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Corbett signs historic spending reduction budgetPAGE 3 Is the administration under-estimating revenue again? PAGE 4 Property tax referenda bill is buzzer-beater PAGE 6 Smart grid investments to benefit Harrisburg PAGES 8-9

Editorial:Is the average person stupid? PAGE 12

Governor Corbett’s Transportation Fund-ing Advisory Commission is noodling over a package of proposals to increase transpor-tation funding in Pennsylvania – with the probable price tag topping out at the cost of a cup of coffee a week.

The Transportation Funding Advisory Commission appears to be making sig-nificant progress in identifying a variety of options designed to meet the long-term funding needs for highways, local roads and public transit and is likely to forward a list of options to Gov. Tom Corbett in the next few weeks.

PennDOT Secretary Barry Schoch said he plans to refine the options discussed at the commission’s June 27 meeting and get the final revenue packages back into the hands of commission members this month for final approval, perhaps negating the need for the commission meeting scheduled for July 18.

“We expect to submit several funding packages to the governor based on discus-sions (of June 27) and our own in-house efforts,” Schoch said in a memo recapping the meeting. “The governor will then deter-mine what funding package or combination of packages will best serve commonwealth residents.”

The outcome of the June meeting was the development of five funding packages that would increase transportation revenue by between $396 million and $711 million in the first year, and by up to nearly $2.7 billion by the fifth year. There is consensus

that Pennsylvania has a $3.5 billion annual funding gap for transportation.

A sound funding package would deliver what Schoch is calling “a decade of investment” in Pennsylvania’s transportation system. The funding strategies would be augmented by what he termed “modernization strategies” aimed at paring back costs for items such as drivers’ license and vehicle registration ser-vices and other administrative expenses.

“This decade of investment will not just provide better roads, bridges and pub-lic transportation, but will also deliver a renewed commitment to our environment by working to reduce our dependence on foreign oil,” Schoch said. He noted that capacity-adding projects would be under-taken by the latter portion of the decade, spurring economic development.

The elements of the packages include various combinations of the following:

• Removing State Police funding from the Motor License Fund to the General Fund. About three-quarters of State Police funding currently comes from the Motor License Fund, diverting more than $500 million from highway projects.

• Increasing drivers’ license and vehi-cle registration fees. Pennsylvania’s fees for those items are among the lowest in the country. This could include basing registration fees on vehicle value, called an “ad valorem” fee.

• Dedicating a portion of the vehicle sales tax to public transit.

• Lifting the cap on the Oil Company Franchise Tax. This would enable rev-enue to increase as petroleum prices increase, as opposed to Pennsylvania’s set cents-per-gallon gasoline tax, which has not been increased since 1997.

• Restructuring of Act 44 to direct $200 million per year for public transit.

The commission also calculated the addi-tional cost per average driver of the various packages, which came in at a range from 19 cents to $2.36 per week in the first year to as much as $3.80 per week by the fifth year.

The funding packages did not include items that require additional study, such as conversion from the current consumption tax on liquid fuels to a miles-traveled fee. Most transportation experts believe such an approach should be handled at the fed-eral level.

They also did not include items that require the actions of others, such as toll-ing, which is a federal issue, or actions which would result in non-recurring reve-nue such as proceeds from the sale of assets or public-private partnerships.

Details of the various funding packages are available at www.tfac.pa.gov. CW

july 2011

Can you spare a cup of coffee for better roads?

Say NO to state budget cuts to cost-saving Home & Community Based Services (HCBS) and supports. The House

budget restores 24 million dollars to nursing homes while cutting less expensive Home and Community Based Services

by over 27 million dollars. Pennsylvania’s seniors and people with disabilities want Home and Community Based Services

so they can live independently in their own homes instead of in segregated, expensive nursing homes.

www.libertyresources.org

Please contact your state legislators and Governor Corbett at (717) 787-2500 and tell

them to fully fund home care services.

You can �nd your representatives at: www.legis.state.pa.us.

july 2011 CAPITAl WATCH 3

PUBLISHER/AD DIRECTORJim Laverty

(717) 233-0109, ext. 122

EDITORIALEditor-in-chief

Jacqueline G. Goodwin, Ed.D.goodwinpin@comcast.net

(717) 418-3366

Contributing WritersPeter L. DeCoursey

Deena C. Malley

News ServiceCapitolwire

Graphic DesignLisette Magaro

ProductionShawn Skvarna

Capital Watch is published every month.

Reproduction of this publication in whole or part is prohibited except with the written permission of the

publisher. Capital Watch is non ideological and nonpartisan.

(717) 233-0109, ext. 114

news

CapitalWatChwww.capital-watch.com

Gov. Tom Corbett signed the 2011-12 budget which cuts government spend-ing, does not raise taxes and includes property tax reform

The $27.15 billion budget cuts overall government spending by more than $1 billion.

“This reality-based budget marks a return to the Constitutional principles that must guide Pennsylvania’s fiscal policy,’’ Corbett said. “It spends no more than we have and it doesn’t pretend we have more than what we have budgeted.

“I was elected last November to change the culture of state government and that means not only must government be honest, it must be fiscally responsible,’’ Corbett said. “The Senate and House join my administration in making these standards a reality.’’

The legislature also agreed to a key eco-nomic proposal for school districts – a ref-erendum on any property tax increase that exceeds the rate of inflation, known as Act 1. Under these changes, any property tax increase above the rate of inflation must be approved by the local voters. Taxpayers in

each district will be empowered to decide whether they want a property tax increase to fund a particular program

The budget is part of a larger Cor-bett administration initiative that also includes tort reform - signed into law on June 28 - which reforms how damages are recovered in civil lawsuits, ensuring an equitable framework for litigation in

the future and improving Pennsylvania’s business climate.

Highlights of the 2011-12 budget include:

• State spending is cut by 4.1 per-cent, or $1.17 billion, from 2010-11.

• The enacted budget eliminates 66 appropriation line items, cutting $822 million in annual spending. It reduces funding for more than 226 appropria-tions and consolidates an additional 52 items, to streamline government.

• Administrative spending is reduced by 4 percent and more than 1,000 posi-tions in state government are elimi-nated. These reductions are achieved in large part by consolidating programs, targeting inefficiencies and reducing or eliminating discretionary financial grants, commonly known as Walking Around Money, or WAMs.

• The budget honors Corbett’s com-mitment to reinstate the phase-out of the Capital Stock and Franchise Tax. That tax was levied on goods and equipment that a company kept in store, even though it had not been sold or put to use. By eliminating this regressive tax, the governor has given more than 100,000 job creators an estimated $70 million in tax relief. The phase-out of this tax will continue until it is com-pletely eliminated in 2014.

• At the same time, the budget has maintained tax credit programs. These are the Job Creation and Film Production tax credits. The bud-get also increases the Research and Development Tax Credits from $40 million to $55 million.

