Capitolwire: House approves further RACP debt ceiling reduction. By Kevin Zwick Staff Reporter, Capitolwire HARRISBURG (Sept. 24) – A half-dozen House Democrats and couple House Republicans split with their leadership over a bill aimed at lowering the debt ceiling of an economic development program controlled by the governor. The House, with a 114-82 vote, passed House Bill 2420 after a little over an hour of debate Wednesday. The chamber voted the bill and abruptly adjourned for Rosh Hashanah, the Jewish New Year, which begins at sundown Wednesday. The HB2420 debate highlighted some key differences among the core of the Democratic and Republican caucuses: supporters said the bill is fiscally prudent; opponents said the bill handcuffs future economic development opportunities. The bill would continue to reduce the borrowing capacity of the Redevelopment Assistance Capital Project (RACP) program. HB2420 would start reducing the ceiling annually by $50 million, beginning in 2018, until the cap reaches $2.95 billion. The bill still needs to be considered by the Senate, with only five days of voting session currently scheduled before the November General Election and what is expected to be the functional end to the current legislative session. “Almost exactly one year ago, Act 77 of 2013, enacted with the leadership of House Republicans, Senate Republicans, and Governor Corbett cut $600 million of state debt – a dramatic and important step forward. We will closely review the new bill approved today by the House,” said Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware. House Minority Leader Frank Dermody, D-Allegheny, said the bill offered “solutions where there are no problems” and will “tie the hands” of a future governor. House Finance Committee Majority Chairman Kerry Benninghoff, R-Centre, who sponsored the bill, touted the Act 77 changes and said, “I think it was responsible then and I think its responsible now.” “The reality is were not trying to tie anyones hands,” said Benninghoff. “What were trying to do … is give a better future to our children and grandchildren. “To constantly be borrowing money and spending more money because people enjoy spending money and making future generations pay it off is not right.” The program is used to fund the acquisition and construction of regional economic, cultural, civic and historical improvement projects, according to the Office of the Budget. The program requires half of the project’s financing be from a local-level source. The Act 77 changes reduced the debt ceiling for the RACP program by $600 million to $3.45 billion. Republicans pushed the bill in response to the increase of the programs debt cap from $1.45 billion in 2003 when former Gov. Ed Rendell took office to $4.05 billion when he left office. Some RACPs authorized by Rendell, like a library named after the late Sen. Arlen Specter, were the subject of criticism. Gov. Tom Corbett refused to issue RACPs during his first two years as governor, but has since issued funds limited at $125 million annually, about a quarter of what Rendell authorized annually, and about half what former Govs. Tom Ridge and Mark Schweiker issued annually in the eight years before Rendell. Lately, Corbett has been making dozens of public appearances announcing RACP projects. “In no way do the grants that we hand out to these capital improvements generate enough money to pay for the debt,” said House Appropriations Committee Majority Chairman Bill Adolph, R-Delaware, contending the benefits for the projects in no way come close to balancing out the costs of the long term debt incurred by the commonwealth to finance the projects. Adolph added the debt constraints within HB2420 made it “a responsible piece of legislation.” The Appropriation Committee’s minority chairman, Rep. Joe Markosek, D-Allegheny, expressed an entirely different perspective, saying the economic development projects create jobs and expand the tax base. Rep. Bryan Barbin, D-Cambria, said with the possibility of less money available due to HB2420, smaller municipalities would lose out to Philadelphia and Pittsburgh. Said Barbin: “If you take $50 million out of RACP, who do you think loses it? Do you think Philadelphia loses it? No offense. Do you think Pittsburgh loses it? No offense. They dont lose it. The people that lose it are the people in Johnstown, the people in Hazelton, the people in Wilkes-Barre, the people in Scranton, the people in Tioga – thats who loses it.” Rep. Steve Samuelson, D-Northampton, was more blunt in questioning the timing of the vote. “He chose to bring this up 41 days before an election!” Samuelson said before being chastised by House Speaker Sam Smith, R-Punxsutawney, for questioning the motive of House Majority Leader Mike Turzai, R-Allegheny. The House adjourned before voting on House Bill 2419, a companion bill. The chamber returns Oct. 6.
Posted on: Thu, 25 Sep 2014 14:22:33 +0000
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