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House of Representatives Commonwealth of Pennsylvania HOUSE OF REPRESENTATIVES COMMONWEALTH OF PENNSYLVANIA * * * * Department of Community & Economic Development Budget Hearing * * * * House Appropriations Committee Main Capitol Building Majority Caucus Room 140 Harrisburg, Pennsylvania Thursday, March 24, 2011 - 10:00 a.m. --oOo— BEFORE: Honorable William Adolf, Jr., Majority Chairman Honorable Douglas Reichley Honorable Gordon Denlinger, Subcommittee Chair on Fiscal Policy Honorable Thomas Killion, Subcommittee Chair on Health and Welfare Honorable David Millard, Subcommittee Chair on Health and Welfare Honorable Mario Scavello, Subcommittee Chair on Education Honorable John Bear Honorable Martin Causer Honorable Jim Christiana Honorable Glen Grell Honorable T. Mark Mustio Honorable Bernie O'Neill Honorable Michael Peifer Honorable Scott Perry Honorable Tina Pickett Honorable Jeffrey Pyle Honorable Curtis Sonney Honorable Joseph Markosek, Minority Chairman Honorable Cherelle Parker, Minority Subcommittee Chair on Health and Welfare Honorable Steve Samuelson, Minority Subcommittee Chair on Education BEFORE: (CONT'D) Honorable Matthew Smith, Minority Subcommittee Chair on Economic Impact and Infrastructure Honorable Greg Vitali, Minority Subcommittee Chair on Fiscal Policy Honorable Matthew Bradford Honorable H. Scott Conklin Honorable Paul Costa Honorable Deberah Kula Honorable Tim Mahoney Honorable Michael O'Brien Honorable Ronald Waters IN ATTENDANCE: Honorable Matthew Baker Honorable Kerry Benninghoff Honorable Vanessa Brown Honorable Michelle Brownlee Honorable Mark Cohen Honorable Margo Davidson Honorable Gary Day Honorable Pam DeLissio Honorable Gene DiGirolamo Honorable Adam Harris Honorable Sue Helm Honorable Dick Hess Honorable Thaddeus Kirkland Honorable Jerry Knowles Honorable Kevin Murphy Honorable John Myers Honorable Marguerite Quinn Honorable Rick Saccone Honorable Jerry Stern ALSO PRESENT: Dr. Edward Nolan, Majority Executive Director Joanne Hunt, Majority Administrative Officer Jeanna Gettys, Majority Administrative Asst. Darlene Schaffner, Majority Budget Adm. Asst. Kathryn Vranicar, Majority Budget Analyst Miriam Fox, Minority Executive Director C O N T E N T S Witnesses Page DCED C. Alan Walker, Acting Secretary 8 Bryce Maretzki, Deputy Secretary 44 of Administration Richard Hudic, Executive Deputy Sec. 83 CHAIRMAN ADOLF: Good morning, everyone. The hour of 10:00 having arrived, I would like to call to order the House of Representatives Appropriations Committee meeting and a budget hearing for the Department of Community and Economic Development. My name is Bill Adolf. I am the Republican Chair of the committee. I am from Delaware County. And what I would like to do is have the members of the committee introduce themselves. Chairman Markosek likes to introduce his members. And the time is yours, Chairman. REP. MARKOSEK: I thank you, Chairman Adolf. And, first of all, welcome, Secretary-designate Walker. ACTING SEC. WALKER: Thank you. REP. MARKOSEK: I look forward to your testimony. To my right is Miriam Fox, who is our Executive Director of the Appropriations Committee. To her right is Rep. Ron Waters from Philadelphia County and Delaware County. REP. WATERS: Yes, that's right. REP. MARKOSEK: Behind us is Rep. Greg Vitali, Delaware County. Also to our right is Rep. Paul Costa of Allegheny County; Rep. Scott Conklin of Centre County; Rep. Tim Mahoney of Fayette County; Rep. Deb Kula of Fayette County; Rep. Mike O'Brien from Philadelphia County; Rep. Cherelle Parker from Philadelphia County; Rep. Matt Smith from Allegheny County; Rep. Steve Samuelson from Lehigh County. Also with us are some visiting legislators. We have Chairman Thaddeus Kirkland from Chester County, who is here, as the Minority Chair of the Tourism Committee in the House; as well as Rep. Margo Davidson is here from Delaware County; and Rep. Pam DeLissio is here from Philadelphia County. Thank you, Mr. Chairman. CHAIRMIAN ADOLF: Thank you, Mr. Chairman. To my immediate left is the House Republican Executive Director, Doctor Ed Nolan. And then I would like the other members of the Republican committee to the identify themselves and the county they represent. REP. PERRY: Good morning, sir. Rep. Scott Perry, northern York and Cumberland counties. REP. GRELL: Good morning, Secretary. I am Glen Grell, representative from the 87th District, which is in Cumberland County. REP. MUSTIO: Good morning. Mark Mustio, 44th District, Allegheny County. REP. CAUSER: Good morning. Marty Causer, McKean, Potter and Cameron counties. REP. SONNEY: Good morning. Curt Sonney, 4th District, Erie County. REP. O'NEIL: Good morning. Rep. Bernie O'Neil, Bucks County. REP. REICHLEY: Doug Reichley, 134th District, from Berks and Lehigh counties. REP. PEIFER: Good morning. Mike