COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES COMMITTEE ON APPROPRIATIONS t: 1999-2000 Appropriations Hearings Presentation By Members

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Stenographic report of hearing held in Majority Caucus Room, Main Capitol Harrisburg, Pennsylvania Thursday February 11, 1999 10:00 a.m.

JOHN E. BARLEY, CHAIRMAN Gene DiGirolamo, Secretary Patrick E. Fleagle, Subcommittee on Education Ron Raymond, Subcommittee on Capitol Budget Dwight Evans, Minority Chairman

MEMBERS OF APPROPRIATIONS COMMITTEE on. William F. Adolph Hon. Steven R. Nickol on. Matthew E. Baker Hon. Jane C. Orie on. Lita I. Cohen Hon. Joseph Preston, Jr. on. Craig Dally Hon. William Russell Robinson on. Teresa E. Forcier Hon. Samuel E. Rohrer [on. Don Frankel Hon. Stanley E. Saylor [on. Babette Josephs Hon. Curt Schroder [on. George Kenney Hon. Edward Staback [on. Frank LaGrotta Hon. Jerry A. Stern Ion. John A. Lawless Hon. Stephen H. Stetler Ion. Kathy Manderino Hon. Jere L. Strittmatter Ion. Phyllis Mundy Hon. Leo J. Trich, Jr. Ion. John Myers Hon. Peter J. Zug

) Present; lael B. Rosenstein, Executive Director Reported by: iryn R. Vranicar, Revenue Analyst Dorothy M. Malone, RPR

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NAME PAGE

Representative Chris Ross 4

Representative Paul Costa 12

Representative Ellen M. Bard 15

Representative Thomas M. Tigue 19 Representative Thomas A. Michlovic 25

Representative John A. Maher 31

Representative P. Michael Sturla 35

Representative David G. Argall 43

Representative John Yudichak 48

Representative Frank Tulli, Jr. 54

Representative Jennifer L. Mann 58

Representative Nicholas A. Colafella 61

Representative W. Curtis Thomas 67

Carole Smith 68

Representative David Levdansky 77

Representative Richard Grucela 82

Representative Dan Frankel 85

Representative Timothy Solobay 89

Representative Keith McCall 94

Representative Steve Samuelson 98

Representative Pat Browne 102

Representative Harold James 109

Representative Sara Steelman 116

Representative Scott Hutchinson 119 Name Page

Representative Louise Williams Bishop 124

Representative Jess Stairs 127

Representative Bob Bastian 132

Representative Jane Clare Orie 134

Representative David L. Levdansky 138

Representative Ronald E. Miller 142 CHAIRMAN BARLEY: Good morning everyone.

I would like to call the hearing to order. This is

our second day and the day we will be hearing from our members that are giving testimony before the Committee

on what they believe to be the priotories in their area

and the priorities that they feel they have for the

upcoming budget.

Before we begin, for the purpose of having

it read into the record, and I believe the court reporter was already supplied with the actual documents, but

there are a number of members that have submitted testimony

that they would like to have that made part of the record;

Represenative Harold James, Representative Sara Steelman,

Representative Scott Hutchinson, Representative Louise

Bishop, Representative Jess Stairs, Representative Bob

Bastian and Representative Jane One. They have all

submitted information to be part of our record. And

copies of that testimony will be available to all members,

any member, who would like to have a copy.

I would like to remind the members that

are here making presentations today, we have a five minute rule and I intend to adhere to the five minute

rule for your presentation, because we have a large number of members that are scheduled to appear before

the Committee and I would like to keep us on schedule. Representative Mundy is here again, I would refer to her as the ranking democrat on the Committee.

She is here in the absence of Representative Evans.

Before we begin do you have any comments or anything

you would like to say?

REPRESENTATIVE MUNDY: Just very much

looking forward to hearing what members' priorities are

for this budget are. It will be a good day.

CHAIRMAN BARLEY: Thank you. With that

I am ready to call the first testifier, Representative

Maher,whomI don't see. I see the presence and acknowledge

the presence of Representative Ross. Would he be kind

enough, have the honor of being the first presenter?

I recognize Representative Chris Ross for purposes of his presentation.

REPRESENTATIVE ROSS: Thank you, Chairman

Barley. I also want to thank the members of the Committee

for giving us this opportunity to comment on the budget.

It is something that I really appreciate having this

chance to talk a little bit in detail about some of

the issues that are of concern in my district down in

southern Chester County.

I have shared with you text of comments

that I have prepared, but in the interest of keeping

things moving along and sparing some of the details here, I am just going to summarize briefly what I wanted to say today.

First of all, I think that the budget as a whole is one that I have a lot of admiration for.

There are a great many things appraised in this budget and generally I am quite satisfied and really positive about what the governor has proposed for us.

In particular, having run a small business, a small manufacturing company in the past, I really appreciate some of the changes in the business tax structure that are proposed. The changes to the capital stock and franchise tax are extremely helpful for small businesses, and I think are going to do a lot to help continue job creation.

Another area that I thought was particularly strong in this proposal was the change to the limits of net operating loss carry forward. For high tech businesses in particular that is terribly important and those are companies that have great swings, some good years and then a number of years where they have to really struggle. Those are the kinds of high paying jobs that are really attractive for us to be able to continue to foster. We have had some success in that area and I hope we are going to be able to continue to attract those businesses and this is a great step in the right direction.

There are a couple of things that I would like to comment on. One in particular, a change that

I've heard you will make as we did in past years, and that is to not take up the suggestion of the budget to charge municipalities that do not have local police for their state police coverage. Just briefly I wanted to remind the members that we all had agreed to create a special task force, which I am serving on currently, to examine the subject of the provision of police in the localties. That task force, which I am serving on, has been operating for over a year right now and we have solicited opinions from all different potential people that are involved in policing, state, local police and then many other organizations that are interested

in policing. We have over 20 members in addition to the legislative members on that committee.

And we are probably right now, Senator

Robinson, who is chairing the committee has indicated that he is going to try very hard to have a final report coming out in June this year. And at that time I think

t we are going to be able to really look reasonably at i this whole problem and this issue which is very important

to the citizens of the commonwealth, and I hope we are

i going to have some good proposals at that time. , I think it is premature to arbitrarily tax some municipalities at this point and hit them with fees. It also really has a lot of policy implications that I think we need to look at more carefully. I know that the decision of this body and of the House and Senate as whole last year was to not take up this proposal and I encourage you to follow that great wisdom again this year if you would.

And then one other thing that I wanted to add or suggest we might add to the budget this year has to do with the subject of dealing with compost, and spent compost in particular: This is a very challenging issue in my district in particular, but it has implications across the state. Agricultural byproducts and waste of one sort or another do need to be dealt with. Ideally, we want to find ways to recycle them. There was an effort in my district in particular to deal with spent mushroom compost and to find a way to practically recycle that into a usable product which is very important for the mushroom industry. Unfortunately, the process that is currently being used is creating a lot of negative comments from some of the neighbors. In particular, there is offensive odors. And in order to deal with this more rationally and try and find ways to recycle this material in a way that it is going to have a little better public approval, the Department of Agriculture or the College of Agriculture at Penn State University has shown me a proposal that would cost approximately

$105,000 over two years to try and find ways to better improve the way we are., dealing with this And I think this has broad applications to other areas, other kinds of agricultural products as well. So, with that in mind,

I hope you give that a favorable look. And Again, I thank you very much for your time today.

CHAIRMAN BARLEY: Thank you very much,

Representative Ross. I think that you have mentioned some issues that are certainly pertinent to remain on the minds of many Pennsylvanians. I know the issue of the State Police is one that many of us are struggling within> our districts. It is important to have good police protection. Probably public safety is one of the highest responsibilities we have.

Of course, in my own personal situation, representing a legislative district near you, mine is southern Lancaster County, but some mushroom growers there. Not nearly the number that you have, but certainly an intense agriculture area, I appreciated your reference to the challenge of dealing with the byproducts, and

I think we should look at them that way. Many times there are co-products, they have a lot of value. But it is important that we provide adequate research so that we can deal with them appropriately. So I, personally, support you and am pleased that you saw fit to highlight that in your testimony. So, thank you very much and

I appreciate the fine testimony you presented here today.

Thank you.

REPRESENTATIVE ROSS: Thank you.

(Complete prepared testimony of Representative

Chris Ross was as follows:)

"Thank you Chairman Barley and members of the Committee for giving me the opportunity to address you today regarding the governor's proposed budget for fiscal year beginning July 1, 1999.

"Overall, I feel that once again the governor and his staff should be complimented on proposing a fiscally sound budget. The proposed cuts reducing the capital stock and franchise taxes coupled with the increased limit on the net operating loss carried forward will go far to continue the improvement in the business climate in Pennsylvania. These targeted changes in the business tax climate particularly help small business­ es and high technology research and development companies--just the kind of rapidly growing companies that produce high paying jobs for our citizens.

"The people in southern Chester County and farmers throughout the commonwealth are particularly pleased to see the governor's continued support for the University of Pennsylvania's Veterinary School's

New Bolton Center. Their research continues to provide valuable help to Pennsylvania's number one industry at a time when farmers are under ever increasing pressure from foreign competition. Not only do the researchers at New Bolton help to prevent and control diseases in farm animals, they are also engaged in nutritional research to help farmers improve their efficiency.

"Despite my general agreement with the budget, there is one initiative which I would like to encourage this Committee to delete. The proposal to

levy a per capita charge against those municipalities which do not have local police. When this proposal came up last year, it was pointed out that there was no particular rationale for levying a per capita charge against municipalities with populations over 9,000 and who didn't have local police. In an effort to understand

this problem better and come up with a fair and cost effective way to provide police for the people on the commonwealth, I introduced a resolution in the House to create the local police task force. This task force

is composed not only of fellow legislators from the

House and Senate but also over 20 representatives from other law enforcement and governmental agencies. The task force has been meeting and collecting information for over a year and we currently intend to issue a report by the end of June. I believe, therefore, that it is premature to initiate a system of fees on select municipalities.

"Finally, I encourage the Committee's consideration of another appropriation which recently came to my attention and would fund a research project at Penn State Univeristy's College of Agricultural Sciences to help reduce odors associated with the recycling of spent mushroom substrate into usable topsoil. Currently, the mushroom industry's efforts to dispose of their spent substrate or soil are causing an extremely strong reaction from some of their neighbors in southern Chester

County. Without a reliable way to dispose of their spent substrate, the mushroom industry could be literally forced out of business. Researchers at Penn State believe that they might be able to help develop technology to resolve this problem and if they can, I believe that this process might be adapted to deal with odor problems in other agricultural and composting operations. The project is targeted to cost approximately $105,000 over the next two years.

"Thank you very much for your attention.

I would be happy to answer any questions that you have." CHAIRMAN BARLEY: We will now call Represent­ ative Costa for purposes of presenting his testimony.

Representative Costa, you can be seated there and when you are ready, you can begin.

REPRESENTATIVE COSTA: Thank you, Mr.

Chairman. I appreciate this. Thank you for the opportun­ ity to speak before you today. You have to bear with me. I am a little bit nervous. I wasn't prepared at this exact time. I thought I would be able to watch a couple of people and understand what the procedure was. So please bear with me with my nervousness.

I am here today to ask for your assistance in two main areas. The first has to do with two watersheds in my district, Thompson Run and Nine Mile Run. The local municipalities and Alcosan are under orders from the U.S. EPA to fix recurring stormwater overflows into the sewer system. Plans are under way now to begin monitoring in the Nine Mile Run area. Monitoring in the Thompson Run area has already shown that whenever it rains, the stormwater overload causes a discharging of raw sewage into the streams and this situation has to be corrected immediately.

Now that the EPA has ordered the local communities to correct this problem, they will need help from the states, so that the local sewer bills do not go through the roof. This would be too much of a burden for local customers to pay, so some combination of grants and low-interest loans is vital.

This is doubly important because these storm overflow problems have the potential to dealy and even kill residential development and the accompanying economic development. Jobs are on the line here.

In addition to asking for specific help for these communities, I am asking you to restore the

45 million dollars in sewage operation grants that the governor wants to eliminate. This would cause huge increases in the sewer bills not only in my district but across the state.

I certainly agree with the governor's goal of controlling suburban sprawl. I represent part of the city of Pittsburgh and several of its inner-ring suburbs, so I definitely support "smart growth111 ideas like directing development to places like my district instead of paving over Pennsylvania's irreplaceable open spaces.

But with a budget surplus racing toward

500 million dollars or more by June 30, the General

Assembly should not cut out the sewage grants.

My constituents cannot afford a major hit to their wallets when the EPA orders corrective action on the stormwater problems, and they definitely cannot afford a double hit from the sewage grants being cut. So I ask you to restore those grants, just as you have done in the past years when the governor has tried to cut other programs.

The second area of the budget I would like to address has to do with shared municipal services.

I would like to see the state help with the councils of Government, or COGs, with additional funding and incentives for sharing services.

As a former Wilkins Township commissioner who served on the Turtle Creek Valley Council of Govern­ ment, I can tell you their is a definite need for more funding. Some communities need money for feasibility studies and some need help with the initial costs that sometimes come with sharing services. In the long run, this is one of the best things we can do to save taxpayers money, and help smaller communities survive.

I thank you for your consideration.

CHAIRMAN BARLEY: Thank you very much.

I appreciate your comments and I share your concerns as well for the inter-municipal government cooperation.

Anything we can do, quite frankly, I am willing to be bold enough to say that we should encourage consolida­ tion of some of our municipalities. The efficiencies are really not very good when we see some of the very small municipalties. I think we all need to work on it better.

REPRESENTATIVE COSTA: I thank you.

I appreciate that, Mr. Chairman.

CHAIRMAN BARLEY: Thank you very much for your testimony and at this time we call the next presenter, Representative Bard. Welcome and you may begin.

REPRESENTATIVE BARD: Thank you, Mr.

Chairman and Members of the Appropriations Committee.

I appreciate the opportunity to testify before you today.

Your attention to the priority needs identified by the House members is gratifying for as is often stated, we are the state elected officials closest to the people.

For a number of years now, I have appeared before this committee to stress the plight of some of the older Pennsylvanians in my southeastern Montgomery

County District. Low and fixed income senior citizens are suffering under the school tax burden.

Although the Abington School District which I represent is considered under the ESBE formula to be a wealthy district, it is adding two to three temporary classrooms each year and considered that some of the elementary school students are studying in temporary classrooms that were added 20 years ago. Consider also

that the single junior high school has a student body

of that is approximately 1700 students and that that

junior high school contains science classrooms filled with 33 students who share lab desks for 30 students.

Consider that the state per pupil subsidy to the Abington

School District was $588 in 1995 and is proposed to

decrease on a nominal basis to $579.65 per pupil in

the Governor's 1999-2000 budget.

Is it any wonder that local school property

taxes are exorbitant when state aid to my school district

is paltry and the education cost burden is carried primarily

by property taxpayers? (Suburban communities such as

Abington rely on the property tax due to the fact that

an estimated 1/4 to 1/3 of the district's wage earners

pay wage taxes to Philadelphia and under the Sterling

Act are therefore exempt from local earned income taxes.)

To illustrate the extent of the school

property tax burden on older Pennsylvanians, I'd like

you to meet Mrs. G, a 79 year old widow in my district.

She called my office one day several months ago in

in tears because her school property taxes were increasing.

To give you a better view of the situation,

let me tell you that Mrs. G does not have enough money

to afford a security call-in device to wear around her neck and therefore she recently spent a very long and

frightening night on the kitchen floor. Mrs. G suffers

from diabetes. She walks with a walker.

Mrs. G's school property taxes are $1930 per year consuming approximately 12 percent of her income.

Her total property tax for her very modest home is $2,931.

That is 18 percent of her income.

To amplify further, 1 would also like you to meet Mr. and Mrs. V who are retired in their mid-70*s. Mr. and Mrs. V built their home themselves

in the 1940's. Mr. V is a decorated veteran. Their

1998 school property tax bill was $2,352. This is an

increase of $702 or 43 percent above their 1997 school bill. The exorbitant increase is due to a double whammy combination of a tax increase and a county-wide reassessment.

The total property tax bill on Mr. and Mrs. V's modest home in 1998 was $3,457.

One of the Township Commissioners in my district wrote to me: "My older constituents are presently considering moving out of Abington because

they can no longer afford the taxes and they are asking me how this can be permitted to happen to them. Ellen,

I do not have an answer for them: I need your assistance.

Our seniors cannot afford these property taxes that are being imposed on them." This Committee and the House of Representa­ tives has been responsive to this problem. I greatly appreciate your past support and help on this matter.

