2008 Budget Hearings
Highlights and Summaries
Tuesday, February 26, 2008
Monday, February 25, 2008
Hearings listed alphabetically here
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Labor & Industry
Labor & Industry -
Summary Senator John Gordner, 27th District and Chairman of the Senate Labor and Industry Committee, asked why funding was decreased by $450,000 from last year for Centers for Independent Living (CIL). Acting Secretary Sandi Vito said the decreased funding is necessary to make room for the Governor’s new programs. Senator Gordner and Senator John Rafferty, 44th District, also asked why the Department eliminated funding for Self Employment Assistance. Senator Rafferty reminded the Acting Secretary that small businesses are the backbone of Pennsylvania's economy. The Senator also noted that many businesses find it difficult to fill high-paying positions with adequate benefits. Acting Secretary Vito noted the importance of the initiative, but added that it does not supply self-sustaining living costs and that it will be up to the Legislature to restore funding. Countering the Acting Secretary's claim that the Department reduced costs from unemployment insurance claims, Senator Gordner noted that those figures were controlled by statute and not the Department. Given a federal cut of 9 percent in the Workforce Investment Act, Senator Gordner asked about the Acting Secretary's ideas for maintaining the program's viability. The issue of maintaining solvency of the unemployment fund, given the prospect of a pending economic downturn, was raised by Senator Pat Browne, 16th District. Senator Browne asked the Acting Secretary if the Department could get through any potential difficult economic times. Acting Secretary Vito said there currently is no solvency problem; however, the Department will have to seriously consider the possibility of recession. Senator Browne was also concerned with the flat-lined funding of the Vocational Rehabilitation Fund and asked if current placement levels and the $331 wage-per-week were sufficient. Senator Bob Regola, 39th District, requested a cost analysis of the Uniform Construction Code and queried the Secretary about the use of $2.3 million for local and municipal code support. The Acting Secretary informed the Senator that the money pays for training municipal code personnel, providing training to opt-outs, and for statewide code enforcement. Senator Mary Jo White, 21st District, questioned the Acting Secretary about the effects of the recent minimum wage increase on employment. Appropriations Committee Chairman Senator Gib Armstrong, 13th District, addressed the unfairness of the Prevailing Wage Act on local school districts and municipalities, and emphasized the need to increase the threshold from $25,000 to $75,000. Department of Insurance -
Senator Don White (R-41), Chair of the
Senate Banking and Insurance Committee, questions the
Administration's proposal to fund an expanded healthcare
plan with the MCARE fund. Senator Pat Browne (R-16) and Senator Jake
Corman (R-34) debate funding
for "Cover All Pennsylvanians" with Acting Insurance
Commissioner Joel Ario.
Summary Several Senators raised concerns about the Governor's proposed universal health care scheme during the Senate Appropriations Committee's budget hearing with Acting Insurance Commissioner Joel Ario. Senator Don White, 41st District and Chairman of the Senate Banking and Insurance Committee, extensively grilled Acting Commissioner Ario about the Governor's proposal to take a $400 million surplus from the MCARE fund to pay a portion of the costs of his universal health care scheme. Noting that overpayments by practitioners built the surplus in the MCARE Fund, Senator White asked, "To the best of your knowledge, did the Administration ever ask the Legislature to take another look at the assessment formula? That is a substantial amount of money to be overcharging providers." Senator Don White also raised concerns about spending the surplus when the Fund faces an unfunded liability of $1.8 billion. A better use of the surplus, Senator White said, would be to "wean the doctors" off of the program through a plan that he introduced as a key component of Senate Bill 1137. Under questioning from Senator Gordner, Acting Commissioner Ario admitted that high-risk medical practitioners, such as obstetricians and neurosurgeons, who already pay more than $100,000 in medical malpractice insurance premiums, could see those costs increase by 50 percent if the MCARE abatement program lapses. Generally, the premiums for providers would go up by 25 to 33 percent, he added. Senator Browne, Chairman of the Senate Finance Committee, asked about the Insurance Department’s role in the Governor's proposed 7-percent tax surcharge on property owners' flood insurance policies. Senator Browne said he was not aware of any similar surcharges imposed by any other state. Following up on questions he originally raised with the State Budget Secretary on Monday, Senator Browne again questioned the Administration's funding plan for the Governor's universal health care scheme. He noted that the Governor originally wanted to impose an "unpopular and unsustainable" 3 percent tax on businesses. Now, the Governor is looking at cigarette taxes, even though those revenues are decreasing and the health costs would certainly go up. Senator Regola, noting that the Governor is patterning his universal health care scheme after similar programs in California and Massachusetts, asked whether he would follow the example of those states and exempt small employers from state mandates for the coverage. Senator Regola also urged the Administration to work with the Legislature to provide state oversight on the proposed merger of Highmark and Independence Blue Cross to ensure competition in the market. Senator Mary Jo White said she also supported the need for state oversight on the Highmark/IBC merger. Further, she noted a need in Pennsylvania for more fairness in insurance reimbursements to providers. Some providers may receive as much as three times more than others for the exact same medical procedures, Senator White said. Senator Mary Jo White sharply criticized the Governor's plan to tap the MCARE program for his universal health care scheme. She said she expected the MCARE abatement program to eventually be phased out, something that won't likely happen if the fund is used as a funding source for a new entitlement program. Senator Rafferty cautioned that Pennsylvania still has a shortage of doctors, especially in high risk fields. He said too many graduates from Pennsylvania's medical schools, especially those in high-risk specialties, are leaving the state after they complete their studies. Eliminating the MCARE abatement could exacerbate the problem, Senator Rafferty said. Senator Pat Vance, 31st District, reviewed enrollment trends in the existing adultBasic health insurance program in Pennsylvania. She asked how the Administration could claim that the