Pa. officials grilled as budget hearings begin

Posted: February 20, 2013

HARRISBURG - The annual budget hearings in the Capitol are typically an opportunity for agency chiefs to tout their accomplishments and make their cases for more money in the new fiscal year beginning July 1.

In this particularly contentious budget season, Tuesday's first-round hearings turned into an interrogation of several of Gov. Corbett's top officials.

Lawmakers, mostly Democrats, who are in the minority, grilled the budget and revenue secretaries about Corbett's most controversial proposals not directly related to the budget but linked to it: privatization of the lottery and liquor stores, pension-plan changes, and the decision to forgo Medicaid expansion.

Rep. Bill Adolph (R., Delaware), chairman of the Appropriations Committee, said he thought the tone was not that different from years past.

Adolph said he was confident that there would be an agreement on a budget before the deadline and that enough revenue was flowing into state coffers to strike a deal on a balanced budget.

Budget hearings, which last three weeks, follow the governor's annual budget address in early February. Corbett's proposed $28.4 billion spending plan includes $90 million in additional education funding and the reduction or elimination of a number of business taxes.

Budget Secretary Charles Zogby, appearing before the Senate Appropriations Committee, took more than 21/2 hours of questions, during which he conceded there were few places left to cut to make up for growing pension costs, and stood by the administration's contention that adding hundreds of thousands of people to the Medicaid rolls under the Affordable Care Act would cost billions.

"You'd need a 24 percent increase in the [personal income tax] just to accommodate the $2.8 billion in increased pension costs that are coming over the next four years," he said. "I don't know where else you go in the budget to find the revenue to pay for those increases."

Senate Democrats took Zogby to task over Corbett's assertion that expanding Medicaid coverage to an additional half-million people would be prohibitively costly.

Democrats say the state will sacrifice billions in federal funds by not signing on to Medicaid expansion, and pressed the Department of Public Welfare to explain the costs.

"I was very disappointed with his answers," said Sen. Vincent Hughes (D., Phila.). "We asked for the public release of information, and they haven't provided it."

Zogby told the panel he would work on getting details but supported the administration's calculations on costs.

Also, Matthew Knittel, director of the Independent Fiscal Office, testified that he would release a review of Medicaid expansion costs and benefits, as requested by Democrats, by the end of March.

In the House, Revenue Secretary Dan Meuser promoted Corbett's strategy to boost the economy by reducing business taxes, which he said had hampered job growth.

House Democrats questioned Meuser on the fate of 170 union jobs under a lottery privatization deal that appears on the rocks, even as Corbett won a weeklong extension of the contract deadline.

Just days after Attorney General Kathleen Kane announced she would not sign off on what she called an illegal contract with the British firm Camelot Global Services to operate the lottery, it was revealed Tuesday that the state had returned the $50 million Camelot put up as collateral against losses.

Meuser said he was confident that lottery workers who wanted jobs would be offered jobs.

Adolph said some members expressed concerns about Corbett's lottery-privatization plan, but he added that he thought it was a good deal for the state.

"What the governor is trying to do makes sense: ensure that there are enough benefits for seniors," he said.

Meanwhile, House Republicans appeared to be trying to move along the plan to privatize the sale of wine and hard liquor in Pennsylvania.

House Majority Leader Mike Turzai (R., Allegheny) circulated a memo to colleagues seeking cosponsors for a bill he plans to introduce in the next few weeks that would sell off the state-owned stores and allow everything from a small convenience store to a sprawling big-box retailer to sell beer, wine, or both.

Despite that movement, however, liquor privatization remains an uphill climb in the legislature, which for decades now has refused to make even minor changes to a system that has been in place since the end of Prohibition.

The hearings are to continue Wednesday with Kane, Auditor General Eugene DePasquale, and Treasurer Rob McCord appearing before the Senate, and the heads of the Department of Environmental Protection, the State Police/Office of Homeland Security, and the Higher Education Assistance Agency testifying in the House.


Contact Amy Worden at 717-783-2584 or aworden@phillynews.com, or follow @inkyamy on Twitter.

Inquirer staff writer Angela Couloumbis contributed to this article, which also contains information from the Associated Press.

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