2010 Senate Appropriations Committee Budget Hearings 

As a member of the Senate Appropriations Committee, Senator Greenleaf participates in annual budget hearings that determine how state money is being used by each department and agency. The following is a summary of Senator Greenleaf's questioning during this year's hearings.  

Department of Aging 
Senator Greenleaf wanted an update on the waiting lists for basic services. Secretary Hall responded that the department is addressing the issue in a couple of different ways. He explained the waiting list for options services has remained essentially the same. Secretary Hall said the department works hard to make sure nobody who receives services under the aging waiver has to wait and get them into the program immediately. He added with the options program, the department works with the area agencies on aging to assess and prioritize individuals so those with the highest need are served first. Secretary Hall pointed out the underlying problem is the funding formula and the department has been working with stakeholders in developing a new approach to distributing funds. Senator Greenleaf asked if there are any programs to help senior centers. Secretary Hall said the senior centers have been a major focus of the department. He said the centers have languished for a long time and have been challenged with level funding. Secretary Hall reported the department had a statewide summit on senior centers last year and the department is looking at several policy changes. He also said the department is using some federal stimulus money to develop a grant program for centers to improve their physical plant. Secretary Hall said they hope to make a final decision in the weeks ahead and he pointed out this is the first major infusion of money in a number of years.

Department of Community & Economic Development/PA Housing Finance 
Senator Stewart Greenleaf, 12th District, asked how cuts to the World Trade PA program would affect the level of exports from the state. Secretary Cornelius said they can continue to do a good job despite the cuts.

Department of Corrections/Probation & Parole
Senator Greenleaf opened the hearing by asking for cost effective ways to reduce overcrowding in PA prisons, and how much the state would save if for instance legislations such as SB 1161, SB 1145, SB 1169, and SB 1198 were adopted into law. Beard responded that it is hard to give an "exact figure" on total money saved, but adopting changes that do not cost money, such as SB 1161 which allows the State correctional facility to send "short minimum cases directly to community corrections," could save money. Secretary Beard explained that over 3,500 inmates have less than a year to serve when they enter the state corrections system and "they are not the kind of people our corrections system is designed to handle." According to Secretary Beard, inmates who serve less than a year are wasting resources and actually are spending more time, 143% more than their minimum sentence, in the state correctional institutions (SCIs). Secretary Beard explained those inmates should go to "county prisons, probation, or treatment." Secretary Beard recommended taking appropriate short term inmates and sending them to "community corrections centers" where programming is available," freeing up programming space in the SCIs. Secretary Beard also echoed a recommendation by the Sentencing Commission regarding state intermediate punishment (SIP). Secretary Beard suggested passing a bill allowing for greater use of SIP and taking SIP out of the hands of the District Attorneys and handing it over to the judges. Only about 21% of inmate eligible receives SIP, and according to Secretary Beard "we could probably double the number of people going into state intermediate punishment." Beard stated DOC is working with Probations and Parole to reduce technical parole violations (TPV), and according to Secretary Beard, if those three recommendations were adopted the Commonwealth could "save $60 million and free up one prison." He continued that 50% of the money could be reinvested in "front end diversion" and probation and parole, and the state "could be saving over $120 million and freeing up over 4,000 beds." According to Secretary Beard the changes could eliminate the need for prisoner transfers and would allow the state to "stop building prisons for the foreseeable future."

McVey explained the savings would be system-wide and that an investment in probation and parole "would ensure adequate staffing and reentry programs." Senator Greenleaf asked how well the tier sanctioning program is working in reducing TPV being sent back to prison. McVey responded that since 2005, TPVs have been reduced by 21% meaning there are 800 to 1,000 fewer inmates entering SCIs per year and successful outcomes have been raised from 48% to 54%. She continued that Probation and Parole has been working with national consultants and they found that shortening "recommitment" time for TPV has been shown to work more effectively rather than having violators serve remained of the sentence for minor offenses such as missing an appointment. Senator Greenleaf concurred and stated "the punishment has to meet the offense."

