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FALL 2009
It continues to be an honor to serveas your state representative. Thisnewsletter is my report to you aboutwhat is going on in our area and in our state Capitol.This year’s more than 100-day delayin adopting a state budget took center stage for months in Harrisburg. WhileI am pleased we have a spending planin place, I was disappointed with whatwas included in the final bill. Earlier this year, I supported a tax-free,bipartisan budget proposal that wouldhave funded vital government serviceswithout further burdening taxpayers.While our full budget plan was notadopted, one component of it was.This newsletter contains an articleabout my proposal to raise revenuesand create jobs by expanding naturalgas harvesting on state forest lands.I also have called on my colleagues to join me in implementing commonsensewelfare reforms to protect taxpayer dollars.Finally, take a look at the sectiondetailing some of the key votes takenthis year in the House and how I votedon those issues.As always, feel free to contact mydistrict office if we can help you withany state government-related issues.Sincerely,Dave ReedState Representative62nd Legislative District
PRSRT STDU.S. POSTAGEPAIDHARRISBURG, PAPERMIT NO. 529
Reed Votes Against State Budget with Tax Increases
No elected official – whether they are a legislator or the governor of theCommonwealth – gets everything they want in a state budget. The processis filled with negotiation and compromise. In the end, each lawmaker mustdecide whether the “good” outweighs the “bad” in the final budget deal. WhileI supported the increased funding for our local schools, I could not vote for this year’s state budget because, outside of education, I do not believe it setthe proper spending priorities for our citizens.
Local School Funding
Schools across Pennsylvania will benefit from an approximately $300 millionincrease in the state budget adopted in October. As you can see in the chart,each of our local school districts will benefit from a funding increase.
Dear Friends,
I recently met withstudents fromHomer-Center Elementary School during their trip to thestate Capitol.Here, we haveour picture takenon the steps of the Main Capitol Rotunda.
Budget
continued on page 3...
Reed Unveils ‘EnergizePA’ Initiative to Tap StateMarcellus Shale Gas Deposits
At the beginning of this year, I was selected to serve asone of two co-chairs for the House Republican Policy Com-mittee Energy Task Force. At a Capitol news conference inMarch, my colleagues on the task force and I unveiled the“Energize PA” plan to expand natural gas drilling on stateforest land and promote the creation of 7,000 new private-sector jobs in Pennsylvania’s emerging Marcellus Shalenatural gas drilling industry.My proposal – House Bill 1050 – is about promoting jobcreation at a time when our state’s workers are suffering theconsequences of a national economic downturn.The proposal would directly result in the creation of 7,300new private-sector jobs during the next decade. This was astark contrast to the potential effects of a new tax proposedby the governor in February, which experts predicted couldhave cost Pennsylvania approximately 53,000 jobs duringthe next five years.We were looking at a net difference of 60,000 jobs betweenour plan and the governor’s proposal. The question weneeded to ask was, do we want to gain jobs or lose them?My bill would lease 390,000 acres of the approximately2.1 million acres of state forest land to natural gas drillingcompanies in the next three years.Of the total amount, 80 percent – or approximately $208million – would go toward filling the state’s projected $2.3billion budget deficit. Local governments that host existingnatural gas, oil or coal shallow well drilling sites would share12.5 percent – or $32.5 million – of the money. Local gov-ernments that host new Marcellus Shale drilling operationswould share 2.5 percent – or $6.5 million – of the money.Conservation districts across the state would share theremaining 5 percent – or $13 million – to pay for programsthat protect the environment.In February, Gov. Ed Rendell proposed adding a new sev-erance tax to natural gas drilling operations in Pennsylvania.A new tax would make it less attractive for natural gas drillingcompanies to expand their operations in the Commonwealth,leading to fewer job opportunities for Pennsylvania workers.We have an industry that wants to grow here and cre-ate more jobs and the governor responded by putting up aroadblock. The governor travels across the state handingout cardboard checks to corporations that promise to deliver jobs. Now, we have an employer who isn’t asking for anymoney from the Commonwealth and the governor wants totax them!The task force held informational meetings with naturalgas industry experts and executives to develop a workableproposal that would provide revenue for the state, localgovernments and conservation districts without enacting anew tax on natural gas companies.We continue to look at proposals aimed at ensuring thereare suitable facilities in Pennsylvania to treat the wastewater from Marcellus Shale drilling. We are committed to identify-ing policies that promote economic growth while protectingour environmental resources.
Reed Votes Against Tax-Hiking,Watered-Down Marcellus Shale Bill
As part of the overall budget “deal,” legislators and thegovernor agreed to expand natural gas harvesting on stateforest lands. This was the basic concept behind the “Ener-gize PA” initiative my colleagues on the Energy Task Forceand I unveiled earlier this year.Unfortunately, the underlying concept was twisted anddistorted as it made its way through the legislative process.For example, Energize PA would have shared with local gov-ernments and conservation districts the increased revenuefrom expanded natural gas drilling. The final agreement thatwas adopted cut out our local municipalities and our con-servation districts, effectively hoarding all of the revenuesin Harrisburg. This was done, despite the fact that localgovernments would need the money to pay for infrastructureimprovements, such as road repairs and water treatmentfacility upgrades to handle the increased activity.In addition, lawmakers hung additional proposals on theunderlying concept, turning the bill into a Christmas tree of various unrelated policies. For example, the bill included aproposal to implement a new tax on “little cigars.”The final bill also completely drained two of the state’sreserve accounts – the Health Care Provider RetentionAccount and the Medical Care Availability and Reductionof Error (MCARE) Fund – which are dedicated to retainingtop-quality doctors in our state. If revenues fail to meetexpectations this year, the state will not be able to drawon these accounts to make ends meet. That could lead toadditional service cuts or tax increases in the future.I was pleased to see the governor and General Assemblyincorporated our plan to increase natural gas harvesting onstate forest lands. However, their decision to hoard all of the money in the state Capitol, cut our local municipalitiesout of the funding and weigh the bill down with tax increasesand reserve fund-depleting proposals led me to opposethe final bill.
