and railroad projects, are now less likely because of the economic downturn.

Rep. Mark Longietti, D-Mercer, asked, “It’s been two months. Do you have any sense when that proposal” will come out?

Schoch responded: “If not this month, then hopefully early next month, … or else we are going to put you in a difficult position to do something this fall.” He said he still believes it can and should be

done this fall.

Schoch also acknowledged it will be harder to pass a major funding proposal next year, during an election year. Past major state funding for transportation projects has historically come in oddnumbered, non-election years.

Schoch told Rep. Steve Santarsiero, D-Bucks, that once a 5-year plan was approved, “We have a list of the projects that we will be discussing with you once the funding is approved.”

He later said that project list “will look different” if the state has $1.5 billion to spend compared to $2.4 billion, as proposed.

Rafferty and Geist said the plan should be at least $1 billion or more a year, so that it could address at least some of the problems.

Dennis Yablonsky, a former cabinet member to Gov. Ed Rendell, was one of the few Democrats appointed to the commission by Corbett. He said the proposal had to be at least $2 billion “or you leave too many problems unsolved.”

Schoch said once the Legislature approved a 5-year plan, he would favor borrowing some funding to “ramp up” and build construction-ready projects in the first five years.

Schoch’s summary of the report has been consistent: the state has not raised transportation funding since 1997, and inflation and rising miles-per-gallon efficiency have made the state’s transportation funding about half of what it was in the 1970s. And more fuel-efficient cars and trucks alone will cut state transportation funding by $500 million “in the next decade … reducing our revenue per vehicle.”

He said: “The feds are not going to help on this, the best they are going to do is [to keep] what we have.”

The transportation commission recommends: • Uncapping the oil company franchise tax, to bring in $1.4 billion a year, by un-capping it for the first time in 30 years; • Capping state police funding from the motor vehicle license fund; or shifting $300 million for state police to the general fund; • Using the turnpike contribution of $450 million per year for mass transit and transferring some sales tax revenues to mass transit.

Schoch also said because of the recent earthquake, tornado and floods in the state, he has to cancel some planned road or bridge projects “just to have money for winter maintenance at PennDOT.” Without that money for road plowing and salt for winter storms, the departContinued on page 9

OCTOBER 2011 CAPITAL WATCH

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Gov. Corbett mulls using gas royalties to repay borrowed transportation funding Continued from page 8

ment will run out of maintenance funds in December, he said.

In discussion with Geist, Schoch said the state had 600 bridges that are weightrestricted and “50 that are closed” due to lack of funding to fix them. Another 14,000 are ”weak bridges” that may have to have weight restrictions, Schoch said.

Geist said: “That is becoming a real problem to businesses,” especially small businesses.

Schoch said those companies and motorists spend a lot of gas and time and money waiting in traffic in cities or driving around closed bridges in rural areas.

Schoch said it will cost motorists $1.50 “to wait in traffic or drive around, we’d rather charge you $2.50 to fix it.”

Yablonsky, CEO of the Allegheny Conference, agreed, saying the businesses who support his group would rather spend money to fix it than waste money on

gasoline sitting in traffic or driving longer distances because bridges are closed.

Rep. Mike McGeehan, D-Philadelphia, noted the recommendations to fix this problem have been roughly the same for a decade, and called on Corbett to act.

“This is the last of a number of commissions that have recommended the same thing and we are still in the same place,” McGeehan said.

Another potential revenue source,

recently proposed by former state Environmental Protection Secretary Dave Hess, was ruled out by Schoch.

Hess said that PennDOT land, including right-of-way, could bring in lucrative lease fees and royalties.

Schoch said: “In most cases, we don’t own the mineral rights. ... We only own the surface in most cases, not the drilling rights.” CW

10 news

OCTOBER 2011 CAPITAL WATCH

Pa. Turnpike launches cost-free traveler alert Motorists on the Pennsylvania Turnpike can now be forewarned about problems that could impact their travels thanks to an innovative smartphone application.

The Pa. Turnpike Commission launched a new iPhone and Droid application that reads audio alerts to travelers when there’s a closure or delay in their way.

