Senator Fontana joined other local and community leaders on Saturday, Dec. 12 for a rally in Brookline.  The rally was organized after the Las Palmas grocery store, located on Brookline Boulevard, was targeted by an act of vandalism last week that included prejudiced graffiti on their building.  A large crowd gathered Saturday in front of the store to show its support for the store, its owners and that Brookline is a welcoming community.

Budget Update

Recently, an article ran in the Pittsburgh Post Gazette with Bishop David Zubik, civic leaders and businesses calling on the Pennsylvania General Assembly to end the impasse.  I found this article very frustrating and quite frankly inaccurate.  What many do not realize is that the Senate has already passed a bipartisan budget plan which also has the backing of the House Democrats and Governor Wolf.  Instead, the House Majority party has now decided to withdraw their support for the tentative agreement.  And although we have three caucuses willing and ready to continue passing necessary bills, the House Republicans not only canceled session on Friday, but also Saturday, continuing to prolong the impasse. 

It’s time for the public to put even more pressure on those leaders who are stalling.  The Senate has lived up to our end of the bargain.  It is time for the House Majority party to quit dragging their feet and pass the plan that all stakeholders have been negotiating for many months now.  

Pensions

Last week, the Pennsylvania Senate passed Senate Bill 1082 (SB 1082) which is a pension reform proposal that would mostly affect new teacher and state employees.  The legislation had overwhelming bipartisan support and passed by a vote of 38-12.  

Total pension costs have soared from under $1 billion in 2010 to a projected $5.9 billion by Fiscal Year 2016-17. That has caused a cascade of problems ranging from cuts in school staffing and programs to higher property taxes. For the last several years, the state and school districts have grappled with spiking costs that were the inevitable result of lucrative benefit expansions passed in 2001 prior to my time in the legislature.

Please make no mistake about it. I did not take my vote on SB 1082 lightly. It was a tough decision to make during an unprecedented, difficult time while we are attempting to get the state’s fiscal health back in order while trying to find ways to make necessary investments in schools and other vital programs.

When the General Assembly passed Act 120 of 2010, which I supported, we enacted a measure that made major changes to the public pension system especially concerning new employees and provided a path towards critical relief to undo the fiscal responsibilities of prior decisions that were made. Act 120 contained reforms with a number of future worker benefit reductions and employer cost containment measures that were estimated to save over $1 billion over the long-term. It eliminated the employer contribution rate spike scheduled for Fiscal Year 2012-13 by spreading it out over several years through the use of annual rate caps or “collars” and reduced pension benefits for new employees. Unfortunately, prior Administrations continued to fail to meet its own obligations while employees kept up their end of the bargain.

Flash forward to today. Through mismanaged budgeting and policies of the prior four years, Pennsylvania is facing a nearly $2 billion structural budget deficit. Philosophical ideologies have persisted and led to an unparalleled budget impasse that we are trying to resolve and part of this process has brought the pension issue to the forefront once again. 

As we’ve learned from the past, we unfortunately cannot simply wish the pension issue away.  These costs have continued to bog down our state budget and have overtaken school budgets, oftentimes causing employee contract issues. The hope here is to relieve some of the stress to contract negotiators in the future.  There simply is no way to sustain the current pension system and this plan provides a real savings of $3 billion.  More importantly, it shifts and shares risk between traditional defined benefit retirement plans and defined contribution systems.

Also of significance to public school employees is that this vote was taken on the heels of my affirmative vote for the latest budget proposal that made historic increases in investments for education by more than $400 million.  This includes $350 million for basic education, $50 million for special education, $50 million for Pre-K Counts and $10 million for Head Start. These pieces of the budget are moving toward protecting our current employees, while most importantly, investing in our schools and the students teachers work so hard to educate. Without addressing the pension issue, this monumental increase in education funding would not have passed.

Furthermore, the provisions of SB 1082 were a result of the Senate Democrats fighting for this style plan for current employees. While compromise oftentimes causes us to consider matters in a different light, we stuck with our original goal of protecting current employees from being forced into a 401(K) plan. And with that compromise came the need for some Democratic votes in order for us to move through the budget process.  

As for the actual provisions contained within SB 1082, the plan as passed by the Senate does not apply to current or retired public employees. The plan would affect only those hired after July 1, 2017, for PSERS and January 1, 2018, for SERS employees. In addition, no current employees will be required to enter a 401(k) plan and it does not eliminate the Option 4 lump sum withdrawal. It simply requires it, prospectively, to be actuarially neutral at the time of withdrawal for that portion of the salary that is earned after the effective date.

Legislators like myself will be considered “new” upon re-election and automatically enrolled in the new hybrid plan no matter how long we have served prior to being moved into a new class. For me to vote no based upon how this change to how my employment is classified would have been self-serving. 

And while there was a provision inserted into the bill for legislators to opt-out once enrolled into the new plan, that is one I strongly disagree with if we are in fact considered “new” employees under the law. I will state now that should I have the privilege of being re-elected to the Senate in 2018, that I will not opt-out of the new system and participate in the hybrid system as the legislation originally intended. To do so would be hypocritical.  
 
While not perfect and perhaps not the plan we or the Governor originally envisioned, it still provides a much more generous plan to our future state employees than most private sector retirement plans. Leading economic experts from organizations such as the Pew Charitable Trusts, predict the plan will provide retirement security for future workers, while cutting risk to taxpayers in the event of a recession that causes the funds' investment returns to crash. I would also like to point out that this organization has labeled that passage of this plan and successful implementation would establish “Pennsylvania as one of the brightest turnaround stories among states” in regards to pension reform.  