Senator Greenleaf asked what types of offenders have contributed to overcrowding. Secretary Beard reported that over the past 10 years, minor drug and nonviolent property offenders have inflated the prison population. He stated "our prisons are for housing violent offenders." Senator Greenleaf asked what the legislature can do to help the issue of TPV. McVey replied that the parolee re-entry system needs to be enhanced and "we need the resources to do so." She stated there also has to be continued use of community centers and the workload and agent to parolee ratio are important. McVey stressed the need of community support such as housing, treatment, and employment. Secretary Beard and McVey stated their support for Senator Greenleaf's legislation SB 1237. Senator Greenleaf asked if jobs are a major factor in inmate success. McVey stated they are important.

Department of Education
Senator Greenleaf said that there is a lack of state funding for suburban school districts and noted that many are only receiving a two percent increase. He questioned if the department is examining school districts that are receiving a higher increase even though they are making less of a local effort and have a reduced population. Secretary Zahorchak said the funding formula initially targeted "school districts with the largest adequacy gaps" and affirmed that this year the state share for all school districts will be 41 percent. He indicated that the formula "changes a little bit every year" but stressed that the "aid ratio changes based on wealth." Senator Greenleaf emphasized that some school districts in his legislative district "pay some of the highest property taxes in the state" and the lack of an adequate state subsidy "hurts people living on a fixed income."

Department of Environmental Protection
Senator Greenleaf asked about alternative fuel incentive grants. Secretary Hanger noted he has recused himself on that issue because his wife works for Penn State. Patrick McDonnell, Deputy Secretary for the Office of Administration, explained the grants are near the end of the scoring process and he expects an announcement will be made in the next few weeks. He explained the program has a number of components, such as biodiesel production credit, and competitive grants for municipalities and school districts for equipment and vehicle purchases.

Senator Greenleaf asked about coal. Secretary Hanger said there is no perfect energy source, but opined new technologies are making coal among the cleanest sources. He praised the development of carbon capture storage technology, noting pilot programs are underway on the technology in other parts of the country and around the world.

Lastly, Senator Greenleaf asked about a flood control project in his district. Secretary Hanger said he would be glad to look at it.

Department of General Services
Senator Greenleaf asked how many prisoners are now in state correctional institutions. Secretary Creedon said he does not know the exact number but he believes it is around 50,000. Senator Greenleaf asked how many have been transferred to institutions in other states. Secretary Creedon suggested that question should be directed to Secretary Beard at the Department of Corrections. Senator Greenleaf asked how much the transfers are costing the Commonwealth. Secretary Creedon again suggested asking Secretary Beard. Senator Greenleaf asked about the cost of the housing projects. Secretary Creedon said it is costing $16 million to $20 million depending on the site and the number of additions. Senator Greenleaf asked why the need for the construction. Secretary Creedon responded that it is because of the overcrowding at the prisons. Senator Greenleaf wanted to know if there will be a need for additional units after the projects are completed. Secretary Creedon said he would defer to Secretary Beard for a response. Senator Greenleaf asked if the department has taken steps to use energy efficient heating, Secretary Creedon responded that they do when it comes to new construction. He pointed out the department must consider the provisions of the Coal Act when it comes to heating facilities and noted the Capitol Complex uses steam heat.

Department of Health
Senator Greenleaf asked how the implementation of the Clean Indoor Air Act is going. Secretary James said it is "going well" but the Department is still processing exemption requests. He stated that 3,829 requests for exemption have been made and the Department has granted 3,600. He said the Department has received 11,799 consumer complaints and issued 1,420 warning letters to businesses that are not in compliance. He noted that the American Lung Association issued a study which found that the Act has contributed to an 87 percent reduction in indoor air pollution and saved the lives of 52 hospitality workers. Senator Greenleaf indicated that studies in other countries have found that indoor smoking bans have reduced the rate of stroke and heart attack. Secretary James said it too early to determine that impact in Pennsylvania but noted that treatment for smoking related diseases costs the Pennsylvania health care system $5.2 billion every year.

