House of Representatives Commonwealth of Pennsylvania Appropriations Committee Budget Hearing
Total Page：16
File Type：pdf, Size：1020Kb
HOUSE OF REPRESENTATIVES COMMONWEALTH OF PENNSYLVANIA APPROPRIATIONS COMMITTEE BUDGET HEARING STATE CAPITOL MAJORITY CAUCUS ROOM HARRISBURG, PENNSYLVANIA THURSDAY, FEBRUARY 16, 2005, 10:00 A.M. BEFORE: HONORABLE BRETT FEESE, CHAIRMAN HONORABLE DWIGHT EVANS, CHAIRMAN HONORABLE MATTHEW BAKER HONORABLE STEPHEN BARRAR HONORABLE GENE DiGIROLAMO HONORABLE PATRICK FLEAGLE HONORABLE DAN FRANKEL HONORABLE HAROLD JAMES HONORABLE KATHY MANDERINO HONORABLE FRED McILHATTAN HONORABLE ANTHONY MELIO HONORABLE PHYLLIS MUNDY HONORABLE JOHN MYERS HONORABLE SCOTT PETRI HONORABLE DOUGLAS REICHLEY HONORABLE SAMUEL ROHRER HONORABLE STANLEY SAYLOR HONORABLE JOSH SHAPIRO HONORABLE JERRY STERN HONORABLE THOMAS TANGRETTI HONORABLE KATIE TRUE HONORABLE DON WALKO HONORABLE JAKE WHEATLEY ALSO PRESENT: EDWARD NOLAN JEAN M. DAVIS, REPORTER NOTARY PUBLIC 2 1 I N D E X 2 3 WITNESS PAGE 4 MIKE TURZAI 4 5 PETER DALEY 9 6 GENE DiGIROLAMO 14 7 PAUL COSTA 19 8 KATHY RAPP 22 9 SEAN RAMALEY 26 10 SUSAN CORNELL 29 11 THOMAS TIGUE 31 12 BERNIE O'NEILL 35 13 RICHARD GRUCELA 40 14 RON MARSICO 43 15 DAVID MILLARD 46 16 DARYL METCALFE 49 17 JACQUELINE CRAHALLA 54 18 DENNIS O'BRIEN 55 19 CURT SONNEY 62 20 W. CURTIS THOMAS 66 21 JESS STAIRS 72 22 GLEN GRELL 75 23 PATRICK BROWNE 79 24 DOUGLAS REICHLEY 83 25 3 1 I N D E X (cont'd.) 2 WITNESS PAGE 3 TIMOTHY SOLOBAY 91 4 FRANK PISTELLA 95 5 BRIAN ELLIS 100 6 GREGORY VITALI 103 7 MARK KELLER 107 8 MARK MUSTIO 111 9 JOHN EVANS 112 10 STEVE SAMUELSON 117 11 MARK COHEN 122 12 JAMES ROEBUCK, JR. 125 13 JOSH SHAPIRO 129 14 JOHN PAYNE 132 15 PAUL CLYMER 134 16 17 18 19 20 21 22 23 24 25 4 1 CHAIRMAN FEESE: I would like to call this 2 meeting of the Appropriations Committee to order. 3 Today is the day for members of the House of 4 Representatives to present written or oral testimony 5 to the committee. 6 At this point, we have a number of members 7 who are submitting written testimony. I would like to 8 read their names for the record and then make their 9 written comments a part of the record. Those 10 individuals at this point submitting written testimony 11 are Representative Susan Cornell, Representative 12 Jeffrey Pyle, Representative Larry Sather, 13 Representative Jess Stairs, Representative Tom Tigue, 14 Representative LeAnna Washington, and Representative 15 John Yudichak. That's the members at this point that 16 we have submitting written testimony. 17 Our first testifier today will be 18 Representative Mike Turzai. 19 REPRESENTATIVE TURZAI: Thank you very much, 20 Mr. Chairman. Good morning. 21 Mr. Chairman and members of the committee, 22 thank you for inviting me to speak to you today. I 23 appear before you to offer my thoughts on a couple of 24 points with respect to the Governor's 2005/2006 state 25 budget proposal. 5 1 My thoughts concern two primary areas, the 2 education funding formula and, secondly, net operating 3 loss carry-forwards. 4 I would like to first speak on education 5 funding and, more specifically, the need to reform the 6 state's basic education funding formula. This is 7 particularly important to me because I represent two 8 school districts in Allegheny County, the North 9 Allegheny and Pine-Richland School Districts that have 10 had rising student enrollments. 11 Last year, I was one of four House members 12 who co-founded the Growth Issue Task Force. This task 13 force was formed to advocate increased state funding 14 for growing school districts and help develop a new 15 funding formula accounting for student population 16 growth. North Allegheny and Pine-Richland both 17 received a growth supplement last year, and that 18 funding may be jeopardized under the Governor's 19 foundation supplement plan as part of his proposed 20 2005-2006 basic education funding. 21 Overall, the Growth Issue Task Force was 22 needed because the current basic education funding 23 formula is broken, as it is largely calculated based 24 on 1990 enrollment figures. 25 Pine-Richland and North Allegheny have grown 6 1 by 76.9 percent, or 1,600-plus students, and 10.9 2 percent, by about 800-plus students since 1991-1992, 3 respectively when the last formula was taken into 4 account. While the estimated state average per pupil 5 allocation of basic education funding is $2,468 and 6 the median is $2,703, under the Governor's 2005-2006 7 budget proposal, North Allegheny stands to receive 8 only $940 per student and Pine-Richland only $918 per 9 student under this plan. 10 These figures become more troublesome when 11 comparing state subsidies to inflation since 1992. 