• The budget increases total fund-ing by $6.2 million for the Children’s Health Insurance Program, provides $405 million for children’s Early Intervention Services and $1.4 billion in county child welfare services.

To review the budget in its entirety, visit www.budget.state.pa.us CW

Corbett signs historic spending-reduction budget

With about 15 minutes to spare before July 1, Gov. Tom Corbett signs his first state budget.

4 july 2011 CAPITAl WATCHnews

For the past four months, Democrats have accused the Republicans of hiding the state surplus.

When Gov. Tom Corbett announced his budget proposal on March 8, his budget office predicted that the year-end revenue was going to be an over-estimate of $78 million.

But as of July 1, it’s ten times that estimate - $785.5 million.

And now, as the fiscal year 2011-12 estimates are coming out, Democrats believe the Republicans are at it again.

Senate Appropriations Minority Chairman Vince Hughes, D-Philadelphia, who pushed for using surplus revenues to restore budget cuts to education and social services, said that he believes the administration is “always low-balling” those estimate.

Democratic budget analysts shared Hughes view that Corbett’s administration is under estimating revenues for the 2011-2012 year. The same analysts said in March the 2010-2011 surplus would be $400 million, when Budget Secretary Charles Zogby insisted it would be $78 million.

This year they say the administration is again understating revenues by $300

million to $500 million.Zogby insisted the administration has

not been intentionally under estimating revenues.

“The $78 million on March 8 was our true estimate of where we thought revenues would by year-end,” Zogby wrote in an email.

“We have no sense then that we would end up where we are now. We have acknowledged that they have come in stronger and have been pleasantly surprised by their strength though prudently cautious given the uncertainty of future economic conditions,” he added.

The total collected revenue in 2010-11 was $27.5 billion, which is $785.5 million, or 2.9 percent, above estimate. For the year, revenue, estimated to rise by 3.6 percent, rose by 6.5 percent. The state collected $3.2 billion in General Fund revenue in June, which was $246.1 million, or 8.3 percent, more than anticipated, according to figures released Friday by the Revenue Department.

Sharon Ward, executive director of the Pennsylvania Budget & Policy Center, wrote in an email that the situation gives more credence to the creation of an independent fiscal office.

“Governors have a tremendous incentive to over- or under-estimate revenue, an independent office with revenue forecasting capacity would provide a truer number,” she wrote.

Hughes said more troubling than the argument over numbers, was the lost opportunities “to spend that $500 million on restoring cuts in education, restoring some version of adultBasic health, to help our schools, our students, and our families. That is what we are concerned about: we had money to address these issues, but we didn’t use it to address them.”

The Budget Office and Revenue Department released revenue collections and estimates the day after Corbett signed his historic spend-reducing budget. A day later, Philadelphia-based Temple University announced a tuition and fee increase of 9.9 percent because of cuts to higher education in the Corbett budget. The State System of Higher Education also announced tuition and fee increase of 9 percent due to funding cuts in the state budget.

Susan Hooper, spokeswoman for the governor’s budget office, wrote in an email that the “most critical objective of

the governor’s fiscal policy this year was to put the state’s budget back on a path to long-term stability and sustainability.”

“While there is still work to do, this budget, by restraining spending and living within our means, made major strides towards accomplishing that goal. To have given into the impulse for short-term spending and ignored the fiscal challenges our state still faces would have only put at further risk the gains we have made in putting our fiscal house in order,” she wrote.

Some analysts agree.“I’d say it is much better to err on the

conservative side though, given you don’t want to end the year with a shortfall, and given the growing issues with pension and debt obligation, we need to prepare for the worst,” Nathan Benefield, policy analyst with the Commonwealth Foundation, wrote in an email.

He added that this revenue estimate is made for taking into account tax refunds, which he said could be around $1 billion: “That is, the net revenue would be about $26.8 billion--or $300 million less than the budget that the governor signed. That would mean a budget deficit, not a ‘surplus.’”

Hooper said that the projected tax revenue growth in administration’s 2011-12 official estimate over 2010-11 is 3.3 percent. That projection for revenue was 4.7 percent in Corbett’s budget, and now has been reduced by almost one-third.

“When you factor out the $292 million in nonrecurring tax revenue that the Department of Revenue tells us was collected in 2010-11, that number jumps to 4.4 percent,” Hooper wrote.

“We believe that a year-to-year comparison of tax revenues is most meaningful. You should not be looking at the growth in total revenues to try to make your comparisons because 2010-11 had considerable one-time non-tax revenue (i.e., transfers from special funds). That pulls the total 2011-12 official estimate down to 1.2 percent growth over 2010-11.”

Democratic analysts say that projection should be at least doubled to 2 percent, and probably tripled to 3 percent. They said about $300 million to $500 million more will pour into the state’s coffers than predicted by Zogby.

“We just got 6 percent in,” said one key budget negotiator. “ One percent? Really?”

Ward wrote that typically Pennsylvania generates higher revenue growth in years to coming out of a recession. Coming out of the 1991 recession, tax revenue increased 4.0 percent in 1993-94 and 6.3 percent in 1994-95, after big tax increases of 2001 largely repealed. In 2002-03 tax revenue increased 4.7 percent - this is before the 2003 personal income tax increase. CW

Is the administration under-estimating revenue again?

july 2011 CAPITAl WATCH 5newsspOnsOred by pcua

Almost every headline in the daily newspaper or evening news coveys a message of doom and gloom. Is that because there is no good news to report? Or that good

news is not attention grabbing and therefore less appealing?

There are good things happening in Pennsylvania credit unions within their member business loan (MBL) programs and good news to share as a result. MBL programs are thriving and performing in safe and sound ways. A white paper issued recently by a Credit Union Service Organization’s (CUSOs) Collaborative Group that includes the Pennsylvania Credit Union Association (PCUA) and two Member Business Lending (MBL) CUSOs headquartered in Pennsylvania offers guidelines toward MBL best practices.

The report, Building a Footprint for Solid Member Business Lending Practices, focuses on 20 credit unions represented by the two CUSOs and PCUA. These 20 credit unions range in total assets from $37 million to $1.1 billion. Total assets of the group exceed $4.3 billion. Demographically, the locations of the credit unions span from the far western counties of Pennsylvania across the state into Delaware.

The small business lending growth that has occurred has not been by granting of large multi-million dollar MBLs. Growth has been slow and steady and controlled. The average loan size in 2010 for the Group was $186,580. “Despite a recession and difficulties in the business lending marketplace, there are credit unions via MBL CUSOs that have been able to mitigate risk and even thrive during difficult times,” said PCUA President/CEO Jim McCormack.

The new white paper demonstrates that through solid lend-ing practices, using the tried and true banking practices of the past; the five C’s of credit, along with experienced commercial lending staff, credit unions can successfully lend to small busi-nesses and work to enhance the communities they serve.

For information about the white paper, contact Christina Mihalik, VP, Governmental Affairs at 800-932-0661, ext. 5282. To find more information about credit unions or how to join one, visit www.iBelong.org.

