April 3, 2015

April 6 PA Environment Digest Now Available

The April 6 PA Environment Digest is now available.  Here are just a few of the headlines--

DCNR Says 1,600 Of 2.2 Million Acres Of State Forest Land Disturbed By Drilling
The Department of Conservation and Natural Resources told the Senate Appropriations Committee Wednesday about 1,600 acres of DCNR’s 2.2 million acres of State Forest land are now disturbed by Marcellus Shale natural gas drilling pads and pipelines.
In response to a question by Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, Acting DCNR Secretary Cindy Dunn said about $117 million of the expected $130 million in royalties coming from drilling on DCNR lands next fiscal year will be used by the agency to pay administrative costs.  
However, she noted the proposed budget includes an additional nearly $20 million from the General Fund to help wean the agency off of using royalty monies for operational costs.

5 Things We Learned From Senate, House Hearings On DCNR’s Budget
The Senate and House Appropriations Committee hearings on Gov. Wolf’s proposed budget for the Department of Conservation and Natural Resources are now complete.  Here are five things we learned as a result of those hearings--

DEP Opens Comment Period For Proposed Final Chapter 78 Drilling Regulations
The Department of Environmental Protection published notice in the April 4 PA Bulletin of a proposed final Chapter 78 (conventional) and Chapter 78A (unconventional) drilling performance standard regulations for a 30 day public comment period with no additional public hearings.

Analysis: Myth-- Conventional Oil And Gas Drilling Is Benign
Representatives of the conventional (non-Marcellus Shale) oil and gas industry in Pennsylvania are trying to perpetuate the myth that conventional drilling is “benign” and doesn’t affect the environment.
Last year, legislation-- Senate Bill 1378 (Scarnati-R-Jefferson) and House Bill 2350 (Causer-R-Cameron) -- was introduced to force DEP to adopt separate regulations for conventional well drillers used the word “benign” in the introduction of the bill to describe conventional drilling industry, but they carefully, but inaccurately, added “after the 1984 Oil and Gas Act was passed.”
Let’s look at the facts.

Winners Of 2015 Western PA Environmental Awards Announced
Four environmental conservation and education programs from throughout Western Pennsylvania will share $20,000 from Dominion and the PA Environmental Council for innovation and effectiveness in making a positive impact on the Western Pennsylvania environment.

PA Resources Council Cans For Pets Initiative Recycles 300,000 Aluminum Cans
“Cans for Pets” – an initiative encouraging individuals to aid shelter animals through responsible recycling – has reached the milestone of collecting 300,000 aluminum pet food cans in thanks to the support of pet lovers across the United States.  
The program, funded by the Alcoa Foundation and coordinated by the PA Resources Council, has offered a 5 cent donation to a local animal shelter for every aluminum pet food can recycled through the program.

PA Extends Low-Income Home Energy Assistance Program Deadline To May 1
Gov. Tom Wolf Tuesday announced Pennsylvanians struggling to pay home heating bills will now have until May 1 to apply for financial help through the Low-Income Home Energy Assistance Program (LIHEAP).

To read the Digest, visit: www.PaEnvironmentDigest.com.  Click Here to print the entire Digest.

PA Environment Digest is edited by David E. Hess, former Secretary Pennsylvania Department of Environmental Protection, and is published as a service of Crisci Associates.


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10 Things We Learned From Senate, House Hearings On The Governor’s Budget Proposal