Senator Greenleaf inquired about Biotechnology Research funding. Secretary James said the funding was terminated in last year's budget and urged the Legislature to restore it.

Department of Labor and Industry
Senator Greenleaf asked what the current unemployment figure is. Secretary Vito said it is 8.9% and the number receiving benefits in the Commonwealth is 553,000. Senator Greenleaf asked where Secretary Vito sees the number going. Secretary Vito said it has gone up drastically since 2007. Senator Greenleaf then asked about any recent improvement. The Secretary said there has been a leveling off and a decrease in the job loss numbers. Senator Greenleaf asked for a profile of the typical person seeking unemployment compensation benefits. Secretary Vito said the numbers are remarkably higher for people without a college education, but the number with a bachelor's degree is 5.4% unemployment. She said there are lots of different people applying benefits than any time before.

Department of Military and Veterans Affairs
Senator Greenleaf inquired about the state's role at the Willow Grove Naval Base. Major General Sischo said the Navy is closing the runway but the Army National Guard is building there 56th Stryker Brigade headquarters at the base.

Senator Greenleaf asked what countries the Guard is deployed in. "Numerous," Major General Sischo responded, "We're in Iraq, Afghanistan, Qatar, and Kuwait; at times we are deployed in 50 countries."

Department of Public Welfare 
Senator Greenleaf explained he is concerned about senior parents of adult disabled children and he questioned if age of caregiver is considered in determining priority on the waiting list. Secretary Dichter indicated everyone on the waiting list is evaluated to determine where they should be placed on the list. Senator Greenleaf asked what is being done to ensure services continue for students transitioning from special education in school to post-graduate life. Secretary Dichter agreed it is very important to ensure services continue so skills are not lost. She said the department has developed initiatives to target these individuals and 500 were served in FY 2009-10, and 100 of the 150 being added to the MR services in FY 2010-11 are included in this group. Senator Greenleaf advocated for restoration of the cuts to hospitals.

Department of Revenue/Governor's Budget Office
Senator Greenleaf asked for an update on seniors and the potential for freezing their property taxes in anticipation of the pension spike. Secretary Hassell said he understands the concerns of seniors in this case, but could not expand on a solution.

Senator Greenleaf pointed out the Corrections budget has skyrocketed. He suggested some of the money should be diverted towards rehabilitation programs for nonviolent offenders. Secretary Soderberg said the administration is investing in Probations and Parole, and working hard to reduce recidivism. Senator Greenleaf remarked more needs to be done to fix the "failed system."

Department of State
First, Senator Greenleaf thanked Secretary Cortes for the Department's work on SB 187 in regards to Occupational Therapy Practice Act, and for working on another piece of legislation dealing with expungement of records for minor violations such as untimely filing. He asked if the Department of State has had access to federal funds and how they are being used. Secretary Cortes testified that the Department of State has been very active in making sure it capitalizes on all opportunities to obtain federal funds. Pennsylvania has received over $134 million to assist in the enactment of the Help America Vote Act (HAVA), he said. Funding from the Department of Health and Human Services has also been received to help voters with disabilities, he explained. The majority of funds received, he said, have been for election reform. He indicated Pennsylvania was one of five states to receive grant funding for data collection on election statistics. Not one single deadline for federal funding has been missed, Secretary Cortes announced. He said the Department will continue to pursue every avenue to obtain funding in the future.

Senator Greenleaf asked if funding for the switch to electronic ballots has been received. Secretary Cortes answered yes, adding most systems were transitioned to electronic ones by the 2006 election. Most of the funding received helped counties with the transition, he added. Senator Greenleaf wanted to know if every county is now using electronic ballots because not all of them were using them a few years ago when he last checked. Secretary Cortes said all Pennsylvania counties are in compliance with HAVA. In the last election, he said, 17 counties used the optical scan versus the touch-screen voting machines, but both are considered "electronic." No counties are using paper ballots or punch cards any more, he stressed. Major changes also include the creation of the Statewide Uniform Registry of Electors (SURE) where there is a centralized database for voter records instead of individual county records, Secretary Cortes said.