Member Business Lending White Paper Shows Credit Unions Thrive With Safe Practices

Pennsylvania’s children are invited to help name the two new puppies that will soon arrive at the Governor’s Residence in Harrisburg. The Airedale Terrier puppies are brother and sis-ter and should arrive at their new home later this month.

“Everyone at the Residence is anxiously waiting for the pup-pies to arrive,” said First Lady Susan Corbett. “Tom and I love Airedales; they are very friendly with lots of energy. They’ll make the Governor’s Residence a very lively place.”

The naming contest is open to Pennsylvania children ages 12 and under. Children can submit one name for each puppy, and the governor and first lady will choose the winning names.

“Susan and I felt it would be nice to let Pennsylvania’s chil-dren pick the names,” said Governor Corbett. “We are really looking forward to seeing the suggestions.”

Suggestions can be submitted online at www.pa.gov/FirstPets.

Letters can also be sent to: Governor’s ResidenceC/O Puppy Naming Contest2035 North Front Street, Harrisburg, PA 17102

All suggestions must be received by July 25. The winning names will be revealed shortly after the puppies arrive at their new home.

The Corbetts have owned several Airedales in the past, includ-ing Fergie, Maggie and Daisy. Airedales are known as the “King of Terriers.” They are the largest of the terrier breed and are thought to have originated in the valley of Aire in England. CW

Children invited to name first family’s new pups

The Pennsylvania Gaming Control Board reported on its web site that tax revenue produced from the play of slot machines for the fiscal year, which ended on June 30, went up by nearly $100 million.

The 2010-11 total was $1,283,992,674, an increase of 7.8 percent from the same

period in 2009-10 when tax revenue was $1,190,592,416.

“Pennsylvania casinos are continuing to see significant patronage which, in turn, means our citizens have benefited by con-tinuing to receive property tax reduc-tion, living-wage jobs, and funds that are

supporting a myriad of projects in many communities,” said Gaming Control Board Chairman Greg Fajt in a press release.

“In addition to lowering property taxes for homeowners, this revenue is funding water and sewer projects, pur-chases by fire and emergency companies,

road improvements, and major economic development projects.”

The Patriot-News writes the improved tax revenues from slot machines came even with the addition of table games to the gambling offerings at the state’s casinos. CW

PA slots revenue keeps going up says Gaming Control Board

6 july 2011 CAPITAl WATCHnews

Property tax referenda bill is buzzer-beater After a day of uncertainty and multiple meetings among legislative leaders and the governor, Gov. Tom Corbett’s top remaining summer education policy priority was signed into law just before midnight on June 30.

The bill, which will take effect with next year’s school budgets, was signed the night after Corbett lobbied, haggled and committed about $2 million in restored welfare funding sought by House members. That rounded up the last 10 votes to amend his school district property tax referendum proposal into the bill.

A night later, the House voted 109-86 to send it to the Senate at 10:34 p.m. That was the earliest possible time to vote the measure, Senate Bill 330, after House Democrats declined to allow an earlier vote.

They did so after House Democrats forced several votes, trying unsuccessfully to delay the vote until after the 11 p.m. deadline to vote on House bills.

Corbett promised to work with lawmakers on potential changes to the bill in the fall, including a wider construction exception, Senate leaders said.

At several points during the day, Corbett and aides threatened not to sign the budget bills until the referendum

measure was enacted, legislative leaders said.

Corbett said lawmakers learned that on that bill, lawmakers learned “I can be like a dog with a bone when I want to get something.”

He said of the bill: “I think you are going to see it restricting the spending quite a bit” in school districts because it would give “more control” to the taxpayers now voting on most above-inflation property tax hikes.

After the House acted, the Senate then made the bill their final vote before the summer recess, as it was for the House. Despite policy questions about it from senators in both parties, the Senate voted 32-17 to approve it at just after 11 p.m.

After Corbett’s crusade to get a last-minute voucher bill approved was rejected by the House GOP, he focused on this proposal: to give local school district voters the right to approve or reject most school district property tax hikes.

While not eliminating all exceptions to the referendum requirement – more than a dozen are in the current law – this bill reduces them and tightens the

remaining exceptions. During the House debate,

Democrats who protested the Corbett and legislative GOP cuts of $300 million in state public pre-K-12 education funding, $900 million overall, said this was the next step in a war on public education.

Rep. Greg Vitali, D-Delaware, said: “I think this is dangerous, it really forces

the dumbing-down of quality school districts. … By forcing referendum questions on property tax increases, the reality is they generally lose.

He also said: “Putting education out to referendum is the wrong way to go: it strikes at the heart of representative democracy. … My school board directors are certain this is part of a concerted effort to destroy public education.”

But Rep. Joe Emrick, R-Northampton, an 18-year teacher, said he supported the bill because he saw money wasted in his years in a public school district, and that he thought voters should have a say before districts hiked taxes “to build Taj Mahal buildings” and erect “Astroturf sports fields.”

Rep. Doug Reichley, R-Lehigh, one of nine GOP members who opposed

the amended bill, said it was a good idea and would help “dampen or temper the annual drive for salary increases,” to teachers. He added that he hoped members would be open after 2014 to giving school districts more flexibility if needed. He also said he hoped the Legislature, having made it harder to raise local property taxes, realized that it was important to provide adequate school funding. Reichley voted for the proposed budget and its education funding cuts of $900 million, compared to last year.

The brief Senate debate took place in Rules Committee where Senate Minority Leader Jay Costa, D-Allegheny, said the bill made too many big changes too suddenly, and would hurt schools.

He and other Democrats offered several amendments to loosen the restrictions and add back exceptions. All lost on party-line votes of 6 Democrats to 11 Republicans.

Senate Majority Leader Dominic Pileggi, R-Delaware, said some of the Democratic proposals were good. But he urged votes against them, saying the bill had to be done, and referring to the deal with Corbett without naming it or him. He said several times “we will work more on this in the fall.” CW