The Senate and House have now both finished their agency-by-agency hearings on Gov. Wolf’s budget proposal.  Here are 10 things we learned--
1. Case Of The Disappearing Budget Deficit: Right off the bat in the first week of hearings by the House, the Independent Fiscal Office said the state’s budget deficit is closer to $1.5 billion than the $2.3 billion deficit Gov. Wolf talked about in his budget address. A spokesperson Gov. Wolf said in response the deficit is a bit more than $2 billion.
2.  More Short-Term Borrowing: On the second day of budget hearings, Acting State Treasurer Christopher Craig told the House Appropriations Committee Gov. Wolf’s proposed budget would require an increase in short-term borrowing in the form of tax anticipation notes to front-load the disbursement of funds for programs like the increase in funding for public schools.
It was noted that while the budget proposal calls for an increase in revenues, some of those revenue streams would not become effective until 2016—a full six months following the budget’s normal effective date.
“I would be anticipated that there would be a much more aggressive use of short-term borrowing to deploy it earlier than when sales tax revenues would come in,” Craig said.
In the second week of March, Gov. Wolf and the Treasurer’s Office increased short-term borrowing limits by $500 million to $2.5 billion to cover near-term obligations like payroll, something both offices criticized Gov. Corbett for.
3. Republicans Don’t Like Tax Increases: Maybe that’s not new, but clearly the proposed hike and extension of the Sales Tax (including extending it to nursing home fees, college tuition and funeral costs) and the increase in the Personal Income Tax generated a lot of heat from Republicans.  The exception was from Republicans who favor doing away with school district property taxes and increasing the Sales Tax and/or Personal Income Tax to make up the difference.  It would not be surprising to see a vote in the Senate or House on this so-called “real tax reform” idea by Republicans.
4. Have To Consider The Whole Package: The Governor’s Budget Secretary Randy Albright Monday the Senate Appropriations Committee Gov. Wolf’s budget is a comprehensive package and it should be considered that way and not picked into its constituent parts.
“We have tried to craft a budget that is comprehensive, that can’t in any way just be viewed by its individual component parts, because if that’s the way we try to break down the analysis, if we try to do one thing over here and ignore something over there that’s a contributor to the same ongoing problem, then we’re not going to serve our state in the best possible way,” Albright said.
5. Pension Reform Before The Budget: Senate Majority Leader Jake Corman (R-Centre) broadened his earlier comments by saying there would be no discussion of a state budget until there is “real, substantive pension reform.”  He had earlier said there would be no discussion of any tax increases until pension reform was done.
6. Change Pensions For Current Workers: Sen. Corman also said he has 30 votes now for a proposal to change the pension system for existing employees as part of a pension reform plan.  This idea was first suggested by Gov. Corbett, but rejected earlier by Republicans.  On the question of whether changing an existing employee’s pension would be an impairment of an employment contract, Sen. Corman said we could always go back if we need to.
7. Chilly Reception To Wolf’s College Tuition Freeze: The PA State System of Higher Education and State-Related Universities were cool to the idea of a tuition freeze, but said they would see what happens if they received the extra funding proposed by the Governor.
Elizabeth Bolden, president and CEO of the PA Commission for Community Colleges, told the House Appropriations Committee maintaining low tuition rates is a priority for the Commission.
“If the colleges are able to continue to maintain quality academic programs, they need the funds to do so,” she said in support of the governor's $15 million proposed funding boost to community colleges. “The percentage of Commonwealth dollars supporting community colleges statewide is about 20 percent … well below the 30 percent promised. It is certainly more than we have received in the past, but still significantly lower than state-run and state-related universities.”
8. $30 Million Hole In Judiciary Budget: Justices from the PA Supreme Court told the Senate Appropriations Committee medical benefits, pension costs, mandated cost of living increases and the continuing structural deficit mean the Judiciary needs a $30 million increase in its budget just to keep up with its basic costs.
If the Judiciary receives the zero increase budget proposed by Gov. Wolf, Justice  J. Michael Eakin said the Court System would not be able to make payroll for about 10 percent of its personnel complement of 3,000.  Funding at this level would cause significant delays in cases dispose or lead to courthouses closing their doors, he said.
9. Price Of Liquor: Liquor Control Board Chair Tim Holden told the House Appropriations Committee his hands are tied in negotiation with liquor suppliers because the Liquor Code requires the LCB to mark up the alcohol it sells proportional with the prices paid by the LCB.
He noted Virginia was able to get a lower price for product because they have a higher prices and suppliers sell to them at a lower cost.
House Republicans have objected to changing the current system in the past as a “revenue generating scheme” to generate more money for the state.
Holden also supported removing the limitation on stores operating expanded Sunday hours and changes that would allow casinos to offer alcohol past 2 a.m. and increase offers for complimentary drinks.
10. Sparing On Minimum Wage: One House budget hearing featured a sparring match between Rep. Seth Grove (R-York) and Acting Labor and Industry Secretary Kathy Manderino over whether raising the minimum wage from $7.25 to $10.10 as Gov. Wolf proposed is a good thing.
Rep. Grove said there are 158,000 Pennsylvanians currently earning minimum wage.  Raising the wage to $10.10 would mean the hike would cost businesses over $1 billion.
“They (minimum wage increase advocates) always perpetuate a certain class of people they’re trying to help out, but it’s not the case. In Pennsylvania the average hourly worker rate is $24.40. Minimum wage workers have been on the decline for a number of years,” said Rep. Grove.
“The goal here is that good paying jobs and good earning jobs raise all boats. The goal here is that good paying jobs and good earning jobs raise all boats,” said Manderino.  “We will, in Pennsylvania, as we bring employee salaries up, we will also be supporting families and we will also be supporting businesses because folks will have more disposable income to spend.”
Written testimony and a video of each House hearing will be posted on the Republican House Appropriations Committee webpage.  Information about Senate budget hearings are posted on the Senate Republican Caucus website.

