Testifiers Urge Panel to Consider Social Harms of Privatization

A litany of testifiers foreshadowed the potential unintended consequences of liquor privatization during the first of three hearings to be held before the Senate Law & Justice Committee.  “We cannot look at expansion without first exploring how increased alcohol use may affect citizens of our state,” committee Chairman Charles McIlhinney (R-Bucks) explained at the onset. 

While McIlhinney says he wants to ensure ‘smart privatization,’ most testifiers on Tuesday seemed to think the smart move would be to retain state control of retail liquor and wine sales.  “What is the problem we’re trying to solve here?” asked Drug and Alcohol Service Providers Organization of PA president Deb Beck.  “We’re lowest on deaths and number two on revenue produced.  What’s the problem?”  Beck’s written testimony included a long list of sources for the numbers she pointed out to the committee. 

But by the start of the 9:30am capitol hearing many in the room had already received an open letter from the Pennsylvania Manufacturers’ Association that questioned the slanted lineup of testifiers, and pointed to other statistics that show Pennsylvania performing worse than privatized states. 

When questioned by one committee member, Fraternal Order of Police Pennsylvania State Lodge president Les Neri noted that everyone can find a study that justifies their position, but he can speak from experience.  “I’m telling you as a street cop, the guy who’s done the job for 38-years, that the increase in licenses and outlets for alcohol will increase crime.  I just can’t tell you by what statistic.” Neri explained. 

While the FOP opposes the liquor privatization bill that passed the House (HB 790), others on the law enforcement panel did not take a position; they merely pointed to the need for additional resources for manpower and investigations should lawmakers vote to privatize. 

The hearing concluded with a handful of middle and high school students from the Council Rock Coalition for Healthy Youth, who asked the panel to prevent privatization in order to protect Pennsylvania’s future.

Despite the onslaught of criticism his privatization plan received, Governor Tom Corbett released a statement thanking the committee for the hearing and asserting that public safety must be the number one focus of state government.  “The Senate took a first step in bringing Pennsylvania consumers choice and convenience,” Corbett said in the statement.  While the House amended his original plan, Corbett’s been taking a lead role in this year’s privatization debate

A second hearing is planned for May 14th and Sen. McIlhinney says a third will be scheduled for early June.  He says all sides of the issue will be heard.

PA Senate Passes Three Good Government Bills

A trio of good government bills went before the state Senate, Wednesday, and all three were approved unanimously.  The highest-profile measure would allow for online voter registration, making Pennsylvania the 17th state to offer the option.  “For the health of democracy, elections should be run as smoothly as possible,” ACLU of Pennsylvania legislative director Andy Hoover said in a statement.  “Online registration can make the process more precise.  That leads to less delay and fewer problems on Election Day.” 

The other two bills are designed to promote government transparency by requiring lobbying disclosure information and campaign finance data to be filed electronically.  Senate Republican leader Dominic Pileggi (R-Delaware), the prime sponsor of the campaign finance bill, says the move is designed to increase timeliness, accuracy and transparency.    

State Senator Rob Teplitz (R-Dauphin), who co-chairs the bipartisan, bicameral Reform Caucus, spoke out in favor of all three bills.  “That’s what all of our constituents I believe want to see us doing – is creating openness, transparency, more accountability in government, more access to be able to vote,” Teplitz said on the Senate floor. 

All three measures require House approval before they can be sent to the governor’s desk.

Transportation Chair Unveils New Funding Plan

A newly proposed transportation funding package uses Governor Tom Corbett’s plan as a baseline, then goes even further.  In February, Governor Corbett outlined a plan that would raise $1.8-billion dollars annually by year five.  Tuesday, Senate Transportation Chairman John Rafferty unveiled legislation that would generate $2.5-billion by year three

Both proposals would uncap the Oil Company Franchise Tax that gas stations pay, but Rafferty also wants to add a $100-dollar surcharge to traffic violations and hike the state’s vehicle & registration fees that have gone unchanged since 1997.

“We aren’t just going to resurface roads and pave bridges,” Rafferty says, “we’re actually going to add capacity to our transportation infrastructure, which is something that is critically needed.  New lanes on roads, new intersections, new bridges.”