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july 2011 CAPITAl WATCH 7news

adVertOrial

David DeCampli President

PPL Electric Utilities

CW: What are your firm’s major products/services? DD: PPL Electric Utilities delivers electricity to 1.4 million customers. Our primary focus is providing safe, reliable electric service. We also strive to pro-vide exceptional customer service and offer a range of tips, tools and incentives under the E-Power brand to help our customers save energy and save on their utility costs. We're proud of being the recipient of 17 J.D. Power awards for customer satisfaction, the most of any utility in the U.S. CW: When did you join the firm? Under what circumstances? DD: I joined PPL Electric Utilities in 2006. Initially, I was hired to lead over-all operations (electric transmission and distribution, engineering, and customer service) in a planned leadership succes-sion role to become the utility presi-dent. However, my predecessor died suddenly and I became President in April 2007. Before joining PPL, I had more than 25 years of industry experi-ence, primarily in operations manage-ment and utility executive leadership in Philadelphia and Chicago. Over the past four years, PPL Elec-tric Utilities has undergone dramatic change. We ended a period of capped rates and made the transition to customer choice and a competitive market for electric generation. We sponsored an extensive community-based consumer education campaign to educate house-holds and businesses that they now could choose among competitive electric generation suppliers. When that new market scenario became reality in 2010, the utility became a delivery company only, not involved in power generation and simply delivering power to our long-standing customers across the state. Under state law, utilities had to divest of their electric generating assets as the state sought to make electricity a market-based commodity. Most compa-nies restructured and separated the util-ity from the generation business as we did; others actually sold off their gener-ating assets. CW: What are your near-term and long-term goals for the firm? DD: Our recent priority has been to pro-mote electric choice and support the emerging competitive electric market in PA. We are still in the early stages, but that market is developing quite well with more than 40 licensed generation suppli-ers providing more than two-thirds of

the electricity we deliver to customers. We encourage our customers to explore their options and choose the supplier that best meets their needs. At the same time, PPL Electric Utili-ties conducted a comprehensive assess-ment of our electric delivery system -- 10,000 square miles of service area, 40,000 miles of power lines, 400 substa-tions, and countless electrical compo-nents. We believe it is absolutely vital to significantly increase our capital invest-ments in our electric delivery system to address aging infrastructure. We antici-pate investing $3.4 billion over the next five years in our transmission and distri-bution infrastructure. Part of the new investment is a smart grid deployment project partly financed by the US De-partment of Energy. This program will dramatically improve our operations and enhance service soon in the Harrisburg area and subsequently in other regions. CW: Are your customers local, regional, national or global? DD: Our customers are the households, small and large businesses, and institu-tions here in PA. PPL Electric Utilities (formerly PA Power & Light) has been serving this region for nearly a century. While our parent company, PPL Corpo-ration is a much larger, more diversified company with operations in other re-gions of the U.S. and in the U.K., our focus is on central and eastern PA. It is part of our heritage and we are commit-ted to this region. All of our employees live and work in PA. CW: Where else does the firm have business locations? DD: PPL Generation, a separate, un-regulated company, operates power plants in PA, and other states. Its affili-ate, PPL Energy Plus, markets retail and wholesale energy in competitive mar-kets. We operate as stand alone busi-nesses under the same parent and must satisfy the regulatory oversight of the state PUC. Our sister companies, Louisville Gas & Electric and Kentucky Utilities, serve about 1.2 million custom-ers in their service areas down south. PPL’s Western Power Distribution sub-sidiary serves 7.6 million customers in southern England and Wales. CW: What will it take for you to invest more in PA? DD: We are investing significantly in PA and believe such investment in our electric delivery infrastructure is essen-tial. We completed about $290 million

July 2011 CAPITAL WATCH NEWS 5

Policy Roundtable Spotlight The PBC Policy Roundtable, like its national counterpart in Washington, is a forum in which CEOs meet on a peer-to-peer basis to formulate public policy proposals to the most pressing issues of competitiveness. The Policy Roundtable provides senior managers the opportunity to interact extensively with policymakers, policy experts, media, and other stakeholders; participate in policy evaluation; decide upon long-term public policy strategy; and guide policy education/advocacy efforts. Corporate Chairpersons, CEOs, COOs, CFOs, and Presidents are invited to become members of the PBC Policy Roundtable. For more, see: www.pabusinesscouncil.org.

in capital improvements in the electric transmission and distribution systems in 2009. In 2011, PPL Utilities will invest approximately $450 million with sustained higher levels of invest-ment over the next 10 years. A consid-erable portion of our delivery system was built decades ago and is at or nearing the end of its useful life. We are rebuilding vintage transmission power lines, rebuilding or upgrading dozens of substations that serve as the hubs for local electric distribution, and making numerous distribution system improvements across our territory, as well as investments in technology to enhance our operations and improve our service. Additionally, we are mak-ing a substantial investment in a new corporate data and utility operations center in the Lehigh Valley. We are hopeful the legislature will enact a proposal introduced with bi-partisan support this year, House Bill 1294. It would enable the PUC to consider alternative ratemaking approaches that would allow more timely recovery of new investments for infrastructure upgrades and would apply to electric, natural gas, water and wastewater utilities. Otherwise, we would need to re-evaluate the level of capital investments the business can prudently support. HB1294 is vital to the financial health of utilities. CW: Are there other public policy changes your firm is advocating? DD: PPL will actively participate in the state's re-examination of current law and programs. PPL Electric Utili-ties devoted considerable effort to realign operations to support competi-tive suppliers of electric generation. The utilities currently serve as the default generation supplier buying power on the wholesale market for customers who do not shop. We also handle metering, billing and collec-tions generally, as well as provide payment assistance programs for low-income households and sponsor en-ergy efficiency/conservation programs to help consumers save energy and manage their costs. While the com-pany does not benefit from serving as the "provider of last resort," we would caution the state from making any major shifts in the role of the regu-lated utilities. The competitive retail market is still in its early stages and needs to evolve. Any changes in our industry structure should be consid-ered very carefully to avoid unintended outcomes.

David G. DeCampli was named President of PPL Electric Utilities in April 2007 after serving as a Senior VP of Transmission and Distribution Operations and Engineering from December 2006. Previously, he was VP of Asset Management for Exelon Energy Delivery, responsible for system planning, investment strategy, and operational performance for both PECO Energy in Philadelphia and Commonwealth Edison in Chicago. DeCampli started his career at PECO Energy. He held a number of posi-tions with increasing responsibility in engineering, operations, and cus-tomer service, and ultimately was elected VP of Gas and Electric Operations in 1999. After PECO’s merger with Common-wealth Edison in 2000, he became VP of Merger Implementation and Operations Strategy and later served as VP of Regional Operations for Commonwealth Edison. He holds a bachelor’s degree in electrical engineering from Drexel University and a master’s degree in organizational dynamics from the University of Pennsylvania. DeCampli is on the board of directors of the Association of Edison Illuminat-ing Companies and the Energy Asso-ciation of Pennsylvania. In addition, he is the chairman of the board of trustees of the Good Shepherd Reha-bilitation Network in Allentown, Pa.

8 JuLy 2011 CAPITAL WATCHnews

Electricity makes our lifestyle possible. Simply put, the appliances that make our lives easier and more productive – from computers and iPods, to HVAC and busi-ness equipment -- require reliable power. And any interruption of service, whether for seconds or hours, can be much more than an inconvenience.

In Harrisburg and throughout the U.S., our 21st-century lifestyle relies on a 20th-century electric delivery system. While diligently maintained, that system is not as reliable, responsive or efficient as it could be.

Until now.Nationwide, utilities and leading tech-

nology firms are pursuing major system upgrades and modernization projects to create an “intelligent” power grid.

A smarter grid would be more respon-sive to changing conditions, and flex-ible enough to allow households and businesses to both consume energy and deliver it into the grid. That’s a much different model than the original designs for delivering electricity developed in the 1920s and 1930s.