“One of our biggest communications challenges has been to inform customers about incidents before they enter the system, and especially getting word to anyone who’s already on the road. Today, smartphone technology has evolved that enables us to answer that longtime challenge,” said Turnpike Chief Operating Officer Craig R. Shuey. “Whether customers then decide to reroute, stop for a cup of coffee at the next travel plaza

or stay the course, the choice is theirs.

It’s like having a crystal ball that allows smartphone users see what’s ahead on the Turnpike.”

Shuey says TRIP Talk senses position and direction on the Turnpike and “talks” to you when it detects trouble spots nearby. Unlike other travel-alert tools out there, TRIP Talk is hands free and eyes free. Just turn it on before you depart, and it does the rest.

“It provides up-to-the minute information about accidents, construction or bad weather for the sections of Turnpike you’re approaching, making you a better-informed driver,” Shuey said.

“And because you don’t have to look at or touch the phone once you launch the app, it can also help make you a safer driver.

All you have to do is listen and drive.”

Once activated, the application remains on during the trip, broadcasting travelcondition alerts reported within a preestablished mile range. The app picks a default range based on your region, but users can customize settings that work best for them. Conditions are broadcast once, and the broadcast stream stays quiet until it receives an alert update or when the user comes in range of a new alert. The app replays alerts that are still in range after a certain interval selected by the user.

If the user gets or makes a call while an alert is playing, the alert will pause and resume playing when the call is ended.

The Pennsylvania Turnpike is partnering with State Farm Insurance, whose sponsorship is helping to defray

application-development and hosting costs and to provide ongoing resources for future application enhancements and revisions.

TRIP Talk was developed in collaboration with Voicenet Communications Inc., Philadelphia, which is the Pa. Turnpike’s longtime web provider. It is built on Voicenet’s patent-pending Open Microphone Platform - a queue-driven, voice-streaming technology that leverages the onboard GPS in smartphones.

To download the free app, Pa. Turnpike travelers can visit http://www. paturnpike.com/triptalk. Users do not have to create an account, register or sign up with the Turnpike to use TRIP Talk. The app uses your phone’s built-in GPS to stream nearby advisories. CW

Big political names, donors picked for Corbett’s privatization panel

By Kevin Zwick, Capitolwire

Some pretty big political names with pretty deep pockets were appointed to Gov. Tom Corbett’s privatization commission.

Other than the who’s-who of GOP power players on the list, including Republican State Committeeman Bob Asher and Allegheny County GOP Chairman Jim Roddey, the list contains . the names of several GOP donors.

Among the names are John A. Moran, of Lewisburg, owner of Moran Industries, Inc., who donated over $200,000 to Corbett’s gubernatorial campaign, according to state campaign finance reports.

Another Corbett campaign donor on the list is Sue Schick, of Merion Station, CEO of United Healthcare Corp., who finance records show donated $13,000 to the governor’s gubernatorial campaign.

The commission will “explore if any functions now performed by state government might be better and more costeffectively performed by the private sector,” according to the press release from the governor’s office. The panel will look at state government to evaluate potential privatization, public-private partnerships or managed-competition opportunities.

And unlike his Marcellus Shale and Transportation Funding commissions that had deadlines to meet, there’s no end in sight with this one.

“Many people may not recognize it, but privatization has been successful in government for many years. From snow removal services to social services, private job-creators have been doing work that government bodies simply could not do without an increased cost to taxpayers and a drop in efficiencies,” Gov. Tom Corbett said in a press release. “Too often, debates over privatization fail to recognize this simple fact – it’s already working to the benefit of taxpayers.”

John Barbour, CEO of Buchanan, Inger-

soll & Rooney, who co-chaired the governor’s transition team, will be the point man for the new privatization commission.

Some other familiar names are listed on the appointment list include: Matt Brouilette, president and CEO of The Commonwealth Foundation; Quantum Communications CEO Charlie Gerow; and Dennis Yablonsky, former Secretary of Department of Community and Economic Development under Gov. Ed Rendell.

Some criticized that the lineup for the new commission is stacked to favor the private sector.

Stephen Herzenberg, an economist with the liberal-leaning Keystone Research Center, said that the governor’s panel should include experienced public sector managers and researchers who have studied government service delivery.

Mark Nicastre, spokesman for the Pennsylvania Democratic Party, in a press release said Corbett’s newest commission is “another vehicle to reward his donors and corporate special interests.”

