Post by melody on Jun 11, 2013 11:25:41 GMT -5
House Democratic Policy Committee
6/6/13, 10:00 a.m., 418 Main Capitol
By Alizah Thornton, PLS Intern
Informational meeting: PA Fish & Boat Commissions Fiscal Slope: Spending Reallocation Plan and Revenue Generating Options
Bills discussed: Senate Bill 1
Members Present: Chairman Mike Sturla (D-Lancaster), Rep. Phyllis Mundy (D-Luzerne), Rep. Joseph Markosek (D-Allegheny), Rep. R. Ted Harhai (D-Westmoreland), Rep. Jaret Gibbons (D-Lawrence), Rep. Thomas Caltagirone (D-Berks), Rep. Deberah Kula (D-Fayette), Rep. Christopher Sainato (D-Lawrence), Rep. Neal Goodman (D-Schuylkill) and Rep. Mark Longietti (D-Mercer).
The committee held an informational meeting on the Pennsylvania Fish and Boat Commission's fiscal slope.
John Arway, Executive Director, Pennsylvania Fish and Boat Commission (PFBC), testified on the financial future of PFBC and why the organization needs to prepare. Arway referred to the plan as a "fiscal slope," which he said is unlike a fiscal cliff because there is time to deal with the issues that need to be faced. Arway contended $9.1 million will be needed by fiscal year 2016-17 and every year after in order to cover pension and healthcare, as well as other operating and necessary costs PFBC has.
In his presentation, Arway stated simply increasing the fish and boat license fees will not provide much help financially because when fees are raised, even slightly, there is a drop in sales. Arway remarked PFBC strives to maintain a reserve to pay for any unexpected or emergency expenses that come up. PFBC earns money from selling licenses and boat registrations, federal augmentations, miscellaneous and fines and penalties, Arway stated. Arway said PFBC spends money on personnel, operating costs, which includes hatcheries, dams and other facilities, fixed assets, grants and payments to state agencies with its budget. Revenues for PFBC can be increased by operational, regulatory and legislative actions, Arway stated.
Arway remarked some of the solutions are reducing expenditures. "PFBC must maintain one year's worth of funding in reserve, PFBC will not expend more than it generates in revenues, infrastructure repair and maintenance needs must be considered and sufficient operating funding must be available for resulting structure," he remarked. Arway said some of the general fiscal concerns are the agency's requirements to pay pension and health care costs and maintain level funding, on top of the rising operating costs that are combined with a flat and/or declining consumer base.
Rep. Mundy asked how big the reserve was and if Arway could provide an example of a crisis in which the reserve would be used. Arway responded that it has been an historical practice for the agency to "never spend more than they earn." He stated one year's worth of revenue is held for emergencies because of the way the cashflow works for PFBC. He explained the money comes later in the year in months like March and April because those are the months people generally buy fishing and boating licenses. Arway stated the reserve is used to make up for the lack in revenue from the beginning of the year. For example, Arway said the PFBC uses money from the reserves to "front-money up" for high hazard dam projects because without the money to "front-up" the organization would not be able to get the grants from other organizations for projects. Arway stated there are 56 dams the agency is responsible for operating and maintaining. If an emergency were to happen, Arway said he would have to use the savings from the reserve.
When asked by Rep. Joseph Markosek (D-Allegheny) what augmentation is, Arway responded it is the "federal excise tax on sport fishing and boating equipment. It's a federal tax that goes to Washington and the service reallocates that back to the states using a formula based on how many fishing licenses we sell. So, the more licenses we sell the more federal money we get."
Rep. Markosek asked if PFBC receives any state money. Arway said PFBC does not receive any money from the General Fund. Arway said a few years ago, before Gov. Tom Corbett's administration, the agency received about $17,000 from the General Fund to pay for the membership to the Atlantic States Marine Fisheries Commission. Arway said the General Assembly, the governor's office and PFBC all have a member on the commission. He stated PFBC now pays the fee and he said "he doesn't think it's right; the legislature should pay their own fee."
When speaking to the question posed by Rep. Markosek about if there is money in the transportation bill, Senate Bill 1, for PFBC, Arway said yes. "We're very thankful Senate put us in," Arway stated, noting PFBC was added to an amendment for the bill.
When asked by Rep. Ted Harhai how PFBC became responsible for taking take care of the 56 dams the organization is responsible for, Arway said "I think we inherited that as part of our mission." Arway commented that the situation is similar for the fish hatcheries. "We don't own the fish hatcheries, we just operate and manage them for the state," Arway remarked.
Arway said PFBC does not receive money to help maintain the dams or hatcheries.