In the very near future, we can real-ize benefits from an electric distribution system that detects problems instantly and can heal itself. Our homes and offices may experience a blink, rather than a power outage, when equipment fails, a tree falls on an overhead line, lightning strikes, or a vehicle accident occurs. Advanced sensors, secure communica-tion relays and new operating controls being installed today in the Harrisburg area will mean local consumers will notice fewer service interruptions and better power quality.

On the hottest day of the summer, imagine a system that can better manage the load of peak consumer demand, send signals to the market to reduce energy use or add more generation, while main-taining uninterrupted service.

Technology and information now can ensure a more secure grid. Utility system operators will be more aware of dynamic

Smart Gridi n v e s t m e n t s

to benefit Harrisburg

region

july 2011 CAPITAl WATCH 9

conditions, and corrective actions will automatically trigger to prevent the dev-astating effects of a cascading problem.

Envision a system in which windmills, solar arrays and electric vehicles can be more easily integrated with the tradi-tional electric grid. Indeed, more than 1,000 “distributed” generation sources have connected to PPL Electric Utili-ties’ grid in just the past two years. Due to environmental considerations, more investment in renewable energy can be expected in the years ahead. Neverthe-less across the USA coal fired plants remain today’s primary energy sourcing, which holds true for both today’s PA electric grid and upcoming PPL Utili-ties Smart Grid. Coal’s relative impor-tance is sacrosanct for the foreseeable future.

Last month, President Obama announced plans to further expand the government’s support for utility smart grids and repeated his call for increased renewable energy development and great-er government use of electric vehicles.

Locally, PPL Electric Utilities is in the midst of a smart grid deployment project that will significantly enhance the utility’s electric operations, dramati-cally enhance the efficiency of electric delivery, and improve service reliability. Consumers in Dauphin and Cumberland counties will realize the first benefits of these smart investments beginning this November.

The $38 million project is supported by a grant from the U.S. Department of Energy, and by several partners whose innovation makes the advanced tech-nology possible – like GE Energy and Lockheed Martin.

About a year ago, PPL Electric Utilities began installing new automated equip-ment and building dedicated communica-tions networks across a 60-square-mile project area. As a result, the electric delivery network will instantly detect problems and automatically reroute power around them. That will reduce outage times and maintain dependable service for customers.

The smart grid also will collect more real-time operating data, better control distribution voltages, and reduce energy lost along the power lines.

“This transformation will evolve over a period of years, and will change how we operate in so many ways,” said David DeCampli, president, PPL Electric Utili-

ties. “This isn’t technology for tech-nology’s sake. We are making prudent investments in proven technology that immediately can demonstrate benefits.

“Our industry needs to make major investments in our aging infrastructure. We view this as an opportunity to use digital systems to modernize our deliv-ery network, strengthen reliability and meet customers’ higher expectations,” said DeCampli.

How it works: like a person with a brain, a body and a nervous system.

You could say the smart grid is like having a roving person in the field who can be many places at once, diagnosing and solving problems in the blink of an eye.

The “brain” of the smart grid is a new distribution management system that integrates numerous operating pro-grams. It constantly monitors, analyzes, and models real-time power flow for operators and can act on many situa-tions.

The “body” of the smart grid consists of more than 500 electronic switches, relays and other devices installed along the distribution network in strategic locations. The devices constantly gather information from local circuits – iden-tifying a flaw or fault in a circuit, for instance – and instantly respond or act based on remote commands from the utility control center. Capacitors will better regulate voltage of the power traveling on the circuits -- improving power quality, which is even more critical in today’s digital era, and saving every-one money.

The ‘nervous system’ features high-speed communications equipment that connects the parts. PPL Electric Utili-ties has installed its own fiber-optic loop that connects 10 area substations and the distribution management system. Newly installed wireless communications tow-ers enable communication from substa-tions to the devices in the field.

“Basically, we have machines that ‘talk’ to each other, sharing real-time informa-tion and taking action to improve our grid performance,” said Michael Godor-ov, senior project manager for the utility.

Make no mistake: The smart grid does not replace or eliminate the role of system operators, line crews and other employees. Instead, it helps and comple-

ments them, Godorov said. “Identifying the exact site of a system fault can be a tricky task, especially in rural areas. The smart grid helps us narrow down, in a matter of seconds, the area where we need to send a crew to make repairs. That saves time and fuel, and helps us restore service more quickly.”

Federal supportIn the electric industry, competition

for the federal grants was fierce. Only one out of every four companies that submitted applications received fund-ing. Each month, PPL Electric Utilities updates the Department of Energy on project progress. About a month ago, DOE sent representatives to Allentown and Harrisburg to view firsthand how the investments will make a difference for consumers and utility operations.

The strength of PPL Electric Utilities’ team contributed to the success of its proposal. The utility secured top-notch technology partners:

•GE Energy is providing the distri-bution management system.

•Alcatel-Lucent established the dedi-cated communications network.

•Lockheed Martin designed cyber-security measures that will protect the grid’s hardware and software, and

•Drexel University provided engi-neering analysis to help choose the most suitable sites for placement of the sensors.

The power of a smart gridAt the outset, about 60,000 custom-

ers in the project area will benefit from these investments. In early 2012, the field work will be complete and the full capabilities of the DMS will be activated. Future phases of deployment already are being designed for other areas where reliability can be strengthened.

Most people take electricity for granted. But it drives our economy and has been essential to innovation that improves how we live and work.

Some benefits may not be noticeable. After all, it’s tough to know about an outage that never happens. Or to fully appreciate the blink that previously could have been a service interruption that would have lasted an hour or two. The benefits will be real in shorter outages and energy saved all along the lines. CW

Smart grid vs. smart metersGenerally, smart grid refers to the technology that improves the reliability, operating efficiency and security of power delivery from the point of generation to the consumer. The interactive distribution networks will give utilities and consumers more information and greater control over energy use. Smart meters are considered part of the 21st century grid. The smart grid proj-ect strengthens the grid along the delivery path to the consumer. It does not assume any direct control over customers’ energy use, which could occur via certain meters or smart home devices.Advanced or “smart” meters record power consumption information and provide the data to the user and to the utility for billing purposes and energy manage-ment. These meters also could be considered “net meters” since they can mea-sure energy consumed or delivered to the grid.PPL Electric Utilities already provides monthly, daily, and hourly usage data to its customers through its Energy Analyzer, available at www.pplelectric.com. Residential customers can use the Energy Analyzer to learn about their energy use and get tips on how to reduce electricity use.Benefits of smart gridmore information for consumers and utility operators about energy usageimproves electric reliability (fewer outages, shorter duration) and power qualitypromotes energy efficiency and supports clean energy improved ability to manage load with generation suppliersbetter integration of distributed and renewable generation sources and electric vehiclesenhanced utility operationsmore secure power grid

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Corbett signs workers’ Compensation reform bill Gov. Tom Corbett has signed into law House Bill 440, a measure that expands the availability of workers’ compensation coverage to small businesses.