Peifer, Wayne, Pike and Monroe counties. REP. MILLARD: Good morning. David Millard, 109th District, Columbia County. REP. CHRISTIANA: Jim Christiana, 15th District, Beaver County. REP. KILLION: Tom Killion, Delaware and Chester counties. REP. PYLE: Good morning. Jeff Pyle, Armstrong and Indiana counties. REP. DENLINGER: Good morning. Gordon Denlinger from eastern Lancaster County. REP. PICKETT: Tina Pickett, Bradford, Sullivan and Susquehanna counties. REP. SCAVELLO: Good morning. Mario Scavello, Monroe County. CHAIRMIAN ADOLF: Thank you. Also in the audience is Chairman Jerry Stern of the Tourism and Recreational Development Committee, Rep. Jerry Knowles, and Rep. Rick Saccone. And I apologize if I am missing someone. Rep. Dick Hess is also here. Thank you. I think that should be it. And I am sure there are going to be other members that come in during the testimony. With us today is the Secretary of Community and Economic Development, C. Alan Walker. Good morning. ACTING SEC. WALKER: Good morning. CHAIRMAN ADOLF: For your information, Mr. Walker has been appointed the next Secretary of the department by Governor Corbett. Mr. Walker comes to DCED from Bigler, Pennsylvania, where he was president and CEO of Bradford Energy Company, Incorporated. He has also served as a member and chairman of several boards, including the Pennsylvania Chamber of Business and Industry, Team Pennsylvania, Pennsylvania Coal Association, and the Pennsylvania -- and Pennsylvanians for Effective Government. DCED offers business assistance, including startup location, expansion and investment. It is also committed to helping Pennsylvania develop and enhance its communities with downtown revitalization programs. Welcome. Good morning. ACTING SEC. WALKER: Thank you. CHAIRMIAN ADOLF: If you would, Mr. Secretary, I would like you to identify your colleagues that are sitting at the table with you, and make some brief opening comments. And what we are going to try to do today because, in reviewing the various budgets that come before us, this department has had as many changes as any that has come before us, and there are an awful lot of questions. I can just see by the number of legislators' names that have been put in front of me. So, I am going to ask my colleagues on this committee if they would try to concentrate your questions on the business before us, which is the budget and their budget request as well as policy changes towards this committee. I am asking you to follow that. And I am also going to ask the Secretary to try to explain these new policies that we are developing here, to the best of your ability. And the time is yours. ACTING SEC. WALKER: Thank you. I would like to introduce Bryce Maretzki, who is my Administrative Deputy, and Rick Hudic, who is my Executive Deputy; and I think many of you know them already. Thank you, Chairman Adolf and Chairman Markosek and members of the committee. It's a pleasure to be here today to discuss the proposed budget for the Department of Community and Economic Development. A little over two weeks ago, Governor Corbett proposed a streamlined 2012 budget for DCED that focuses all budget resources on economic growth, job creation and community development. The proposed budget maintains level funding for critical community and economic development initiatives, while eliminating programs that are duplicative, ineffective, inefficient and otherwise wasteful of taxpayer resources. Throughout the budget process, I have learned that Pennsylvania has some of the most innovative and creative tools for economic development in the country. Pennsylvania's economy has performed better than the economies of its neighboring and competitor states throughout the recession that began in late 2007. From 2007 to 2009, Pennsylvania's gross domestic product growth was at 3.8 percent; over three times the national rate of 1.18 percent; and it exceeded GDP growth rates of our neighboring and competitor states to make us 14th in the nation. Additionally, Pennsylvania's unemployment remained below the national rate throughout the recession, and its personal income per capita and volume of exports exceeded the national average, also surpassing income per capita and export values of all neighboring and competitor states. That said, taking into account our location, infrastructure, skilled workforce and strong network of colleges and universities, Pennsylvania should not settle to be in the middle of the pack - we should strive to lead the nation. In the past, DCED was a maze of programs that was challenging for businesses, communities and even those within government to navigate, and costly for the state to administer. The budget proposal reduces the number of programs from 127 to 56, funding only those programs focused on economic and community growth
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