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House Appropriations Chair Grove Blasts Shapiro’s Budget

There is an old saying among farmers and financial analysts: Don’t eat your seed corn.

That sums up what House Appropriations Chair Seth Grove (R-York) said in an hour’s discussion with the press Wednesday about Gov. Josh Shapiro’s $48.3 billion 2024-25 budget ahead of budget hearings. The Democratic governor wants to spend $3.7 billion more than the previous year or 8.4 percent.

Shapiro’s plan calls for spending more money than the state takes in and will burn through its general fund surplus and Rainy Day Fund by 2028-29, leading inevitably to tax increases, according to Grove.

The general fund surplus would be cut in half to $3.4 billion from the projected $7.1 billion.

In the current fiscal year, revenue is falling $209 million below projections. Revenue from personal income taxes is down by $306 million; non-motor vehicle sales and use is down by $29 million, and cigarette taxes are down by $17 million.

He said three agencies use 84 percent of the budget: Human Services, Education, and Corrections.

Grove referred to Shapiro’s “Christmas List” of requested spending, with an additional $1 billion for education topping the gifts.

Shapiro did not address the structural deficit, said Grove. His budget would “blow through” $15.9  billion of the general fund and Rainy Day Fund balances.

They are two separate funds. The Rainy Day Fund, now at $6.12 billion, was created for economic downturns like the 2009 recession, he said.

Because the state has a $6.2 billion surplus in the general fund, the treasurer does not have to borrow to meet expenses throughout the year, saving $10 million on interest payments “that we can use for other stuff,” he explained. The state also makes money from interest on the Rainy Day Fund, which is invested, he said.

“Over the next three years, (Shapiro’s) budget eviscerates that,” said Grove.

Grove claimed Shapiro “wants to be president,” adding Lt. Gov. Austin Davis might not want to run with Shapiro again because he’d be stuck raising taxes.

Two “revenue modifications” that Shapiro proposes are raising the minimum wage to $15 an hour and imposing a 42 percent tax on the daily gross from some electronic gaming machines (skill games). The increased wages could bring in $22.6 million in personal income tax and $34.1 million in sales and use taxes in 2024-25. And the skill games tax would bring in $150.4 million this year and $300 million annually in the following years.

But he said while Shapiro’s budget calls for $2.5 billion in new or expanded government programs, including for basic education, there’s no accountability. Grove noted the governor also plans to spend more on higher education.

“The big question is, do we have a balanced budget?” said Grove. “There’s one-time revenue propping up massive spending.”

“The big problem is we’re growing (the budget) at 2 percent based on the basic education ($1 billion in additional funding) he has,” said Grove.

“It’s a compounded problem…the general fund balance goes to zero, and then you start on the Rainy Day Fund,” said Grove. “And we’re out of all surplus in 2027-28.”

“Everything sounds good when you want to give puppies and kittens and chocolate and candy to everybody. But there’s a cost to that,” said Grove.

Grove said the income tax would be raised by 6.3 percent to cover the budget gaps, noting Democrats prefer to raise income taxes rather than other taxes, like the sales tax.

And if they shift taxes so the wealthy are paying more: “If you have money, you’ll be out of here in two seconds.”

“If someone finds a new tax that we didn’t propose, I’d be shocked,” he said, listing various taxes, such as the hotel tax, that the legislature has considered over the years. “You need a major tax source to cover billions of dollars.”

“Based on this budgeting (Shapiro) is going to be good for reelection, all this spending without raising taxes,” said Grove. “Financially sound, yada-yada.”

But eventually, taxes will need to increase. Unlike the federal government, the state can’t print money.

Personnel costs are increasing under Shapiro, Grove pointed out, including $2.1 billion for pending contracts for the state police and corrections officers. Employees have increased by 1,200 people, and so have salaries. Total salaries are up 4.8 percent. The average state employee’s compensation is $114,752, including benefits. Overtime expenses have also increased, reaching $372 million for 2022-23, up from $351 million for the prior year.

Shapiro also penciled in $161 million more for SEPTA, bringing the total state funding to $1 billion. Grove said the counties served by SEPTA should increase their share of SEPTA funding.

“They need skin in the game as well. I have not seen one county propose new revenue or new taxes,” said Grove, who also noted SEPTA’s money woes stem from falling ridership due to passengers’ safety fears. He said the legislature passed a bill for a special prosecutor for SEPTA areas that Shapiro signed. The attorney general has not yet hired that prosecutor in the face of opposition from Philadelphia District Attorney Larry Krasner, and a 30-day deadline has passed.