The new law authorizes insurers, including the State Workers’ Insurance Fund, or SWIF, to voluntarily provide workers’ compensation coverage to sole proprietors, partners in partnerships and members of limited liability companies.

“The small-business community has waited too long for this reform. I am pleased that we are finally able to provide a crucial segment of our economy with this deserved protection,” Corbett said. “This law is important progress toward making Pennsylvania the preferred state in which to start or run a business.”

Specifically, Gov. Corbett said the new law will:

• Extend the availability of workers’ compensation coverage to sole proprietors, partners in partnerships and members of a limited liability company;

• Transfer $4 million from the Workers’ Compensation Administration Fund to the Uninsured Employers Guaranty Fund to ensure the latter’s solvency;

• Have no adverse effect on the state’s General Fund or SWIF;

• Place no burden on the Department of Labor & Industry’s Bureau of Work-ers’ Compensation.

“Sole proprietors and other small businesses need access to the peace of mind afforded by workers’ compensation coverage,” said Department of Labor & Industry Secretary Julia Hearthway. “This legislation makes that protection possible, ensuring that more Pennsylvanians injured on the job can make ends meet while they recover.” CW

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Senate Education Committee Chairman Jeffrey Piccola, R-Dauphin, blamed House Republican leaders for not committing to finalizing a school voucher bill.

After Gov. Tom Corbett got both sides to discuss the issue one more time on June 28 but no real deal-making ensued, Piccola wrote in an email: “All choice issues are off until fall.”

The state House of Representatives did slot a school-property tax referenda bill for final passage , after negotiations with Gov. Tom Corbett and the House produced a proposal. Corbett then personally lobbied House members to vote for that bill.

But the drama was over last-gasp attempts by lawmakers to pass a natural gas drilling fee and school vouchers.

Lawmakers eventually gave up on the fee on June 28 and vouchers on June 29.

In a statement released by his office, Piccola said: “As we approach these last days in June, the Senate at the request of the Governor, made a comprehen-sive, balanced and fair proposal to the House including many components of which we thought they had an interest. Unfortunately, the House was unable or unwilling to engage in any meaningful discussions to finalize this proposal.”

House GOP spokesman Steve Miskin responded only: “We did meet and we did discuss and agree to work on these issues in the fall.”

Piccola said: “I am extremely disap-pointed that a comprehensive compro-

mise proposal including school vouchers, the Educational Improvement Tax Cred-it (EITC) program, and charter schools did not cross the finish line this month. The school children of Pennsylvania and their parents have lost out, not to mention the taxpayers. Kids trapped in failing schools remain trapped; parents who wish to make educational choices for their children largely remain without assistance. The monopoly system of pub-lic education – good, bad, or indifferent and expensive remains in place.”

Senate leaders had said that they were willing to pass a vouchers and EITC bill if the House would vote for it and send it to the governor’s desk.

Piccola challenged Corbett and the

House to make that chamber approve a vouchers and EITC bill in the fall.

Said Piccola: “This is a lost opportu-nity to fundamentally change the Com-monwealth’s approach to education. We are aiming to implement proven methods to enhance academic achievement for all students. While it will be more difficult, I stand ready to work on this issue in the future. Over the last several months, House leaders and some in the Gover-nor’s administration have said this is an issue to address in the Fall 2011. I am ready but it is clearly the responsibility of the Governor if this remains on his agenda to define the parameters, initiate the process and drive that process to a successful conclusion.” CW

Last-gasp voucher talks fail to get House approval

12 july 2011 CAPITAl WATCHOPInIOn

school boards: From politicians to salesmenJune 30, 2011 will be a date that people will point to in years to come as the day the “new normal” was established when it comes to funding basic education in the Commonwealth. Time will tell if this new normal will work wonders for our public schools, or if this paradigm shift causes real damage. One thing we know: school districts will be doing business quite a bit differently from here on out.

The state budget this year included cuts in basic education funding of close to a billion dollars ($962 million), includ-ing cuts to the popular Accountability Block Grant program, as well as a com-plete wipe-out of funds that schools used to receive to pay for the cost of char-ter schools. Yes, school districts across Pennsylvania were warned that there was no more federal stimulus money, but these cuts went quite a ways above and beyond those dollars.

That an education budget like this one could even pass the General Assembly marks a dramatic shift from where the state was just five years ago, when the Costing Out Study was the name of the game, and schools were the benefi-ciary of eight years of generous funding increases. Historically, in good times and bad, public schools have never faced a decrease in state funding. There have been times when funding levels were frozen, but even those instances were few and far between.

Most budget seasons, rank-and-file lawmakers base their budget yea or nay in large part by how it affected their school districts. For both chambers to pass a budget that cuts funding for every school in the state is nothing short of astounding.

Hours later, the paradigm shift was complete when the House and Senate both passed, and Governor Tom Corbett signed, a bill that would greatly reduce school boards’ ability to raise proper-ty taxes. Proposed increases above the

state index (think 1.5 percent, typically) will have to go to voter referendum, with exceptions being made for pension contributions and extraordinary special education costs.

Pennsylvania elected officials know firsthand how often, or more aptly, how rarely voter referendums succeed (1 out of 14 since the original, much less restrictive law, was passed.) So in one fell swoop, public school aid was cut by unprecedented levels, while the abil-ity to raise funds locally was drastically curtailed. In effect, what lawmakers did, whether inadvertently or not, was to take ownership of local school budgets. Now, the onus to fund those school dis-tricts will fall primarily on the state in years to come.

Then the new normal becomes school boards, going hat in hand to the voters, asking for increased revenue. School districts are, to be blunt, woefully unpre-pared for this task. Gone are the days when school boards would hold a few open meetings, then pass the budget. Instead, those boards will now have to find a way to communicate meaning-fully with a huge swath of their own constituents who have very little to gain by authorizing property tax increases.

For sure, school boards can still com-municate fairly easily with parents though the children who attend the schools. That universe has to expand now to include seniors with no children left in school, newly-married couples with no children, and single people who don’t plan on having children anytime soon.

Here are five quick scenarios created by the new normal.

1. School construction – There are a large number of rapidly-growing school districts whose population growth is far outstripping the state aid they receive. Their budgets are already pushed to the max, and many of them need new

facilities. Conversely, there are poor dis-tricts with dwindling tax bases that still educate children in buildings built in the 1950s. Your mission, local school board? Convince the voters to allow you to raise property taxes to build a new school.

2.Unfunded mandates – The fed-eral government may be poised to do some level of re-write to the No Child Left Behind Act. If this re-write entails anything that a school district will have to do but not get direct funding for, the local school board will now be in a position to try and convince voters to authorize more spending to comply with federal law. Schools boards are already hamstrung by federal and state man-dates, now they may need voter approval when a new one lands in their laps.