Timothy Schaeffer, PFBC's director of policy, planning and communications, commented "one of the things about these facilities is that when we got them they were new, basically, now these are old facilities and the cost to operate these things are just going up astronomically each year."
Rep. Harhai asked Arway to speak on the issue of the hatcheries. Arway replied "the conclusion that I've drawn as the CEO of my company is that we either have to raise additional revenue or cut expenses."
Arway explained the group has put together a spending reallocation plan, which does not spend less money but spends the money in a different way. He stated in order to cover new costs expenditures have to be cut. Arway said he would propose the closing of two fish hatcheries. He remarked after talking with many individuals no one liked the idea, so PFBC decided to wait two years and see if PFBC can come up with a plan to increase revenues so the hatcheries would not have to close.
Rep. Mundy asked the definition of a high hazard dam. Arway replied "anytime a dam places people at risk below, the dam becomes a high hazard dam. There's another category of dams called the unsafe high hazard dams which mean the dams are in need of repair, so we have to do something about them before they breach and cause people downstream to be flooded."
Rep. Mundy followed up by asking if the high hazard dams were originally built for fishing or boating. Arway remarked there is a "mixture of different kinds of dams." He stated most of the dams are recreational dams for fishing and boating, but there are some in place for reasons like flood control and recreation, for example the Tamarack Lake in Meadville.
Schaeffer added there are other dams that PFBC took over to provide for use in fishing and boating.
Rep. Mundy commented that she is concerned when she hears about dam maintenance. "I have a staff of engineers who work very closely with the Department of Environmental Protection (DEP) safety engineers to watch our dams. We're required to do monthly inspections," Arway stated. He said there are remote monitors which can be checked from the office to watch the well levels of the different dams to help determine whether the dams are at risk for failure. Arway stated dams are an asset to the Commonwealth for reasons other than fishing and boating.
Responding to Rep. Gibbons' question about how much it could cost to repair all of the dams including Hereford Manner, Arway said as of now PFBC does not have the funding. Schaeffer remarked the estimated cost to repair non-hazardous dams is $44 million and the cost to reconstruct Hereford Manner dam is $15 million.
Arway said PFBC is "appreciative" of the funding it gets. He stated there are not many more grant programs that PFBC can go to obtain money to help take care of the dams. Arway said right now the group is retiring some dams and hoping to repair and rebuild them.
Rep. Gibbons commented "I would like us to take a portion of the money that's going to DCNR right now toward the Gas Lease Fund and direct a portion of that, which they're allowed to use for dams towards allowing you to use for your dams as well." Arway said he believes dams are not different from roads and bridges and they attract revenue into the state.
When asked by Rep. Markosek about what other states are doing about pricing of senior licenses and on raising for lowering prices for licenses, Arway replied, "It's all over the board." He commented some states have raised the price and some have lowered it. Arway remarked he is closely watching New York because the state recently lowered its fees. Arway stated he has found when fees a raised there is a drop in the number of licenses sold and when fees are lowered there is an increase. He said he wanted to see how New York does with selling licenses after the state lowered the prices. Arway said even if PFBC offers free or voluntary licenses it would still need to charge $1in order to receive federal revenue from the purchase. Schaeffer commented that when the seniors buy the trout stamp one time for $8 to fish for trout for life when a regular stamp is $65, he said is starting to "creep up" on them.
Acknowledging Rep. Markosek's question about whether he has any thoughts about lowering the senior license cost but raising the age since people are living longer, Arway replied PFBC has created scenarios on different ways the prices can be lowered or raised. Shaffer commented that in order to change the age of the senior licenses the legislature would have to change that though a bill or act.
Arway said PFBC is still on the Water Fee bill, however, the company's focus will be on the transportation bill, SB 1, because of the amendment that would provide PFBC with monetary support through a particular fund.
Chairman Rep. Mike Sturla (D-Lancaster) commented on the water fee bill. Chairman Sturla stated the bill "charges a one one-hundredth of a cent per gallon fee for people that extract water from the streams and rivers in Pennsylvania." He remarked currently a permit is required to extract the water but it only allows the extraction it does not address the amount of water taken out. The bill would charge the fee to people who take out more than 10,000 gallons a day. Chairman Sturla said the bill would not affect municipal water systems or agriculture use.
"It's only water that literally gets taken out of the watershed," Chairman Sturla stated.
Chairman Sturla remarked "consumptive water use is almost 10 billion gallons a day in the state of Pennsylvania. If you take that times one one-hundredth of a cent, you get close to three-quarters of a million dollars a day that could be generated in fees."