The Shapiro administration said, “The Commonwealth is projected to have a total budget surplus of $14 billion at the close of June 2024. This sum factors in federal funding received during the COVID-19 pandemic and nearly $7.2 billion in the Rainy Day Fund.

“Even if every one of the initiatives in the governor’s budget is fully funded, Pennsylvania will still have an $11 billion surplus by the end of Fiscal Year 2024-25. This is on top of the fact that the governor’s vision maintains a balanced budget and does not raise taxes.”

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Bucks County Rep. Galloway Resigns, Leaving PA House Tied

Bucks County Democrat Rep. John Galloway resigned his seat in the 140th District Thursday, just hours after House Democrats used their slim 102-101 majority to push through their fiscal plan. His departure leaves the House evenly split between the parties until a special election can be held on February 13, 2024.

By complete coincidence, House Democrats said, repairs to a leaky roof will prevent any voting sessions until March. In fact, Democratic Gov. Josh Shapiro will even be forced to deliver his annual budget address in the rotunda rather than to a joint session of the General Assembly in the House of Representatives Chamber.

Galloway was elected to a district justice seat for Falls Township on Nov. 7, so his departure was no surprise. And given the partisan makeup of this district, his replacement will likely be another Democrat, returning the House to a one-vote Democratic majority.

Republicans are crying foul, with sources telling DVJournal the leak was discovered a year ago.

“You see the chaos on the floor. An alleged water leak. I have not seen water drop from the ceiling yet in a year,” said Rep. Seth Grove (R-York).

“I am very tired of them managing to the next election and maintaining power instead of actually governing the commonwealth,” said Republican Leader Bryan Cutler (R-Lancaster).

Cutler alluded to a resolution the Democrats passed declaring the state as being in the “Taylor Swift Era” in the midst of work on the budget and various other bills. The popular singer is a Berks County native and was named Time Magazine’s Person of the Year.

Governing “is the job of the majority. They are failing,” said Cutler.

Three Democrats are running for Galloway’s former seat: his chief-of-staff Melanie Bidlingmaier, former Eagles cheerleader Donna Petrecco, and Pennsbury School Board Member Jim Pokopiak.

The Bucks County Republican Committee Thursday endorsed Candace Cabanas, who will be on the ballot for the 140th District, which includes Falls Township, part of Middletown Township, Morrisville and Tullytown.

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Shapiro to Appeal RGGI Decision

Gov. Josh Shapiro is appealing the Commonwealth Court’s recent decision striking down Pennsylvania’s bid to join the Regional Greenhouse Gas Initiative (RGGI).

The court said Gov. Tom Wolf (D) created an “invalid tax” in 2022 when he issued an executive order pushing the state into the RGGI without legislative approval. It is a multi-state carbon cap-and-trade plan designed to reduce carbon emissions by forcing energy producers to buy credits to generate electricity. Entering the compact was a top priority for Wolf, who vetoed a bill that would have required the state’s legislature to approve entering the RGGI.

“As I have said since January, Gov. Shapiro had the ability to rescind the $600 million RGGI energy tax, but he chose not to,” said Rep. Seth Grove (R-York), chairman of the House Appropriations Committee. “This cap-and-trade RGGI tax scheme will result in job losses in Pennsylvania while at the same time raising the price of energy. It’s a lose/lose for Pennsylvania. Shapiro must be doing this to appease his radical leftist base or attempt to score political points nationally because it doesn’t benefit Pennsylvanians.”

Shapiro’s office said he is appealing the decision to protect the principle of executive authority.

“The Commonwealth Court’s decision on RGGI – put in place by the prior administration – was limited to questions of executive authority, and our administration must appeal in order to protect that important authority for this Administration and all future governors,” said Shapiro’s spokesman Manuel Bonder.

“The governor stands ready and willing to implement the recommendations of the RGGI Working Group, and he would sign legislation replacing RGGI with a Pennsylvania-based or PJM-wide cap-and-invest program, as they proposed.

“Should legislative leaders choose to engage in constructive dialogue, the governor is confident we can agree on a stronger alternative to RGGI. If they take their ball and go home, they will be making a choice not to advance commonsense energy policy that protects jobs, the environment, and consumers in Pennsylvania,” Bonder added.

“We urge Republican and Democratic leadership to join us at the productive table the Governor has set with labor, environmental advocates, energy producers, and consumer advocates to further a commonsense energy policy that moves our Commonwealth forward. Now is the time for action. Inaction is not an acceptable alternative,” Bonder concluded.

But Grove was skeptical.

“Keep taxes on energy producers low and keep taxes on energy consumers lower. If he can’t agree to this, we know where his priorities lie,” said Grove.