Last year, for example, we, in the House of Representa­ tives, emphasized the importance of per capita school budgeting. We passed Budget Amendment #964 debiting the surplus by $6.4 million and guaranteeing a minimum

1 percent per capita school subsidy increase. The amend­ ment passed 200 - 0. In Conference Committee, the House fought hard for this provision which would have aided our tax burdened older residents. However, the final budget did not include the provision.

Now the Governor's 1999-2000 budget is before us. This budget for my school district again proposes a decrease in the per pupil subsidy. Again, it is time for the House of Representatives to take action. Hopefully, this year the Senate and the Governor will join in our effort to relieve the school property tax burden.

Per capita subsidy guarantees, as offered by the House last session, which approach the inflation rate would be most helpful. HB16, prime sponsored by

Representative Stairs, offers equity funding for special education, and that would also be of assistance. Other bills, such as my House Bill 7 proposing to increase income limits and rebate amounts under the Rent and

Property Tax Rebate Program provide another alternative.

Many legislators have focused on this critical issue and have proposed viable alternatives.

I respectfully and urgently ask the committee

to again give top priority to addressing the problem

posed in this budget by the lack of state support for

our public schools and our older citizens desperately

in need of school property tax relief.

Thank you very much for your attention

and your past efforts on behalf of this issue.

CHAIRMAN BARLEY: Thank you very much,

Representative Bard. We appreciate your thoughts and

your comments and we look forward to working with you

on your efforts.

REPRESENTATIVE BARD: Thank you.

CHAIRMAN BARLEY: At this time I would

like to recognize Representative Tigue for purposes

of making a presentation before the Committee. Welcome

and you may begin.

REPRESENTATIVE TIGUE: Good morning, Mr. Chairman and members of the Appropriations Committee.

I appreciate this opportunity to present some of my

concerns regarding the Budget. Basically, I am not

going to read my testimony, but basically I am going to talk about four things to deal with tax reductions and to deal with education.

First, the tax reductions that have been proposed. There has been a myriad of tax reduction proposals. The governor, of course, has a number of items he talked about and there has been talk in the

House and there has been a bill passed out of the Finance

Committee reducing the Personal Income Tax. I strongly oppose reduction of the Personal Income Tax. Let me tell you why. Because the Personal Income Tax is based on one's ability to pay unlike our onerous property tax. In 1991, the Personal Income Tax was raised to

3.5 percent. In over a two-year period, it was lowered back to 2.8 percent which is a 20 percent reduction which is amazing that no businesses seem to know about that nor individuals. That in essence means about one and a half billion dollars a year from the state.

We can do two things by taking the money from a one-tenth reduction in the income tax and put

it into a restricted account. We can use that money, approximately $220 million or more to reduce property taxes. To mandate a reduction in property tax.

The problem with the income tax is senior citizens really don't receive any benefit from a tenth of a percent reduction on income tax because they in fact by and large do not pay a state income tax. Senior citizens do not pay any taxes on their income unless they have investment income, husband and wife, of over

$13,000, which means they have some money in the bank and probably should pay some money.

Secondly, according to the special tax forgiveness provision in our tax code, low income, what we consider low income individuals do not pay the personal

income tax because a family of four who makes $25,000 or less does not pay one cent in Personal Income Tax.

So therefore, we are not helping those folks. But by mandating a reduction in the property tax we are helping everyone. People who lose their jobs because of economic problems or become disabled or retired, their income

is reduced, they cannot continue paying an increased property tax. As their income goes down, their property bills go. That is a problem. So I would suggest

that we look at that.

The second part of it is a tax that I haven't heard any discussion on for a few years which

is an unfair tax. As more and more people lease vehicles

rather than purchase them based on a monthly payment plan, and it sounds good. Younger people are doing

it more, and if you look at the number, significantly more and more people are leasing vehicles. But if you lease a vehicle in Pennsylvania, in fact, you pay nine percent sales tax. We put a surcharge on leased vehicles, which really I think was intended for rental vehicles.

Ironically, if you live in Allegheny or Philadelphia counties, you pay in fact 10 percent on leased vehicles.

So I think it is time we eliminate -- we have the funds to do it so we should eliminate that three percent sur­ charge on leased vehicles so that individuals who lease vehicles pay the same sales tax as people who buy ve­ hicles. This is not rental cars. This is a leased vehicle. So I would ask you, the Committee and the

House as a whole to look at that.

The two things I would like to mention in education are, first of all, special education funding and the prior speaker mentioned that. And as we all know, special education funds are distributed on not based where the need is but on a statewide average.

And we know how averages work. If you stick your head in the oven and your feet in ice water, by average you should feel comfortable. So averages don't work. Let's take the money, at least the additional money that is going into special education and distribute it based on where the students are. Probably we should include the Aid Ratio as part of the distribution formula so that those school districts who have the least resources available locally will receive more state aid.

Secondly, something that has not been changed in over a decade is the state reimbursement for construction of schools. It has been, I think, since 1987 since we increased that and I think we should take a look at that reimbursement and we should do two things. One is we should increase the amount of per pupil in the formula we have set. I think it is $3900 for elementary and 5100 for 7 through 12. So they should be increased because those numbers are so low based on 1987, we should increase that. And I believe there has been legislation introduced to do that. But in addition to that, we should look at the formula. In fact, there is no formula in law which rises. The Depart­ ment has determined what aid ratio will be used and they don't use the full aid ratio. They use the market value. They do not include the income in the aid ratio.

So I think it is time to take a look at that and reimburse

school districts who need major innovations for new construction so that we reimburse them and help them.

Just one last thing as I am thinking about it. We could do two things by not reducing the

income tax and mandate a reduction in property tax.

Not only will it be a fairer tax, it will also eliminate or at least somewhat reduce the argument that the state is not paying their full share. That will significantly increase the state's share and reduce the local share.

So something should be done.

I am happy to answer any questions if there are any and thank you for allowing me this opportunity.

CHAIRMAN BARLEY: Thank you very much.

I appreciate your testimony, Representative Tigue.

You make some very good points.

I would like to now recognize Representative

Michlovic for purposes of making a presentation. Before he begins and as he is finding his way to the desk,

I wanted to do this yesterday and I simply forgot it as we were wrapping up the day that tended to be somewhat lengthy. But for benefit of the Members of the Committee and those interested, it is a bit of a congratulatory opportunity. We did this I believe two years ago for

Representative Josephs and we can do it today for Representative

Mundy. Representative Mundy became a grandmother yesterday for the first time.

(Applause.)

They are really scoring for those that didn't hear that. Someone said she doesn't look old enough. So, I understand her daughter-in-law had a boy. Congratulations.

Representative Michlovic, you can begin. REPRESENTATIVE MICHLOVIC: Good morning,

Mr. Chairman and members of the Committee, thank you for this opportunity to testify today. I am here today to advocate for specific funding in four areas: Equitable

Funding for Special Education Cost; adequate funding for Community Based Family Centers; increased funding for Higher Education tuition and increased funding for

Pennsylvania's only World Trade Center. These four areas are keys to Pennsylvania's economic development and its economic leadership in the 21st century economy.

Before I talk about special education,

I should note that I am the third legislator that has come before you, Democrat and Republican, to talk about special education. If that is not a signal to you that this is a critical area of attention for you, I don't know what is. I think we really — we are out here pleading with you, let's get something done on special education and I have a recommendation on that.

The most urgent of these four areas is providing an equitable funding formula for special education cost. The current funding levels for special education cost has over burdened taxpayers in my legislative district and threatens the overall quality of public education.

For example, the East Allegheny School district spent

$2,157,904 on special education, yet received only $761,775 in state funds. The shortfall has to be made up from property taxes in an economically distressed area trying to make a comeback. This is a formula for > disaster.!

Likewise, the McKeesport Area School

District is faced with the same calamitous scenario.

That district's special education subsidy is the same as it was in the 1991-92 budget which means that the state is only funding 32 percent of their special education cost with the remaining 68 percent generated in increased property taxes. Similarly my own district of Woodland

Hills, the special education costs are eating us alive.

An increase of state funding to a 50 percent level would remove a full 20 mills from the local tax burden.

The current funding level has got to be changed because it has over burdened local taxpayers and has seriously affected the resources available to public school districts in providing quality education for all students. So I take this time to both advocate for additional funding for these school districts and suggest that we should fund all school districts for a minimum of 50 percent of their special education cost.

More importantly, the formula should be based on the real cost of providing special ed rather than some ethereal estimate. SB 153 and HB 16, as you know, introduced by Senator Robert Tomlinson and Representative Jessie Stairs respectively, address this issue. X have been asked by my constituent school districts to support these bills and I intend to do so. So I ask that we start that process in this budget. There are a couple of letters from a couple of the school districts attached to my testimony.

Last year I told you that the supporting

Community Based Family Centers is an investment in the

i

t future that can and will benefit distressed communities.

But I didn't tell you that it is an investment that will benefit all communities. I didn't tell you that we could see a return on our investment in as little as three years. And it is an investment in our children and their families, our most valuable asset.

', Allegheny County's Community Based Family

Centers are community family growth centers that provide an excellent human services model for the rest of this state.

These family centers have always recognized that early childhood education and childcare have a direct and decided impact on school readiness, academic achievement, crime prevention and economic development.

Yesterday in this very same room, the National Conference of State Legislators presented a symposium on childcare, drawing experts from Law Enforcement, Corporate and Public Service Communities; all of whom said the same thing -- "early investment in children and their families pays high dividends later on."

There is no argument as to the root cause of crime, poverty and abuse; the issue is how we address them. The Family Support Movement believes that we have to offer whole family support, and I agree with them.

The Community Based Family Center's intervention starts from the beginning and works with an enabling formula for self-sufficiency rather than dependency.

The goals are the same as those expressed by current social services agencies of all kinds, but the approach and the outcome is different. Here is why.

Family support is governed, designed and

approved by participants and family members

to meet their own priorities, not some bureau­

cratic perception of them;

Family support builds on existing individual,

family, community, abilities and experience;

They are based in the community and serve an

entire family without elibibility requirements;

and they are voluntary. In other words, people

participate because they want the best for

themselves and their children, not because they are required to do so.

In fiscal year 1996-97, this line item was slashed by two million dollars and last year the

Administration restored one million to this line item.

However it is simply not enough, and I suggest this item be increased to a total appropriation of the four million dollar level where it was four years ago.

World Trade Center - Next, I wish to ask for $300,000 to be dedicated to the World Trade

Center in Pittsburgh, from the seven million dollar line item for international trade. This center has struggled to survive in Allegheny County since 1992 largely through the individual efforts of myself and

Representative Mayernik by providing legislative initiative fuding over the years. Nevertheless, the WTC has serviced both large and small businesses by providing training in the basics of international business and sponsoring trade missions to China, Brazil, Mexico, Russia, Eastern

Europe and many other sites that are desperately seeking trade opportunities in the United States. Their successes have been important components in Pennsylvania's increas­ ing world presence in such markets as environmental engineering services, technology transfer, legal and accounting control and consulting and a host of other high-end goods and services that in which few other regions in the world can compete. Attached is an impres­

sive list of companies served by this agency in 1998, and upon your perusal, I am sure you will agree that they deserved our support.

My final comments have to do with Higher

Education. I was recently informed that Pennsylvania

is 45th, that is, fifth from the bottom when it comes to state allocations for higher education. In this time of budget surplus it makes no sense that tuition at our State Colleges and Universities are among the highest in the nation. If we are truly interested in the economic development in our state, then we can make no better investment than providing greater numbers of kids an opportunity to obtain a college education.

I can honestly sit before you here and testify that

I know of kids in my neighborhood who have quit college because their parents can't afford it — still others never bothered to apply for the same reason. At the very least, let's invest the extra $20 or $40 million in our institutions of higher learning to guarantee that none of them will raise tuition again this year as they did last year. Even better, let's embark in the long run with them to drive those tuition costs downward toward a more universally affordable level.

Once again, I thank you for this opportunity to testify on these matters and I thank you for your time and considera­ tion and hold myself available for any questions.

CHAIRMAN BARLEY: Thank you very much,

Representative Michlovic. We appreciate your comments.

REPRESENTATIVE MICHLOVIC: Thank you.

CHAIRMAN BARLEY: At this time I would like to recognize Representative Maher for purposes of making a presentation to the Committee. I would like to remind the presenters, I mentioned this when i we opened the hearings today, that we have allotted five minutes for purposes of your presentation. So

I would ask if you could hold your presentations to the five minutes. Representative Maher.

REPRESENTATIVE MAHER: That will be my goal. Good morning, and I first wish to observe the great occurrence last year of an early budget, which early by itself doesn't necessarily mean a lot, but what it does do is send a message to the rest of the nation, the rest of the world that this Legislature is conducting its affairs in a business like fashion, and that is part of the messge we need to send out about

Pennsylvania. So I encourage you to strive for a similar goal again this year.

With respect to special education, it certainly is a riddle that needs a solution. We have, a great proportion of the children in this state are categorized as one sort of special education or another.

And there is a concern about the level of support to local schools. I discourage embracing the cost reimbursement notion. As a CPA and understanding the joys of accounting and having observed cost reimbursement programs over the years, I know that cost reimbursement programs inevitably lead to accounting that drives higher imported cost in the interest of claiming all funds to which one might be entitled. And that is to be expected. There is nothing wrong with it, but it tends to drive up cost.

It doesn't really tend to provide more resources.

Rather, I think what we need to do is understand. And when we talk about special education, when we talk of funding, we group all children alike regardless of their exceptionality. The state has created

14 categories of exceptionality. And I think you would all agree with me that resources required to assist a child who is speech therapy need is very different than what is required for autism. It is very different than what is required for someone who is gifted.

And rather than treating all conditions as equal, I would suggest we consider developing a prospec­ tive payment system so that there would be a reasonable rate paid for each of the 14 categories of exceptionality recognizing there are distinctions and the resources required to help those children.

Our current system also has an odd penalty

involved. Those schools which are most successful treating

the children who have the greatest needs become magnets.

The word gets around and families move into those districts

for that special education as they should be expected

to do. But we wind up penalizing the schools which did the best job of caring for our children.

When it comes to education as a whole, all the talk about money and disparity I think is a

great disservice to children. It is true that we have permitted our local districts to set their own agenda,

to determine their own fate toward the extent of how much they wish to invest in schools. And I think you

all are all aware there is very little correlation between

the amount spent and the quality of education received

from any study.

The Pennsylvania Campaign for higher

education is reported statistics that observe that the

top 20 percent of districts in Pennsylvania spent an

average of $9,000 a child, and that they are proposing

that we should bring all other districts up to that

level.

I would observe that based upon their very good presentation of data, there is only two of our 501 school districts, only two, that spend less than $5,000 a child. And the reason 1 am focusing on

$5,000 a child is because that is what is spent, on .average nationally. So it is fair to say that 499 out of our

501 school districts already spend more per child than on average across this country. And I don't think we are getting an above average result. And the longer we focus on trying to pretend that there is a correlation between dollars in and education out, it is just unfair to children. Because we are delaying addressing whatever the real issues are with education that portends to anything to do with money.

And if I may just follow up with a couple of other brief thoughts. And tax reduction, I think it is fabulous that we are continuing to push tax reductions.

The Capital Stock Tax is not a tax that is readily understood or talked about, but it is a tax that has a great deterrent to investment in Pennsylvania, because we have a peculiar thing, and at the same time we are hurting businesses that locate here. We are penalizing for making investment and we should bring down that tax.

On the overall view, I would encourage us not to be tempted by all talk of surplus. Let's I

keep in mind if we boil this down to a family situation,

our so-called surplus would be much like a family having

$500 in the bank in the big event and in their wallets

and purses and owing $10,000 on their credit cards and

saying what am I going to do with all this extra money.

So beware of that temptation. Thank you very much.

CHAIRMAN BARLEY: Thank you. I appreciate

you being able to make your presentation within five

minutes. I now recognize Representative Sturla for

purposes of a presentation and remind Representative

Sturla that we do have a five minute time allotted for

the presentation. Welcome and we look forward to hearing

your thoughts on the budget.

REPRESENTATIVE STURLA: Thank you, Chairman

Barley. I will provide you copies of this testimony

as soon as we get them made. Mr. Chairman, members of the

Appropriations Committee: Thank you for the opportunity

for being able to testify today.

In the past years, I have made several

suggestions concerning changes in the budget that would

benefit communities throughout the state and this year

will be no different.

Again, as I did last year, I would urge

the Committee to look seriously at the proposal of house

democrats to cut property taxes by 50 percent over the next five years. A budget that includes the first installment of a 50 percent property tax cut would truly, in the words of the governor, be a budget for the bold. The incremental nature of the proposal, 10 percent cuts over the next five years allows for adjustment in future years to reflect the economy.

