HARRISBURG, July 1, 2014 – The $29.1 billion Pennsylvania budget that Republicans and the Corbett administration pushed through the legislature late Monday night could compromise the commonwealth’s credibility in the business community and place Pennsylvanians in greater fiscal peril, state Sen. John Blake said today.
Because the 2014-’15 spending plan has been balanced using unreliable assumptions about future state revenues and one time transfers, the Democratic chairman of the Senate Finance Committee said that state lawmakers may have to completely rewrite the state budget in the first quarter of 2015.
“This budget relies on nearly $2 billion in one-time budget transfers that will virtually assure a $2 billion structural deficit heading into the next fiscal year,” Blake said after a thorough review of the spending plan adopted on a mostly party-line vote. “There were better choices that we could have made, and we could have crafted a much better fiscal plan for the citizens and the business community of this commonwealth.”
Two obvious choices that would have advanced a better spending plan, he said, were Pennsylvania’s entry into the federal government’s expanded Medicaid program and a modest severance tax on Marcellus Shale drillers.
“Simply expanding Medicaid would deliver $400 million in savings to the state General Fund and create 35,000 jobs in healthcare and human services while insuring 500,000 Pennsylvanians who now go through their day without the security of affordable health care coverage,” Blake said. “A modest 3 percent Marcellus Shale tax would have netted Pennsylvania $350 million in this fiscal year and enabled recurring revenues to avert future broad-based tax increases.”
Sen. Blake said a great concern of his is the new budget’s negative impact on state programs designed to help manufacturers and small businesses.
“The budget decimates the commonwealth’s capacity to leverage funds for community and economic development. The $200 million transfer from the Machinery & Equipment Loan Fund, or MELF, and the Small Business First program, or SBF, at the Department of Community and Economic Development will totally incapacitate those programs,” Blake said.
“The MELF transfer is particularly egregious because that economic development funding capacity has been building up for years. The MELF program recently offered a more favorable interest rate to Pennsylvania businesses to foster investment and growth through the purchase of new machinery and equipment. The promise of those funds now disappears as a 35-year endowment has been wiped out to balance this year’s budget,” the senator said.
Blake noted that these decisions underscore the fact that the Corbett administration sees no role for the state in fostering economic development and it further explains why we’ve dropped from 8th to 48th in the nation in job growth over the past four years.
“The credibility of the commonwealth with its business community will be severely compromised in that tens of millions of loan commitments currently pending but not closed may be reneged by the commonwealth due to the diversion of these funds as one-time transfers to balance the budget,” Blake said.
“The Small Business First fund is a life-blood program for small businesses and it is a program that is administered in Northeastern PA by the NEPA Alliance in strong coordination with the region’s lending community,” Blake said. “The $100 million transfer out of SBF will virtually end small business lending through that program.”
Finally, and importantly, Blake criticized the final budget plan because it transfers nearly $100 million in new gaming revenues that were meant to provide property tax relief to balance the budget.
“With the extraordinary pressures on property owners, and particularly our seniors, in meeting school property taxes, this one time transfer is particularly harmful,” Sen. Blake said.
HARRISBURG, November 15, 2011 – – State Sen. John P. Blake (D-Lackawanna/Luzerne/Monroe) today decried the virtual party-line passage of legislation that would assess a minimal impact fee on gas drillers. Blake noted that his opposition to SB 1100 “was not only because of what it does, but because of what it fails to do”.
Senate Bill 1100 would levy an initial base impact fee of $50,000 per well, which would decrease annually and be completely eliminated in twenty years even if wells were still producing at that time. There is no provision in the bill that addresses the volume of natural gas produced at well-heads throughout the state.
“We in Northeastern Pennsylvania know all too well the implications of allowing our natural resources to be extracted from the ground while seeing the wealth associated with that extraction industry exiting the state,” Blake said. “Global multi-national, multi-billion dollar natural gas companies who are consolidating control of the Marcellus field are able and willing to exploit our natural resources for years to come, but the Republican-controlled General Assembly in Harrisburg appears unwilling to ask that industry to pay a fair share back to state coffers to relieve tax burdens on our middle-class or to support local communities statewide that are afflicted by failing infrastructure, environmental degradation, joblessness and economic recession.”
“Drilling companies are paying hundreds of millions in severance taxes in other states and yet in PA Senate Bill 1100 provides only for a wholly inadequate impact fee that will be but a rounding error on the balance sheets of these profitable companies,” Blake added.
Under Senate Bill 1100, revenue from the proposed impact fee would be split, with 55 percent going to counties and municipalities in the Marcellus Shale regions and the remaining 45 percent being used for statewide infrastructure improvements, environmental protection programs and other natural gas related projects. Republicans estimate that the impact fee would raise $94 million this year, up to $155 million next year and roughly $255 million 3 years from now.
“Contrast these numbers with the tax revenues collected in other gas states like Texas where they raise over $2 billion per year; North Dakota where they collect over $2 Billion and Alaska where they collect over $4 billion,” Blake said.
In floor remarks Senator Blake also expressed serious concerns about the provisions in SB 1100 that “erode or preempt the influence of local land use and zoning ordinances and remove local control over proposed gas drilling and pipeline operations within their jurisdictions”.
Senate Bill 1100 would permit the state attorney general’s office to compare a municipality’s zoning ordinance to a statewide zoning standard. If it were found that the municipality ordinance had stricter standards than the state, that municipality would be ineligible for any impact fee revenue.
The bill was sent to the House for concurrence.
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SCRANTON, July 7, 2011 – – State Sen. John P. Blake (D-Lackawanna/Luzerne/Monroe) today joined the Northeast Regional Cancer Institute at Lackawanna College to announce a $75,000 state grant to conduct a health survey in the areas of Northeastern Pennsylvania affected by Marcellus shale drilling operations.
The study, which will be conducted by Cancer Institute researchers, will determine the current health status of the population in Bradford, Lackawanna, Luzerne, Lycoming, Pike Sullivan, Susquehanna, Tioga, Wayne and Wyoming counties and establish an important baseline of data for future comparisons and research regarding public health in the areas impacted by Marcellus operations.
“Research is one of the most important tools in the fight against all cancers and this grant shows the state’s faith in the quality of research being conducted here in Scranton,” Blake said. “It is imperative that the health and well-being of Pennsylvania residents be the number one priority as the Marcellus industry expands in our state.”
The specific goals of the survey are to estimate the prevalence of a variety of acute and chronic medical conditions among residents living in counties where natural gas production has begun or is likely, as well as estimate the prevalence of known health risk factors in this population. At least 500 survey participants will be recruited for the study.
“With 20 years of experience in cancer control and more than a decade of experience conducting epidemiological research in Northeastern Pennsylvania, the Cancer Institute is very glad to be able to provide the community with this valuable information on public health in the Marcellus shale region,” added Robert Durkin, president of the Northeast Regional Cancer Institute. “The Institute welcomes the support of Pennsylvania’s Northeast delegation in the General Assembly as well as the support of the Corbett Administration through the Department of Public Welfare.”
The grant is being administered by the Pennsylvania’s Department of Public Welfare.
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