Critics privately told DVJournal they don’t believe Shapiro’s decision to announce the move late on the Tuesday before the long Thanksgiving holiday weekend was a coincidence.

“He ran as a moderate, but he doesn’t want to govern that way,” one political insider said.

Free market groups have also condemned Shapiro’s move.

“Shapiro’s decision to appeal the Commonwealth Court’s ruling on RGGI is a massive mistake,” said Commonwealth Foundation Senior Vice President Nathan Benefield. “The move threatens the well-being of working families and raises enormous questions about Shapiro’s governing priorities. Right before Thanksgiving, Shapiro proclaimed his desire to fight for the unilateral authority to raise electricity taxes. It’s a move that could burden Pennsylvanians with higher taxes and electricity bills and undermine the reliability of our electrical grid.”

Americans for Prosperity (AFP) Pennsylvania Deputy State Director Emily Greene posted on social media that she was disappointed because it seemingly ignored higher energy costs. She said thousands of Pennsylvanians see larger energy bills as their top reasons to “turn out to vote” in 2024.

Energy and manufacturing groups panned Shapiro’s suit, as well. The Oil & Gas Workers Association accused Shapiro of breaking his campaign promises. It also called RGGI “jobs-killing” for the Keystone State. Pennsylvania Manufacturers posted a gif of Marlon Brando from “The Godfather” with the quote, “I’m gonna make him an offer he can’t refuse.”

Power, PA Jobs Alliance, took the criticism a step further by saying Shapiro’s decision was troubling and also “anti-worker, anti-family energy policy” that mimics Wolf.

“This message also shakes industry confidence and is a bar to new investment in reliable fossil-fueled assets and the maintenance and expansion of generation-related jobs in the Commonwealth of Pennsylvania,” the group said in a statement. It also criticized Shapiro for prodding the legislature because of its ongoing budget stalemate. “The result, of course, is that taxpayers will continue to bear the tremendous costs of this litigation, and Pennsylvania’s workers and families will have to continue to live with the uncertainty surrounding the ongoing, existential threat of the RGGI carbon tax.”

As for the Shapiro administration’s portrayal of the appeal as an attempt to hold onto executive power and bring the state legislature together to come up with an RGGI solution, Benefield scoffed on social media. “If the governor just wanted to work with the legislature, there’s no need to sue for executive authority.”

Rep. Grove Explains the PA State Budget Impasse

Despite multiple media reports that the state’s $45.5 billion budget is a done deal, Rep. Seth Grove (R-York) says not so fast.

Grove, Republican appropriations chair, told DVJournal Tuesday that because the Senate leadership has not signed it, the budget is not actually finalized.

Grove laid the blame squarely on Gov. Josh Shapiro, who reneged on his promise to Senate Republicans to fund a $100 million school choice program.

“I call it the great betrayal of Josh Shapiro,” said Grove. “You know, talking about how important school choice is and, ‘All of God’s children need the opportunity for education, blah, blah, blah,’ right?”

“And then, to get the budget out of the House, he commits to line-item veto the school education choice portion of it to get the House Democrats on board,” Grove said. “And the Senate, currently, is not in. They haven’t signed it. So it’s still sitting in the House.”

Asked if there are enough Republicans to pass the Lifeline Scholarships — now known as the PASS program– in the Democrat-controlled House, Grove said there were. “And there’s a lot of House Democrats that have said they support school choice. They just don’t want to bring it up on the House floor for a vote.”

Grove added, “Listen, there was a negotiation between Gov. Josh Shapiro and Senate Republicans. They came to an agreement. Josh was supposed to get House Democrat votes. (The budget needed 102 House votes to pass.) And he never did that. He faced strong opposition from very extreme House Democrats who don’t want to spend 0.2 percent of the budget. That’s what we’re talking about…$100 million out of a $45.55 billion budget in order to help some kids.”

Grove was astonished Shapiro, and the Democrats would block the budget over “a couple of thousand kids [having] the opportunity for academic success and changing their life in a positive way forever. “It’s crazy.”

Grove said the state can make it through the summer without a budget until the Senate returns in September, noting it took nine months to get former Gov. Tom Wolf’s first budget done. School districts will be getting their property tax payments soon, and “They’re sitting on billions of dollars of reserve funds,” Grove said.

Another sticking point is state funding for state-related universities like Penn State.

Grove said it takes two-thirds of the General Assembly to pass that bill because those are “non-preferred appropriations.” Republicans would like a tuition freeze and to have the universities to be subject to right-to-know law for greater transparency.

