Blake Weighs Good & Bad in State Budget

HARRISBURG, July 1, 2013 – After giving careful consideration to the $ 28.37 billion budget approved Sunday by the state Senate, Sen. John Blake said he voted against the 2013-’14 spending plan.

“There are several important line items in the budget that signal good news to Pennsylvanians but they are outweighed by investments that are not there or are insufficient,” Blake (D-Lackawanna/Luzerne/Monroe) said.

The good news, Blake said, is the budget increases Attorney General Kathleen Kane’s appropriation by $8 million to $87.3 million and includes $2.5 million for a mobile crime unit that is important for Northeast PA. He said he also likes that the budget delivers much needed funding for strategic upgrades in technology for Auditor General Eugene DePasquale’s office.

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Additionally, the senator said he applauds the $150,000 increase for regional cancer institutes, the reappearance of state support of the Civil Air Patrol, additional support for Heritage Parks; more money for three new state police cadet classes; and increases in commitments to serve veterans and their families.

However, Blake listed several other areas of the budget that, taken together, were reason enough to vote against it.

“A major reason is this budget simply does not go far enough in helping our children in public education,” Blake said. “It flat funds special education, misses the opportunity to help distressed school districts and still underfunds public schools all over Pennsylvania that continue to struggle with the $1 billion in cuts rendered in the governor’s first budget. These are cuts that have resulted in massive teacher layoffs, increased class sizes and higher local property taxes.”

With the 2013-’14 budget, Pennsylvania holds its special education funding at $1.026 billion despite extraordinary pressure on local school districts to meet rising costs and responsibilities in this area.

Other shortcomings of the budget, according to Sen. Blake:

  • Insufficient funding for proven job-creation programs at the Department of Community and Economic Development, or DCED;
  • No additional investment for Scranton, Carbondale and other struggling PA small cities;
  • The budget will carry forward an estimated $500 million in unspent funds left to the discretion of the Governor that could have helped meet some pressing and more immediate needs;
  • It includes budget gimmicks and shifting of funds for nearly $90 million in spending that is not obvious to PA taxpayers; and
  • It unnecessarily delays Medicaid expansion, which will delay $150 million in federal aid to relieve state spending.



Blake’s Job-Creating ‘Innovate in PA’ Bill Wins Unanimous Committee Support

HARRISBURG – June 20, 2013 – With the unanimous and bipartisan support of the Senate Finance Committee, Sen. John Blake said his bill to create an early stage capital investment program of approximately $175 million is one step closer to becoming reality.

Senate Bill 456 would create the “Innovate in Pennsylvania” program and deliver desperately needed financing for new and growing businesses throughout the state.

The large-scale economic development program would make job-creating investments through the state’s economic development partners: Ben Franklin Technology Partners, venture investment partners, life science greenhouses, local development districts, industrial resource centers, small business development centers, and regional industrial development organizations.

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As it helps businesses become viable, Blake said “Innovate in Pennsylvania” will help to create jobs, something he said is critically important in Northeast Pennsylvania where the Scranton/Wilkes-Barre Metropolitan Statistical Area (MSA) has had the highest unemployment rate among the state’s 14 MSAs during the past three years.

The committee’s passage of the Innovate in Pennsylvania program Wednesday comes on the heels of the recent release by the Ben Franklin Technology Partners of an independent, third-party impact report on the state’s economy. The study, released on the 30th anniversary of the founding of the Ben Franklin Technology Partnership, concluded that the organization produced 20,200 jobs in the commonwealth between 2007 through 2011 that otherwise would not have existed. Over the same five-year period, new state tax revenue generated because of the partnership represented a $3.60-to-$1 payback to the commonwealth on its $137.7 million investment.

Blake, the Democratic chairman of the Senate Finance Committee, said the Ben Franklin Technology Development Authority would manage and invest a portion of the “Innovate in Pennsylvania” funds.

“‘Innovate in Pennsylvania’ will make a significant difference in the economic future of Northeastern Pennsylvania,” said Ken Okrepkie, regional manager, Ben Franklin Technology Partners of Northeastern Pennsylvania, Pocono Northeast. “Since 2009, because of state budget challenges, funding to Ben Franklin has been reduced by more than half. The consequences have been declining investments in promising high-tech start-up firms, and short-funding clients in which Ben Franklin does invest.

“With a return of $3.60 to the state treasury for every $1 of funding, Ben Franklin Technology Partners is an exceptional investment. ‘Innovate in Pennsylvania’ will help restore some of this crucial funding,” Okrepkie said.

Blake said Pennsylvania has been losing its reputation as a place that fosters new job creators as the commonwealth’s investment in early stage companies dramatically decreased from $53 million in 2008 to $14 million two years ago. That drop removed Pennsylvania from the National Venture Capital Association’s list of top-three states for business enterprise outlays.

“Pennsylvania lost ground nationally with regard to early stage investment,” the senator said. “‘Innovate in Pennsylvania’ will not only return the state to a more serious level as a supporter of business and job growth, it will return huge dividends for Pennsylvanians with new businesses, new products, new jobs, and new revenue.

“For every $1 Pennsylvania invests in early stage businesses, $2.37 will be returned to the commonwealth. That’s money well spent,” Blake said as he encouraged the full Senate to adopt the measure and send it to the House for its consideration.

The state is projected to realize a return on investment of more than $500 million in new revenue once “Innovate in Pennsylvania” comes to an end.

How it Works

“Innovate in Pennsylvania” will offer $225 million in deferred premium tax credits to qualified insurance companies that pay the state’s insurance premium tax.

For every $1 of tax credit offered, insurance providers will receive an up-front discount. The difference between the $225 million in tax credits offered and the potential $170 to $190 million in investment capital raised would be the discount offered to insurance companies that purchase the tax credits.

Investments received from participating insurance companies will be allocated to the Ben Franklin Technology Development Authority and, subsequently, into private venture capital firms through its Venture Investment Program for market-based investment decisions, and through the Department of Community & Economic Development (DCED) through the Partnership for Regional Economic Performance (PREP) program.

Forty percent of the net proceeds will be directed to the Ben Franklin Technology Partners to support its mission of statewide early stage investment.

“Let’s drive innovation in Pennsylvania and establish a predictable source of investment capital to grow small business and jobs in the commonwealth,” Blake said.