The substantial new investment in Pennsylvania’s transportation infrastructure is designed to improve public safety, create new construction jobs and attract new businesses to the area.  The estimated cost would be $2.50, per week, for the average motorist in Pennsylvania. 

PennDOT Secretary Barry Schoch was among the many stakeholders to join Rafferty for Tuesday’s announcement.  Schoch praised the leadership of Sen. Rafferty, but stopped short of fully endorsing his proposal.  “The governor and I have always said we’re open to a dialog… obviously there are balances between the cost to consumers and the benefit,” Schoch says.  “This is a great beginning point of that debate and discussion.”

Knowles: Transportation is Smartest Place to Invest Liquor Privatization Dollars

With a public hearing on liquor privatization now scheduled in the state Senate, a group of state House members is calling for the upfront windfall from the sale of private wine and liquor licenses to be invested in transportation infrastructure. 

State Rep. Jerry Knowles (R-Berks/Schuylkill)

State Rep. Jerry Knowles (R-Berks/Schuylkill)

“It takes each and every dollar from privatization of the wine & spirits shops, and those dollars would be spent on roads and bridges,” state Rep. Jerry Knowles (R-Berks/Schuylkill) said of the legislation he sponsored

The governor wants to see liquor privatization revenue used for education block grants, but the bill that passed the House never designated a specific use for the revenue; it simply created a restricted account to hold the money. 

“I would like to see it be a billion, but it doesn’t matter if it’s $750-million, it doesn’t matter if it’s half a billion,” Knowles said at a capitol news conference.  “That’s still big money where I come from.” 

Knowles and his supporters are wary of being blamed for school funding cuts when the four-year block grant program, envisioned by the governor, expires.  “I want to make it perfectly clear,” Knowles said, “the governor has a good idea, it’s just that I have a better idea.”

Rep. Knowles recognizes that his plan would not raise enough revenue to solve PA’s near $3-billion dollar annual transportation funding shortfall, but he suggests that any legislative solution should start with HB 220. 

Meanwhile Senate Transportation Chair John Rafferty is scheduled to unveil a new funding plan on Tuesday, and the as-of-yet unrelated liquor privatization bill faces an uncertain fate in the chamber.

Senate Votes to End Philadelphia Traffic Court

With unanimous votes late Wednesday morning the Pennsylvania Senate signaled its intention to put the brakes on Philadelphia Traffic Court.  The chamber has advanced a pair of bills.  One would gradually transition the responsibilities of the Philadelphia Traffic Court to Philadelphia Municipal Court; the other would erase the traffic court from the state constitution completely. 

“One of the key distinctions between the municipal court judges and the traffic court judges, of course, is that the municipal court judges must be licensed attorneys in the commonwealth,” explains Senate Majority Leader Dominic Pileggi (R-Delaware), the prime sponsor of both measures.  “The traffic court judges need not be.” 

In recent weeks the Pennsylvania Supreme Court has released a scathing report on Philly’s traffic court, citing a culture of dysfunction and favoritism.  That document was soon followed by the indictment of a dozen people – including nine judges – who were caught up in an alleged traffic court “ticket fixing” scheme. 

Pileggi says Philadelphia has the only traffic court in the state, and it’s not worth saving.  The city’s Senate delegation supports Pileggi’s bills, but Senator Anthony Williams (D-Philadelphia) believes this should be the first step of a sustained effort to clean up the judicial branch of state government. 

“If people think that Philadelphia Traffic Court is the only place that somebody may walk in… and a magistrate may give some kind of favoritism, based upon your affiliation, then there are actually green men on Mars,” Williams says. “We’re the first guys willing to pony up and say we’re willing to fix ours.”    

Up next for the bills is the state House.


Corbett Opts to Privatize Lottery Management

Early Friday evening the Corbett administration announced its decision to hire a private sector manager to run the Pennsylvania Lottery.  The administration has been exploring the possibility for months, as a way to secure steady revenue growth for the programs that benefit PA’s senior citizens.  Ultimately it received one bid, from Camelot Global Services – the same company that runs the National Lottery in England.

