Week in Review: PA credit rating drops, medical marijuana bill advances

By PA Independent Staff

Before raunchy emails traded within the Pennsylvania Attorney General’s Office captured the attention of politicos across the state, there were far less risqué stories making the rounds.

The state got slapped with another debt rating downgrade, medical marijuana legislation took a big step forward and the fallout from Bonusgate continued long after the scandal erupted.

Here’s a look back the week’s coverage:

Fitch slaps PA with debt downgrade as pensions, bad budgeting continue to wreck state’s finances

Fitch Ratings dropped Pennsylvania’s credit rating to AA- from AA on Tuesday, citing the state’s reliance on $2 billion in one-time revenue in this year’s $29 billion budget and a refusal to take on the long-term budget-busted pension costs that will continue to drive costs higher for the rest of the decade.

“The ‘AA-‘ rating is sensitive to the commonwealth’s continued ability to address increasing fixed-cost pressures, particularly for pensions,” Fitch said in a statement announcing the downgrade.

It was the second time since July 2013 that Fitch dropped the state’s credit rating by a notch. Moody’s Investors Service, another of the so-called “big three” credit rating agencies, has dropped Pennsylvania’s credit rating on two occasions since July 2012, most recently just two months ago.

A lower credit rating makes it more expensive for the state to borrow money, and also serves as a gauge of fiscal health.

Pennsylvania and Pittsburgh: A tale of two credit ratings

As Pennsylvania’s credit rating took another hit, Pittsburgh’s credit rating was upgraded.

Surprisingly, a local economics professor said the picture between the two isn’t as different as one might think, and both still have substantive problems.

Robert Strauss, an economics and public policy professor at Carnegie Mellon University, said state budgets are often tweaked to make the numbers look better, but those sort of “budgetary shenanigans” are “what everybody does.” Strauss also discussed Pennsylvania’s “huge tax giveaway” in how the state treats retirement income.

Medical cannabis bill takes leap forward

The state Senate voted 43-7 on Wednesday to approve medical marijuana legislation, the first time in state history either chamber of the General Assembly embraced such a proposal.

The bill’s success in the state Senate was the result of an unlikely political alliance between one of the chamber’s most conservative members, state Sen. Mike Folmer, R-Lebanon, and one of its most liberal members, state Sen. Daylin Leach, D-Montgomery.

The bill would legalize consumable forms of medical marijuana like oils, edibles and tinctures, but doesn’t legalize smoking or vaporized forms of the drug. It would allow up to 60 licenses for growers and up to 130 licenses for distributors.

The bill moves to the state House, where it’s uncertain if it will receive a final vote before the legislative session ends in November.

Mayoral candidate vows to take back Philadelphia schools

Philadelphia attorney Ken Trujillo wants to become Philadelphia’s next mayor and disband the School Reform Commission.

“As a candidate and as mayor, I will continue leading the fight to reclaim our schools,” Trujillo said.

The Philadelphia City Council and the teachers union would also like to see the city take back control of the schools. However, no individual or organization has the authority to disband the SRC. Only the five members of the SRC have that power.

That’s not stopping the City Council from placing a referendum on the ballot asking voters to decide the issue.

‘Bonusgate’ attorney disbarred seven years after legislative scandal hit

Seven years after the Capitol “Bonusgate” scandal erupted and landed several legislators and staffers in jail — perhaps launching then-Attorney General Tom Corbett into the governor’s office — the Pennsylvania Supreme Court has finally disbarred lawyer and former legislative staffer Jeff Foreman.

Corbett and his office investigated millions in bonuses paid to legislative staffers in the General Assembly and other misuse of public funds.

Foreman “was a central participant in a concerted pattern of illegal conduct in which taxpayer dollars, equipment and other resources were misdirected to campaign efforts,” the disciplinary board said in its recommendations to the Supreme Court.

Property tax reform hits another wall

Proponents of eliminating school property taxes cheered a win last week, but it might have been a hollow victory after state Senate Majority Leader Dominic Pileggi told a business group a bill that would end the burdensome levies “will not become law.”

While the elimination bill, Senate Bill 76, hit a potentially fatal roadblock, state Rep. Seth Grove, R-York, continued to push for his own version of property tax reform. It would give school districts the power to phase out or reduce property taxes through an elimination tax, which could include a combination of an earned income tax, business privilege tax and mercantile tax.

“It’s something that legitimately, actually can get done,” Grove said.

Hanover’s amusement tax debate heads into bonus round

The Hanover Borough Council still doesn’t know exactly what to do with its amusement tax, which has caused consternation for a local arcade owner who believes he doesn’t have to pay the levy.

The council tabled proposed changes to its amusement tax ordinance this week to give itself time to study what other municipalities do. In the meantime, it sliced TimeLine Arcade owner Brandon Spencer’s 2014 amusement tax bill to $2,000.

Spencer and the borough have been at odds over the tax since at least this summer. The borough ordinance says “coin-operated” amusement devices are subject to an annual $50 fee, but Spencer’s 130-plus machines don’t accept coins.

While some on the Council favor eliminating the tax altogether, there’s also a sentiment among some to revise the language of the ordinance.

“They’re going to try to change the wording to kill me,” Spencer said. “That’s the way it works.”