“Tom Corbett’s privatization task force is stacked with donors and special interests,” Nicastre said. “The most likely result is a path to more profits for Tom Corbett’s donors, but worse services for Pennsylvanians.”

Here’s the full list of members: • Robert B. Asher, of Gwynedd Valley, southeastern PA GOP powerbroker and National Republican Committeeman, a member of Corbett’s inauguration committee; • John A. Barbour (chair), of Mars, CEO of Buchanan, Ingersoll and Rooney, and a member of Corbett’s transition team; • Matthew J. Brouillette, of Hershey, CEO and president of Commonwealth Foundation, a conservative Harrisburg-based think tank;

• Peter N. Calcara, of Mechanicsburg, vice president at the Pennsylvania Institute of Certified Public Accountants; • Jerome Cochran, of Pittsburgh, Vice Chancellor of the University of Pittsburgh; • Laura E. Ellsworth, of Sewickley, a Pittsburgh attorney, and member of Corbett’s inauguration committee; • Gerald E. Feldman, of Bradford Woods, Resource Investments, Inc; • Varsovia Fernandez, of Ardmore, head of the Greater Philadelphia Hispanic Chamber of Commerce; • Charlie Gerow, of Mechanicsburg, CEO of Quantum Communications and spokesmen for All Votes Matter; • William P. Hankowsky, of Philadelphia, of Liberty Property Trust; • Mark Hanna, Venetia, a political strategist with Hanna & Associates; • Melissa A. Hart, of Bradford Woods, former United States Congresswoman; • Raymond W. Hoover, of Camp Hill, Hoover Rehabilitation Services; • Richard G. Jewell, of Grove City, president of Grove City College; • James E. McErlane, of Malvern, Lamb-McErlane Law firm; • J. Paul McMillen, of Camp Hill, president of the Pennsylvania Automotive Association Foundation; • John D. Moran Jr., of Lewisburg, of Moran Industries; • Jonathan H. Newman, of Bryn Mawr, a former Pennsylvania Liquor Control Board CEO who favors privatizing the state’s liquor stores; • James C. Roddey, of Oakmont, GOP Chairman from Allegheny County;

• Sue Schick, of Merion Station, CEO of United Healthcare; • Andrew J. Sordoni III, of Forty Fort, a construction mogul, owner of Sordoni Construction; • Robert S. Walker, of Lititz, former United States Congressman; • Joseph P. Watkins, of Philadelphia, a proponent of school choice and former Republican strategist contributor to MSNBC; and • Dennis Yablonsky, of Presto, a former Secretary of the Department of Economic and Community Development under former Gov. Ed Rendell.

Brouilette said he is looking forward to working with the governor to “identity and implement win-win solutions.”

“Streamlining state government to its core functions is good for taxpayers and good for government. If government is operating outside its core competencies, running liquor stores, for example, taxpayers lose twice: first in inefficiency and again in lost economic opportunities,” he said Herzenberg said: “The fear has been that the Governor’s laudable pursuit of cost effective government service would become a one-size fits all rush to privatize.

“The bias of the Governor’s Advisory Council reinforces this fear: most members are either political supporters or people who think privatization is always the answer,” he said.

“In the real world, one size doesn’t fit all: privatization is sometimes a good idea and sometimes a bad one. But it’s hard to be optimistic that this panel will be discerning about when to outsource and when to bring some privatized work back in house,” he said.

The governor’s office says the commission posts are unpaid and voluntary. CW

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Bob Deiseroth raised horses on a local farm, rode bulls in the rodeo, and — now that he’s retired — is traveling the world over. But with all he’s seen and done, sitting back and taking in the natural beauty surrounding his Pennsylvania home is still at the top of his list.

So when Bob chose to put a gas well on his property, he was rightfully concerned that his land be treated with care and respect. According to Bob, Range Resources did all that and more: “They didn’t come in and cut trees, they worked around them. In fact, they actually left the site looking better than it did when they started.”

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12 news

OCTOBER 2011 CAPITAL WATCH

Scarnati: Liquor privatization report says tax increase may be needed

By Peter L. DeCoursey, Capitolwire

Senate President Pro Tem Joe Scarnati, R-Jefferson, gave the public a peek at the so-far-secret PFM report Gov. Tom Corbett has closely held on the fiscal benefits and costs of selling the state liquor stores.