Commonwealth Foundation: Prevailing Wage Mandates Cost $1 Billion Annually In PA

New research from the Commonwealth Foundation shows simply ending prevailing wage mandates could save taxpayers billions for years to come. Wouldn’t a billion dollars go a long way to closing the budget deficit, funding schools, or lowering property taxes?
“Instead of raising taxes on middle class families, Gov. Wolf should advocate for allowing government to pay market wages—rather than artificially inflated union wages—for construction projects,” commented Bob Dick, a policy analyst for the Commonwealth Foundation. “Taxpayers should not be forced to knowingly overpay for government construction projects. That's like going to an Apple Store, picking out an iPhone 6 marked at $299, and offering them $350 instead. In the real world, you'd be laughed at.”
When the prevailing wage law was first enacted in 1961, the threshold where the mandate kicks in was set at $25,000—twice the value of an average home. If adjusted for inflation, the threshold would be nearly $200,000 today. But for many projects, the threshold hasn’t changed since the law was enacted more than 50 years ago.
The Pennsylvania Association of Boroughs compared prevailing wage rates across the commonwealth’s 67 counties and found they exceed market wages by 30 to 75 percent.
School districts alone spent more than $1.6 billion on construction in 2012.  Allowing schools to opt out of the prevailing wage mandate could save taxpayers between $160 and $480 million each year.
Pennsylvania state and local governments spent nearly $11 billion on construction projects in 2012. Based on wage data, ending prevailing wage—which raises the total cost of construction projects by 10 to 30 percent—would result in a savings of $1 to $3 billion annually.
Dick continued:
“In York County’s Southwestern School District, a project to fix a leaking roof was bid out for $84,000. But when prevailing wage mandates took effect, costs ballooned nearly 50 percent to $125,000. This is just one of many local examples of the harms caused by this unnecessary mandate. In fact, a Local Government Commission survey found municipalities rank the prevailing wage as one of the most burdensome mandates in the state.”
For more information, visit the Commonwealth Foundation’s Pennsylvania’s Prevailing Wage Law webpage.

Greenleaf Bill Would Create Special Business Courts In Pennsylvania

Sen. Stewart J. Greenleaf (R-Montgomery) Thursday announced plans to introduce legislation that would create special commerce courts in Pennsylvania.
Headed by judges with backgrounds in business law, the proposed courts would adjudicate efficiently and predictably disputes and issues concerning Pennsylvania business law.
According to the Senator, these specialty courts would help retain and grow existing businesses and help attract more businesses to the Commonwealth.
Encouraging business investment in Pennsylvania and likely spurring the job growth this investment brings, Sen. Greenleaf’s legislation seeks to cement Pennsylvania’s place among states that are hospitable to business and dedicated to economic growth.
“We are losing businesses and the jobs they create to states with specialized business courts,” said Sen. Greenleaf. “Business litigation is often more costly in Pennsylvania, because disputes that require quick resolution are delayed. Many business issues are cost-intensive and time-sensitive, requiring judicial attention and resolution before shareholder meetings or other critical dates. Having a judge available to hear cases on short notice is a great benefit, allowing businesses to move forward with operations. Pennsylvania has an outstanding judicial system, and we should make better use of our resources to resolve business disputes.”
Presiding in Philadelphia, Harrisburg, and Pittsburgh, expert judges would comprise the commerce court and consider disputes between businesses and internal disputes between shareholders and directors.
The senator said, “I believe that commerce courts will help grow our state’s economy, helping Pennsylvania gain a competitive edge in attracting employers. Pennsylvania is already a great place to do business. This measure will further enhance the Commonwealth’s business-friendly environment.”