The reason this is critical to communities throughout Pennsylvania is that current failed efforts at local tax reform will only shift the burden from one form of local taxes to another form of local tax.

School districts in many small urban areas and other older suburban areas; with shrinking property tax bases and dwindling average household incomes are, in many cases, near their breaking point. This "phenomena" if you will have it, is called "municipal overburden" and it is the point where the prospect of increasing taxes to increase revenues is not an option because the increase actually has a negative effect on revenues received. Increased taxes lead to property abandonment devaluation and property owners selling at loss just to get out from under the tax burden. While this sounds drastic, it is a reality, particularly in many communities in the western part of the state and in increasing number in the eastern part of the state.

We should seek relief for the taxpayers in these communities and we should do it now while we have the surplus funds to initiate this tax relief.

The conservative nature of a 10 percent school tax cut each year for the next five years will allow us to look at innovative ways to maintain current levels of services and programs. I will try and be brief here and only offer a few suggestions on how we might achieve some of the goals of the budget in an innovative and cost effective manner. I am certain that I and others will put forth ideas here in the future.

First, in the area of education, as many of you are aware, in an attempt to curb run away special education costs, the Legislature adopted changes to the funding formula several years ago. Because statewide figures for special education students had remained relatively constant as a percentage of the total school population (one percent in the "severe" category and

15 percent in the "mild" category), a formula was adopted that drove special education funding to the school dis­ tricts based on statewide average percentages of their total student population instead of actual numbers of special education students in any particular district.

The result was that some districts were overfunded for their actual number of special education students while others were underfunded for their actual number of special education students. Meanwhile the statewide average remained the same. Three years ago, I attempted to correct this problem with an amendment on the floor of the House. Without spending any additional state revenues, the proposal would have distributed special education funds to districts based on actual special education enrollment, not a statewide average of students from the district. That proposal was defeated by those who were overfunded by the formula and would have lost revenue to those who were underfunded by the old formula.

To give you an example, there are 501 school districts,

300 were going to lose money under that proposal, 200 were going to gain money under that proposal. Obviously, the numbers were stacked against me.

To his credit, the governor recognized this inequity and proposed holding harmless those districts that were overfunded and provided $17 million in additional funds for districts that were underfunded in the old formula. While a step in the right direction, there still remains a gap in the actual per pupil funding by the state for special education costs. In other words, the overfundeds are still getting more per pupil than the underfundeds. But at least the gap was closing with the new funding scheme. Unfortunately, with last year's budget proposal the governor veered off course 0 in terms of closing the per pupil gap. This year the governor has said the Legislature should decide this

issue. I hope the governor will lend his leadership

to this issue as he did three years ago and joined with

the Chairman of the Edcuation Committee to fund actual numbers of students. I and others I am sure will offer

some more of these equitable alternatives. I would ecourage the Appropriations Committee to do so also.

Now some, including I believe the represent­

ative that just preceded me, said that money is really not the issue. And if that is true, then I would propose

that those of us that are reimbursed at a 35 percent rate on special education, get our 100 percent reimbursement and those that are currently reimbursed at 100 percent get the 35 percent. Because if money truly is not the

issue, then no one should squeal when that happens.

We know from experience though that when I even try and balance it out just among those that are currently getting overfunded and those that are not, we lose that

fight on the floor of the House because people will

suddenly believe that money does matter when it comes down to whether or not their scool district is going

to get more.

PHEAA is another educational issue. The

Administration's proposed budget provides additional funds for this worthwhile program. Another way to in­ crease funding for PHEAA without costing new dollars is to collect on delinquent student loans. Several years ago I asked PHEAA to cross check delinquent student loans against lists of licensed professionals in Pennsyl­ vania. Because the Bureau of Professional Licensure only has social security numbers used for cross-matching with PHEAA lists on about 25 percent of licensed profes­ sionals in the state, we were only able to track about four million dollars in delinquencies to currently licensed professionals in the State of Pennsylvania. But the potential for this realistically is more in the neighborhood of 15 million dollars. Representative Elinor Taylor, who is a member of the PHEAA Board,has again co-sponsored legislation with me to correct this problem. We already have 76 co-sponsors on this bill. While I am on the subject of higher education, I would propose that we earmark some state budget dollars to promote higher education as an "industry" in Pennsylvania. We have a wealth of nationally recognized universities, both private and public in the State of Pennsylvania. This

"Industry" provides high paying jobs and an educated workforce and imports millions of dollars from worldwide locations into the Pennsylvania economy. I would hope that we could establish a promotional program that would have any student nationwide that is of college age or their parents, who are thinking about sending their children to college, think of Pennsylvania as their first choice for higher education.

One other point on education that deals with basic ed, there is no line item that I can find in the budget that recognizes the fact that the federal government has said that they will provide dollars to reduce class size. I would hope that we would take advantage of that federal program and draw down some dollars for more teachers to reduce class size.

Finally, several points, one, please do not cut the Homeowners Emergency Mortgage Assistance

Program. Two, do not cut the sewage facilities grant programs. Three, the governor has proposed charging municipalities for State Police costs, and I actually support the governor on this proposal. To give you an example, locally in the City of Lancaster, two years ago we spent $154 per capita just for local police.

This past year taxes were raised to the tune of $30 per capita to increase community policing in the City of Lancaster. That means every citizen in Lancaster pays $184 in policing costs. In addition to that, we still pay our taxes which covers State Police in those areas that currently have no cost for policing. Finally, I would like to request that approximately five million dollars be earmarked for the Home Ownership Mortgage Insurance Guarantee Program with the Pennsylvania Housing Finance Agency. Currently in an attempt to meet their Community Reinvestment Act

Requirements with the federal government, many banks have 100 percent loan-to-value ratio residential mortgages on their books in their "in house" portfolios. Many of these portfolios are at their regulated "in house" limit. Current state regulation only allows for mortgage insurance on a 95 percent, or in some special cases with "PHFA", a 97 percent, loan-to-value ratio mortgage.

By allowing PHFA cooperation with private mortgage insur­ ance providers to underwrite the risk of the last five percent of loan-to-value ratio mortgage collateralized with five million dollars, you allow banks to place these "in house" mortgages on the secondary market and, in turn, free up hundreds of millions of dollars in private banking dollars for reinvestment in Pennsylvania communities.

I would appreciate your consideration of these and other innovative proposals that will help stretch the finite dollars available in the state budget.

And I cannot stress enough the importance of reducing crushing property taxes by supplementing educational programs with surplus state dollars. This

will go further to strengthen communities in Pennsylvania

than any other proposal. Thank you. I might have gone

over a little bit.

CHAIRMAN BARLEY: A little.

(Laughter)

I appreciate your comments, but I would

suggest that in the future if you would try to contain

them to the five minutes out of respect to the rest

of our colleagues.

REPRESENTATIVE STURLA: Thank you, Mr.

Chairman.

CHAIRMAN BARLEY: Representative Argall.

REPRESENTATIVE ARGALL: Thank you, Mr.

Chairman, members of the Committee. I appreciate the opportunity to once again discuss with you two issues that affect not only my district but all Pennsylvanians.

The first is Pennsylvania's Heritage

Parks Program. I represent the headwaters of the Schuylkill

River and the north end of the park that, of course, would come to a conclusion in Representative Manderino's district down around Manayunk. And I know she also has been very interested in the potential which this program holds. You will also be hearing from Representative

Scott Hutchinson on this, I think in writing as well. Pennsylvania's Hertiage Parks Program is about the things that are important to Pennsylvania

- steel making, coal mining, oil drilling, lumber, railroads, agriculture and tourism. In the 10 years since the program began it has experienced substantial growth.

It is likely that by this time next year Pennsylvania will have 11 heritage parks. I have included a map at the end of my comments for your review.

And as you can see there, heritage parks are large regional areas that cross county lines. In all 49 of Pennsylvania's 67 counties have at least a portion of a heritage park within their boundaries.

Mr. Chairman, I would suspect that many members of this

Committee have at least a piece of one park in their district.

The five goals of the heritage parks program are as follows:

1. Economic development

2. Partnerships

3. Cultural conservation

4. Recreation and open space

5. Education and interpretation

Mr. Chairman, I believe it is important for Pennsylvania to remain a leader in this movement and we can do that if this program gets the resources that it needs.

Last year the Joint Legislative Air and

Water Pollution Control and Conservation Committee, which I chair, held statewide hearings on this program, and the testimony that we received was compelling. The committee heard from state officials, local officials and volunteers were very excited about the program and the parks in their areas. They all stressed the need for additional resources.

Recently, I was upset in hearing that two of the heritage areas are now experiencing considerable difficulty because of financial and some other problems.

And I believe that we would be making a serious mistake if we allow the residents of these and other parks to lose the many benefits which this program has to offer.

Since we began this program in 1989,

Pennsylvania has appropriated $16.2 million for program grants and administration. This has been used for feasibility studies, park management plans, implementing projects and program administration. DC&R reports that our state funds have been matched by $13.5 million in local, public and private funds and leveraged over $100 million in federal dollars.

Furthermore, the department reports that the Heritage Parks Program is directly or indirectly accountable for over $129 million in heritage tourism and economic development opportunity activity in Pennsylvania.

And so I think from my review of the numbers, it is clear that Pennsylvania is getting indeed a significant return on its investment and at the request of the parks, I would be asking that this number be increased this year from 2.75 to five million.

The people who testified in front of the Joint Committee talked about this additional funding being used for increased economic development; leveraging more private dollars for projects; and helping the parks

to increase the awareness, visibility and stature of the parks within their own regions. We would hope that, qn ce again, you would consider increasing the appropriation

for this program.

The other that I would like to talk to you about is one that I also have been very active on

in this Legislature is the clean up of our abandoned waste tire piles. We have made tremendous progress

in the last few years in ridding of waste tire piles.

Representative Mundy and I have discussed some problems

in her region. Unfortunately, it is a problem that stretches all across the State of Pennsylvania. The

Waste Tire Recycling Act signed by Governor Ridge in

1996 provides for grant programs, tax credits and enforcement and penalty provisions to reduce the waste tires that are stockpiled and generated annually in Pennsylvania.

Since March of 1997, when the first list was published,

DEP has remediated over eight million waste tires across the commonwealth.

In addition to the Waste Tire Recycling

Act, funding in the amount of two million dollars has been included in the past in the governor's budgets for grants to municipalities to clean up waste tire piles. But this year that two million in cleanup funds was not included.

Pennsylvania has, as you all know, experienced tire fires at unregulated tire dumps. Some of these fires are accidential, some are set on purpose by their owners who eventually become subject to large fines or penalties. Waste tires and waste tire stockpiles are very difficult to ignite. Once on fire these tires, of course, burn very hot and are very difficult to extinguish.

The commonwealth most recently I think had to spend several million dollars putting out the fire and replacing that section of Interstate 95 in Philadelphia following that disaster.

Without continued assistance to the municipalities with tire piles, I fear that we will experience more illegal dumping of tires and more fires. I would urge that this Committee and other members of the General

Assembly restore that two million dollars in funding

to DEP for the clean up of their piles.

Again, I thank you for your time and

look forward to working with all of you.

CHAIRMAN BARLEY: Thank you very much.

And I do share your concerns on the challenge that we have with the scrap tires. It is a monumental challenge and we do need to work at finding alternative uses as well. I think that is a real challenge. I appreciate you bringing that to our attention.

At this time I recognize Representative

Yudichak for purposes of making a presentation. Welcome and you may begin with your presentation.

REPRESENTATIVE YUDICHAK: Good morning.

Thank you, Chairman Barley, and all of the members of

the Appropriations Committee for an opportunity to present my thoughts concerning the 1999-2000 budget. As a freshman member of the House of Representatives, I am honored

to participate in this process and bring forth the concerns

of the residents of the 119th Legislative District.

Like you, I listened intently to the

Governor's address and have reviewed all of the available

documents concerning the budget. While a number of

the Governor's budget proposals are of concern to me, I wish to use this brief presentation time to highlight what I believe to be the most crucial issue facing the

General Assembly.

There is no larger problem in my legislative district than the problem of public education funding

and its servile reliance on property taxes. Pennsylvania's public schools are shackled with an antiquated, inequitable and insufficient means to raise the necessary funds

to educate our children. Like many other residents, my district consists of a large number of senior citizens

and working families who can no longer bear the burden

placed upon them in the form of property taxes. Unfortunately,

the Governor's budget in no way addresses this problem.

Even worse, even worse than that, no steps are planned

to mitigate inevitable future increases of an already

onerous tax.

Against this backdrop of suffocating

property taxes is the prospect of a surplus in excess

of $400 million for the current year. It is extremely difficult for many Pennsylvanians to reconcile the knowledge

of another surplus while dreading the prospect of their

upcoming property tax bill. Some effort has to be made

to ease this burden. Some effort must be made.

Governor Ridge has often used the phrase

.job-crushing taxes" when referring to various taxes on business in the commonwealth. I wish to remind

the members of this committee that many of your constit­

uents, and most of mine, are being subjected to "family-crush­

ing property taxes". They simply cannot continue to

bear this tremendous burden without some form of relief.

I respectfully call on this committee to consider the

implementation of a public school funding program that

reduces our school districts' reliance on property taxes.

While the Governor may argue that cutting business taxes must come first, I suggest the time has come to cut

property taxes.

Think of the number of families like

the Kurowski's of Nanticoke. The Kurwoski family dreams

of the day when they can move from the world of property

renters to homeowners. They are a young professional

couple that desperately wants to be homeowners. Unfortun­

ately, their dreams and the dreams of many other young working families like them cannot currently be realized

because paying school property taxes on a new home is

like having to pay a double mortgage. School property

taxes in the 119th district have risen more than 250

percent over the past 10 years. Is there any relief

in sight for senior citizens or working families? The

quality of life for Pennsylvanians like the Kurowski's will continue to suffer until those of us in Harrisburg take serious meaningful strides to offer real property tax relief.

As we struggle with the complex problem of funding public schools, it seems to be counterproductive to dedicate over $63 million to a pilot education opportunity grant program. Let us direct our collective efforts to solving the funding problems faced by our school boards instead of experimenting with programs that siphon valuable funds from an already strained educational system. The current condition of our public education financing mechanism is currently not capable of supporting this pilot program.

While I recognize the need to relieve the tax burden on business and industry in our state, we cannot forget that our residents deserve their fair share of relief from taxes. I believe that more must be done. I am confident that the favorable fiscal condi­ tion of the Commonwealth provides the unique opportunity to begin to reduce property taxes in a creative and cost conscious manner.

However, if we are not able to move forward with a plan to meet the property tax dilemma during this period of economic prosperity and budget surpluses,

I urge the committee to consider a reduction in the personal income tax. While a plan to meet the property tax crisis would provide more substanstial relief to many residents, a personal income tax reduction will at least demonstrate our commitment to serving the inter­ ests of Pennsylvania families while we develop measures to deal with property taxes.

Absent a proposal to reduce property taxes, a personal income tax reduction will provide a modest measure of relief for many families. It's time to recommit ourselves to resolving the significant financial needs of our Commonwealth's working families.

Let's direct a more equitable share of the "largest tax cut ever proposed by a Pennsylvania governor" in a manner that helps those who have not directly benefitted from the tax reductions of the past four years.

As a result of the surpluses realized during the past few years, Pennsylvania's ability to weather an economic downturn has been mightly strengthened.

Increasing the balance in our rainy day fund to over

$700 million was good public policy, and the governor should be commended. However, we must not become so enamored with the growth of the rainy day fund that we fail to seize the opportunities that this budget can safely support.

An expansion of both the PACE and the property tax/rent rebate programs is one example. As you all know, both of these programs are wildly success­ ful. At the same time, many seniors who do not currently qualify to participate in either of these programs must face the burdens of increasing property taxes, rising rents and skyrocketing prescription drug costs without the Commonwealth's assistance. Modest expansions of these programs would provide needed relief to many cash strapped senior citizens. It is my desire to join in an effort by this General Assembly to expand PACE and the Property tax/rent rebate programs for this coming year.

Finally, I look forward to the Governor's proposal for the use of the funds expected from the national tobacco settlement. This extraordinary opportunity requires careful bipartisan deliberation and unbound creativity. Use of these funds for an expansion of the children's health insurance would seem natural.

Programs to assist small businesses provide health insurance to their employees should also be considered. Use of the funds for the PACE expansion I discussed earlier may also be an alternative. Most importantly, we must not cater to a select few in allocating these funds.

The course we select can have an extremely positive impact for all of our constituencies as we begin the new millennium. Thank you again for the opportunity to testify today. I look forward to working with you all in this upcoming budget process. Again, thank you.