Scarnati said during his Sept. 26 Pennsylvania Press Club question-and-answer session at the Hilton, Harrisburg & Towers, that “I’m all in with moving forward with privatization and I’ve opened up some on the issue,” that there should be full disclosure of what it would mean.

During his speech, he said “right now it could mean a tax increase.”

But staff of House Majority Leader Mike Turzai, R-Allegheny, said no such increase was needed. Nor was the report key to the forthcoming House move to vote on the bill, his staff said.

“Whatever the report shows,” said Turzai spokesman Steve Miskin, “the government should not in the business of selling liquor.”

After the speech, Scarnati explained his comment to reporters, saying, “Based upon some things that I am reading, because of the sale of the system, we take a loss to our general fund in the term of a couple hundred million dollars a year, and if we want to have this revenue-neutral, then there has to be an increase in, I believe it’s the gallonage tax,” proposed

by House Majority Leader Mike Turzai, R-Allegheny.

Raising that tax could be “problematic” given Gov. Tom Corbett’s no-tax-hike pledge, Scarnati said, adding, “People need to know what we’re doing here. If they’re alright paying more for liquor and we privatize it … either we’re gonna cut something in the general fund that we’re paying for now, or we’re gonna have to increase that gallonage tax, under the bill as it’s being proposed.”

Miskin responded, “... given the current financials of the PLCB, it is hard to believe prices won’t go higher under the status quo system.”

Miskin also said the gallonage levy was intended to produce the same state revenues as the current mix of taxes and fees do.

Turzai, responding to a similar leak from the PFM report, said the assumption of current general fund revenues was a mistake.

“Many years the LCB was not making that much, it was making less than it was giving to the general fund and Gov. Rendell insisted on a revenue number,” he said.

Turzai said the state government should not assume those revenues will continue.

Turzai said he had not seen the PFM report or been briefed on it, personally.

But he has said for years that estimates of $200 million to $300 million in annual

revenues to the state from the liquor control board overstated the $80 million to $120 million the state annually received, and that most of that was not profits, but money taken from other LCB operations.

Miskin wrote in an e-mail of Turzai’s bill: “House Bill 11 is revenue-neutral as drafted... Rep. Turzai’s bill eliminates once and for all, the Johnstown Flood Tax, eliminates the $1.20 to $2-plus handling fee per bottle, and it eliminates the 30 percent markup; the bill would leave it to the private industry to do what they do best -- bring products to market at competitive pricing.

“The House Liquor Control Committee is doing its job of reviewing the bill... frankly, if they have issues with the gallonage tax as drafted, they can change it any way the want... the main point is to privatize the wholesale and retail sales of wine and liquor.

Sources who had been in on briefings on the PFM report said the long-awaited PFM report on liquor system privatization was a “good news, medium news” report for proponents of the sale, like Corbett and Turzai.

The PFM report, sources said, estimates the whole state liquor system, wholesale and retail, could be sold for $1.9 billion, but if the state retains wholesale operations, the retail system would bring in $500 million in an uncon-

ditional auction.

The Turzai proposal puts limits on how many stores one entity could own, how many could be in each county, and other restrictions. That would produce less revenue, the report suggests.

But Miskin said: “We want to sell wholesale and retail, so what one part of it would bring really doesn’t matter.”

Corbett spokesman Kevin Harley did not respond to Scarnati’s comments, but wrote in an e-mail: “The PFM report is not finalized, so I cannot comment on any preliminary findings that your House sources may or not may have seen.

However, the amount of money brought into the Commonwealth depends on what model is being used.”

The PFM-estimated price for selling the whole system may be high enough to tempt some fence-sitting lawmakers, pro-privatization leaders said.

But the potential tax-hike issue highlighted by Scarnati may prove troublesome. Scarnati this summer questioned the privatization deal, saying first the state should maximize its stores before selling them.

After strong negative reaction this summer, especially from Turzai and Corbett, but from some allies and constituents as well, Scarnati said he had softened his stance.