Senator Greenleaf wanted to discuss counties' abilities to transfer election results to the Department. He asked what has recently been done to improve the posting of election results online. He also wanted to know what the requirements are for accessing the election returns. Secretary Cortes said the counties have done a remarkable job keeping up, while the Associated Press and CNN compile their own election results. The Department of State is the official source of election returns, he noted, so this is improving. In the 2009 election, over fifty counties reported results electronically, and he stated that moving forward, the Department will work to help all of them do that. There may be challenges, he suggested, such as military ballots which arrive later in time.

Department of Transportation 
Senator Greenleaf wanted to know the cost of maintaining I-80. According to Secretary Biehler, the cost is $80 million per year for capital and operating costs. Senator Greenleaf asked if the Commonwealth receives any federal funding for that. Secretary Biehler responded, "Absolutely." He explained the department receives about $300 million in earmarks for the entire interstate system but he would provide the committee with the exact number. Secretary Biehler described I-95 as the "weakest link" in the system because of its need for repairs and capital improvements. He added that over 200,000 vehicles a day use that highway. Senator Greenleaf asked how much money for I-80 comes from tax dollars from the southeast part of the state. Secretary Biehler could not respond, but explained the Motor License Fund includes moneys from license fees, registration fees and the fuel tax. Secretary Biehler said the department does not track the fuel tax because it is collected at the wholesale level. Senator Greenleaf wanted to know if there has been an increase in truck traffic on I-80 since the Turnpike Commission increased its tolls. Secretary Biehler did not know but said the department is looking at growth on the entire interstate system.

Senator Greenleaf wanted an update on the Route 202 and Route 309 projects. Secretary Biehler described the Route 202 project as a "labor of love." He said a new redesign saved $200 million and a contract has been let for the project. He added he would provide Senator Greenleaf with a schedule of the project. Secretary Biehler said he would get information regarding Route 309.

Executive Offices and Office of the Governor 
Senator Greenleaf asked about the Executive Office line items pertaining to intermediate punishment, and asked if more can be done to divert nonviolent offenders towards such programs. Secretary Soderberg said she agrees they are very important, which is why the administration has proposed level funding for them.

Senator Greenleaf said 36 states, as well as the federal government, have a government liaison who works with charity groups, faith-based organizations and other entities committed to providing re-entry and recidivism reduction services. He asked if the administration supports his bill, SB 1118, which would establish such an office in Pennsylvania. Secretary Soderberg said she is not familiar with the details of the legislation but said she would look at it. She added that with the dire revenue situation, it is not a great time to be adding new programs. Senator Greenleaf said it would be a very small agency, possibly consisting only of one person with support staff. He said it is an idea worthy of exploration.

Gaming Control Board 
With respect to smoking, Senator Greenleaf noted the gaming law allows that if a gaming facility can show its machines in smoking areas are generating systematically more revenue than machines in non-smoking areas, it can increase its smoking sections from 25% to 50% of the overall space. He pointed out he does not think people should have to walk through smoking areas to get to non-smoking areas. Fajt noted virtually all the casinos have done this and pointed out there have not been many smoking complaints. "We haven't seen it as a big problem," he said. Fajt noted that with the expansion to table games, there has been discussion about designating smoking and non-smoking gaming areas. Senator Greenleaf asked if the board has scrutinized the layout of the casinos with 50% smoking. Fajt said the board will pay attention to that but said it cannot dictate the placement of certain machines. Senator Greenleaf emphasized he is concerned about employees who may be exposed to smoke. He asked if there has been any evidence of organized crime in the casinos. Fajt said the board has seen none, and added the District Attorney's Association has testified there has been no increase in general crime in areas around the casinos due to the slots. McCabe agreed they have not seen an increase in crime and added that while organized crime has not disappeared from the gaming industry, is it being successfully kept out by law enforcement, both at the management level and among support services.