CHAIRMAN BARLEY: Thank you very much.

I appreciate your presentation. At this time I recognize

Represenative Tulli for purposes of making a presentation to the Committee. Welcome and you may take a microphone and begin.

REPRESENTATIVE TULLI: Chairman Barley and Members of the Appropriations Committee I appreciate the time ycu are giving me to present my views of the budget and the upcoming deliberations in the House of

Representatives. I admire your tenacity and devotion to service for all the weeks' hearings you have ahead of you and I wish you well through all of that. And

I look forward to your report and participation in the budget deliberation.

I have two items that I would like to address in the governor's budget and recommend that we enact them, perhaps not in the same way that the governor presented them. But the first one I would like to talk about is the elimination of the gross receipts tax on natural gas. This tax is a tax on residences only in Pennsylvania. Presently, industry and large commercial establishments do not pay the gross receipts tax on natural gas. And the elimination of it this

year in this budget would provide a middle class consumer a

tax cut for two million families in Pennsylvania. Two

million households would benefit from this natural gas

tax removal. Presently, we charge five percent of a

families' natural gas bill in that gross receipts tax.

This five percent reduction would be, on an average,

of about $70 to $90 per family per year that Pennsylvania

families can decide how to spend it instead of sending

it to Harrisburg. And I heartily recommend that we en­ act it, and that it comes as an action from the Appropria­

tions Committee to the House floor that we do repeal

the gross receipts tax on natural gas.

There is an additional benefit to this.

With the removal of the gross receipts tax on natural

gas, the way is paved to come to a consensus agreement

to deregulate the natural gas industry in much the way

we have the electricity industry in Pennsylvania, and

will provide for combinations of offerings to consumers

for greater savings in all of their energy purchases.

It would make Pennsylvania the leader in energy competition

in the entire United States. And this is one of the

things we have been seeking in our deliberations in

public policy and the repeal of the gross receipts tax

would be one of those certainly that would be a help to us.

The second point I would like to discuss with you today is the governor's proposal that we increase the sales factor in calculating the corporate net income tax for Pennsylvania corporations. He is suggesting that starting January 1, 1999, over a month ago, starting with that date, we increase the sales factor from 50 percent to 60 percent with a possible continuing increase in that in future years. That cost would be approximately

$31 million for the year and a half span that it is projected starting January 1, 1999 going to June 30,

2000.

What I would like to propose to the Appropria­ tions Committee that we take a bolder step in the House of Representatives than the governor did and move ahead starting, perhaps, July 1, 1999 instead of January 1st, and completely make the sales factor the single factor in determining how much a company would pay in their corporate net income tax. What this does is eliminates the payroll and property factor and increases the value of manufacturing and employment in Pennsylvania. So companies that employ people in Pennsylvania, companies that invest in capital projects in Pennsylvania, would not have that penalized by having it as a factor in the corporate net income tax. So, what it does, it encourages investment and employment in Pennsylvania rather than encouraging companies to invest elsewhere and sell their products in Pennsylvania. We would base the corporate net income tax on the sales factor, and I believe it would be a great impact in increasing employment and jobs in Pennsyl­ vania. I am not alone in that thought. T.he Pennsylvania

Economy League believes that if we take this course of action, in three years it would actually be a surplus or a benefit for the state budget rather than a cost to the state budget, because of the increase in jobs and investment that would come into the commonwealth because of it. States all around us are beginning to do this. They are either ahead of us in the percentage of the sales factor or moving to the single sales factor as a calculation of the corporate net income tax.

Times are good, jobs are plentiful, but we must always be on our guard that we don't let Pennsylvania slip behind. We want to be a leader. We want to make

Pennsylvania more attractive to companies around the country, and I believe these two steps would be good for our families in Pennsylvania, as we reduce the gross receipts tax on natural gas and good for the growth of the commonwealth in the future.

Thank you very much for your time. I do appreciate it and good luck in your deliberations.

CHAIRMAN BARLEY: Thank you very much,

Representative Tulli, and I appreciate your thoughts on both of the issues that you have highlighted. I think they are very important issues to the job creators here in the commonwealth.

I now recognize Representative Mann for purposes of making her presentation. Just again a re­ minder for the presenters that are here waiting for their presentations. We would appreciate if you could make your presentation in five minutes in respect of those colleagues that are waiting and are already sched­ uled. So, welcome and we will look forward to hearing your comments.

REPRESENTATIVE MANN: Thank you, and good morning, Chairman Barley and Members of the Appropri­ ations Committee. I appreciate the opportunity to be here this morning and share with all of you my concerns with the recently introduced budget.

I represent the 132nd District which primarily encompasses the City of Allentown. As a lifelong resident and now representative of the district, I am concerned that we in state government are sending an inconsistent message to the constituents we serve.

We talk about a strong economic climate, a state in which new jobs are continually created, consecutive budget surpluses in the hundreds of millions of dollars.

Yet as we review the proposed budget, we see valuable programs appropriations reduced and many critical projects not even considered.

As the fourth largest municipality in the state, Allentown is challenged by many of similar circumstances other cities our size across the country encounter. What I am asking of this committee is considera­ tions for programs which will assist our community in not only facing these challenges but successfully conquering them.

For example, the Allentown School District is the third largest school district in the state, and one that has done its best to balance the difficulty of a decreasing tax base in a rapidly expanding student population. The district has not raised taxes for several years while the student population has grown by more than 10 percent during that time. Financial support is needed not only for state mandated programs, but for basic needs such as textbooks and supplies. In

Lehigh County, the fastest growing segment of the populatioi is people over 85. Yet the capital budget for senior centers has been cut in half in the proposed budget from four to two million dollars. Also, there is consensus that seniors needs are best met in the home rather than in an institution. Yet as waiting lists grow for basic needs assistance, funding has stagnated.

Allentown, again, as many urban areas have, has experienced increased violent crime primarily as a result of illegal drug activity. Yet we see no effort to draw down funds available for increased police forces. Allentown has learned that by establishing a zero tolerance community policing program and focusing on quality of life crimes that affect all of us, violent crime is also impacted. Community Centers such as the

Boys and Girls Club offer alternative activities and safe havens for school age children. Yet in Allentown received minimal support from the state.

It is not enough to say other cities have these problems. That is a cop out. We in state government must work with those in our communities to bring about positive change. This cannot be achieved without the state upholding its financial responsibilities to its residents who are the ones indeed who send their hard earned dollars to Harrisburg.

Again, we send a mixed signal. We live in a prosperous time,yet refuse funding to the very areas critical to quality of life issues; good schools, safe communities, and an opportunity to retire in dignity. Thank you.

CHAIRMAN BARLEY: Thank you very much.

Appreciate your comments today, and you were well within

the five minutes.

REPRESENTATIVE MANN: Tried to be.

CHAIRMAN BARLEY: Representative Colafella,

welcome and you are on deck ready to go.

REPRESENTATIVE COLAFELLA: Mr. Chairman

and members of the Appropriations Committee, I am honored

to speak to the distinguished members of this Committee.

Thank you very much for the opportunity to address

you this morning.

While I have many concerns about the

Governor's proposed budget, I would like today, as the new Democratic Education Chairman, to focus on one specific area that is of particular concern to school districts and taxpayers in my district and every other district throughout the Commonwealth. Namely, state special education fudning and the need to make serious changes in how the state funds special education.

The current funding formula for special educatiion fails to take into account where special needs students reside and what they cost to educate.

The problem with the existing special education funding formula is that it is based on the fundamentally flawed assumption that the incidence of special needs students is uniformly distributed in the population of each school district with one percent of the students in severe need and 15 percent in mild need. The present funding formula also creates a distribution system that does not take actual program costs into consideration.

A dollar amount is identified and simply distributed to districts on the flawed assumption of where special needs kids are. The current formula bears no relationship to costs incurred by school districts for special needs students. In the school year 1996-1997, state payments, as a percentage of actual expenditures, ranged from

15.5 percent to 110 percent. Which means that in some cases, school districts were actually getting more money for special education, and in some cases, 10 percent more and they were using those monies for their regular program while there were some districts in the state where they were only being paid 15 percent of the total special education. cost. Of the 501 school districts, i 236 districts received state payments that were less than 50 percent of actual cost.

Problems with the present funding system have resulted in school districts facing one or more of the following undesirable choices: (1) providing limited resources for special education resulting in special needs students being underserved or inadequately served and thus could lead to the district being sued by parents of special education students for not meeting the federal and state requirements for educating special needs students. I think right now we are at the tip of an iceberg that I think will occur if something isn't done about the formula. (2) Shift funding out of the general education fund to special education, or (3) increase local property taxes to pay for the shortfall in state funding for special education.

School districts from my own area have faced these choices over the last several years. Dr.

Terry L. Mack, Superintendent of Hopewell Area School

District, which is in my district, expresses a common concern of school districts in my area. He notes that

"the demise of the excess cost formula for funding of special education programs, which occurred in 1991, has resulted in a profound negative effect upon the local taxpayer. In Hopewell Area School District alone, the costs are expected to exceed FDE allocation for the 1998/1999 fiscal year by $1,311,000 placing 53 percent of the costs on our local taxpayers. Where right now they are also in a very massive program on building new schools because the population in Beaver County has turned around and is increasing. But they are being saddled with the enormous burden of paying for special

education. The current funding formula is merely a

continuation of the erroneous system put into place when the excess system was eliminated. Funds are dis­

tributed based upon a school's total student population

and assumed level of needs and costs for such needs which are "backed into" based upon the dollars available.

The programmatic needs of students are given no consider­

ation."

Enrico Antonini, Superintendent of the

Western Beaver County Schools, a very small school district

in my area, expresses another special education funding

concern of mine noting that his school district "faces

growing annual special education costs that pose financial

restraints on other school budget categories. Many special education mandates are not reimbursed. A close

approximation of additional expenses due to these mandates

incurred by our district is $163,175,'. In the 1997-98

school year, special education -costs in this small school dis­

trict totaled $924,414. Our state special education

allocation was $334,250. Only 36.16 percent of the

total cost was subsidized by the state."

Dr. Samuel A. DePaul, Superintendent

of the Ambridge Area School District, which is a very

large school district, in remarks that he provided me stated that data that graphically demonstrates the impact on local property taxess due to the difference between the special ed costs and state reimbursement for those costs. He noted that these differences are worsening with the difference increasing from over $1.34 million in 1995-96 to over $1.55 million in 1998-99. To cover this special education funding gap, his school district has had to raise property taxes by 5.6 mills in 1995-96 to 6.47 mills in 1998-99 at $240,000 per mill.

You would think that given the concerns raised by our school superintendents by our educators, parents, students and taxpayers that more funding for special education would be forthcoming. Unfortunately, this is not the case.

Last year the Governor proposed only

3.5 percent increase in state funding for special education.

The General Assembly in its collective wisdom more than doubled this funding increase for special ed to

7.3 percent sending a message to the Ridge Administration that it was concerned with the lack of state support for special education.

In fact, the overall state share of funding for special education has decreased from nearly 50 percent in 1992-93 to under 43 percent in 1996-97. Unfortunately, the Ridge Administration doesn't seem to have gotten the message yet given their five percent increase in special education funding for this fiscal year. It is time once again for the General Assembly to send the

Ridge Administration a message by significantly increasing the state commitment to adequately fund special education.

CHAIRMAN BARLEY: Representative Colafella, if you could just summarize. We are way over time.

In respect to the other members that are waiting, I would appreciate it.

REPRESENTATIVE COLAFELLA: I am almost through here. The message of a minimum of 50 percent state funding of special ed must not only be reflected in the budget but also must be enacted into law. Let me just wrap this up.

The House Education Committee has taken the first step toward addressing this pressing issue by approving HB16. I ask that the Appropriations Committee take the next steps by moving HB16 and significantly increasing above the Governor's request the state's commitment to adequately fund special education. Thank you. I thought you guys were running behind. I figured

I was going to help you out.

(Laughter.)

Thank you very much.

CHAIRMAN BARLEY: Thank you very much. I appreciate your comments and your consideration.

I now recognize Representative Thomas for purposes of making his presentation. I continue to remind the members of the five minute time slot that has been allocated.

REPRESENTATIVE THOMAS: Good Morning,

Mr. Chairman. Good morning to the democratic chair,

House Appropriations Committee and to all of my esteemed colleagues and members of the House Appropriations

Committee.

Let me introduce Miss Carole Smith, Workforce

2000, who will be taking part of my testimony.

And since time is of the essence, you

should have a copy of my testimony, but let me just kind of capsulize it.

Five concerns, five areas of concern.

One, school to work opportunities line item of the budget needs to be increased to about a million dollars so

that we can expand on some of the creative school to work programs that are currently underway in Philadelphia

County.

Secondly, the Community Economic Development

line item of the budget needs to be increased to develop

a greater base of employment opportunities and to get

people ready for the world of work in the 21st Century. Third, the Children, Youth and Families line item needs to be increased to provide a holistic environment for a growing population of children who have been abandoned and neglected.

Also, I ask that we increase the hold fast on the line item in DPW's budget around teen pregnancy.

As you know as a result of testimony and an amendment that I introduced during the last budget process, we were able to get sufficient dollars for teen pregnancy.

I ask that that remain intact and be increased if at all possible.

At this particular time I would like to turn it over to Miss Carole Smith to talk about the success that we have had with the two school to work programs that are currently in.place in .Philadelphia County,

Miss Carole Smith.

MISS SMITH: Good morning, Mr. Chairman and members of the Appropriations Committee. I thank you for the opportunity to discuss school to work with you this morning.

Before I begin my presentation, I would like to say that I was involved with the establishment of the Health Academy at William Penn High School from its inception back in 1993 and in 1998 our first graduating class. And we are having a second graduating class « this year. In that period, 60 children have graduated, all of who have gone either to college or into entry level employment. Their attitudes about education and their understanding of the relationship to work has increased, as well as, their performance in school.

And I think that is important for considering what we seek now.

I would like to point out the 181st School

To Work Initiative established by State Representative

W. Curtis Thomas is one of the most timely and appropriate initiatives being launched in the City of Philadelphia today. This School-To-Work Initiative addresses a crit­ ical national need which is building a technical workforce and is targeted to a population that has been historically left out. The 181st School To Work Initiative focuses on creating an educational environment which provides youth in North Central Philadelphia, many of whom come from families supported by welfare, with an unprecedented opportunity to receive education and training necessary to acquire 21st Century job skills.

Partners in this initiative are the New

Millinneum Foundation, the School District of Philadel­ phia, members of the business community and my organiza­ tion, Workforce 2000. Through our colloborative efforts, growth industries have been identified and an education and training program designed to respond to industry workforce needs.

Five Clusters in North Central Philadelphia are participating in this initiative. Our goal is to establish a School-to-Work Institute in each of the five clusters by 2001. Each will focus on a specific industry. As I mentioned already, the William Penn

Cluster is focusing on health. The Ben Franklin Cluster is focusing on Maritime, Commerce and Trade. That academy is up and running and in its first full year. And Gratz

Cluster, we are focusing on Robotics/Technical; Edison

- Mortuary Science; Strawberry Mansion - Law and Justice.

We have designed a comprehensive program model to address some of the nation's 21st Century training needs. If we intend to prosper, we cannot continue doing things in the same way that we have been as far as education and then complain about results. Our educa­ tional system must produce individuals who are competent and who can also produce. We live in a very competitive r society, and we owe it to our youth to create opportunities for them to succeed, not to fail. Even more important, we must make a concerted effort to grow and develop our own technical workforce here in the Commonwealth of Pennsylvnania, not import it.

We are changing immigration laws to respond to the nation's technical skill shortfall, but we are not changing the way we educate to begin to rectify this problem.

The 181st — okay, I have to wrap this up I am told. So I will do this.

The key component of this initiative is exposure, education and training. And I believe what the representative has launched in Philadelphia will make a significant difference in the outcome of our youth in the 21st Century.

And I thank you for the opportunity to present for you today.

CHAIRMAN BARLEY: I would certainly like to thank you, Miss Smith, and Representative Thomas,

I know, has been a real leader and we appreciate the work that he has been doing in the very challenged area of our commonwealth. I have had an opportunity to visit some of the area, and I again, want to commend you for your work and really appreciate the presentation you made here today.

MISS SMITH: Thank you.

CHAIRMAN BARLEY: Commit to both you and to Representative Thomas that we are going to stand shoulder to shoulder and work with you to help solve these problems in the neighborhoods and the communities where you work.

MISS SMITH: Wonderful.

CHAIRMAN BARLEY: Our young people are a real treasure. They are our resource for the future.