3.Consolidation – There is little doubt that this new normal will make

struggling schools think more seriously about achieving savings through con-solidation. If two districts pursue con-solidation, the school boards may be in a position to immediately ask for a tax increase to cover the initial costs.

4. Extracurricular activities – Many districts are already asking parents to pay for their children to participate in sports, the marching band or other after-school activities. As budgets get tighter, it may become too costly for some par-ents to do so. Will boards then go to voters to ask them if they mind paying higher property taxes to support the football team, or the band?

5.Teacher layoffs – One of the most difficult decisions a board makes is to furlough teachers and this year’s state budget has already forced an unprec-edented number of layoffs. Two or three years down the road, classroom sizes may again balloon back to dangerous levels, and student instruction could suf-fer. At what point will a board be willing to go to the voters for the extra property tax money to hire teachers again?

The new normal moves the issue of school funding into the public arena like never before, and the state’s 500 plus school districts had better figure out a way to communicate with the public in a much more effective way than was necessary two weeks ago. Will it be through social media or town hall-style meetings? What will be the role of P.R. campaigns and grassroots coalition-building?

The new normal is upon our school districts, and by our count, they have about seven months to figure it out. That will be when their next budgets, and perhaps first referendum votes, will be unveiled. CW

Reprinted with permission from The Tri-advocate (http://triadstrategies.typepad.com/)

Is the average person stupid?Editorial

The national headlines as we drifted into the Fourth of July holiday weekend was focused on the “consumer confi-dence index” reaching a six month low. So where is the news here? That the average citizen, confronted with a stac-cato tattoo of reports about high energy prices, high unemployment, lackluster home sales and a burgeoning foreign trade deficit is feeling a tad negative about prospects for prosperity?

Wouldn’t you be more worried if people were bullish on the short term future?

It’s a case of asking the wrong people the wrong questions and being surprised by the answers. No, the average citizen is not stupid. We are beginning to wonder, though, about the pundits.

The report on the lagging consumer confidence index does generate an addi-tional observation – that no one is really looking for tangible solutions.

We are reminded by a friend of Capital

Watch of the old maxim, “You can’t talk your way out of a situation you behaved yourself into.” Politicians of both parties in both Harrisburg and Washington talk a lot about jobs and the economy. But no one does much more than that.

We know that the economy would improve greatly if we could encourage the creation of about 250,000 new jobs in Pennsylvania at a decent level of pay. So what do we see? People bickering over whether the Marcellus Shale industry has created 10,000 or 45,000 jobs in Pennsylvania – and whether many or most of those jobs are held by Pennsyl-vanians.

At this point, we do owe a “shout out” to Pennsylvania’s senior senator, Bobby Casey, for at least chairing hearings on the plan to create a national manufacturing strategy. It’s a great first step, especially when paired with Casey’s on-going aver-sion to any policies which encourage the outsourcing of more U.S. jobs to other

nations. Over the past half century, we’ve exported not only hundreds of thousands of Pennsylvania jobs overseas but even the equipment that Pennsylvanians once used to make things. It started with the steel mills, spread quickly to the clothing industry and soon was followed by basic and advanced electronics. At some point, policy makers have to figure out strate-gies to help reverse the flow.

Pennsylvanians, meanwhile, have ample reason for a bad attitude about the economy. Fuel prices remain high even though, as we write, gasoline prices have declined somewhat. Governments at the state and local level are freezing wages and laying people off. Our unemploy-ment numbers are growing because of this. There is a direct, causal relation-ship. You lay people off; they become unemployed; they become a drag on the economy. The economy sags, you lay more people off; they apply for unem-ployment; more drag on the government

for services.One of the things government can do

at this point in time is invest in physi-cal improvements that have real value; things that will have a useful life of 25 or 30 years. The most obvious improve-ment along those lines would be trans-portation infrastructure: roads, bridges, rail, ports, airports – you name it. Invest a billion dollars and you create 30,000 good paying jobs; improve infrastructure and you attract new industry.

The beauty is that government can borrow to build things that have value and shelf life at interest rates way below what we normal humans can get. If you go to Wal-Mart or Costco and pay with a credit card, you can expect to be charged 18 percent or more on your MasterCard or VISA. The government borrows at 5 percent or so.

Can we afford to mount a massive infrastructure investment program? Can we afford not to? CW

july 2011 CAPITAl WATCH 13

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You can go home to Home 231by Jacqueline G. GOOdwin

While you might not be able to go home again in Thomas Wolfe’s Look Homeward Angel, you can go to Home 231 for nos-talgic home cooking faves such as deviled eggs, mac and cheese, fried green tomatoes, cornbread with honey butter, meatloaf and chicken pie. You can also find the usual bistro carte like French onion soup, mus-sels, crab cake and spinach salad. In fact, you can find a lot of wonderful dishes at Harrisburg’s newest restaurant.

Nick Laus, who also owns two other downtown Harrisburg restaurants--Café Fresco and Level II—has taken his new-est baby to great heights.

We arrive at Home 231 high on antici-pation. We find it to be the kind of little bistro where, if you are lucky, you might find a good home cook whose mantra is making food for friends and neighbors. Then Rob Dacko, head chef steps out from the open kitchen and gives us a welcome smile that resembles the word “charm.” We’ve hit the jackpot.

Dacko, who spent 10 years as a chef in Philly, has just finished the rainbow trout with fingerling potatoes, spinach and lemon drawn butter ($19). He gently sets his concoction in front of us, as we admire the pierogies with caramelized onion and sour cream ($7) that Tara McDougal, manager, sets down. Of course he says we must try the deviled eggs ($5) and jumbo lump crab salad with watercress, corn and curry vinaigrette ($9). We also try the grilled Scottish salmon ($24) and roasted oysters with lemon, garlic and toasted breadcrumbs ($11). All of the entrees go down quite well with a glass of our pleasant Bordeaux, Grand Bateau 2009 which we brought along. At the moment, Home 231 is BYOB, but owner Laus expects that to be temporary.

We luxuriate over the climactic home-made ending—bay leaf ice cream—a unique, floral ending ($5). Other flavors are available if you’re not into bay leaf—pis-tachio, rum raisin and plan vanilla. Dacko tells us that we haven’t eaten anything yet. He returns to our table with two slices of coconut custard cake ($6) Both are superb.

We’re keen on Home 231.Three and a half stars Food, two stars Service.* CW

Ambience. No wheelchair access. Outside patio area. Sunday brunch. Lunch (Mon-Fri, 11-2 p.m.); Dinner (Mon-Sat, 5-10 p.m.; Sat, 5-11 p.m.). BYOB. Reservations: 232-4663.

231 Home, North Street, Harrisburg, PA.

*Stars awarded for food, service, decor, comfort: 4 stars Perfection • 3 stars Excep-tional • 2 stars Very good • 1 star OK

14 july 2011 CAPITAl WATCH

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OPInIOn

Tech vaca – no wayby deena c. Malley

Budget is done. Legislators are long gone. Capitol is quite. Time to let the summer vacations start.