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news 13

OCTOBER 2011 CAPITAL WATCH

GOP senator opposes ‘Official English’ legislation in floor speech

By Kevin Zwick, Capitolwire

A Republican state senator criticized legislation that would require English as the official language of Pennsylvania government, saying lawmakers should “not dishonor” the state’s heritage of tolerance.

Sen. Lloyd Smucker, R-Lancaster, gave a speech on Sept. 26 in recognition of National Hispanic Heritage Month, where he highlighted the Hispanic community’s contribution to the “civic and economic strength” of Lancaster.

“Everyday, a lot of Spanish is spoken.

A lot of literature and documents written in Spanish are used, and a lot of students are learning Spanish as a second language – and we are none the worse for any of this,” he said. “Hard to believe that some people see this as somehow threatening our economy or our fiscal health.”

Smucker made his speech in the Senate Chamber against plans from conservative House GOP lawmakers to require English as the official language of Pennsylvania government.

The two bills, sponsored by Reps.

Scott Perry, R-York, and RoseMarie Swanger, R-Lebanon, would ban the use of languages other than English from official documents and communications in all levels of government in the Commonwealth.

“We would be better served by addressing deficiencies in our own civic education and understanding,” Smucker said in his speech, quoting former Supreme Court Justice Sandra Day O’Connor. “Those who seek to erase other languages and cultural influences from our lives, who seek to disrupt the growing ethnic communities in our midst, do nothing to improve our society or brighten our prospects.”

During the speech, Smucker recalled recently attending Hispanic Heritage celebrations in Lancaster, saying “words on paper fall short in conveying the sense of celebration involved with the month.”

He said Latino professionals make “an important contribution to Lancaster’s economic and civic strength.”

“Some may be surprised to learn how many countries of origin are represented in our Latino communities,” he said.

“This diversity adds to the quality of life and attractiveness of community – it surely does not subtract from it.”

Pennsylvania has “long been known for religious tolerance, long before that freedom was enshrined in the Bill of Rights,” he said. “More than 200 years later, we should not dishonor this heritage by becoming intolerant toward other cultures and other languages, not in our attitudes and not in our laws.”

“I just don’t see a need for it,” said Smucker. “When I speak to folks from different backgrounds, they’re working to learn the English language,” he

When asked to respond to Swanger’s comments, Smucker said, “I think some of the comments made in the speech speak for themselves.”

He added, “I feel very fortunate to represent a district that is very diverse.

I think one of my roles is to promote policies that respect the worth and dignity of each individual regardless of background.”

Sen. Lloyd Smucker

said, that more should be done to help them learn. “I always hear there are not enough resources to learn the language.”

Swanger, whose legislation is almost identical to Perry’s, said, “that’s very obvious Sen. Smucker has no clue what my bill will do.”

“It will not harm or discriminate against any culture. The only thing it does is say that English will be the official language of the state’s business,” she said. “I really wish that before he had spoken out that he took the time to understand what the bill is really about.”

The bills contain some exceptions.

Perry’s bill and Swanger’s bill each contain the first five exceptions, but Swanger’s bill adds the last three: • When Federal law imposes contrary provisions; • When the public safety, health or justice requires the use of other languages; • Instruction in foreign language courses; • Instruction designed to aid students with limited English proficiency in their transition and integration into the education system;

• The promotion of international commerce or tourism; • To provide interpretation for hearing impaired individuals in American Sign Language; • When using terms of art or phrases from languages other than English; and • For informal and non-binding translations among or between representatives of government.

A staffer in Smucker’s office said the senator has talked about having a staff member learn Spanish to better communicate with his constituents.

Rep. Babbette Josephs, D-Philadelphia, said that someone in her district office speaks Russian to communicate with Russian-speaking constituents.

The bills also state that the act should not be “construed in any way to infringe on the rights of citizens” who have the right to choose their own primary language. The bills also state that the law could not be used to dictate language policies for organizations and businesses in the private sector. CW

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14 OPINION

OCTOBER 2011 CAPITAL WATCH

Editorial

An ambitious agenda; realistic goals When Pennsylvania had a garment industry, everybody knew that the term “piecework” meant getting paid for each completed article of clothing rather than by the hour or by the week. The catch was that payment was per garment completed to the satisfaction of the product inspectors. Crooked seams, missing stitches – whatever – and you worked for free for the period of time you had that shirt or blouse in your hands.