Governor's proposed universal health care scheme, which would include prescription drug and some mental health care coverage, would have lower costs than the existing adultBasic program. Senator Stewart Greenleaf, 12th District, asked if the Administration has looked at public-private partnerships for the universal health care scheme. He said the experiences of other countries show that costs go up and availability goes down if a health care program is "overly dominated" by government. Senator Jake Corman, 34th District, criticized the Administration’s contention that the Governor's universal health care scheme is not an entitlement program. He added that the Administration would be better off working to address health care costs. Senator Corman said the real problem is affordability, especially when government spends $14 billion (including $7 billion in state money) for subsidized health care in Pennsylvania. "We don't have a health care problem in Pennsylvania. We have a health insurance cost problem in Pennsylvania," Senator Corman said. Senator James Rhoades, 29th District, asked about trends in long-term care insurance in Pennsylvania. He also raised concerns that employers may drop insurance coverage as a cost-saving step if the Commonwealth sets up the Governor's universal health care scheme. Liquor Control Board
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During the Liquor Control Board budget
hearing, Senator Gib Armstrong (R-13), Chairman of the
Senate Appropriations Committee, remarks on the need to
modernize the sale of wine and spirits in Pennsylvania. Senator Pat Browne (R-16) discusses
privatization issues with LCB Chairman Patrick Stapleton. Summary Because Pennsylvania's state store system is a monopoly, a number of Republican senators urged the Pennsylvania Liquor Control Board (PLCB) Commissioners to work harder at making a wider variety of products available to consumers, particularly in rural areas of the state. Senator Mary Jo White, who represents a large rural area, took issue with a PLCB assertion that consumers can obtain any available product within 48 hours. "I tried it and I found out that my store only stocks once a week," she said. "When people try it out in real life, they find that's not how it works. It continues for consumers to be a very spotty system. You have an obligation to serve all people." Senator Rhoades reiterated that concern – noting that stores are being closed in his district, forcing people to drive further. Senator Corman agreed, saying, "We have an obligation to provide this in rural areas – whether it is profitable or not. It's part of the business of being a monopoly." PLCB Chairman P.J. Stapleton said the agency is working to improve service and ensure that all state stores meet high standards. Senator John Pippy, 37th District, said he has heard complaints about the quality and quantity of high-end wines in state stores and asked if steps are being taken to improve access to some of the smaller California vineyards. "What I'm hearing is that people were happy with the Chairman's Select and it seems to be slowing down," Senator Pippy said. Noting that there is a growing market for wine, Senator Greenleaf referenced a recent Philadelphia Inquirer article that said the state store system is not doing a good job marketing Pennsylvania wines. He wanted to know if the PLCB responds to requests for wines and urged the agency to do more to enhance wine sales. Senator Greenleaf also suggested that the PLCB consider imposing a fee on every liquor licensee and using the revenue to provide free transportation to people who are too intoxicated to drive. Senator Greenleaf said many universities have started providing the service. Chairman Stapleton said he was supportive of the concept. Senator Mike Waugh, 28th District, whose senatorial district borders Maryland, said that many residents in his area of the state "go down the road" to buy their alcohol. He wanted assurances that the PLCB has a specific marketing plan for these facilities located near the state’s borders. Senator Waugh also made a pitch for Pennsylvania wineries, which are a key part of the state's agricultural industry. "I encourage you to do what you can to give our winemakers the benefit of the doubt and the ability to market their product," he said. Appropriations Committee Chairman Senator Armstrong said he would prefer to privatize and modernize Pennsylvania's state store system. "I think we are caught in a time warp and we are not being consumer friendly. If you put this out there to the people, they want convenience, not inconvenience," Senator Armstrong said. "Anyone who comes to Pennsylvania can't believe we are stuck in prohibition." State Related Universities
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Senator Jake Corman (R-34) discusses the
need for additional research institutions in the
Commonwealth.
Summary Several members of the Senate Appropriations Committee voiced concerns about the rising cost of higher education during a budget hearing with Pennsylvania's state-related universities. The hearing included testimony from Temple University Vice President and Chief Financial Officer Anthony E. Wagner, Lincoln University President Ivory V. Nelson, University of Pittsburgh Chancellor Mark A. Nordenberg and Pennsylvania State University President Graham Spanier. Education Committee Chairman Senator Rhoades asked the university officials how the Governor's funding proposal would affect current and future university students. The university representatives projected that tuition would increase by more than 5 percent and student loan debt would be greater under the Governor's proposal. Appropriations Committee Vice Chairman Senator Robert Tomlinson, 6th District, asked how many students at state-related universities receive financial aid through the Pennsylvania Higher Education Assistance Agency, as well as how much debt the average student would face after graduation. Senator Stewart Greenleaf, 12th District, asked how much tuition has increased over the past 10 years and what costs are driving tuition increases. Senator Mary Jo White said that the Governor's proposed 1.5 percent increase for state-related universities was "embarrassing" and Senator Corman joined her in advocating increased funding for higher education. Senator Roger Madigan, 23rd District, and Senator Mary Jo White also questioned the proposed cuts to agriculture research while the state is trying to promote the production of bio-fuels. Senator Madigan asked university representatives to explain why the six-year graduation rate at state-related universities is less than 63 percent. Senator Browne asked how much funding was used for remedial education for students who do not meet proficiency standards. Senator Rafferty expressed concerns about the safety of state-related universities and questioned what security practices the university has in place to alert and protect students in case of an emergency. |