The “notice of award” comes just days before the Senate Finance Committee is to convene a public hearing on the controversial issue.  Below you will find complete statements being issued by various stakeholders:


The Corbett Administration (Department of Revenue):

Harrisburg –– In the effort to secure critical, long-term funding for older Pennsylvanians, Secretary of Revenue Dan Meuser today announced the next step in the selection process for the the Private Manager of the Pennsylvania Lottery. 

The Commonwealth of Pennsylvania has issued a notice of award to Camelot Global Services PA, LLC, which provides for a 20-year Private Management Agreement.  A notice of award is not a binding contract. 

Under Pennsylvania procurement laws, the issuance of the notice of award allows the Corbett administration the opportunity to disclose contractual and procurement details of the Private Management Agreement at the Senate Finance Committee Hearing scheduled for January 14. 

With the issuance of this award, Secretary of Revenue Dan Meuser, Secretary of Aging Brian Duke and Pete Tartline, Executive Deputy Secretary, Governor’s Budget Office will be able to address all relevant contractual procurement questions at the hearing. 

The administration will gather information at the hearing and the near future will determine what is in the best interest for Pennsylvania seniors.


Camelot Global Services: 

“We are delighted the Commonwealth of Pennsylvania has issued a notice of award for the private management of the Pennsylvania Lottery. We know the state has placed enormous trust in giving us responsibility for its Lottery and we intend to work tirelessly to earn that trust. We are confident in our projections on growing responsibly the Pennsylvania Lottery over the next 20 years and guaranteeing the economic future for seniors programs. We are committed to make major investments in the lottery – in its brand, in its operations and in its people. We fully recognize that at the heart of any successful organization is its people. We intend to retain as many current lottery employees as possible and increase the number of employees in Pennsylvania overall.”


State Senate Democrats:

Harrisburg — January 11, 2012 — Senate Democrats today released statements expressing dismay and disgust at the actions of the Corbett Administration  in announcing the notice of award as it relates to the private management agreement, (PMA), for the Pennsylvania Lottery. 

“This is extremely disappointing and disturbing,” said Senator Jay Costa (D-Allegheny).  “The action taken by the Corbett Administration was done without public input.  Today’s decision has the potential to jeopardize senior programs and put taxpayers on the hook.”

“This has been a bizarre process that violates the public trust,” Costa continued.  “There were no hearings, little opportunity to understand the proposed PMA and no scrutiny. The process was violated and the citizens of Pennsylvania were abused by this arbitrary action.”

Senator John Blake (D- Lackawanna), Democratic Chairman of the Senate Finance Committee pointed out the proposal needs legislative authorization and it demands legislative scrutiny.

“The process was culminated when the General Assembly was not in session and there was little public examination of the proposal,” Blake said.  “This process wasn’t transparent — it was opaque. No one could see the end result except a small group of the governor’s inner circle.”

Expressing extreme disappointment on behalf of his constituents, Senator Rob Teplitz (D-Dauphin) said the use of a secretive process would lead to the privatization of a significant state asset and is unprecedented. “This is not a proper way to alter generations of public policy and violated the public trust.” 

“On a personal level, many of the affected employees are my constituents and have been treated with complete disregard,” Teplitz said.  “The arrogance of this administration in the way this was handled is deplorable.”

“I am extremely disappointed in this administration’s decision to jam this deal through at the last minute prior to a key Senate Finance Committee hearing,” said Senator Matt Smith (D-Allegheny).  “This shows a disturbing lack of transparency by the Corbett administration and hinders a meaningful dialogue regarding this multi-billion dollar deal. The Camelot plan certainly deserves a proper examination by the General Assembly and Pennsylvania taxpayers are entitled to further information.”

Senator John Wozniak (D-Cambria) echoed the sentiments of his colleagues related to the PMA.  “There are many questions related to how this privatization effort impacts seniors and property tax relief related to gaming.  The concerns of taxpayers should have been taken into consideration and questions answered before the governor took this action.”


AFSCME Council 13 (State Workers Union):

HARRISBURG – (JANUARY 11, 2013) AFSCME Council 13 will continue to oppose Gov. Tom Corbett’s plan 

to give away as much as $1.5 billion in PA lottery funds that could fund vital senior programs to Camelot

Global Services, the U.K.?based corporation that wants to take over the lottery.

