July 1, 2011: Legislature holds $183.6 million surplus
Note: The audit report and report of line items are attached below.
Last July, as state lawmakers celebrated their "fiscally responsible" cuts to programs that serve the real needs of citizens, they continued to hoard a $183.6 million surplus in a variety of accounts that are hidden from public view until the legislature's annual audit.
This surplus is significantly lower than the $212.5 million surplus at the end of the 2009-10 fiscal year. Yet that number, reported in the attached line item detail, is $24 million higher than lawmakers had previously acknowledged. Again at today's meeting, the previous surplus was reported to be $188.5 million, a number that does not appear in the actual audit report.
Some may recall that the House and Senate promised to give back $62.7 million of their surplus to the General Fund as a contribution toward a multi-billion-dollar deficit in 2010-11. It didn't happen. The audit report released today, months behind schedule, says that the $62.7 million give-back is occurring this year. However, no documentation was available that the transactions actually occurred. DR will seek the documentation and let you know.
According to today's report, the Senate ended the year with a surplus of $70.1 million (down from $84.9 million); the House with a surplus of $94.7 million (down from $105.2 million); and Legislative Service Agencies with a surplus of $18.7 million (down from $22.5 million).
An Odd Meeting
Today's meeting of the Legislative Audit Advisory Commission was notable for several things. After House leadership repeatedly told DR and Rock the Capital that the audit results could not be released prior to the committee meeting, we learned that the surplus figure was, in fact, given to Associated Press last weekend.
The meeting began with Sen. Vince Hughes (Philadelphia) asking for an executive session to discuss "personal" matters. There is nothing in law that permits executive sessions for that purpose. Nevertheless, LAAC Chair Gordon Denlinger (Lancaster) required reporters and the public to leave the room. When the meeting was again open to the public, Denlinger reported that the closed-door session was needed to discuss attendance at meetings and the schedule of future meetings.
As the meeting progressed, the participants had to be reminded repeatedly to give the documents being discussed to those in the audience for the public meeting.
Question: What really required the secrecy of an "executive session"? Or was it simply illegal?
If in fact the House and Senate have returned $62.7 million to the General Fund, that would reduce the legislature's surplus to just under $121 million. When reporters asked how large a surplus the legislature should have, Denlinger said that $120 million was at the "ragged edge" of what was required to stand up to the governor.
To put even this lower number in context:
- It gives lawmakers a surplus equal to 40.4% of the legislature's operating budget last year. By comparison, all but the smallest school districts in PA are limited by law to 8%. Human service agencies often are limited to 3%.
- If the executive branch had a comparable percentage surplus, it would equal $11 Billion; yes, that's billion.
- If the judicial branch had a comparable percentage surplus, it would equal another $121 million.
By lawmaker logic, to protect the three branches of our government from each other, taxpayers should be prepared to shell out more than $11.2 Billion and get nothing of value in return.
Lawmakers have two main excuses for hoarding money for themselves while cutting support for everyone else.
1. "If we give the money back to the Treasury, it will just end up in Philadelphia." Not true. To end up in Philadelphia, the legislature would have to appropriate it and the governor would have to sign the appropriation before the money could leave the General Fund. Who believes that's really going to happen?
2. "If we don't have a reserve in case of a budget impasse with the governor, the legislature will be at a disadvantage in negotiations." Not true. The legislature's surplus does not create a level playing field. It tilts the field, giving the legislature an advantage over the governor. More to the point, only the legislature can avoid a budget impasse by simply passing a budget on time. 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.
Details, details: Line item surpluses on July 1, 2010
In many cases, the individual line items for the House and Senate had a larger surplus on July 1, 2010 than they would spend during the year, yet they still received new money. In the Senate, for example:
- The line item for "Salaries and wages of employees of the Chief Clerk" began with a surplus of $2 million and ended with a surplus of $4.6 million. Actual expenses and commitments were $148,000. With a surplus of $2 million and expenses of $148,000, why did this line get $2.7 million in new money?
- The line item for "Incidental expenses" began with a $3.4 million surplus and ended with a surplus of $3.9 million. Actual expenses and commitments were $2.4 million. Why did this line get $3 million in new money?
- The line item for "Senators' expenses" began with a $2.7 million surplus and ended with a $2.1 million surplus. Actual expenses and commitments were $907,903. Why did this line get $1.2 million in new money?
- The line for the Republican Appropriations Committee began with a surplus of $117,000 and ended with a surplus of $343,500. Actual expenses and commitments were $22,501. Why did this line get $249,000 in new money?
- The line for the Democratic Appropriations Committee began with a surplus of $113,000 and ended with a surplus of $257,500. Actual expenses and commitments were $104,500. Why did this line get $249,000 in new money?
A similar pattern holds in the House where the surplus for 22 of 39 line items grew during the year. In 19 line items, there was already more money available than would be spent during the year, yet lawmakers gave themselves more money anyway.
Many of the legislature's line items, most fairly small, are listed only as "Contingent expenses," and many of them have surpluses that are 10, 20, and 30 times greater than their actual expenses and commitments. What is the purpose behind such huge surpluses?
Altogether the surplus for "Contingent expenses" totals $1.5 million in the House and $602,000 in the Senate. These are not to be confused with "Incidental expenses," which add another $2.4 million in the House Chief Clerk's Office to the $3.9 million in the Senate Chief Clerk's Office noted above.
Finally, a similar pattern holds in the variety of "legislative service agencies." For example, the Legislative Budget & Finance Committee began 2010-11 with a surplus of $3.3 million and ended the year with a surplus of $3.7 million. Its expenses and commitments for the year were $1.4 million. So why did this line item get $1.8 million in new money?
What can we do about it?
Speak up. Everywhere you can. Don't accept business as usual.
Gov. Tom Corbett has proposed additional money for all of the line items where lawmakers already have more money than they need. He also has the power of line item veto. That is, he can simply delete any line item in the budget he doesn't like. He should begin with every line item where the surplus is already greater than the amount expected to be spent during the year.
Will Gov. Corbett use his veto power? Or will he continue to break his promises about getting tough with legislative excesses?
Will your own lawmakers continue to overspend on themselves while cutting everyone else? Or will they tell legislative leaders to give back the surplus and refuse money they don't really need?