Looking at the current legislative schedule, older Pennsylvanians might wish that we were paying our state lawmakers on a piecework basis. The agenda looms huge with a half dozen major issues and a host of smaller ones to be addressed. The question is, how much can the legislature really accomplish in the 20 or so days they meet concurrently before the Chrishannukwan (Christmas/ Hanukah/Kwanza) recess?

Maybe if lawmakers were paid piecework – only for bills signed into law by the Governor – they would feel compelled to see some things through to conclusion that might well slop over into the second year of the current legislative term. (Some might not think that is so bad – addressing an issue with a clear head come January 2012 – but the reality is that a whole new set of barriers to action go into effect with the new year including legislators dealing with the reality of meeting hundreds or maybe even thousands of new constituents in

reapportioned legislative districts, circulating and filing nomination papers for re-election, running in an early Presidential year primary election and, in their spare time, working out details of the 2012-13 state budget).

In other words, if the ambitious agenda facing the General Assembly this fall doesn’t get done by Christmas, there’s a good chance most of the items also will not be addressed by the Fourth of July. And, sports fans, if something isn’t accomplished by the Independence Day holiday, you can pretty much kiss it goodbye because this is a Presidential election year with a U.S. Senate seat and 18 Congressional seats in play along with the Auditor General, Attorney General and state Treasurer, not to mention the re-election efforts of every member of the state House and 25 members of the state Senate.

Tick tock. Tick tock. Hand me that shirt collar, Genevieve. Here’s a stack of sleeves.

For the record, let’s do a quick rundown of things on the fall to-do list: Congressional redistricting, Marcellus Shale tax or impact fee, funding highway and bridges and mass transit, school vouchers, privatizing the state’s liquor stores, immigration legislation, proposals to change the way the Electoral College works in Pennsylvania, a state takeover of the City of Harrisburg, distracted driving legislation and abortion

clinic standards. That’s not everything, but it covers the high points.

What’s likely to get done? What blouses and trousers can the legislators hand over to the inspector (in this case, the Governor) for inspection and approval?

The one sure thing is Congressional redistricting. Because we face an April Primary in 2012, the election cycle literally begins with the New Year. Incumbent Congressmen and challengers really need to know the boundaries of the new Congressional districts – to be reduced by one from 19 to 18 because Pennsylvania’s population growth has been less than southern border states. There may even be court challenges to new district lines so the legislature will want to push this proposal as quickly as possible.

Then there’s transportation funding.

Yes, increasing the amount of dollars available for highways, bridges and mass transit will require voting for things that look or smell suspiciously like taxes. But the reality is, without new transportation dollars, tens of thousands of private sector construction workers will be idled and the company owners (read that: job-creating Republican business men and women) will feel the pinch. Some – dare we say it, will go out of business or take early retirement. No sane person is really expecting any new “federal stimulus” to substitute for state action. So, transportation funding is No. 2.

After that, it’s likely a “no go” on any

major proposal. A small, pilot voucher program – Senate Bill 1 “Lite” – might have some appeal except that it would have to be limited only to the poorest districts in the state and that’s not likely to sit well with rural Republicans who want their share of any new state dollars going for anything. But expand the program to serve most of the state and the cost puts the entire plan out of reach. Privatizing state stores sounds good to many in the abstract, but getting 103 members of the House and 26 members of the Senate to agree on one plan is unlikely, especially in the current economy. Notice that no one has mentioned the figure $2 billion in more than a year – the amount that optimists were projecting as the state liquor monopoly’s market value. If the state can’t make a killing, a large portion of the enthusiasm for privatization cools. Factor in concerns that we would be trading a state monopoly for a functional monopoly by a handful of big box store operators, and the LCB plan also fails to cross the finish line.

This is not to say that passage of just redistricting and transportation funding is not a satisfactory score card for 20 legislative days. We’re just suggesting that people recalibrate their expectations.

It would be far from fair to call this a “do nothing” General Assembly. It’s not just a “do everything” legislature. And that may be a good thing. CW

The best chance of survival during a SCA event is early CPR combined with defibrillation. Ironically, Pennsylvania law protects a bystander from liability when using an AED, but it fails to protect them when performing CPR. So, even though an AED will instruct the bystander to start CPR after a shock has been delivered, technically good Samaritans are left open to potential litigation in attempting to save a life.