DVJournal asked Grove whether diversity, equity, and inclusion policies, “which many people see as political boondoggles,” would be included in the transparency.

Grove said he believed that would fall under the right-to-know law.

Asked about the state’s budget surplus, Grove said Pennsylvania has $5.9 billion in the rainy day fund and another $7 billion budget surplus.

“The kind of interesting part is the fact that we’re under a budget impasse. (Because of that) the current fiscal code law requires that 10 percent of the budget surplus be remitted back to the rainy day fund,” Grove said.

The overall budget that had passed had a 6 percent spending increase and included “this robust school choice program for the commonwealth,” he said.

The legislature also has to pass various enabling legislation before the money in the budget can be spent, and it has not done that, said Grove.

With Shapiro’s change of heart on the school choice program, Grove wondered if even members of his own party could trust him now.

“I mean, the simple fact is that (in) Harrisburg, you have one thing. You have the handshake, right? You have an agreement. You have your word. If you don’t have that, you have nothing. So even the House Democrats have to be leery of cutting any kind of negotiation with Josh because at what point is he going to walk away from it for his own benefit?”

Shapiro defended his decision, blaming Senate Republicans during a recent press conference.

“House Democrats made it clear it would not pass their chamber, particularly with the Senate’s unwillingness to advance more of the House’s priorities,” Shapiro said.

Rep. Kristin Marcell (R-Bucks) said, “While there was much in this budget I worked to include and wanted to support – including increased education funding and funding for mental health services — the fact remains that the House majority refused to provide the actual spending plan for the dollars allotted. It means that while a framework for spending was there, it was not ‘locked in’ and can still easily be changed – so those dollars we may believe will be used for priorities we agree upon can still be appropriated elsewhere. That, to me, is bad policy and why I voted no.

“It is also disappointing that the governor refused to fight his party’s leaders and special interests to fulfill his campaign promise and rescue children trapped in failing school districts. I came to Harrisburg ready and willing to work in a bipartisan manner. Sadly, when I attempted to do so, the other side of the aisle not only rejected it, they did so by lying.”

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Rep. Grove Says Federal Court Ruling May Invalidate Mail-In Ballot Law

A Third Circuit Court of Appeals ruling against the signature requirement of Act 77 –the 2019 law that gave Pennsylvania no excuse, mail-in ballots– may have triggered a “non-severability clause” in that law invalidating it.

The result, say Act 77 opponents say, could be, “Bye-bye ballot boxes.”

That is state Rep. Seth Grove’s premise in a July 12 letter he wrote to Acting Pennsylvania Secretary of State Leigh Chapman. Grove (R-York), chair of the House Governmental Affairs Committee overseeing elections, noted that if any section of Act 77 is ruled invalid, the remainder of the law is also invalid.

“Non-severability clauses are an important tool of the General Assembly in ensuring the legislation it enacts will be applied in a way consistent with the legislature’s intent when considering and approving the legislation,” Grove wrote. The section shows “it does not intend for the individual provisions of the law to stand on their own.”

Chapman did not respond to Grove’s letter, nor did her spokesperson respond to the Delaware Valley Journal’s request for comment.

During a Tuesday press conference, Grove noted problems with how Pennsylvania’s elections have been conducted in the past two years. Grove has released reports on the general elections of 2020 and 2021 and most recently the 2022 primary entitled “Missed Opportunities and Continued Chaos.”

“Today is July 19, 2022, over two months from the May 17 primary election. We still do not have a certified 2022 primary election,” Grove said.

“On June 30, 2021, Gov. Wolf vetoed HB 1300 without reading it or understanding the provisions contained in it. Further, his administration had refused to even discuss election changes,” Grove said, noting that a bipartisan bill would have gone a long way toward improving Pennsylvania’s elections. A new version of that law remains pending in the legislature.

“Regardless, House and Senate Republicans sent the governor sweeping election changes addressing three major areas of elections: increasing voter access; providing integrity and security in every process; and modernization.

“To date, our elections have been anything but smooth,” Grove said. “This report highlights repeated election failures, which have been categorized as ‘smooth elections’ by Wolf administration secretaries of state.”

He added, “Ask thousands of Montgomery County voters if receiving wrong ballots in the mail is ‘smooth.’ Ask candidates in Montgomery County who went to bed thinking they won and waking up losing because they, the press, and residents didn’t know…thousands of sequestered mail-in ballots existed and were sequestered because of errors.

“Ask Bucks County voters if elections are ‘smooth’ after the Board of Election had to sequester ballots because of illegal voting at drop boxes, which delayed returns. Ask Lehigh County voters if there are smooth elections after DA Jim Martin verified hundreds of illegal votes were cast in their local elections using drop boxes.

