State Legislative surplus a target
HARRISBURG - The size of the Pennsylvania Legislature's budget surplus has shrunk greatly to $120 million in recent years, but it's still large enough to pay for state environmental protection programs for a year.
And that remains a sore point with some during the fourth year in a row in which the size of spending cuts dominates the state budget debate.
The legislative surplus is a target for activists and advocacy groups at a time when public education and public welfare programs are on the chopping block. Lawmakers defend the surplus as the price of independence in case a governor threatens to veto the legislative budget to get leverage in a budget dispute. The current focus of the budget debate is how far to go to restore spending cuts proposed by Gov. Tom Corbett in February when the state's fiscal picture was more dire.
The Senate recently approved a $27.6 billion budget bill that restores $500 million of proposed cuts offered by the governor. The House Appropriations Committee takes up the budget this week.
The proposed operating budget for the House and Senate for fiscal 2012-13 is $272 million, the same as current levels.
The current $120 million surplus developed from carrying unspent money over from preceding years stands apart from the operating budget. It had reached a peak of $240 million as recently as four years ago. The Legislature has reduced spending in recent years, but it also changed some cost parameters by redefining several legislative support agencies with combined budgets in the $34 million range as "government support agencies." Lawmakers say such units as Legislative Budget and Finance Committee and Local Government Commission belong in a separate budget category because they serve the executive branch as well. Even with the cost of these support agencies not counted, Pennsylvania has the second-most expensive legislative branch in the nation, according to the most recent comprehensive report for fiscal 2010-11 by the National Conference of State Legislatures. Only California, the nation's most populous state, outspent Pennsylvania on its legislature. The legislative surplus is down 30 percent from the fiscal 2010-11 amount of $183 million - the result of lawmakers striking an agreement with the governor in June 2011 to earmark roughly $60 million of it to keep the Accountability Block Grants that public schools use to pay for full-day kindergarten and pre-school programs partially funded.
Activists and advocates want another surplus earmark in the new budget, but the odds seem against it.
"It could (fully) restore the Accountability Block Grants. It could fund services for people with disabilities. It could fund domestic violence services," said Tim Potts, founder of the reform group Democracy Rising.
"I understand the need for maintaining a constitutional protection so the Legislature can function," said Stephen Drachler, co-chairman of the Better Choices for Pennsylvania Coalition which is lobbying to restore spending cuts and a one-time House staffer. "But the amount of money that has been allowed to accumulate in a number of places goes beyond what would be reasonable."
The chairman of the special commission that reveals the size of the surplus each year doesn't think the surplus should go much below $120 million.
This amount would cover legislative salaries and expenses for up to five months if a governor vetoed spending, said Rep. Gordon Denlinger, R-99, Ephrata, chair of the Legislative Audit Advisory Commission.
Pennsylvania has experienced budget standoffs in 2003 and in 2009 when nearly $80 million surplus was drawn from the surplus to meet legislative payroll. The surplus is a hedge too against the threat of a gubernatorial veto, said Stephen Miskin, spokesman for House Majority Leader Mike Turzai, R-28, Pittsburgh.
But some suggest having a surplus can work in reverse by prolonging a stalemate.
"Having a surplus creates an incentive not to pass the budget on time by putting the governor in a desperate position and sparing lawmakers from the pain of their indecision," said Potts.
The roots of the sizeable surplus go back nearly 25 years ago.
In 1988, the late Gov. Robert P. Casey line-item vetoed $205 million from a state budget bill he considered out of balance. The veto included the appropriation of the Republican-controlled Senate which was at odds with Casey over a business tax cut. The standoff lasted several months.
Legislative leaders began accumulating larger surpluses after that. They have relied on provisions in budget bills saying that legislature appropriations are a continuing expenditure than can roll over each year.
A new study of the Pennsylvania General Assembly by Temple University's Institute for Public Affairs cites the 1988 veto as a milestone in legislative efforts to balance executive branch power.
Most states have policies that either prohibit legislative surpluses or limit them, said former Rep. Joshua Shapiro, D-Montgomery, who had chaired the audit commission until last year. He had sought unsuccessfully to eliminate the surplus.
Officials with legislative fiscal offices in neighboring New Jersey and Ohio said they are unaware of any similar surplus comparable to Pennsylvania's in their states. Pennsylvania lawmakers have yet to act on the recommendations of their auditor Ernst & Young to set a formal policy on the size of the surplus and how it is used.
Senate President Pro Tempore Joseph Scarnati, R-25, Jefferson County, sponsored a bill last year to reduce the surplus to one-third of the Legislature's annual budget, but the bill has seen little action.
"Since the legislative reserve has been reduced by over 30 percent this year, the need for legislation is diminished," said Scarnati spokesman Drew Crompton.
Lawmakers have yet to reach a consensus on what the appropriate size of a surplus should be, said Miskin.
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