Another problem is that 911 operators are trained and required by state protocols to provide instruction on administering CPR over the phone if the bystander is willing to try. This creates yet another contradiction between what a good Samaritan should do to save a life and is an example how the law fails to protect them if they follow these instructions.

Further, first responders aren’t protected from liability when they assist in an emergency while off-duty.

Businesses and property owners put themselves at risk of liability under current law when placing an AED on their premises, which in many cases causes them to forgo placing an AED even though they know it’s the right thing to do. There is no reason for this barrier to exist, especially when this equipment is designed with voice commands that instruct the user on what to do and will not deliver a shock unless an irregular heart beat is detected. This high-tech, life-saving equipment should be encour-

aged in settings that are open to and do business with the public.

That’s the bad news. The good news is that there is a common-sense, no-cost, solution to this problem before the PA General Assembly: Senate Bill 351, which is supported by the American Heart Association, Pennsylvania Emergency Health Services Council, the American Red Cross and other leading health and safety organizations across the Commonwealth. This legislation will expand liability protections to those assisting in an emergency and businesses who want to establish an AED program on their premises. Yet, the law also provides reasonable legal requirements to protect parties in the event of negligence.

Pennsylvania citizens, businesses and off-duty first responders shouldn’t have to think twice about personal liability when they are trying to do the right thing in an emergency, especially when a stranger’s hands and the presence of an AED often mean the difference between life and death. The Senate of Pennsylvania should move this legislation to the House of Representatives for its consideration and ultimate approval by Governor Corbett. CW Jeffrey S. Mandak, M.D., F.A.C.C., F.A.C.P., Moffitt Heart and Vascular Group PinnacleHealth Cardiovascular Institute, and the American Heart Association, Capital Region Board of Directors contributed to this opinion editorial.

The Need for Speed Cardiovascular disease is the most common cause of death in men and women, claiming about 1.5 million American lives per year. About a third of these deaths occur from sudden cardiac death (SCD). While advances in medicine have improved survival and treatment for patients with cardiovascular disease, no strategy will prevent out-of-hospital cardiac arrests completely. Volunteer assistance is essential.

When cardiac arrest occurs outside a hospital setting, the likelihood of survival drops 10% for every minute that passes until defibrillation and restoration of a normal heart rhythm occurs.

EMS, therefore, cannot be counted on to arrive in time to save the victim. Overall, the survival rate from out-of-hospital cardiac arrest is around 8%. Thus, the community is the ultimate “cardiac care unit” to improve survival of SCD victims with early access to defibrillation.

Extensive research and documentation demonstrates the success rates of CPR and defibrillation with an automatic external defibrillator (AED). These are proven life-saving strategies that can be deployed by anyone during an emergency when a medical professional is not available to assist.

Improved access to early defibrillation saves lives. In a study at O’Hare International Airport, AEDs were placed every few minutes walk throughout the airport. Over the study period, there was a

70% save rate for cardiac arrest victims in that airport. What an improvement over the national average!

This study indicates a few things: 1. availability of AEDs is important; 2. bystanders are encouraged to use them in an emergency; and 3. the technology works. The same can be said for CPR. This proven life-saving technique keeps blood flowing to vital organs, especially the brain, which is the most sensitive organ with regard to oxygen supply when someone goes into sudden cardiac arrest (SCA).

In a time when volunteer response systems and corresponding resources are stretched, we need to look for a common-sense approach to empower members of the community to assist during an emergency. In 36 other states, being a good Samaritan means coming to someone’s aid in an emergency, but Pennsylvania isn’t one of those states.

In Pennsylvania, the Good Sam law contains many contradictions and fails to adequately protect bystanders and off-duty professional first responders, such as emergency public safety, law enforcement, and emergency response teams, from personal liability. Currently, bystanders who perform CPR or aid someone in an emergency and businesses that wish to place an AED on their premises are at risk of being sued because the law is too restrictive and inconsistent in granting immunity from liability.

OPINION 15

OCTOBER 2011 CAPITAL WATCH

Who owns shale gas?