12 North Allegheny received 9.5 percent more per pupil in 13 basic education funding in 2003-2004 compared to 1992. 14 Pine-Richland actually saw a 9.4 percent drop in its 15 per-pupil funding during this period. However, if 16 North Allegheny and Pine-Richland had simply received 17 basic education funding increases at the rate of 18 inflation over this period, they would have seen a 19 31.1 percent funding increase. 20 I remain a staunch advocate of reforming the 21 state's education funding formula to take better into 22 account parity in per-pupil funding. At a minimum, I 23 would like to continue my efforts in advocating at 24 least growth supplements to school districts like 25 Pine-Richland and North Allegheny so that they may 7 1 receive a closer fair share of that state funding. 2 Secondly, I'd like to talk about the 3 Governor's proposal with respect to net operating 4 losses. As part of the Keystone Manufacturing 5 Initiative, we had advocated last year an increase and 6 hopefully an abolition of the cap on net operating 7 loss carry-forwards. 8 Net operating losses are essentially if a 9 business has a loss in a particular year, they can use 10 that against a profit in a future year. And that is 11 particularly important to industries out West, in the 12 steel industry in particular, that absolutely are 13 going to face cyclical time periods. 14 In addition, those companies that were trying 15 to grow in Pennsylvania in connection with 16 universities like Carnegie-Mellon University or the 17 University of Pittsburgh, those start-up businesses 18 are going to experience losses, oftentimes seven to 19 ten years. And their ability to use those in future 20 years against profits really is essential capital for 21 getting that business growing and to take it to the 22 next step. 23 Currently, the net operating loss is capped 24 at $2 million per year in the state of Pennsylvania. 25 Forty-seven states in the United States Government 8 1 offer net operating losses. And yet, Pennsylvania is 2 only one of three states that cap net operating 3 losses. We are at a complete disadvantage, a complete 4 disadvantage, with respect to competitor states on 5 this net operating loss issue. 6 The fact of the matter is, I'm happy to see 7 that the Governor has moved in the right direction and 8 started to take a truly pro-business perspective, 9 which we did not see in the first two years of his 10 term. 11 In addition to the fact that we really do 12 need to reduce taxes for our employers, because you 13 can't have jobs without employers, we also need to 14 take on workers' compensation reform, unemployment 15 compensation reform, and tort reform as well. 16 But here, with respect to the budget, I would 17 like to emphasize that we would like to see the net 18 operating loss cap eliminated. This is the year to do 19 it. And it's a great opportunity to make Pennsylvania 20 more competitive. 21 I have introduced a bill as part of the 22 Keystone Manufacturing Initiative House Bill 650 that 23 will, in fact, do that and it will make it retroactive 24 to the year 2000 so that business in this state can 25 take advantage of the losses that they have incurred 9 1 to put it against profits. It's the way we should be 2 doing business in Pennsylvania and we need to be 3 proactive. 4 I thank you very, very much for the 5 opportunity to address you on these two issues. It's 6 an honor to be in front of this esteemed committee. I 7 appreciate the hard work that you do for Pennsylvania. 8 CHAIRMAN FEESE: Thank you, Representative 9 Turzai, for your testimony. 10 REPRESENTATIVE TURZAI: Thank you. 11 CHAIRMAN FEESE: Our next testifier will be 12 Representative Peter Daley. 13 REPRESENTATIVE DALEY: Chairman Feese, 14 Chairman Evans, members of the committee, it's a 15 pleasure to be here with you this morning. I 16 apologize for my coughing. I have the budget bug; and 17 as you know, this time of year, it goes around. I 18 apologize. 19 This is a hard year to ask for an increase in 20 any line item with a straight face. I believe that 21 only extenuating circumstances can explain any such 22 request, and I have two to discuss with you this 23 morning. 24 First, as the Democratic chair of the 25 Agricultural Committee, as some of you know, the 10 1 veterinary school at the University of Pennsylvania 2 endured a devastating, hospitalwide infection of a 3 drug resistant Salmonella Newport at the New Bolton 4 Center Large Animal Hospital last summer.