So, we look forward to working together to continue to solve the problems you have identified and the ones that you have already found some solutions for. Thank you very much for your presentation today.

REPRESENTATIVE THOMAS: Thank you.

(Complete prepared testimony of Representa­ tive Thomas was as follows:)

"Good Morning Chairman Barley —Chairman

Evans --and other esteemed members of the House Appropria­ tions Committee.

"Please accept my sincere thanks and appreciation to each and every member of the committee for this opportunity. I don't know when the House Appropria­ tions Committee started giving members a chance to address the committee with budget concerns. Nor do I know whether the opportunity has resulted in positive changes in public policy or additional financial resources in a member's district.

I do, however, know that the opportunity to address the committee is a very important one provided by the majority and minority chairs. I also know that residents in the 181st Legislative District of Philadelphia

County —my constituents -- both young and old -- have benefitted greatly from the opportunity.

"In the past, you have listened and responded to my budgetary concerns. Thank you for not only articulating the doctrine of inclusion and participation, but also for practicing what you have preached. I applaud each and every one of you.

"Today, I would like to take the opportunity that you have extended to me to discuss three very important budgetary concerns. The three areas of concern a 1.

School to work opportunities 2. Neighborhood economic development and 3. Children and families. I will address them in the order that they have been outlined. education (School to Work Opportunities — $1 million)

"Five years ago, I initiated and promoted a New Millennium Education agenda for the five high school clusters in and around my legislative district.

These five clusters have the awesome responsibility of educating well over 25,000 young people. Prior to this initiative, truancy poor academic performance, deficient basic skills, violence, and a regressive attitude about education dominated the landscape of public education in the above-referenced school clusters.

"The overall focus of my New Millennium Education agenda is to use a school to work career model as a stimuli and foundation for improving basic skills, increasing academic performance, developing school to work and career transition skills, improving attendance, and enhancing the overall attitude about education.

"The essential building blocks of this model are public/private partnership, integrated curriculum, school to work/career transition skills, mentoring, hands on work experience and an articulation agreement that speaks to the world of work upon graduation from high school.

"The new Millennium Education agenda calls for the development and implementation of a Health

Care; Maritime, Commerce and Trade; Mortuary Science;

Bio-technology; Robotics; and Law and Justice school to work academies in each of the five high school clusters in North Philadelphia.

"To date, the jury is in on the effectiveness of the school to work model as we have designed it.

Ms. Carole Smith, the program coordinator, will soon talk to you about the outstanding results we have witnessed from the Health Academy program in the William Penn

High School cluster and the Maritime Commerce & Trade

Academy in the Benjamin Franklin clusters.

"The New Millennium Education initiative is requesting.a $1 million increase in the school to work opportunities line item of the 1999-2000 Budget.

This money will be used to fully develop and implement the Law & Justice; Mortuary Science and Bio-technology programs in three additional clusters.

Neighborhood Economic Development ($1 million)

"Friends Neighborhood Guild, Inc. — in conjunction with a collaborative of business, social and community based organizations -- is requesting an additional $1 million in the Community Development line

item of the budget. This funding will be used to continue the planning, development and implementation of a comprehensive development strategy for the Girard Avenue/Broad Street corridor. The two basic components of the strategy are a housing development of single family homes on the east and west sides of the 900 and 1000 blocks of

Marshall Street, and the revitalization of the Girard

Avenue corridor between Broad Street and 5th Street.

"Revitalization plans encompass new commercial business development, a supermarket, and other small retail opportunities. The Girard Avenue/Broad Street corridor is one of the few corridors in Philadelphia

that can literally take you form one end of the city

to the other. The corridor is bound by five of the city's poorest communities. The economic, social and education landscape of the Ludlow and West Poplar communities is devastating.

"Between the two communities there are four major public housing developments with a growing number of vacant lots. Direct assistance from both the state and federal government has resulted in 250 soon to be completed single family homes.

"Major modernization is underway in several of the public housing developments, and an active business and commercial corridor will represent a major boost to the old and new residents that are moving to the area.

Children & Families ($300,000)

"Lastly, for our children and families, a total of $300,000 is needed in the human services support line item of the Department of Public Welfare.

This money will be used to develop and implement an effective intergenerational childcare and evening child care programs in Philadelphia County. A recent report of the Commerce Department Census Bureau states that families with working mothers most often rely on fathers, grandparents or other relatives for the primary care of children under 5. This has a great impact since more and more mothers are entering today's work world, and even more will need help come March when some 15,000

Philadelphia TANF recipients will be looking for a job. "Whether it is a full or part time, every mother who becomes part of the work world will require supervision for her children. I hope, with this money that we will soon have a plan in place to help provide a smooth transition for the working mothers of Philadelphia.

"Thank you."

CHAIRMAN BARLEY: I now recognize Representative

Levdansky. Welcome and you can begin your presentation, and reminding the members of the five-minute timeframe.

REPRESENTATIVE LEVDANSKY: Thank you,

Mr. Chairman. I apologize, I haven't had the time to put these comments in writing, but I will follow up and do that.

There is four areas I am going to talk about so I am going to move rather quickly through them.

One is timely. I just want to echo the concerns that

Representative Colafella did about special education, but I just want to go a step further. The legislation that passed committee this week, HB16, would simply establish a minimum funding level of 50 percent for special education in an effort to drive more additional state dollars to those school districts that are being short changed. But it really doesn't, in my judgment, deal with the fundamental and apparent problem with the system, and that is, the formula by which we assume that one percent of a school district's students are severely learning impaired and 15 percent are mildly learning impaired or learning challenged. So, I think we need, and until we get at changing that formula,

1 think we are always going have an inequity of a system.

And it will just continue to be perpetuated even if we establish a minimum floor.

I would rather suggest that we abolish this one and 15 percent formula and instead reimburse school districts based on actual head counts. School districts and the Department of Education now know in every school district how many kids are severely and mildly learning impaired. We know that and we ought to reimburse school districts based on that actual incidence of special education rather than this assumption of one and 15 percent.

Secondly, my secondary concern that I want'to bring to your attention is the issue of how much and how we go about funding volunteer fire companies in this state. I have "just- recently been-appointed *to the

Joint Legislative Budget and Finance Committee and last week we received a report from the staff that points out some problems in the amount of money and how the state distributes the two percent foreign fire insurance premiums tax. We have a lot of volunteer fire companies in this state believe it or not that receive less than

$1,000 a year in state reimbursement to provide sickness and accident insurance for their members. And we have some other volunteer fire companies in the state that are sitting on over one million dollars in surplus fund reserves in their accounts. We have a huge disparity in the financial support that we give to volunteer fire companies across the state.

I think we need to change that funding formula so that we can provide a minimum floor level of support and at the same time put a cap on the maximum amount of money that is going to those fire companies that are sitting on perhaps million dollar reserves.

So we need to change that funding formula in my judgment.

But we also need to put more state dollars into the program. Right now the program in support of fire companies is entirely funded by a two percent tax on foreign fire insurance premiums. But the two percent tax on domestic, on in-state fire insurance premiums,goes into the general fund. It doesn't go into the funding stream to provide support for our fire companies. We approximately have this year about $19.3 million in domestic insurance premium tax that's going to the General Fund. But I would suggest that we free up and allocate as additional support for the volunteer fire companies in this state. I think that is important.

You know, we all, democrat, republican, urban, rural, suburban, all have volunteer fire companies and I think they have gone too long without some additional support from the state.

The third area I briefly want to touch is the mental health/mental retardation field. This is an unbelievably complicated convoluted issue and budget streams and how we finance these programs.

I, like members of the legislature, have always heard concerns about the direct care workers and how poorly paid that they are, how lowly paid that they are. And last week we had a report from the Budget and Finance

Committee that documents that these people are paid far less than poverty wages to take care of the most frail of our citizens.

This is a complicated issue, but just let me say this. We have, in the last several years, put two and three percent COLAs into the MH/MR line items, but it never gets down, the direct care caseworker never sees the two or three percent increase in his or her salary. It just doesn't happen. And we need to work together to do some changing to the funding formula to make sure that those increases that we appropriate get to the people on the front lines. Because right now our counties and the provider communities are syphoning off a signficant portion of those funds. We ought to do something about that.

One last area, it is an area that I have been working on for a long time, and hopefully you are going to hear more about it this year, and that is in the area of campaign finance reform. It is absolutely scandalous the amount of money it takes to run for public office in this commonwealth anymore, from governor down to our level of the state legislature. Twenty-seven states provide some form of public financing for campaigns for public officials in their states. And just a couple months ago in November, Maine and Arizona, the people both passed referendums to put public money into a fund to enable candidates to draw down those public funds and rely less on special interest dollars to fund their campaigns.

We certainly have enough surplus. And if we don't want to allocate any money from the budget, we could certainly take money out of legislative surplus accounts that have been squirreled away throughout the budget and take some of those monies. Maybe we could take a portion of the WAMs, and instead of having an indirect form of political capital, we can have a direct and honest form of political capital. So I would like to see us move in the direction of putting in some sort of program for those of us interested in relying less on special interest dollars to finance our campaigns.

I will follow up, Mr. Chairman, with written comments in these four areas, and appreciate the time and opportunity to make a presentation.

CHAIRMAN BARLEY: Thank you very much.

I appreciate your comments today.

I now recognize Representative Grucela.

REPRESENTATIVE GRUCELA: Thank you, Chairman

Barley. Good morning, ladies and gentlemen present, members of the Committee, esteemed colleagues. My name is Rich Grucela and I am a state representative from

Northampton County, specifically the 137th District.

I am here to address the Committee on a rather singular issue, and that is, the huge budget surplus which I believe should be returned to the taxpayers in some form. Now, I don't believe we should return all of the surplus. I certainly believe that we should save some money. But I think basically the surplus is overtaxation and that money belongs to the taxpayers.

And I think we are in a rather enviable position at this time to return some of that money.

If I might, I would like to indulge the

Committee, not to be egocentric but a little bit on my background. The late speaker of the house, Tip O'Neill

used to say all politics is local. Well, I began as

a township supervisor and served six years and then

served 14 years in county government and taught school

for over 30 years.

So, the property tax is something I am

rather familiar with. As we know, it is the only tax

that, or the basic tax, that drives those local levels

of government. And ironically, this is rather a good

time to be elected to the state legislature. We seem

to be awash in money. When I was first elected to county

council, we had the same thing. We had a huge budget

surplus. In my first term, we returned that money with

a reduction in the property tax. Now the state doesn't

have, obviously a property tax. But Mr. Chairman and

members of the committee, the state has the opportunity

to provide relief to members of the local governing

bodies in the form of the surplus and with a property

tax reduction.

Now I know there is talk of a personal

income tax reduction, which I also of course would favor,

any tax cut we should favor. However, I don't think

a cut in the personal income tax will do as much for

senior citizens or will do as much for the average Pennsyl-

vanian. In fact, the average Pennsylvanian will probably only have a wash, be equal, a personal income tax cut will just cover the increased licensed fees that was enacted last year.

So, I ask you at this time with that particular surplus that we have this opportunity to remove or at least reduce, not remove I'm sorry, but to reduce burdensome onerous property tax. And again,

I am very familiar with having to levy that tax as a local official and as a former school teacher.

Again, I thank you for the opportunity for addressing you this morning. I look forward to working with you in the months ahead to give all Pennsylvanian J a fair and just state budget and to give local officials a much needed influx of revenue to help them reduce the property tax. Thank you, Mr. Chairman.

CHAIRMAN BARLEY: Thank you very much and I must continue to commend the first term members for being able to make excellent presentations within the five-minute timeframe. I am not certain what happens term after term in service, but maybe we gather more information.

Representative Frankel, one of our own

Committee members, but also a first term member. We invite him now to make a presentation for the Committee. REPRESENTATIVE FRANKEL: Thank you, Mr.

Chairman. It is really an honor for me to be here as a freshman, another one of our freshman class, to address the Appropriations Committee which I am also very honored to join my new esteemed colleagues on that Committee.

I want to really focus on two issues, one of which you have heard a great deal about already this morning and that is public education. The other one I would like to talk about, the Pittsburgh City

Magistrate Courts that have been funded through our budget.

As we have heard already today, the education budget is a significant issue in the City of Pittsburgh, about probably a decade ago the state funded 50 percent of our local school district budget. Today that proportion

is 34 percent. We have really an enormous gap that we had to make up by relying on our property tax system to replace those revenues. As we all know, and as has been repeated here today, a very regressive tax. Probably one of the most regressive possible. And as we rely on that tax, we have continued to deal with the issue of a shrinking tax base in our city, and the property tax is one of the primary reasons that we continue to dig that hole. So, I would like to see a restoration back towards the level of funding that the state traditional!/ I i took to replace at least 50 percent of our local school district budgets.

It is interesting for me to note that the 1994-95 budget, the Department of Corrections Budget since that time has received an increase of over 50 i percent while the education budget has only been increased 14.4 percent.

As was also heard today, there is also a need to address the inequities within the special education formula. Special education, which is mandated by the state, an important area for our schools, particularly our city schools, in our urban areas throughout the

State of Pennsylvania, we know that we deal with issues that may not be evident in other portions of the state.

We deal with more special education students basically due to economic demographic reasons. We have a high level of poverty, more low birth weight children that creates significant impact with respect to the number of special education students that we have to deal with

i in our city schools.

I know the Department of Education made a commitment last year to address the issue of funding i and fair funding of special education dollars. And up until this time, even with the five percent increase we have seen in this budget, we don't know what that i i I reconstituted formula will be.

Specifically in Pittsburgh, one of the issues that we are looking to with respect to a line item, there is a vocational school, the Connelley School, that has had an allocation of the state's budget within the state Department of Labor and Industry, but that wasn't funded this year in the 1999-2000 budget. The

Connelley Center has a three million dollar shortfall.

How can the district make up the difference, it can't.

That money helped train students and provided workforce development — something that is important to keeping jobs in the area and to sustain a good economy.

Having an available pool of highly skilled workers is key to attracting new business. Job training programs, including ones taught in a vo-tech school such as the Connelley Center, are vital to ensuring that Pennsylvania has and continues to have a good work­ force. In order to do so, we need to address the funding needs for this type of training and restore $3 million to the Pittsburgh School District for the Connelley

Center.

Another area that we must make up for a shortfall in is the city of Pittsburgh for its magi­ strate's court.

The proposed budget provides a $1.2 million allocation for the City Magistrate's Court. That is a four million dollar decrease from the funding for the prior year.

In the scope of Pennsylvania's $37.6

billion budget, four million may not seem like much, but that is more than one percent of the city of Pittsburgh's general operating budget.

The funding for the Pittsburgh's Magistrate's

Court began several years ago, when the city appealed to the General Assembly to include the funding in the state budget. Now previous to this, money had been provided in the state budget for the Philadelphia Magistrates and the District Magistrates across the State of Pennsylvania.

Because of the city's appeal, Pittsburgh's City Magistrates received a $1.2 million allocation in the 1996-97 budget for the first time.

The next year, Pittsburgh requested additional funding of the magistrates and received $5.2 million in state funding for the '97-'98 Budget. The city requested

5.2 million again in '98-'99, but only 1.2 million has been included in the current fiscal year. The city courts are to receive the remaining four million through a supplemental appropriation.

I am requesting that the city courts be restored to the current level of $5.2 million and remain there until the implementation of the unified judicial system. (Under the unified judicial system, the state will assume the costs of all levels of the judicial system, including the magistrates.)

In an era of relative prosperity and budget surpluses based on routinely conservative revenue projections, it makes little sense to penalize the Pittsburgh

City Schools by taking away $3 million from the Connelley

Center and to punish the city of Pittsburgh by not restor­ ing its court money. We should also take this opportunity to reduce the burden of public schools that have to rely on property taxes and provide adequate and equitable funding for special education.

Thank you.

CHAIRMAN BARLEY: Thank you very much.

Now I recognize Representative Solobay for purposes of making a presentation. Welcome and you may begin.

REPRESENTATIVE SOLOBAY: Thank you Chair­ man Barley and honorable members of the Appropriations

Committee. Thank you for your patience today and the opportunity to speak in front of you. I believe everyone should have a copy of what I will say and you can refer to.

There are three major issues I believe are vital to the people of the 48th District, which is in Washington County, as well as the entire commonwealth.

The first of these and the most important issue up in my district is the need for infrastructure improvements, which mainly deal with the municipal water and sewer programs. The cost of these projects is very overwhelming, and the smaller municipalities in my district and even the larger communities have a very tough time finding the funds to handle these in their local budgets and even if they have to relay it onto their taxpayers.

