Budget hearings begin in era of “new normal”

Budget hearings begin in era of “new normal”

Author: Jason Gottesman/Tuesday, February 21, 2017/Categories: News and Views

The legislature Tuesday began its three-week slate of budget hearings in what one ranking Appropriations Committee member called an era of “new normal.”


The budget hearing process, undertaken by the Appropriations Committee in the House and Senate, traditionally takes place in the period following the governor’s budget address and before the run-up to the enactment of the state budget in early summer.


While members of the committees—and usually invited members of legislative oversight committees in the particular chamber—use the process to examine the budget requests of various executive agencies and others that receive state funding, questions can also range from overarching policy questions and concerns, particular activities of an agency, and actions taken by agencies in the past.


Tuesday’s hearing in the House kicked off with members questioning representatives from the Independent Fiscal Office about the current state of Pennsylvania’s economy and financial pictures, as well as the various financial implications of the governor’s initiatives as outlined in his budget proposal.


During the hearing, Majority Chairman Stan Saylor (R-York) implemented a reinvigorated time standard on testimony and member questioning by putting a three-minute timer on display before him.


He also relayed a new policy that those appearing before the committee not able to fully answer member questions will remain subject to recall within 48 hours to reappear before the committee for a public release of their eventual answer.


“These hearings are important for learning additional information detailed in the governor’s proposal,” he said. “The governor’s proposal is a very complicated document and the General Assembly is going to need more details to weigh the pros and cons of the proposed initiatives.”


Minority Chairman Joe Markosek (D-Allegheny) said that while there are early indications of cooperation from Republicans in the budget process, that will need to continue over the next weeks and months in order to navigate the complicated path of budget enactment.


“Taxpayers are watching to make sure we’re spending their money in the best way, schools are watching to make sure our commitment to education continues and even grows, human services advocates are watching to learn how the new budget cares for them,” he said.


“These are days of living a new normal,” he continued. “Many of us, Republicans and Democrats alike, really don’t like the feeling and are uncomfortable with it.”


In their testimony to the committee, IFO Director Matthew Knittel and Deputy Director Matt Ryan said the office has large consensus on the deficit forecast for next year that sits between $2.5 billion and $3 billion, something they said will need changes on either the revenue or expenditure side to address.


They also said that the office is largely in agreement with the Department of Revenue on the growth rate of 0.3 percent, which was slower than anticipated when the budget was enacted.


Lastly, on the revenue sources put forward by Gov. Wolf in his budget proposal, the IFO is currently reviewing their accuracy with a final report due out in March. Currently, Knittel noted, the office is finding some similarities with the numbers the governor assumes from the revenue proposals, but noted there are also differences.


Member questioning focused on the efficacy of the minimum wage and severance tax proposals put forward by the governor, with the office confirming that they would generate revenue to the General Fund, but uncertainty surrounds the specifics.


The committee also heard from the Department of Revenue (including the Pennsylvania Lottery) and the Department of State Tuesday afternoon.


In the Senate, who heard from the IFO Tuesday afternoon, budget hearings held little new in the way the hearings would be conducted, but did start off with a new face: recently-elected Treasurer Joe Torsella.


Treasurer Torsella spent his time before the committee discussing the financial cost of the Commonwealth’s credit rating, new transparency initiatives undertaken since he’s taken office, the extended credit line to help the General Fund from falling into a negative balance, and his plan to have companies develop private retirement savings accounts.


"[We] will strive to operate at the highest levels of transparency and accountability, to save the taxpayers as much as we can, and to implement programs that empower the Commonwealth and its citizens economically," he said in written testimony submitted to the committee.


"I pledge to work closely and constructively with the General Assembly and the Governor to find solutions that allow Pennsylvania’s government to continue to serve our citizens as we face looming budget challenges."


Budget hearings are expected to wrap up the week of March 6, 2017, and Pennsylvania’s new fiscal year starts July 1, 2017.