“Ask Election directors if our undated ballot soap opera created ‘smooth elections’ or the reality the last court ruling by the Third Circuit Court invoked the non-severability clause of Act 7,7 making those provisions void. Ask voters if they have ‘smooth elections’ when we had to threaten two different county Boards of Election with impeachment because they voted to violate the election laws,” Grove said.

Grove added, “We can’t continue with what has occurred in the commonwealth. Our voters are demanding change. Our election administrators are demanding change.”

 

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PA Congressional Redistricting Process Teeters on Edge of Court Challenges

With fewer than 60 days before the Feb. 15 deadline to enact new congressional district maps, efforts to conduct the process in a less partisan and more collegial manner hang by a thread.

Throughout the year, Republican leaders in both the state House and the Senate have promised transparency and public involvement, hoping to pass a map beyond dispute and that Democrat Gov. Tom Wolf would sign so that state courts don’t intrude on the process.

In July, Rep. Seth Grove (R-York), chairman of the House State Government Committee, announced what he called the “most transparent congressional redistricting in Pennsylvania history” through direct citizen involvement in the process. Sen. David Argall (R – Berks/ Schuylkill), chairman of the Senate State Government Committee, has similarly promised to “roll back the hyper-partisan gerrymandering sins of past decades” by “making this redistricting process much more open and transparent.”

However, Democrats have looked upon these comments with skepticism and are so far not impressed by the processes being used.

On Wednesday, an adjusted version of a map drawn by a Lehigh Valley piano teacher and redistricting advocate Amanda Holt was passed on a party-line vote by the House State Government Committee. Holt, a former Republican Lehigh County commissioner, was deeply involved in the state’s map-making a decade ago and led the charge for fairer, less gerrymandered maps.

“The only thing better than a citizen-drawn map is a citizen-drawn map that incorporates the feedback of citizens all across our commonwealth,” Grove said in a statement after the vote. “The minor adjustments made to the preliminary plan reflect changes that were important to Pennsylvanians.”

Yet, a leading Democrat on the committee threw cold water on the vote while foreshadowing arguments Democrats will likely make when a map comes to the full House floor for a final vote.

“We have an opportunity to use a citizen’s map as a vessel,” said Rep. Scott Conklin (D–Centre) in comments before the vote. “But today, what we’re about to do, is we’re going to throw the citizen’s map out and we’re going to amend it again with what the elected officials wanted.”

Grove noted during the committee meeting that the map was 95 percent similar to Holt’s and that changes were made to minimize splitting municipalities among a few other technical corrections.

In the Senate meanwhile, a draft version of a bipartisan map being drawn by Argall and Sen. Sharif Street (D–Philadelphia) has drawn heated feedback from Democrats.

The leaked draft would solidify Democratic U.S, Rep. Chrissy Houlahan’s district in the Philadelphia suburbs. However, it also appears to split Philadelphia into four districts rather than three, as it is now.

That move would take a northern portion of Democratic U.S, Rep. Brendan Boyle’s Philadelphia district and move it into Republican U.S. Rep. Brian Fitzpatrick’s district, which is comprised mostly of the Bucks County and a small slice of Montgomery County north of the city. The move would reduce the White population in Boyle’s current district, making a primary challenge from a Black politician, such as Street, more likely.

Democratic political consultant J.J. Balaban told The Philadelphia Inquirer, “Any Democratic elected official should be embarrassed to support a map as bad for Democrats as that map is.”

An anonymous national Democratic official who also spoke with The Inquirer went even further, “It’s clear the Republicans have never taken this process seriously and are just running out the clock — it’s time for the court to step in,” in a comment very similar to the claims made in a new lawsuit filed by “voters” with the help of the National Redistricting Action Fund, a group aligned with Democrats.

The unanimous Democratic opposition to the citizen’s map put forward by the house committee and the harsh Democratic criticism of the leaked Senate map show how fragile the desire for compromise is in Harrisburg.

Both chambers of the General Assembly and Wolf must come to a final agreement by Feb. 15 so that candidates hoping to be on the May 18th primary ballots can circulate nomination petitions on time.

As Holt testified, her map was “Based on census data and to not break precincts.

Although Wolf will need to approve the map the legislature puts forward or the map will end up being adjudicated by the courts, he has stated that he will not negotiate.

“No one should be surprised King Wolf doesn’t want to negotiate,” Grove said on Facebook.

State Rep. Andrew Lewis (R-Harrisburg) said, “We’ve got to move this process forward. We’re going to improve this map as we move forward.”

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