Communities in my district are rapidly becoming the bedroom residential neighborhoods for the

Pittsburgh area, since the long-awaited Mon/Fayette

Expressway is nearing completion and the Southern Beltway

is soon to begin. But how can these municipalities offer viable housing if the current water and sewage

systems aren't up to par with the Department of Environmental

Protection standards?

Thanks to programs like PennVEST, many muncipalities have been able to offer water and/or sewer programs to some of their residents, but even then,

the homeowner's responsibility for upgrading these anti­ quated systems is beyond the scope of their household budgets. Particularly when it comes to senior citizens

living on fixed incomes, the additional $50 or $60 a month to pay for the water and sewer bills usually come out of their need for maybe medication or food and it can be a problem for them.

And when these projects are contracted, residents really don't always have a choice to participate

-- whether they can a€.ford to or not -- because of the funding mandates that each household participate -- more money that the homeowner does not have.

The pool of money available through Penn-

VEST as full grants is very limited. In order for commun­ ities to get water and sewer projects going, and bring residents up to par with the progressing times, more money needs to be included in this year's fiscal budget in the form of full grants for the water/sewer projects.

The next issue I would like to talk to is one that is very close and near and dear to my heart, since I am also a volunteer firefighter and have been for the past 21 years. As you have heard today, there has been many proposals on things to do for the volunteer fire service. And it is my proposal now to establish a volunteer fire service retention program. These days not only is it hard to recruit and retain a good corps of volunteer firefighters, but sometimes and often is nearly impossible. Among the reasons it is so difficult is because these men and women not only have to put

in considerable hours of time for fighting fires and going to other types of emergencies, but they spend

long hours training and performing administrative duties within their departments as well as needing to raise

funds to keep their companies afloat. This, in addition

to trying to work a regular job and tend to family obliga­

tions, which we know now with the variety of things your children can be involved with have a tendency of

taking up a lot of time. And with two income families where you have a mother working out there, it also becomes very difficult for time.

They do all these things without compensation, basically for free, because they feel so strongly about providing this vital service to their community.

I would like to see the budget include money to establish a statewide pension plan for volunteer

firefighters. Presently I am working on drafting legislation

that will provide this. It has also been a thought

of myself and in talking with the Attorney General that

this could possibly be a proper use of the tobacco funds.

When I brought this up, there were some people they kind of scratched their head and wondered where I was

coming from with this, but it is a known fact that over

25 percent of all the fire related emergencies that occurred in the state are based on tobacco use or some reason for tobacco use, and the higher percentage of that, but hard to believe, We felt it very strong to utilize these dollars in that form.

The estimate for a plan such as this would be between eight to $10 million per year, but

I believe it would be money well spent to the dedicated men and women who have done so much for our commonwealth and ask for so little.

Remember, the volunteer fire service in the commonwealth saves the taxpayers approximately six billion dollars per year. If it weren't for the volunteer firefighters, many of the small communities would have no guarantee of protection and a rapid response in a critical time.

This state is made up of so small cities, townships and boroughs that unlike Harrisburg, Pittsburgh and Philadelphia, cannot afford a paid fire department.

Committee chairman and committee members, please consider something for these men and women, the volunteer fire­ fighters, when you finalize your 1999-2000 spending plan.

Lastly, and I'll be brief, I am sure my time will soon be up, I would like to talk about special education funding and the way it is currently funded.

Right now the state pays school districts their subsidies for special education based on a formula

that looks at total school enrollment. These numbers don't always reflect a district's actual burden for

special education costs, since each district has individual

students with individual needs.

We are looking at House Bill 16, which

I believe calls for the state to pay 50 percent of the district's actual costs for special education. I support

this bill and hope that it is just the first step toward

the state helping districts with mandated expenses like

those for special education.

Again, Mr. Chairman, I thank you for your time and the Committee's consideration this morning.

CHAIRMAN BARLEY: Thank you very much, and again, I appreciate your presentation.

I now recognize Representative McCall

for purposes of making a"presentation before the Committee.

Representative McCall

REPRESENTATIVE MCCALL: Thank you, Mr.

Chairman. Thank you, members of the Committee. I would be remiss if I didn't personally thank the chairman of the Appropriations Committee for providing the members of the legislature this forum, and I think a very important forum for us to tell you what we think is important representing the people that we represent in our districts.

What I'd like to illuminate are the issues

of education funding and local property tax reform.

The budget, as it was presented two weeks

ago, represents a positive starting point, but I think

we can do more.

I am pleased that the budget includes

a $34 million increase in special education funding.

This will certainly assist our school districts in

funding'mandated programs. Now we need to work on revamping

the funding formula so that all districts receive reimbursemert

on a same level per pupil basis. These are mandated

programs--if we dictate our schools offer a program,

then we•should provide the funds to pay for it.

Pennsylvania is sitting on a huge budget

surplus. At the end of last year, we had $676 million

in our coffers, stashed away in rainy day accounts and

other reserves. While remaining fiscally responsible

as a state, I believe we should strengthen our education

funding^ and re(*uce local property taxes. We must make

our tax dollars work harder for our hard-working taxpayers.

The budget includes a token increase

in the state share of basic education subsidy. A mere

three percent is offered when inflationary rates for

i i i i our schools are now at 3.5 percent. We're not talking about frills for these districts, we're talking about the costs of current textbooks, tablets, pencils and retaining qualified teachers. We have a sworn duty to educate our children and to educate them in a manner that will allow them to compete in the global economy.

This requires offering the latest textbooks, competent teachers and access to computers.

I urge members to consider what just a portion of the nearly one billion dollars we have sitting idle in various accounts could mean to the school districts of our state. Think about the number of new textbooks and computers we could purchase. Think of the new programs we could fund.

Today our property owners shoulder the burden of paying for education—what the state doesn't provide, the taxpayers make up through local property taxes, i

This budget includes $273 million in tax cuts, but about 80 percent of those cuts will have little or no effect on the middle class. Over the past four years, taxes for our largest corporations have been cut by almost three billion dollars. A Personal

Income Tax cut was offered last year to help people at the lower end of the income scale, but we have done

i nothing to help working families. Yet working families have to pay one billion more in higher property taxes, higher gasoline taxes and increased motor vehicle registration fees and other fees levied by this commonwealth.

Last year at the end of January, we were

$211 million above our expectations for General Fund revenue receipts and by year end, the General Fund had received $676 million more than anticipated. Also, by year end, the administration had reduced appropriations by $162 million, culminating in almost $840 million of extra cash.

This money is not our money to stash away in various accounts. It is time to give this back to the taxpayers of this commonwealth.

Even as discussions of cutting the Personal

Income Tax by one-tenth of one percent has begun, I believe that rather than returning $30 to the wage earners, we should consider utilizing the projected $200 million to reduce property taxes.

As a representative of every taxpayer in the state, we should look to the needs of the middle class wage earner, as well as our seniors and children.

We have the means to enact real tax reform. Let us use property tax reduction as a start and then become a model for other states in this nation to follow. Through sound fiscal management we can

accomplish this goal. Thank you, Mr. Chairman.

CHAIRMAN BARLEY: Thank you very much

and I appreciate your testimony today.

I now recognize Representative Samuelson

for purposes of presentation.

Welcome. You may begin.

REPRESENTATIVE SAMUELSON: Thank you,

Mr. Chairman, and thank you for the opportunity to testify

today.

I am encouraged by some of the initiatives

I've seen in the Governor's proposed budget for 1999-2000.

The significant increase that is proposed for libraries

across the state will dramatically expand opportunities

for our citizens and will have a tremendous impact on

our communities for the years to come. This is a wise

investment.

The proposed budget also includes $35

million for a Read To Succeed Program for kindergarten

through third grade students to insure that children

can read by the end of third grade. This targeted investment

will unlock the gates of knowledge for thousands of

our youngest students and will open doors for them throughout

their lives. I think we can do even more in the early elementary grades and we need to work together to address issues like reducing class size. We've got some real opportunities to try to do that this spring.

There is no substitute for parental involvement and parental responsibility. Ecucational opportunities would be even better if more parents spent more time reading with their children at night. But the commonwealth is wise to bolster its reading programs in the early grades. Learning to read is the key to success in our information based society in school and in life.

Another line of this budget focuses on adult literacy programs. Perhaps a generation from now this line item will be unnecessary if we can Read

To Succeed at school and at home.

I would also like to take a moment to discuss a reduction in the Personal Income Tax. I am one of more than 120 co-sponsors of House Bill 1 which would cut the Personal Income Tax rate from 2.8 percent to 2.7 percent effective July 1st. This tax reduction is fair, makes economic sense and is a fiscally respons­ ible thing to do.

The governor has stated that taxes have been reduced by 3.9 billion dollars since 1995. As we know, most of the tax cuts to date have gone to bus­ iness. The commonwealth has been able to reduce the rates for both the Corporate Net Income Tax and the

Capital Stock and Franchise Tax. This year our focus should be on cutting taxes for working families first, and the Personal Income Tax is a great place to start.

The people of Pennsylvania pay the largest share of our state budget. In this proposed budget, it lists the projected tax revenues for the coming year as follows:

6.7 billion from the Personal Income Tax; 6.6 billion from the sales and use tax; and 4.1 billion from corpora­ tion taxes. A reduction in the Personal Income Tax is a fair and direct way to cut taxes and this would be seen by working families effective July 1st.

This tax cut would also benefit small business. There are thousands of small business owners who are subject to Personal Income Tax and would benefit from a reduction. Using the revenue figures in the proposed budget, one can calculate a cut in the Personal

Income Tax would total about $240 million statewide.

We have often heard about the economic impact of targeted tax cuts. I believe a reduction in the broadly based

Personal Income Tax would have a wide economic impact in every community, in every neighborhood, household by household throughout the state. Cutting the Personal

Income Tax is also a fiscally responsible thing to do.

It could be sustained over the years. The state has had surpluses of nearly $1.8 billion over the last few years for an average of over $440 million per year.

We are $286 million ahead of budget projections just seven months into this fiscal year and the Rainy Day

Fund, the Tax Stabilization Fund, is projected to be at $785 million by the end of the next fiscal year.

The bottom line is that the state's fiscal condition is healthy, and a $240 million cut in Personal

Income Tax with a new rate of 2.7 percent could be and would be sustained over the years. This government has a surplus and we must remember whose money this is. It belongs to the taxpayers and we should give the working families of Pennsylvania some tax relief.

There are some very worthy proposals under consideration this year, including finding ways to give property tax relief to the citizens of this commonwealth. I believe we have a real opportunity to reduce taxes for people for whom we work, the citizens of Pennsylvania. And I think a reduction in the Personal

Income Tax is a fair and direct way to start and should be the downpayment in our efforts to reduce taxes.

Thank you very much, Mr. Chairman, and thank you for this opportunity.

CHAIRMAN BARLEY: Thank you and I appreciate your observations. You made some excellent observations today.

The final presenter for the day is Repre­

sentative Pat Browne. Representative Browne, welcome and

you are on. You are the presenter we have been looking

for all day.

REPRESENTATIVE BROWNE. That's why you put

me last. Chairman Barley, Members of the Appropriations

Committee, I appreciate the opportunity to testify about

several issues that I think are appropriate and will make

our state government appropriation effective this fiscal year.

These two areas include Early Childhood

programming and Risk-Adjusted reimbursement rates for

providers in the Commonwealth's Medicaid Health Choices

program.

First, Early Childhood Programming - As

members of the General Assembly, we are all aware of our

constitutional obligation to provide for a thorough and

efficient system of public education. It is my opinion

that a thorough system must necessarily include equal

access by all the Commonwealth's children to a quality

primary and secondary education experience; one that pro­

vides each child with the tools he/she needs to be productive

and self-sufficient.

I believe that the Governor and this

assembly are taking strides towards meeting our obligation

I by adopting initiatives that promote excellence in public

school instruction. These initiatives include performance

incentives, Link-to-Learn and assessment of educational stakeholders against our newly adopted standards through

the baseline measure of academic bankruptcy.

Yet, I hope you will agree, that the effectiveness of these initiatives are compromised if our children are not prepared when they enter school years to achieve the standard of excellence that we all want them to have.

Many children in my urban legislative district, similar to many other urban children throughout the Commonwealth, are exposed to a variety of risk factors that are generally not experienced by youth in more affluent suburban communities. Poverty, single parent households, low-formal educational level of parents, poor nutrition and other factors jeopardize a child's normal cognitive, intellectual and emotional development leaving them at risk in regard to their ability to main­ tain a normal progression through reading, writing and other educational areas when they enter primary .school,—

ing. Falling behind in these early years increases the likelihood for low test scores, failure and paves the path toward eventual school drop out.

Many urban children, however, are not left hopelessly isolated from the promis of education.

This is due to their participation in quality Early

Childhood Programming. Early Childhood Programs, such as Head Start, put children on the path to success in school and in life. Embracing the whole child philosophy they offer a wide range of youth and family educational, health, nutritional and social services which help the child grow mentally, socially, emotionally and physically.

These programs are widely recognized as a way to lift families from the cycle of poverty and bring children into the educational mainstream. While they may be costly, studies have shown that every dollar invested in high quality early childhood education, returns seven dollars in savings because of lower special education and welfare costs and higher work productivity.

Unfortunately, Pennsylvania state government has not committed itself towards the benefits that Early

Childhood Programs bring to our urban youth. While states with major urban concerns such as Ohio, Texas,

Florida, New York and California have capitalized Head

Start and state sponsored Early Childhood initiatives with tens of millions and sometimes hundreds of millions of state resources, Pennsylvania's current commitment is less than that of Alaska. We had, in the past, appropriated one million dollars to Head Start. However, that was eliminated in the 1996-1997 General Fund Budget.

With many other jurisdictions of our significance recognizing the importance of Early Childhood

Programming to the future of many of their urban youth and families, I am asking this committee to strongly consider revising the Governor's budget request to include a more significant appropriation towards these initiatives.

Given that Head Start is the most established and successful program in the commonwealth and the country, I believe that replacing the appropriation to Head Start and possibly increasing it would be warranted.

The second is Risk-Adjusted Reimbursement rates under health choices - As this committee is aware, the Department of Public Welfare, under its authority given to it by HCFA,has implemented managed care for the Medicaid service population in Southeastern Pennsylvania and is currently implementing it in Pennsylvania's southwestern counties. Managed care for Medicaid recipients is being embraced by Pennsylvania and states throughout the country as a health care delivery system that will provide better access and improved overall health for a previously underserved low-income population.

Reimbursement methodologies utilized by DPW are similar to most managed care' arrangements

fixed capitated rates paid in advance to participating plans for each enrolled recipient. This methodology

is beneficial in that it creates an incentive to improve

efficiency by controlling costs and over utilization.

Yet, it simultaneously creates certain risks. First,

is a risk of under service, because plans can produce

positive cash flow by reducing the number or quality

of beneficial services. And second, the risk that when

the rate setting method does not take into account the

cost variation associated with different types of disabling

conditions, plans will seek to enroll the healthier,

less expensive individuals. These risks may be greater

when plans feel financial pressure from actual or potential

losses from serving enrollees with extreme needs. The perverse incentives that a fixed capitation rate methodology

can create is one of the reasons why many providers

in the southeast have told members of the Health and

Human Services Committee that Health Choices is not

currently structured to properly serve individuals with

special needs.

A means to remedy this problem that has

been implemented by some states and is being explored

by others is to utilize risk-adjusted methods for setting

capitation rates. Risk adjustment is an attempt to

match the rates paid to health plans with the expected

costs of providing appropriated services to individual recipients. This methodology also creates an incentive for plans to specialize in the diagnosis and treatment of certain diseases and conditions that, because of the extreme expense, they would avoid under fixed capi­ tation. With the difference in health status among seniors,

HCFA is currently attempting to implement a risk-adjusted rate methodology in Medicare.

While in the past DPW was reluctant to explore risk-adjustment methods, it has established a separate risk pool for HIV/AIDS patients as part of its expansion plans for managed care throughout the state and the Governor's budget request for the 1999-2000 includes an appropriation of approximately $30 million to establish another risk pool for special needs recipients enrolled in Health Choices-Southeast. Although these pools are basically an increased allocation to reimburse plans for expenditures above current capitation rates and not a new, more appropriate rate methodology, they do serve as an initial commitment towards this endeavor.

In order to improve the overall Health

i Choices delivery system, I sincerely request that this committee, one, endorse the Governor's request for risk pools for HIV/AIDS patients and other special needs

individuals in this budget request. Two, support expanding these risk pools into other service areas as Health Choices is implemented statewide, and three, encourage the Secretary of the DPW to work with the General Assembly

in implementing risk-adjusted rate methodologies for

Health Choices. I believe that these efforts will be an effective way to improve Managed Care for all our low income individuals and families in the Commonwealth.