Chairman Sturla said he would be holding a press conference on the water bill on Monday.
6/6/13, 10:00 a.m., 418 Main Capitol
By Alizah Thornton, PLS Intern
Informational meeting: PA Fish & Boat Commissions Fiscal Slope: Spending Reallocation Plan and Revenue Generating Options
Bills discussed: Senate Bill 1
Members Present: Chairman Mike Sturla (D-Lancaster), Rep. Phyllis Mundy (D-Luzerne), Rep. Joseph Markosek (D-Allegheny), Rep. R. Ted Harhai (D-Westmoreland), Rep. Jaret Gibbons (D-Lawrence), Rep. Thomas Caltagirone (D-Berks), Rep. Deberah Kula (D-Fayette), Rep. Christopher Sainato (D-Lawrence), Rep. Neal Goodman (D-Schuylkill) and Rep. Mark Longietti (D-Mercer).
The committee held an informational meeting on the Pennsylvania Fish and Boat Commission's fiscal slope.
John Arway, Executive Director, Pennsylvania Fish and Boat Commission (PFBC), testified on the financial future of PFBC and why the organization needs to prepare. Arway referred to the plan as a "fiscal slope," which he said is unlike a fiscal cliff because there is time to deal with the issues that need to be faced. Arway contended $9.1 million will be needed by fiscal year 2016-17 and every year after in order to cover pension and healthcare, as well as other operating and necessary costs PFBC has.
In his presentation, Arway stated simply increasing the fish and boat license fees will not provide much help financially because when fees are raised, even slightly, there is a drop in sales. Arway remarked PFBC strives to maintain a reserve to pay for any unexpected or emergency expenses that come up. PFBC earns money from selling licenses and boat registrations, federal augmentations, miscellaneous and fines and penalties, Arway stated. Arway said PFBC spends money on personnel, operating costs, which includes hatcheries, dams and other facilities, fixed assets, grants and payments to state agencies with its budget. Revenues for PFBC can be increased by operational, regulatory and legislative actions, Arway stated.
Arway remarked some of the solutions are reducing expenditures. "PFBC must maintain one year's worth of funding in reserve, PFBC will not expend more than it generates in revenues, infrastructure repair and maintenance needs must be considered and sufficient operating funding must be available for resulting structure," he remarked. Arway said some of the general fiscal concerns are the agency's requirements to pay pension and health care costs and maintain level funding, on top of the rising operating costs that are combined with a flat and/or declining consumer base.
Rep. Mundy asked how big the reserve was and if Arway could provide an example of a crisis in which the reserve would be used. Arway responded that it has been an historical practice for the agency to "never spend more than they earn." He stated one year's worth of revenue is held for emergencies because of the way the cashflow works for PFBC. He explained the money comes later in the year in months like March and April because those are the months people generally buy fishing and boating licenses. Arway stated the reserve is used to make up for the lack in revenue from the beginning of the year. For example, Arway said the PFBC uses money from the reserves to "front-money up" for high hazard dam projects because without the money to "front-up" the organization would not be able to get the grants from other organizations for projects. Arway stated there are 56 dams the agency is responsible for operating and maintaining. If an emergency were to happen, Arway said he would have to use the savings from the reserve.
When asked by Rep. Joseph Markosek (D-Allegheny) what augmentation is, Arway responded it is the "federal excise tax on sport fishing and boating equipment. It's a federal tax that goes to Washington and the service reallocates that back to the states using a formula based on how many fishing licenses we sell. So, the more licenses we sell the more federal money we get."
Rep. Markosek asked if PFBC receives any state money. Arway said PFBC does not receive any money from the General Fund. Arway said a few years ago, before Gov. Tom Corbett's administration, the agency received about $17,000 from the General Fund to pay for the membership to the Atlantic States Marine Fisheries Commission. Arway said the General Assembly, the governor's office and PFBC all have a member on the commission. He stated PFBC now pays the fee and he said "he doesn't think it's right; the legislature should pay their own fee."
When speaking to the question posed by Rep. Markosek about if there is money in the transportation bill, Senate Bill 1, for PFBC, Arway said yes. "We're very thankful Senate put us in," Arway stated, noting PFBC was added to an amendment for the bill.
When asked by Rep. Ted Harhai how PFBC became responsible for taking take care of the 56 dams the organization is responsible for, Arway said "I think we inherited that as part of our mission." Arway commented that the situation is similar for the fish hatcheries. "We don't own the fish hatcheries, we just operate and manage them for the state," Arway remarked.
Arway said PFBC does not receive money to help maintain the dams or hatcheries.