DREED@PAHOUSEGOP.COM
I recently joined with fellow state and local officials at thegroundbreaking event for the Southern Indiana County Regional Sewage Improvement and Sewage Treatment Plant expansion,a project between the Blairsville Municipal Authority and Burrell Township Sewer Authority. The approximately $16 millionexpansion will provide additional sewage service to residents and further enhance the economic development potential in southernIndiana County.
Taxes
Unfortunately, budget negotiators were only able to balancethe $27.8 billion spending plan by raising taxes, depletingthe state’s reserve fund and reducing some tax credits - likethe education improvement tax credit program.The budget includes a 25-cent-per-pack increase in thestate tax on cigarettes and creates a new tax on “little cigars”at $1.60 per pack. In addition, it includes a tax on MedicaidManaged Care Organizations (MCOs).The state spending plan also calls for a $374 million tax onPennsylvania employers at a time when the Commonwealthshould be doing everything in its power to encourage jobcreation. This tax could delay or jeopardize Pennsylvania’seconomic recovery. That is the last thing local workers andfamilies want as they struggle to make it through the currentinternational economic recession.While the budget includes the targeted tax increasesabove, my colleagues and I were able to work together in abipartisan manner to block several new or increased taxesproposed by Gov. Ed Rendell. At various points during thebudget process, the governor called for both a PersonalIncome Tax (PIT) increase and an expansion of the stateSales and Use Tax (SUT). We were able to avoid both of these broad-based tax increases.In addition, the governor proposed a severance tax onnatural gas harvested in Pennsylvania. This would havestunted the growth of Pennsylvania’s emerging MarcellusShale natural gas industry, resulting in fewer good-paying jobs for our workers. My colleagues and I were able to avertthis job-killing tax proposal.
Reserve Accounts
Budget negotiators balanced the state spending plan, inpart, by draining several reserve accounts. For example, theCommonwealth had built up a $755 million Rainy Day Fund.With the effects of the international economic recession, it iscertainly “raining” in Pennsylvania. However, using all of thesedollars to balance this year’s budget means we will have noumbrella for next year. This could lead to taxpayers gettingsoaked with large tax increases in next year’s budget.
Government Operations
As residents across the Commonwealth tighten their finan-cial belts in an effort to make ends meet during the recession,lawmakers in both the House and Senate are doing the same.Funding for the Senate will be reduced by $9.7 million thisyear and funding for the House has been cut by $7.3 million.The governor’s office also joined in the effort, although its$393,000 funding cut is much smaller in comparison to thoseof the Legislature. However, the important thing to note isthat both branches of government, including Republicans andDemocrats, acknowledged the need to trim spending.
Timing of the Budget
The more than 100-day delay in adopting a state budget wasboth unnecessary and unacceptable. The Senate passed itsversion of a budget on May 6. Unfortunately, the DemocraticHouse Appropriations chairman did not bring a budget bill upfor a vote until after the July 1 deadline to enact a new spend-ing plan.The delay did lead to the introduction of several bills aimedat making the budget process more open, transparent and re-sponsive to the will of the public. One thing is painfully obvious.The current process does not work and changes must be madeto ensure this year’s stalemate is not repeated in the future.
Budget
continued from page 1.
Important Votes
House Bill 1416 – State Budget Voted “No”
At a time when Pennsylvania families are cutting backin their own budgets, this funding plan set the wrongpriorities for our commonwealth and required too manytax increases.
House Bill 1531 – Tax Hikes Voted “No”
This bill required nearly $1 billion in tax increases tobalance the budget proposal. Raising taxes during arecession defies common sense and could threaten our Commonwealth’s economic recovery.
House Bill 1 – Health Care Tax Voted “No”
This bill includes a 2 percent tax on health care pre-miums for those with health insurance to pay for an ex-pansion of the Commonwealth’s adultBasic health caresystem for uninsured adults. Although I agree we needto find ways to make health care insurance more afford-able for all of our citizens, taxing those with health careinsurance is not the answer.
House Bill 1407, Amendment A4317 –Eliminating Funding for ACORN Voted “Yes”
I voted for an amendment to this bill that would stripall Commonwealth funding for the Association of Com-munity Organizations for Reform Now (ACORN), thecontroversial group that has come under scrutiny in recentmonths.
House Bill 1089 – mini-COBRA Health CareExtension Voted “Yes”
In 1986, Congress passed the Con-solidated Omnibus Budget Reconcilia-tion Act (COBRA) allowing employeeswho lose their jobs to continue to payfor and receive health care benefitsat their previous group rate. COBRAapplies to companies with 20 or moreemployees. This bill extended similar health care protections for workers atsmaller firms with between two and 19employees.
House Bill 1770 – Extension of Unemployment Benefits Voted “Yes”
The federal government approved a law paying for aseven-week extension of unemployment compensationbenefits for workers who were unable to find a job. Thisbill empowered Pennsylvania to take advantage of thisfunding under the American Recovery and ReinvestmentAct (ARRA), allowing unemployed workers to collect ad-ditional benefits without any increased cost to the state.
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