Insurance Department
Senator Greenleaf, citing the 2002 medical malpractice insurance reform, asked if the climate has changed since that time, and if there has been a stabilization of rates. Ario said there has been stabilization and leveling off of rates and added the malpractice climate has improved "markedly." Speaking to the prospect of returning to the private market, he said one "cloud on the horizon" is that most of the growth in the insurance marketplace has come in the form of capped Risk Retention Groups (RRGs), whose ability to perform in a crisis is unknown. Senator Greenleaf asked about premiums. Ario said they increased for several years following 2002, but then declined and are now stable. He said Pennsylvania is "holding its own" as compared to rates in other states. He added the number of insurers has also increased, but could not offer specific numbers. Senator Greenleaf also said he has been receiving complaints regarding incomplete reimbursements to the medical community. Ario pointed out that is not within the purview of the Insurance Department, and is more a national issue.

Judicial Department
Senator Greenleaf said the Governor's proposal is 23% less than the budget submitted by the judicial department. He asked the panelists to discuss the history of the fees they were supposed to be getting to bridge the gap and how they will impact the budget in the coming years. Justice Baer explained that when all is said and done, the actual disparity between the budgets is "only" $13-14 million. He said the fee, if raised, could help bridge the budget disparities. Senator Greenleaf said this might be the solution. Justice Baer said fees are not the ideal way to fund the judiciary, but it is better than no funding at all. Senator Greenleaf asked if the panel had any recommendations as to how the prison overcrowding situation can be dealt with. Justice Saylor explained some changes require legislative action, especially in the area of mandatory minimums. He said other states have revisited their criminal laws due to fiscal problems and he explained he understands this might be difficult for the General Assembly. He also added judges at the county level want more discretion. Justice Baer said all criminality is handled by the Superior Court, which is the busiest court in the nation. He explained the Superior Court needs to be funded for 21 judges, but is currently only being funded for 15, with the gap being filled by the court funds. He also said the job of mandatory minimums is to keep criminals off the street, but the job is not getting done and also the prisons are crowded due to the death penalty backlog. He said Pennsylvania has the largest death row in the country following Furman v. Georgia. He noted life imprisonment without the possibility of parole would be cheaper.

Senator Greenleaf said he welcomes the evaluation of the Senior Judges and noted the Senior Judges cannot make more in a year than a regular judge so their services come at a bargain and they help reduce the caseload. He also noted that they always ask the county commissioners about funding new judges and that specialty courts are in fact more expensive in the short-term but cheaper in the long-run. He said the main focus should be on reducing the corrections crisis and said the court has the discretion to deal with technical probation violations and such changes can help reduce the number of people in prisons. Justice Baer said they will do what they can do with rule changes.

Office of Attorney General
During a hearing on the proposed budget for the Attorney General's Office several Senate Republicans stressed to Attorney General Tom Corbett the need for stronger drug prevention efforts at all levels and the connection between drugs and growing prison populations. Senate Judiciary Committee Chairman Senator Greenleaf said he has sponsored legislation to establish a task force on drug enforcement to try to prevent large dealers from bringing drugs into the state. Senator Greenleaf also suggested that the Attorney General's Office collect data on whether crime rates are increasing as a result of expanded gaming. 

Office of Auditor General
Senator Greenleaf wanted to know about the performance audit of the Board of Probation & Parole. Marks said the problem was the number of parolees assigned to case workers. He added the board had some trouble providing the caseload numbers. Marks told the committee one of the recommendations was lowering caseloads. Wagner added they also suggested the use of GPS technology as more efficient. He noted more counties are using the technology to track sexually violent predators. Wagner said they looked at Lycoming County in particular and their use of GPS. He suggested the board could learn a lot from certain counties.