Presently, taxpayers are forced to cover for poor investments or policy mistakes that leave the pension systems short. I feel that the real benefit of this plan lies in long-term financial stability for both state government and school districts. The shift to a hybrid plan going forward for new employees will help provide greater security that our current debt is not exacerbated and will be paid down, allowing our financial path to be managed with more certainty.

Property Tax/Rent Rebate Program

As the year winds down, I want to remind everyone the Pennsylvania Department of Revenue is still accepting applications for the 2014 Property Tax/Rent Rebate program.  If you did not receive an application, or did not apply last year and wish to apply this year, applications can be obtained from any of my district offices and my staff would be happy to assist you in preparing your application.  The deadline to submit an application is Dec. 31.

The Property Tax/Rent Rebate program benefits eligible Pennsylvanians age 65 and over; widows and widowers age 50 and over; and people with disabilities age 18 and over.  Homeowners with a maximum yearly income of $35,000 and renters with a maximum yearly income of $15,000 are eligible for a rebate.  Keep in mind that half of Social Security income is excluded.

Due to program changes enacted last year to ensure claimants aren’t disqualified from rebates solely because of Social Security cost-of-living adjustments, homeowners and renters may be eligible for rebates even if their eligibility income is greater than these limits.  Any homeowner who collected Social Security, received a property tax rebate in 2013 for claim year 2012 and had annual income last year, discounting half of Social Security, up to $36,129, is encouraged to apply for a rebate for claim year 2014.  Any renter in that same situation with an annual income in 2014, discounting half of Social Security, up to $15,484, is also encouraged to apply.

LIHEAP

The Pennsylvania Department of Human Services (DHS) is accepting applications for this season’s Low Income Home Energy Assistance Program (LIHEAP).  The program helps low income families pay their heating bills.  You can apply and check the status of your application on the state’s COMPASS website.  You can also pick up an application in my district offices or download one yourself from the DHS LIHEAP website.  Completed paper applications should be returned to one of the Allegheny County Assistance Offices.

Funding for LIHEAP is provided by the federal government and eligibility is based on Federal Poverty Income Guidelines.  The income limits for this season are as follows:

After your application is received you will receive a written notice explaining your eligibility and the amount of assistance you will receive.  Payments are generally sent directly to a utility company or fuel provider and will be credited to your heating account.  Crisis grants may also be available if you have an emergency situation and are in jeopardy of losing your heat.  For more information, please contact the LIHEAP hotline at 1-866-857-7095.

Slots Revenue Increases in November

The Pennsylvania Gaming Control Board recently announced that revenue from the play of slot machines at the state’s 12 casinos increased by 2.2 percent in November compared to the same month in 2014.  Gross revenue from slot machines was more than $187.5 million in November, compared to the over $183 million in revenue produced in November 2014.  Tax revenue generated during November from slot machines was over $100.2 million.

Slot machines are taxed at 55 percent in Pennsylvania and directed as follows:  34 percent for property tax reduction; 12 percent supporting the horse racing industry; five percent is placed in a state economic development fund; and two percent goes to local governments that host casinos.

The state’s gaming industry employs over 17,700 people and generates an average of $3.7 million per day in tax revenue from both slot machines and table games.  For more information on gaming in Pennsylvania and to read reports from the Gaming Control Board, please visit them online at www.gamingcontrolboard.pa.gov.

Open Enrollment at HealthCare.gov

The Pennsylvania Insurance Department is reminding consumers that the open enrollment period for 2016 health insurance coverage is taking place.  Open enrollment for 2016 health insurance coverage runs through January 31, 2016.  In order to avoid a lapse in current coverage and have a plan effective January 1, 2016, the federal government requires that consumers must purchase a plan by today.

Subsidies are available to many consumers who purchase coverage through the federal marketplace at www.healthcare.gov and can off-set the costs consumers face on a monthly basis through their premiums and in some cases help cover some of their out-of-pocket costs.  Also, please remember that anyone who can afford health insurance must purchase coverage or they may face a tax penalty from the Internal Revenue Service.

For more information and to purchase insurance, please visit the online federal marketplace at www.healthcare.gov.  You may also visit https://localhelp.healthcare.gov/ or click here and enter your zip code to locate a navigator nearby who can help you apply.  You can also call 1-800-318-2596 with questions about how to enroll.

First Night Pittsburgh

The Pittsburgh Cultural Trust is once again producing First Night Pittsburgh on New Year’s Eve.  This year’s celebration marks the 22nd anniversary of First Night Pittsburgh and the 13th as a production of the Cultural Trust.  As the largest single-day celebration in the region, First Night offers approximately 150 events at nearly 50 indoor and outdoor locations within the 14-block Cultural District with 90 percent of events taking place indoors.  This family-friendly event provides the city the opportunity to ring in the New Year with a bang while celebrating Pittsburgh’s many rich cultural assets.

First Night Pittsburgh kicks off at 6 p.m. on Dec. 31 with a children’s fireworks show and concludes with the countdown to midnight, and the raising of the Future of Pittsburgh Ball at midnight, with tons of fun in between.  This year, The Wailers will perform as the headline act during the Future of Pittsburgh Grand Finale.  The Wailers epitomize this year’s Highmark First Night Pittsburgh theme, Around the World – Around the ‘Burgh, by bringing to  Pittsburgh, the site of Bob Marley’s final performance, a legacy and sound celebrated internationally for more than 50 years.

To view the many activities taking place during First Night and for a full schedule of events, shows and entertainment and information on how to purchase all-access buttons please visit www.firstnightpgh.org.

Fontana Fact

It was on this date in 1791 that the Bill of Rights was ratified and became the law of the land.  Virginia became the 10th of 14 states to approve the amendments which gave the Bill of Rights the two-thirds majority of state ratification necessary to make it legal.