As many property owners throughout Pennsylvania Marcellus Shale counties have learned in recent years, ownership of the surface does not necessarily include ownership of what lies below.

Title to the surface and subsurface can be “severed”; that is, owned by different parties. In fact, it is not uncommon to now find different parties owning the mineral, coal, oil, gas and surface rights to the same property. A recent decision by the Pennsylvania Superior Court raises, but does not resolve, significant questions about that historic ownership model.

For the last 130 years, Pennsylvania lawyers have relied on the Pennsylvania Supreme Court’s decision in Dunham v. Kirkpatrick, source of the so-called “Dunham rule.” Simply stated, it holds that a conveyance of “mineral rights” is presumed to not include “oil and gas rights.” In other words, a deed conveying mineral rights does not include the right to extract oil and gas. Subsequent decisions further strengthened the Dunham rule, holding gas rights as separate and distinct from oil and mineral rights.

The rule in Dunham, however, has one significant exception. In U.S. Steel v. Hoge, the Pennsylvania Supreme Court ruled on a dispute between owners of the coal and gas rights. In a departure from the Dunham

By Erik M. Hume, Esq.

rule, the court held that coalbed methane is owned by the owner of the coal, because “subterranean gas is owned by whoever has title to the property in which the gas is resting.” In rendering its decision, the court cited the historical view of coalbed gas as a waste product from coal production, the unconventional methods used to extract the gas and the effect gas extraction would have on the underlying coal.

Most practitioners have relied on the Dunham rule in determining ownership of gas in unconventional formations, including the Marcellus Shale. Similarly, they interpreted the Hoge decision as applicable only to coalbed methane. Last month the Pennsylvania Superior Court called those beliefs into question with its decision in Butler v. Powers Estate.

The Butler decision raises, but does not answer, crucial questions concerning Marcellus Shale gas rights ownership.

The Butler decision arose out of a dispute between the Butlers, owners of the property surface as well as a portion of the subsurface rights, and the heirs of Charles Powers, who own a one-half interest in the minerals and petroleum oil underlying the property. Powers’ heirs claim that their mineral interest includes a one-half interest in the Marcellus Shale underlying the property, and pursuant to

Hoge, the gas it contains. The trial court, citing Dunham, dismissed the heirs’ claims at a preliminary stage of the litigation.

The Superior Court, however, reversed the decision. Based on the limited record before it, the court said the question of whether Marcellus Shale is a “mineral” included in a mineral conveyance remains unsettled, and further questioned whether ownership of Marcellus Shale gas should follow the Dunham rule or rub with the Shale through the Hoge exception. The court instructed the trial court to more comprehensively explore these crucial issues.

The Butler case, barring a discretionary appeal to the Pennsylvania Supreme Court, will now return to trial court for determination of the applicable rule and disposition of ownership rights. That court’s decision will likely then work its way through the appellate courts, over the course of several years. Unfortunately, until the case is finally decided, controversy will surround ownership of some Marcellus Shale gas.

Predictably, the Butler decision has spawned confusion and concern throughout the gas industry in Pennsylvania. Ultimately, however, the heirs to Charles Powers have a hard hill to climb. The Hoge decision turned, in part, on coal’s long

history as an extracted mineral in Pennsylvania. Prior to the current gas boom, most people did not know of the Marcellus Shale or any of the Appalachian Shales, let alone opportunities for their commercial development. Furthermore, the rule in question affects only a limited number of properties. Were the Hoge exception found to control Marcellus Shale gas, only properties where the mineral and gas rights are owned separately would be affected. Range Resources, a leader in Pennsylvania’s natural gas industry, disclosed in a press release that in response to Butler it reviewed a portion of its leases in southwestern Pennsylvania and preliminarily found that 15% of those leases would possibly be affected by the decision.

As the debates in Harrisburg have demonstrated, Pennsylvania oil and gas law is still catching up to Marcellus Shale development. While the recent focus has been on legislative initiatives, it is clear that recent and forthcoming Pennsylvania court rulings will wield considerable impact. CW Erik Hume is a member of McNees Wallace & Nurick LLC in Harrisburg. He counsels clients on gas leases as well as other issues related to the Marcellus Shale play, including easements and municipal and zoning issues.