PA State System of Higher Education 
Speaking to the rising cost of higher education, Senator Greenleaf asked what PASSHE's tuition increases have been. Cavanaugh said the state system's average tuition is $500 below the national average, and $2,500 below the average among mid-Atlantic states. He said PASSHE has eliminated $200 million in costs over the last decade and continues to streamline. Cavanaugh noted however, that labor costs make up more than 70% of the budget and continue to increase.

Senator Greenleaf pointed out education is becoming more and more internet-based. He asked how PASSHE is reacting to the online trend. Cavanaugh offered one example of how PASSHE is embracing online learning, noting that California University was recently named an award winning institution nationally for being "wired." He noted the system does offer degrees for online coursework.

Pennsylvania Emergency Management Agency / Homeland Security
Senator Greenleaf asked how effective the sprinkler systems are and how much they cost. Mann answered it cost $4,500 to install a sprinkler system in a new $455,000 house. Mann stated his support for sprinkler systems because "smoke detectors alert you about a fire, sprinklers systems put the fire out." He also pointed out that "lightweight construction" timber collapses in 6 to 8 minutes and this could endanger firefighters if the building does not have sprinklers. Mann further suggested the sprinkler will in most cases "completely put the fire out." Senator Greenleaf asked Mann to explain the grant program. Mann explained $25 million was allotted; $22 million was directed to volunteer fire companies and $3 million was directed to volunteer ambulance centers. The money is funded directly from slots revenue, he noted. Mann revealed 2,638 organizations received grants in 2009-10. Senator Greenleaf asked about the flood warning system and how the state can deal with homeowners in the floodplains. French explained sensors that provide an early warning system are put along stream and creek banks to notify residents of oncoming floods. According to French there are federal funds available for homeowners willing to move but "about 25% of the costs are locally borne." French also acknowledged that "some folks don't want to move."

SERS/PSERS
Senator Greenleaf discussed an AP article on a report that ranked PA's systems as "needs improvement" and indicated this improvement can be solved via "relatively modest steps." The senator asked what those steps are. Clay said there are only three options: increase funding, increase liabilities, or defer. He said a combination of these three is probably the best solution. He said the systems need to know from the legislature what is fiscally affordable, noting there are many options that can be pursued. Senator Greenleaf asked if the state should address the present obligations, not additional future obligations. He noted some have claimed the state can afford a COLA. Clay reiterated that the COLA should be secondary to solving the rate spike, noting the current unfunded liability of $15 billion. He said waiting will make this worse.

Senator Greenleaf then pointed to a statutory change several years ago that enabled the plans to invest more liberally and asked how that has played into the situation. Clay explained that until the early 1990s the plans had a legal list of investments, which, for example, excluded the NASDAQ. He said the lifting of that list allowed the systems to diversify, but he opined the issue now is a very unique downturn of the market.

Department of Agriculture
Senator Greenleaf asked if the department has a position on his bill, SB 138, that would require octane testing. Secretary Redding indicated he agrees with the premise, suggesting it could be incorporated with the additional biofuel testing.

Senator Greenleaf next asked if enough funding will be available for farmland preservation. Secretary Redding applauded the program and its creators' foresight. He said the state has proposed $28 million which will be supplemented by $17 million from counties. He noted there is a backlog of 2,000 farms and stated that probably equals about 400,000 acres, an amount equal to the number of acres already preserved.

Senator Greenleaf asked if progress is being made to remove PA's title as a puppy mill capital. Secretary Redding reported PA is doing well, but explained it is challenging to work with commercial breeders to change their business and meet new protocols.

Public Utilities Commission
Senator Greenleaf asked about the relationship between regulated and nonregulated companies (such as solar providers) and the impact of rates. Powelson said the $650 million energy fund helped establish the PA Sunshine Fund for residential solar. He discussed the importance of customer awareness. Christy further commented that while the majority of electricity in PA is generated from coal and nuclear, prices are driven by natural gas. He opined Marcellus Shale will be a "game changer."