Gov. Corbett signed a contract tonight after months of secretive negotiations with Camelot.

“It’s just incredible that the governor would ignore the General Assembly and the thousands of 

Pennsylvanians we’ve heard from who understand that this is a bad deal for our seniors,” said Dave

Fillman, Executive Director of AFSCME Council 13.

“This is a midnight raid. The governor rushed this deal through when the legislature was not in session.

He refuses to provide access to any of the documents that they’ve traded back and forth with Camelot

and he has refused to hold a single public hearing on this deal,” Fillman added.

AFSCME has provided a counter?proposal to the administration to modernize and expand the lottery 

that would provide $1.5 billion more for senior programs than Camelot would under its flawed plan. 

“Apparently, the governor wants to privatize something – anything – no matter the costs to 

Pennsylvanians,” Fillman said. “Our lottery is one of the best in the nation and this administration just

two weeks ago was congratulating our team for the great work they’re doing. Now, they’re telling 

people thanks, but we’re terminating your job.” 

AFSCME and seven Democratic lawmakers filed a lawsuit in Commonwealth Court to stop the governor 

from privatizing management of the lottery. Seniors who benefit from lottery programs and several

lottery employees also joined that litigation.

In addition, AFSCME is working with lawmakers in both parties to oppose Camelot’s proposal to change 

current state law to drastically reduce the Commonwealth’s annual commitment to lottery?funded 

programs. Current state law mandates that the state invest 27 percent of the Lottery Fund in senior 

programs annually. That minimum returns to its standard level of 30 percent on July 1, 2015.

But Camelot is betting that lawmakers will change that law and maintain the 27 percent floor for

the next 20 years, through 2033. This change alone would amount to a $1.244 billion loss to seniors if 

the same sales revenues are achieved without Camelot’s profit taking.

“For 42 years, the lottery has always gone well above the minimum because that’s the right thing to do,” 

Fillman said. “But under this deal, every $1 above that minimum goes to Camelot’s bottom line.”

State House, Senate Seats up for Grabs Too

The big races, like President and US Senate, may be getting most of the attention today, but state lawmakers are also jockeying for position all across the state.  All 203 state House seats are on the ballot, as well as half of the 50 seats in the state Senate. 

Terry Madonna

Terry Madonna

Franklin & Marshall College political science professor Terry Madonna doesn’t expect any sweeping changes in the makeup of the Republican-controlled legislature tonight.  “There won’t be the huge coattails that would help Democrats win back control of the legislature,” Madonna says.  “It looks like in the House they may pick up a couple of seats, but I think it’s largely going to be the same composition in the House.” 

Ditto for the Senate, where Madonna could see the Democrats pick up a few seats, but not enough to win back control.  The GOP held a 30 – 20 edge in the Senate for most of the legislative session, but a retirement in western Pennsylvania makes the current tally 29 – 20, with one vacancy.    

Another factor to consider is that of the 203 state House seats, nearly 100 incumbents are unopposed on today’s ballot.  Nine incumbent state Senators are unopposed as well.

Resource Extraction Bill Awaits Governor’s Signature

A mineral resources bill could provide a new revenue stream for the 14-universities in the State System of Higher Education.  SB 367 is now awaiting the governor’s signature after clearing both the House and Senate.  It would authorize mineral leases for more state-owned land, like prisons or state-owned universities. 

“Currently the law only permits the Department of Conservation and Natural Resources (DCNR), and the Game Commission or Fish & Boat Commission to enter into such leases,” explains Senator Don White (R-Indiana), the bill’s prime sponsor. 

The minerals the bill refers to could include everything from limestone to coal; but most importantly Marcellus Shale natural gas. 

Governor Tom Corbett spoke out in favor of the concept on Radio PA’s Ask the Governor program, stressing that horizontal natural gas drilling allows for the wells to be thousands of feet off site – not right in the middle of a the university’s quadrangle. 

“This will be beneficial to the student body, if we get tuition reduction, beneficial to the schools and to the State System of Higher Education,” Corbett explains.

Under White’s bill, money raised from the leasing of mineral rights at a state-owned university would be allocated as follows: 50% stays with the home university, 35% is distributed system-wide, and 15% would be used for tuition assistance across all 14-schools.