Thank you, Mr. Chairman, for your time.

CHAIRMAN BARLEY: Thank you very much.

I appreciate your comments. Do any members of the committee, Representative Mundy, do you have any further comments or anything you would like to address?

REPRESENTATIVE MUNDY: I would just note

today that a lot of what we have heard is how to return

taxpayer money to the people of Pennsylvania. I know

House Democrats and I would hope the House Republicans would join us in a property tax cut proposal that makes a lot of sense. And Representative Browne, before you

leave the room, I am very interested in your pre-school

initiatives and I would be very, very glad to work with you to come up with a proposal that makes sense for

Pennsylvania. It sounds like a very good investment.

CHAIRMAN BARLEY: Thank you. Are there any additional members that have any comments?

(No response.)

If not, that concludes the presentation for today. We had I believe 20 members appear before the committee. I am sure it would be interesting to take the sum total of recommendations made and see exactly what impact that would be on the budget. Most of our members I believe were advocating additional spending today, and maybe we will attempt to do that so that we can summarize what the impact on the budget would be.

Again, thank you very much and we will reconvene our hearings in two weeks. Thank you.

(Whereupon at 12:15 p.m. the hearing

was concluded.)

(Prepared testimony of Representative

Harold James was as follows:)

"Ladies and gentlemen of the committee,

I thank you for the opportunity to discuss Pennsylvania's future with you here today. I am state Representative

Harold James of the 186th Legislative District in Phila­ delphia.

"It might be an overused phrase these days, but it still holds merit and it is worth repeating

--This budget is the spending plan that will lead Pennsylvania into the new millennium. As such, I believe it should set an example of the path we plan to lead our residents down in the new age.

"Judging by the proposed budget presented to the General Assembly earlier this month, it appears as though we have chosen a road that will force us to leave many of our residents behind.

"In 20 days, on March 3, an estimated

25,000 people --17,000 in the city of Philadelphia alone

—are in danger of being cut off from public assistance.

Soon we will face the reality of the mean-spirited welfare-to- work force initiatives.

"Thousands of Fennsylvanians will be forced off public assistance and into a job market that may not be able to support them all. Many of the people who receive state aid want to work, but they cannot find family-sustaining jobs.

"We have a responsibility to provide our citizens with some level of support until they can find real employment with a living wage.

"Many of our communities, especially those in Philadelphia, will be devastated by the number of individuals who will lose their benefits. These people will be forced onto the streets to search for jobs that might not exist.

"The state has turned its back. That means caring for these individuals will become the response

4 bility of religious organizations, nonprofit groups and charitable agencies —most of which are ill-equipped and underfunded.

"It is time for the governor and his administration to take a hard look at this budget and realize that they can help. Let's bring back legislative initiative money so we can provide nonprofits and charities with the money they need to hire former welfare recipients and assist those in need.

"We need to infuse money into our communities to prevent the devastating impact that will occur when

25,000 people find themselves alone, without support.

The Legislative Initiative Program is the perfect way to make sure money gets to where it needs to be.

"Another area where we can protect our communities is by bridging the racial divide gripping our state and nation.

"President Bill Clinton has set up an office in the White House to focus on racial issues.

The President's Initiative for One America will keep alive the work of a yearlong race campaign that has opened a new dialogue on race relations —not just for minorities, but for women and the disabled as well.

"If is time to do the same in Pennsylvania.

"As a result of the rise in racial problems throughout the county and in our Commonwealth, the Pennsylvania

Human Relations Commission is in dire need of additional funding to staff more agents. Right now, through discussions

I have had with the FHRC, I have learned that the commission does not have enough agents to adequately handle the complaints being filed with the office.

"In a recent meeting between the Pennsylvania

Legislative Black Caucus and the governor, I raised this issue of more funding for the PHRC to deal with rising racial problems in our state, and the governor said this was something he was willing to discuss. I look forward to working with the governor and our Appropriations

Committee in this regard so we can go forward.

"If we are serious about addressing the racial issue in Pennsylvania, then let's start by making sure programs that promote racial harmony receive their fair share and are not left out of the budget process.

"This is not a new issue.

"During budget debates for the 1997-98 fiscal year, the House approved an amendment (A-0522 of 1997) I sponsored to boost funding for the Pennsylvania

Human Relations Commission by $511,000. That money would have increased PHRC staffing levels to monitor and track hate crimes racial intolerance and racial violence in our Commonwealth. The amendment was removed without discussion from the conference committee that eventually became the state spending plan that year.

"As you can tell by President Clinton's recent commitment to find programs that promote racial harmoney, the need for better monitoring and action has not diminished, particularly here in Pennsylvania, where we have the unfortunate distinction of being a national leader in the number of hate crimes.

"Whether we're talking about welfare or racial intolerance or job development, the discussion always comes back to one item --education. How we teach our children to determine the level of success they will achieve and how they will treat others.

The widespread disparities in our education system continue to mount. Since the 1994-95 fiscal year, corrections spending has increased by 50.8 percent while basic education funding has only risen by 14.4 percent. This is a backward and misguided approach to teaching our children.

"Even worse, hard-working middle-class families are forced to make up the difference through higher property taxes.

"Despite the so-called tax reform plan enacted last year, the rise in property taxes is still the No. 1 social issue facing our Commonwealth. The reform has had little effect, as predicted. In fact,

not a single county or school district has adopted the

complicated plan, so the new law has produced absolutely

no relief.

"What must we do to convince this august

body that the middle-class working families of this

state —the ones.who continue to provide the labor that bu£tds Pennsylvania —need relief?

"We ended the 1996-97 fiscal year with

a surplus of $576 million. Revenues from 1997-98 were

$676 million over estimate. The 1998-99 surplus already

stands at $286 million, with the heaviest collection

months still ahead.

"One other matter we need to resolve

—one which can be addressed with the state's large

surplus --is coming to terms with the United Foods and

Commercial Workers Union, which represents our 3,000

liquor store employees.

These men and women have been working

without a new contract for two years. They deserve

job security and peace of mind. This is a matter that

we need to resolve. Let's show the workers that Pennsylvania

supports them.

"Our budget surplus continues to grow.

And it grows because of hardworking men and women like those from the union. Isn't it time we returned this money to its rightful owners? Isn't it time we stop digging deeper into the pockets of taxpayers who have already given us more than enough?

"The governor unveiled a spending plan for the 1999-2000 fiscal year that proposes $273 million in tax cuts, with 80 percent of the reductions aiding big businesses. Corporate leaders would benefit substantially with a $116 million cut in the Capital Stock and Franchise

Tax and another $67 million in changes to the Corporate

Net Income Tax.

"All this, even though big business has received more than $3 billion in tax cuts during the four years the governor has been in office.

"Pennsylvanians need real relief and they're not getting it. The House Democratic proposal to reduce school property taxes by 50 percent over the next five years would be a meaningful start. The reduction could be funded with a portion of our budget surplus and the state's annual revenue growth. The plan would save taxpayers two billion in the first year alone.

"Tax relief should be a top priority.

Let me rephrase that —tax relief for middle-class working families should be a priority. They have been ignored for too long and the current situation is unacceptable " (Prepared testimony of Representative

Sara G. Steelmasv was as .follows:)

"Dear Colleagues:

"Rather than testifying before you, I

am writing to ask all of you to consider, as we develop

the budget, the needs of our community college students

and our need as a state to expand and encourage our

community college system.

"Some of you are familiar with the work

done by the higher education subcommittee of the Education

Committee last session in studying community college

programs in Pennsylvania and other states. One of the

conclusions we reached was that our current funding

system for community colleges leaves much to be desired.

Perhaps as a result, we have not seen the development

of a network of community colleges across the entire

state as has been the case elsewhere in the country.

"In states with a more fully developed

community college system, particularly North Carolina,

there have been clear benefits both to individual students

and to the business community. Community colleges,

with their ability to develop specifically focused short

courses that serve the educational needs of businesses

and students alike, have become a key element in economic

development. "The subcommittee heard a number of suggestions for improving the funding structure for community colleges in Pennsylvania, some of which would be quite costly to the state. However, I would like to suggest to the committee that we begin to deal with improvements this year by initiating a very small and inexpensive change: providing a sufficient appropriation to eliminate the variable sitate share ceiling formula.

"The variable state share ceiling formula theoretically takes into account a community college district's wealth and costs of operation. It has, unfortunateLy, an unforseen downside: It penalizes the schools that spend the least. It also, because of the fact that community colleges receive their state funding in arrears rather than in advance, has the most negative effect on the schools that are growing the fastest.

"It has been estimated that to have eliminated the variable state share ceiling in the current fiscal year and to have funded all our community colleges without formulaic caps would have cost us no more than $700,000 in additional appropriations. This year's community college budget was $166,419,000. As a percentage of the total community college budget, let alone as a percentage of our entire budget, $700,000 is 'hardly visible. However, it means a great deal to our newest, smallest and fastest- growing community colleges. "Similarly, to fund the state's share of community college costs fully in the coming year would cost less than $750,000. I am asking you to add this amount to the governor's proposed operations line item for community colleges of $171,412,000.

"Perhaps I should mention that eliminating the variable state share ceiling would not reduce any community college's reimbursement. It would, however, drive out slightly more money to newer, growing community colleges in southwestern and northwestern Pennsylvania and assist them in preparing our residents for fuller and more productive lives.

"Although community colleges already play an important role in both general education and workforce development in Pennsylvania, they could play more. Unfortunately, many of us are not fully aware of their current role and their potential.

"The community colleges are hampered in their relationship to the state by their current organizational structure, to which the subcommittee also recommended changes. An example of this is the fact that although the State System of Higher Education, the University of Pittsburgh, Penn State, Temple, Lincoln, and the University of Pennsylvania all have the opportunity to testify before the Appropriations Committee, to make

their requests and answer questions from committee members,

the community colleges have no such opportunity. Their

issues are considered as part of the Department of Education

budget, and given the natural interest of legislators

in such elements of the department's budget as the basic

education subsidy and the new state assessments, the

needs of community colleges are likely to be given lesser

consideration.

"Therefore, I'm using my opportunity

to present testimony to the Appropriations Committee

to call this issue to your attention and to ask you

to reflect on it. Please contact either me or Lee Myers

of the Pennsylvania Commission on Community Colleges

if you have questions."

(Prepared testimony of Representative

Scott Hutchinson was as follows:

"Mr. Chairman and members of the committee:

"Thank you for this opportunity to testify

regarding budget items of special importance to the

64th district, Venango County, and all of Pennsylvania.

"Today I would like to highlight three

(3) funding priorities:

1. Pennsylvania's Heritage Park Program

2. The New Choices/New Options Program i 3. Polk State Center for the Mentally

Retarded

"First, I would like to echo the comments

of another Member, Representative Argall, who laid out

a strong case for increased funding for the highly successful

State Heritage Parks Program. This regional tourism,

cultural and economic development initiative has been

extremely cost effective. Since inception, $16.2 million

in direct state funding of this program has leveraged

an additional $13.5 million in local and private funds

as well as over $100 million in federal funds. This

does not include the estimated $129 million in heritage

tourism dollars spent in Pennsylvania yearly.

"One of the added benefits to which I

can attest from my local Oil Heritage Region experience,

and certainly one of the original goals of the Heritage

Park movement, is to forge interagency and intergovernmental

partnerships. In the Venango County Region, we have

regular meetings of local leaders who never even talked

previously, as well as cooperative, successful, concrete

local projects carried out because of the Heritage Park

process. Now that we will soon have eleven Heritage

Regions at about the same relative funding level as when the program began ten years ago, (at $2.75 million),

the appropriation is very deserving of a bump to $5 million annually.

"Next, I would like to advocate continuation of the New Choices/New Options Program, for single parents and displaced homemakers which is funded through the

Department of Education under the old Federal Perkins

Act. We may quibble about whether the federal mandate requires the Department to fund this worthwhile program into the future, but I am here to toll you that any hope of developing a modern, seamless, and successful

Workforce development system must b<; modeled after and include this special help provided ior single parents and displaced homemakers who are entering the workforce after a long hiatus or under difficult situations, including abandonment by their spouse.

"Since 1984 New Chol:es/New Options projects have been providing career development and counseling, job search skills, and continued education and training opportunities for single parents, displaced homemakers, single pregnant women, and individuals interested in nontraditional employment. There are currently 28 projects in Pennsylvania, serving 65 counties in 112 locations, with program delivery to over 5,000 individuals on a yearly basis. Two of the projects operate within state correctional institutions for incar:erated women.

"These programs are anique in their operation. They address multiple problems besides just unemployment.

Many single parents and homemakers lack child care coverage, financial support from spouses, adequate parenting skills, high school diplomas, math and communication skills, or even the ability to leave abusive relation­ ships. All these complications must be taken into consider­ ation before self-sufficiency and employment can occur.

"I am asking today that four million dollars be restored to this worthwhile ,program under the Department of Education for the coming fiscal year while we strive to develop a more permanent funding source and a permanent future as part of the Unified

Plan for Workforce Development Act.

"Another item of major concern to me personally as well as to Venango County is the future of Polk State Center for the Mentally Retarded, the largest state center with approximately 550 residents and 1200 employees.

"As you may know, the Department of Public

Welfare is currently in the midst of implementing a

Multi-Year Plan which reduces by one-half the number of state center residents. (from approximately 3,000 residents to 1,500).

"Years ago, many individuals were insti­ tutionalized who probably were not best served there. Now, I feel the societal pendulum has swung too far in the other direction, and if many more individuals are removed to community living arrangements, they will not be able to live the safe quality life which they could in a center like Polk. Community living may well offer a good alternative to certain members of the disadvantaged community but not all of them.

"Polk State Center offers a crime-free rural life nearby the close-knit community of Polk Borough.

The high quality of life at Polk Center is also made possible by an outstanding, dedicated, professional, and caring staff.

"I am personally aware of many success stories of individuals who have prospered once they entered the institutional setting after living in the community. We owe the families of these individuals the peace of mind that when they are gone, their children will continue to receive quality assistance instead of bouncing unhappily from one community home to another.

The bottom line is that families should have options for their children—some are better situated in centers, some in the community. We need several alternatives for our most vulnerable of citizens.

"In summation, I sincerely believe that there is a way to provide both community services for those who can function with little assistance within the community, as well as institutional services for those with little-to-no ability to function within the community. To say that "one size fits all" does a disservice to a population that is dependent on our help, for their well-being. Although there are problems with the mental retardation system in this Commonwealth, maybe it is time we start focusing upon the reason the system was created in the first place: to serve the diverse needs of the mentally retarded population and their families.

"Thank you for your consideration of my viewpoints."

(Prepared testimony of Representative

Louise Williams Bishop was as follows:)

"Chairman Barley, Chairman Evans, honorable committee members, thank you for allowing me to submit comments regarding the 1999-2000 fiscal year budget.

"One of my main areas of concern is domestic violence. The impact it has on the victim, its impact on her family, its impact on society.

"The figures continue to increase on a regular basis. Every day, more and more children are removed from the home and placed in foster care because the level of violence in their own home presents a threat to their safety. Every day, more and more victims of domestic violence seek medical treatment, seek the safety of shelters, seek an escape from the abuse.

"And these are the lucky ones.

"We won't even think about the ones who aren't so lucky, except to say we should have done more to help.

"For every service available to victims of domestic violence, there is perhaps another that is needed even more. And for every donation made to a women's shelter, homeless agency, children's liaison program, so many more are needed.

"The state will soon be receiving a very large amount of money as part of the national tobacco settlement.

"This money has been earmarked for use in health care and related issues, including education about the dangers of smoking and smoking cessation programs.

But isn't domestic violence a very serious health issue?

"The cost of treating a victim of domestic violence can be skyrocketing, especially if she (or he) is a chronic victim, one who has suffered more than once at the hands of an angered partner. Trips to emergency rooms or clinic, coupled with the costs of finding child care if youngsters must be left at home while Mom seeks treatment — or worse, is admitted — can far exceed the cost of health care for the "average" patient.

Is there a way, Mr. Chairman and committee members, to include some funding for victims of domestic violence in this proposed budget?

"Another area I would like to see addressed in this year's budget is that of teenage pregnancy.

"Again, these are statistics that continually increase and have added staggering expenses to the health care system, welfare system, and so on.

"Yes, what we need is an answer to the problem, but until we have that, we must not ignore it. It won't go away.

"Please consider some funding for programs to help young, often unwed mothers, and their unborn babies. Pre-natal care is so important in the future health of a child, but these young girls so often don't have the means to seek out clinics and proper treatment.

"They need help with more than the physical aspects of the pregnancy, too. Counseling for the young mothers-to-be is critical, as is instruction in the proper way to care for the newborn.