Timothy Schaeffer, PFBC's director of policy, planning and communications, commented "one of the things about these facilities is that when we got them they were new, basically, now these are old facilities and the cost to operate these things are just going up astronomically each year."
Rep. Harhai asked Arway to speak on the issue of the hatcheries. Arway replied "the conclusion that I've drawn as the CEO of my company is that we either have to raise additional revenue or cut expenses."
Arway explained the group has put together a spending reallocation plan, which does not spend less money but spends the money in a different way. He stated in order to cover new costs expenditures have to be cut. Arway said he would propose the closing of two fish hatcheries. He remarked after talking with many individuals no one liked the idea, so PFBC decided to wait two years and see if PFBC can come up with a plan to increase revenues so the hatcheries would not have to close.
Rep. Mundy asked the definition of a high hazard dam. Arway replied "anytime a dam places people at risk below, the dam becomes a high hazard dam. There's another category of dams called the unsafe high hazard dams which mean the dams are in need of repair, so we have to do something about them before they breach and cause people downstream to be flooded."
Rep. Mundy followed up by asking if the high hazard dams were originally built for fishing or boating. Arway remarked there is a "mixture of different kinds of dams." He stated most of the dams are recreational dams for fishing and boating, but there are some in place for reasons like flood control and recreation, for example the Tamarack Lake in Meadville.
Schaeffer added there are other dams that PFBC took over to provide for use in fishing and boating.
Rep. Mundy commented that she is concerned when she hears about dam maintenance. "I have a staff of engineers who work very closely with the Department of Environmental Protection (DEP) safety engineers to watch our dams. We're required to do monthly inspections," Arway stated. He said there are remote monitors which can be checked from the office to watch the well levels of the different dams to help determine whether the dams are at risk for failure. Arway stated dams are an asset to the Commonwealth for reasons other than fishing and boating.
Responding to Rep. Gibbons' question about how much it could cost to repair all of the dams including Hereford Manner, Arway said as of now PFBC does not have the funding. Schaeffer remarked the estimated cost to repair non-hazardous dams is $44 million and the cost to reconstruct Hereford Manner dam is $15 million.
Arway said PFBC is "appreciative" of the funding it gets. He stated there are not many more grant programs that PFBC can go to obtain money to help take care of the dams. Arway said right now the group is retiring some dams and hoping to repair and rebuild them.
Rep. Gibbons commented "I would like us to take a portion of the money that's going to DCNR right now toward the Gas Lease Fund and direct a portion of that, which they're allowed to use for dams towards allowing you to use for your dams as well." Arway said he believes dams are not different from roads and bridges and they attract revenue into the state.
When asked by Rep. Markosek about what other states are doing about pricing of senior licenses and on raising for lowering prices for licenses, Arway replied, "It's all over the board." He commented some states have raised the price and some have lowered it. Arway remarked he is closely watching New York because the state recently lowered its fees. Arway stated he has found when fees a raised there is a drop in the number of licenses sold and when fees are lowered there is an increase. He said he wanted to see how New York does with selling licenses after the state lowered the prices. Arway said even if PFBC offers free or voluntary licenses it would still need to charge $1in order to receive federal revenue from the purchase. Schaeffer commented that when the seniors buy the trout stamp one time for $8 to fish for trout for life when a regular stamp is $65, he said is starting to "creep up" on them.
Acknowledging Rep. Markosek's question about whether he has any thoughts about lowering the senior license cost but raising the age since people are living longer, Arway replied PFBC has created scenarios on different ways the prices can be lowered or raised. Shaffer commented that in order to change the age of the senior licenses the legislature would have to change that though a bill or act.
Arway said PFBC is still on the Water Fee bill, however, the company's focus will be on the transportation bill, SB 1, because of the amendment that would provide PFBC with monetary support through a particular fund.
Chairman Rep. Mike Sturla (D-Lancaster) commented on the water fee bill. Chairman Sturla stated the bill "charges a one one-hundredth of a cent per gallon fee for people that extract water from the streams and rivers in Pennsylvania." He remarked currently a permit is required to extract the water but it only allows the extraction it does not address the amount of water taken out. The bill would charge the fee to people who take out more than 10,000 gallons a day. Chairman Sturla said the bill would not affect municipal water systems or agriculture use.
"It's only water that literally gets taken out of the watershed," Chairman Sturla stated.
Chairman Sturla remarked "consumptive water use is almost 10 billion gallons a day in the state of Pennsylvania. If you take that times one one-hundredth of a cent, you get close to three-quarters of a million dollars a day that could be generated in fees."
Chairman Sturla said he would be holding a press conference on the water bill on Monday.