Mine came early this year with a trip to London to see my daughter graduate from from college. Unbeknownst to me, the trip across the pond included a vacation of another kind. As the packing commenced, I was informed I would be required to leave behind some of my best friends - my iPhone, iPod, Mac, and PC.

They are always by my side day and night. It may sound silly but my life is so integrated with technology the mere idea of not even being in the same room with my iPhone causes anxiety.

They contain all the things I need to function on a daily basis. Alarms keep my life in order and on track. Then there are the familiar dings and unique tones to let me know a meeting is about to start, a new text message or email has arrived, or alerts me to breaking news around the globe.

LinkedIn keeps me connected to the business community and is always a great source for story ideas. Friends and family are never more than a tap or click away on Facebook. And then, of course, is the incomparable feeling of a warm laptop keeping your legs warm while you’re stretched out in bed after a long day.

When I am traveling, my electronic mates keep me wired and attune to my surroundings. I use them for restaurant recommendations, to find the best stores for retail therapy, and they help an otherwise directionally challenged

individual get around parts unfamiliar.My husband and kids assured me I

would be fine. I wasn’t so sure.There was trouble right off the bat.

Telling time was issue number one. Not because of the five hour time difference but because I have become solely dependent on my iPhone as my watch substitute. Thank goodness for Big Ben - the clock not the Steeler.

The pain of separation grew even greater with every tea shop and pub we visited. A quick glance around the room and not a single person without their mobile device. In fact, almost everyone was equipped with not one but two!

With all of its ancient buildings and steeped in tradition, London is a tech town. It is very integrated with technology everywhere you go. You quickly realize their community planning for technology has paid off. They do not let technology rule but use it to enable possibilities for businesses and residents.

There were some reminders of the challenges we face in the IT industry. Like the big JumboTron hanging from a rooftop in Piccadilly Circus with nothing but the black screen of death with the

big red X error message looming high above. It really made me feel for all the techs behind the scenes who I am sure were scrambling to fix the problem.

As each day passed, my feeling of loss only grew. I felt I was missing out. Worst of all was being without the access to information. It really got me thinking about what it must be like for so many Pennsylvanians that still do not have access to what I consider as essentials to basic life.

We still have a long way to go as a state. We need to help our communities do better planning for technology, we need to find creative ways to better equip

our citizens, and we absolutely must make technology education as important as reading and arithmetic.

The technology is the just the conduit to which so many things are possible. It is the gateway to greater knowledge. It connects you to new thoughts, ideas, and people you would otherwise never encounter. We need to make sure there are ways for all Pennsylvanians to have keys to the kingdom.

So when you go on vacation this summer, take your technology with you. Be glad you are privileged enough to have it. Most of all use it extensively in other areas to see how other towns and cities are integrating it into their communities. Then bring all of these ideas and observations back to Pennsylvania and your hometown. Your fresh perspective may make a difference in enabling someone to have access to a better job or education.

Think about it and never, ever leave your tech behind. CW

Deena C. Malley is a technology and business consultant with more than 20 years experience. Her website can be found at www.deenamalley.com.

Deena C. Malley

“…we absolutely must make technology education as important as reading and arithmetic.”

july 2011 CAPITAl WATCH 15OPInIOn

Corbett’s historic spending-reduction budget governs as he promised Tom Corbett ran for governor on the idea that government was too big and spent too much and that public education was too big, spent too much and pro-duced results that aren’t good enough.

Those were the big ideas his cam-paign, and those of most of the House and Senate GOP, embodied. Those are the ideas his first budget, the biggest spending reduction in decades, perhaps in 80 years, embodied.

He just passed a state-spending plan that, while raising state dollars for basic K-12 education subsidies, actually cut state education funding by $300 million and, counting lost federal dollars, by $900 million.

You can argue over whether this bud-get really spent $1 billion less than last year’s or $800 million less. But you can-not argue it is the biggest budget cut in the modern gubernatorial era.

And it comes in the low $27 billions, just like past budgets proposed in recent years from the House and Senate Repub-licans have.

And with a state surplus of $500 mil-lion, even after putting $250 million to work in the new budget, it was a choice for Corbett to do this, not a necessity or requirement.

He got a Legislature to leave $500 million on the table, which is hard to do, even with this new conservative GOP group, even with their last three years of touting cuts ins spending.

And frankly, they probably left more on the table than that, once all the count-ing is done. And he got them to lowball this year’s economic growth number too.

Then, when it looked like he could not get a bill passed to sharply limit when school districts could hike property taxes above inflation, he insisted on it.

Corbett learned what all governors learn: each budget you have to pick one of your policies and shove it home. You have to pick carefully so you are not demanding something legislative leaders had to do anyway, like tort reform.

The governor had to get into a game of chicken with Senate Majority Leader Dominic Pileggi, R-Delaware, a guy few folks care to get into a staring contest or a battle of wills with. Pileggi is consid-ered by many to be the best negotiator in the Legislature, poker-faced and careful.

Corbett traded ultimata with Pileggi and won. For now. The governor may have to use his veto pen and more to keep his referendum bill whole come fall. The Senate GOP and a big chunk of the

House GOP is going to try to make new construction an exception to the referen-dum requirement in some way.

But Corbett got it into law, which looked unlikely until he exerted himself, and threatened to blow up the on-time budget train.

Would Corbett have actually done that? Well he is stubborn enough to make the House and Senate GOP believe he would, and that is most of the battle.

He also put pressure on his staff, so when a House vote on the referendum looked dicey, they agreed to restore $2 million in welfare to some programs. Because they knew they had to deliver this bone to the Big Dog.

Also, Corbett’s Gov Budget Gimme, property tax referenda, will mean more to the lives of most Pennsylvanians than the Tom Ridge airport or the Film Tax Credit of former Gov. Ed Rendell.

But governors get one or two “Gov Specials” each budget. The big question was could he pass a bill to avoid having his state spending cuts trickle down as local tax hikes?

The biggest danger to Corbett’s edu-cation funding cuts was that local dis-tricts would hike property taxes higher and higher and blame him.

Now, for most higher-than-inflation property tax hikes, starting next year, voters will decide and if they allow a tax hike, have to blame themselves not the governor.

Having cut education so sharply at the state level, and with federal education dollars shrinking, Corbett had to make sure the public could have their say on local tax hikes.

And he basically did that. The bill the Legislature passed gets rid of most of the exceptions allowed under the current law requiring school property tax refer-enda, and whittles down the remaining ones.

Plus, this is one area where the state Education Department used to “close their eyes and authorize” exceptions to the referenda requirement. Under Cor-bett’s team, those days are over.

Nor were those two all he got done. Maybe it took him longer to get pro-portional lawsuit damage awards passed than he wanted. And Castle Doctrine. And a few others.

But he got them done. And he got those done a lot faster than former Gov. Ed Rendell accomplished his first year priorities, all of which took til Christmas, and some took three years.

by peter l. decOursey, capitOlwire

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