Mr. Chairman, committee members, again,

I thank you for your time and hope you will give these important issues some consideration when finalizing the 1999-2000 fiscal year spending plan."

(Prepared testimony of Representative

Jess Stairs was as follows:)

"I am submitting these comments on Governor

Ridge's proposed budget for fiscal year 1999-2000 as majority chairman of the House Education Committee.

"The proposed three percent increase in basic education funding, following last year's increase, is once again good news for Pennsylvania's public schools.

The targeting of the distribution of these funds to districts which are themselves the poorest, which educate the largest percentage of poor children, or which are showing growth in enrollments, coupled withN the provision once again of small district assistance, earmarked to provide additional aid to the 112 poorest and smallest districts make sense from an educational, and more importantly an equity, standpoint.

"However, I believe the debate over the final amount of support to be provided to our public

schools will be greatly colored by what will undoubtedly be the most critical and controversial debate of this budget cycle — the proposed use of $63.6 million of public taxpayer monies, to fund a pilot educational opportunity grant program for parents who choose to send their children

to private and parochial schools. Constitutional issues notwithstanding, the fiscal implications of this proposal cannot be disregarded. $63 million is more than the total state funding allocated to vocational education

— an area of public education which is dramatically in need of reform if we are going to produce well-educated

Pennsylvania workers for the highly-technical 21st century job market. And the five-year projected cost of this pilot project ($587 million) is very nearly the total current year funding appropriated for special education for the entire state. Every dollar that goes to this program is a dollar that will not be available to our local schools and which will have to be supplemented by local taxpayer revenues. $63.6 million distributed to public schools could do much to enhance the quality of equipment in our public schools, provide alternative education for our most disruptive students, or renovate aging and outmoded school buildings rather than to provide state taxpayer dollars to private and parochial schools which are not required to meet the mandates and standards under which our public schools are legally required to operate. The educational opportunity grant program is a bad idea constitutionally, programmatically, and fiscally.

"Despite the $33.9 million (5%) proposed increase in funding for special education, I believe this line item will continue to be problematic until we can devise a funding distribution which more accurately reflects the reality of costs to local school districts and the actual occurrences of various exceptionalities.

Special education costs do not accrue in neatly predictable patterns and, the mere arrival of one child with multiple handicaps in a school district can cause a dramatic impact on a district's budget. We must move to address the inequities in our current funding distribution in this area.

"As the prime sponsor of House Bill 8, continuing professional development legislation, I am pleased to note the $2,840,000 proposed increase to expand teacher professional development programs.

Keeping our teachers up-to-date on changing academic standards, classroom technologies, intervention strategies

for dealing with disciplinary problems, and other best available practices for use in our classrooms is a sound investment in the future.

"As an educator, I know that no skill

is more fundamental to the future success of a child

than the ability to read. As a result, I am initially very supportive of the Governor's proposed $35.2 million

"Read To Succeed" program. Focusing on assuring early reading literacy in children at the earliest grade levels is critical and I look forward to reviewing specific details of how this program is going to target these

funds to the most critical areas of need.

"I must comment on an area which I believe

is not emphasized enough as a funding priority in this budget proposal -- that of making our schools safer

learning environments and removing the most disruptive

learners from the regular classrooms. Ask any teacher what they believe would make their classrooms better

and they will tell you the removal of the small number

of disruptive students who daily steal precious instructional

hours from their classmates. Ask parents what their major concern is about their schools and they will pinpoint

school violence. Yet the Governor's budget proposes

only a $500,000 increase in funding for altjer.na.ti.iV-e school

programs and only a total of $2 million to assist 501

school districts in addressing violence and school safety.

This seems to be an inadequate funding level for issues

of such grave import.

"The Governor once again proposes a significant

cost savings to local districts -- and the Commonwealth

— through reduction in the employer contribution rate

to the Public School Employes' Retirement System.

While the estimated $55 million in savings to school

districts is good news -- I must again add a note of caution to the Appropriations Committee to assure that

these on-going reductions are in no way jeopardizing

the future actuarial soundness of our retirement system.

We must be certain that current savings to districts

and the state are not being made at the expense of the

long-term solvency of the System, particularly as it

is called upon to meet increased benefit demands as

the baby-boom generation approaches retirement in the

next decade.

"The proposed increase in higher education

funding is of course good news. However, the relatively

modest 2.5 percent increases for the State System and

state-related university and three percent for community

colleges must be balanced against the impact on tuition

costs for Pennsylvania's students. The House Education

Committee is continuing to look at the results of last year's study on the rising costs of higher education in the Commonwealth and I expect will have specific recommendations, some of which have budgetary implications,

prior to final by adoption.

"The Governor's proposed "Sci-Tech Scholars"

and "GI Bill for the New Economy" scholarship programs

have worthy goals -- to keep Pennsylvania's best students

in Pennsylvania and to target scholarships to job fields

with identified employee needs. However, it will be critical to review the details of these new and costly

($16.5 million) initiatives.

"Finally, I would like to commend the

Governor on his dramatic and historic proposed increase in funding for our state libraries...the largest ever.

The quality and efficiency of our state's public library system has been a topic of on-going study by the Education

Committee.

"Our public libraries are a key to lifelong learning for the Commonwealth's citizenry and are one of our most utilized and popular municipal services.

Efforts to improve access to, and the quality of, our libraries is a good investment.

"The Governor's proposed budget for education, while addressing many of our most critical education needs, also includes many new initiatives and controversial proposals which will need much examination and debate before a final budget is put in place for the 1999-2000

fiscal year. I, and the House Education Committee, stand ready to assist in the final adoption of a strong educational budget for Pennsylvania."

(Prepared testimony of Representative

Bob Bastian was as follows:)

"In lieu of personal testimony at the

Appropriations Committee hearing, I understand I can submit in writing my proposals.

"1. Highway construction, specifically US 219 .from Somerset borough south to Interstate 68 in Grants-

ville, Maryland, is of highest priority for economic

development in Somerset County. I understand the complex­

ity of highway funding, but anything the Pennsylvania

Department of Transportation can do to facilitate the missing link of highway would be greatly appreciated.

The economic and social future of Somerset County depends

on the completion of that missing link.

"2. Operation Outward Reach (00R) is

a program administered by a non-profit organization

located in southwestern Pennsylvania and with programs

in five prisons in Southwestern Pennsylvania including

SCI - Somerset located in Somerset Township. I would

urge the Appropriations Committee to continue funding

this very worthwhile program for rehabilitation of prisoners

about to be released back into society, and to consider

increased funding so that this not-for profit organization

can begin similar programs in other state prison systems.

"3. I would like to make a request for

financial assistance for Elk Lick Township for a sewer

extension project in the Borough of Salisbury Pennsylvania.

This community was devastated by the May 31, 1998 tornadoes

that went through the center of the borough. Salisbury area is also being considered for a Keystone Opportunity

Zone (KOZ). This update on the sewage system would be quite beneficial.

"4. Finally, Garrett Borough has submitted a DCED single application for assistance in the amount of $47,263.35 for a new police cruiser and a Ford Truck

to be used in the municipality. I would appreciate

your consideration to fulfill this refund request."

(Prepared testimony of Representative

Jane Clare Orie was as follows:)

"Representative Barley and Members of

the House Appropriations Committee:

"I petition you today for your support and assistance in obtaining funding for three projects;

the Three Rivers Wet Weather Demonstration Project, the

Domestic Violence Health Care Response Act of 1998,

and the Pennsylvania Coalition Against Rape. I formally request that these projects be included in the budget currently under consideration.

"The first project, the Three Rivers

Wet Weather Demonstration Program, seeks to help solve

a serious infrastructure crisis facing Allegheny County.

Due to aging sewer systems and new EPA requirements, municipalities in my district and across the County will soon be incurring large costs as they attempt to reach federal compliance. Recent estimates indicate that the cost of upgrading the sewer system to eliminate wet weather sanitary sewer overflows (SSOs) and control combined sewer overflows (CSOs) may be as high as three billion. In order to provide the tools for communities to solve these problems in the most cost-effective manner, the Allegheny County Health Department and Allegheny

County Sanitary Authority have partnered together to form the Three Rivers Wet Weather Demonstration Program.

The goal of this program is to provide the technical, institutional, and financial mechanisms to assist communities in meeting this challenge. The organization seeks to provide the lowest cost engineering through multi-municipal watershed solutions, innovative financing.and technical demonstrations. This proposed 8-10 year demonstration program will cost $120 million.

"Federal grant regulations require at least 45 percent local match for all demonstration projects funded by the program. To assist Allegheny County's communities, I ask that $27 million of State support be allocated to provide one half of the local match to lever Federal support. The return on this support will be realized many times over in reducing the long-term cost to the citizens in this significant infrastructure upgrade being required by the EPA. As you are aware, the maintenance and upgrade of this infrastructure is an important factor in the continued economic development and redevelopment in Allegheny County.

"Secondly, I request that you consider a budgetary allocation of three million to fund the implementation of the Domestic Violence Health Care

Response Act. With the Governor's signature HB 2268 became Act 115 of 1998 and made Pennsylvania the first state in the nation to mandate universal screening and advocacy programs in emergency departments of selected hospitals. As required by this legislation, hospital personnel will screen all patients seeking medical treatment for reasons related or unrelated to domestic violence.

In 1997 The Journal of American Medicine claimed that screening programs like this increase detection of victims by 70 percent. Those patients who are determined to be victims of domestic violence are then directed to onsite advocates who inform the individuals of their options for assistance from law enforcement, legal and social service agents.

"Originally, $1.5 million dollars in appropriations were attached to the bill to fund 25 programs across Pennsylvania. However, in speaking with House and Senate leadership it was suggested that

Pennsylvania attempt to fund as many hospitals in the Commonwealth as can and wish to have the universal screening and advocacy program. Therefore, I am requesting a full three million dollars in funding to make this law a reality.

"Finally, I would like to pledge my support for two million dollars in the budget for the Pennsylvania

Coalition Against Rape. According to the National Institute of Justice Centers for Disease Control and Prevention an estimated 2.1 million women are raped or physically assaulted annually. Because some rape victims experience multiple victimizations each year, it is estimated that

875,000 rapes and 5.9 million physical assaults are perpertrated against U.S. women annually.

"As a result of alarming statistics like these, I am urging increased funding beyond the $750,000 in the Governor 's address to increase rape prevention strategies focusing on rapes perpertrated against minors and rape research focusing on the long term effects of rape occurring at an early age.

"I ask that you please review these comments thoroughly and pledge to support full funding for these three worthwhile projects. Thank you for your time and attention."

(Prepared testimony of Representative

David K. Levdansky was as follows:) "I am writing as a follow-up to my testimony before the House Appropriations Committee on February 11.

1. "SPECIAL EDUCATION

"Under the present system school districts are reimbursed one percent of their average daily membership assumed to be severely learning impaired and 15 percent is assumed to be mildly learning impaired. This formula when implemented acts to generate inequality in the amount which school districts spend on special education programs. It does so because some school districts have less than 16 percent of their students in special education programs and many other school districts have far more than 16 percent of their students in special education programs. I would suggest that we abolish this arbitrary formula and instead replace it with a mechanism that actually reflects the number of students in special education programs. Pennsylvania's school districts and the Department of Education know precisely how many severely and mildly learning impaired students are in every school district in the Commonwealth.

We should adopt a mechanism that distributes the state's

special education appropriation based on the actual

incidence and experience of special education students

rather than by an aribitrary formula. If we funded special education this way, then no school district would receive a shortfall and no school districts would

receive windfalls.

2. "STATE SUPPORT FOR VOLUNTEER FIRE COMPANIES

"Presently there is a two percent tax

on fire insurance premiums which provides state financial

support for volunteer fire companies. Insurance companies

located outside of Pennsylvania (foreign fire insurance

premiums tax) rebate that two percent back to the State

and the State distributes that money to volunteer fire

companies in the Commonwealth by a formula. The insurance

companies that are located in Pennsylvania also collect

a two percent premiums tax which is deposited in thje

General Fund. Our volunteer fire companies provide!

critical fire protection to communities and have not

received adequate support from the Commonwealth. I

suggest that we change the funding formula to establish

a minimum level of support for every volunteer fire

company and also establish a maximum level of support.

We need to do this because presently we have some fire

companies receiving less than $1,000 a year in financial

support from the State while other fire companies are

sitting on milion dollar plus fund reserves. Secondly,

in addition to changing the formula we need to put more money into the program. I would suggest that we redirect the approximately $19 million of the fire insurance premiums tax collected by in-state companies from the

General Fund into the program that supports volunteer fire companies.

3. "MENTAL RETARDATION - COMMUNITY BASED PROGRAMS

"Over the years the Legislature has passed budgets that increased funding in the community based line item for mental retardation. But, according to a report recently issued by the Joint Legislative Budget and Finance Committee many of these funds never reach the care provided by the caseworkers. Often times the counties that administer the programs siphon off some of the increased cost of living allocations granted for new programs to fund other existing programs.

In addition, the community providers also siphon some of the increased allocation for some of their purposes as well. The reality is that we have care being delivered to the most frail and vulnerable of our citizens in the community based programs by workers who are paid far less than poverty wages. We need to adopt legislation similar to Act 36 in Michigan so that any cost of living increases the Legislature appropriates will be passed through the system and result in a dollar for dollar increase in wages and salaries for direct care workers.

4. "CLEAN ELECTIONS CAMPAIGN FUND "Twenty-seven states have enacted legislation

to provide some form of public financing for candidates

for state office. Just last November, Maine and Arizona

passed legislation to provide for public financing for

campaigns. Whether or not we care to admit it, we do have a form of public financing in Pennsylvania. It

is called "incumbent protection" and it includes legislative mailing, our information office services, staff, telemarketing,

etc. All these tools of incumbency protection are tools

paid for by the state taxpayers. We also have a form

of political capital called WAMS or Legislative Initiative

Grants. We all know that the tens of millions of dollars

hidden in the WAM account in the budget are distributed with political considerations in mind. I would suggest

that we decrease the WAM allocation in the budget by

$20 million and instead allocate that money to a Clean

Elections Campaign Fund.

"I will be proposing legislation in the

near future providing for comprehensive campaign finance

reform to limit contributions, provide for public financing,

control expenditures and provide for an independent

Elections Commission. We should follow New Jersey and

other states that have moved in the direction of public

support for candidates rather than continue to perpetrate

the corrupt system whereby we all must beg and pandet for contributions from monied interests.

"I appreciate your consideration of these budget priorities. I look forward to working with you in a bipartisan fashion to secure passage of the FY

1999-2000 budget."

(Prepared testimony of Representative

Ronald E. Miller was as follows:)

"Mr Chairman, I am formally submitting to the House Appropriations Committee my opposition to the governor's proposed local police surcharge, included in his 1999 state budget proposal. As written, such a fee imposed on townships of 5,000 residents or more and without a local police force is unfair to taxpayers and would wreak havoc in township budgets.

The governor has proposed charging these townships $35 per resident beginning July 1, 1999 and

$70 per resident beginning in 2000. The only way for affected townships to avoid this mandated fee would be to hire their own police force or make other arrangements for law enforcement coverage by July 1. As you are well aware, the General Assembly is not even required to approve the state budget until June 30. This hardly provides adequate time to research all of a township's options and to implement the necessary changes.

"In the 93rd Legislative District, I represent one township that would be adversely affected by this poorly timed proposal. Shrewsbury Township, with a population of 5,989, wuld instantly incure a debt of $206,500 if the governor's proposal is adopted.

Six months later, Shrewsbury Township would be billed an additional $412,000 to retain its State Police Services.

"The issue boils down to the fact that no affected township will have the ability to instantly adjust its budget, increase tax revenues, and pay this protection fee on a moment's notice. These townships will be left with no police protection, at least until the next fiscal year.

"Our townships simply need more time to research the proposal and investigate their options.

I am recommending Shrewsbury Township study the possibility of partnering with other municipalities for a regional police force. Township supervisors may reach a decision by July, but they cannot and will not have the funds to implement any change before their next fiscal year.

As their state representatives, we must give township supervisors the opportunity to act in the best interest of the people, and we must allow taxpayers to decide at the local level how their tax dollars will be spent.

"I strongly urge the committee to veto this proposal and help taxpayers defeat this unnecessary state mandate."

I hereby certify that the evidence and proceedings are contained fully and accurately in the notes taken by me during the hearing of the within cause, and that this is a true and correct transcript of the same.

Dorothy M^jMalone, "RPR

The foregoing certification of this transcript does not apply to any reproduction of the same by any means unless under the direct control and/or supervision of the certifying reporter.