Pa. Insurance Department Could be Shuttered by Budget Impasse

July 9, 2007

The impasse over a state buget in Pennsylvania could start being felt at 12:01 a.m. today and the effects could include a furlough of nearly all employees in the state insurance department.

The state entered the weekend with budget talks among members of both parties in the narrowly divided state Legislature and Democratic Gov. Ed Rendell’s aides but furloughs for thousands of state workers were to begin at 12:01 a.m. if they failed to reach a resolution by then.

The state’s fiscal year ended June 30, meaning the state is prohibited from spending on services unless they are considered critical to health, safety or welfare.

Pennsylvania’s largest state workers’ union vowed to sue on Saturday to block furloughs. David Fillman, executive director of Council 13 of the American Federation of State, County and Municipal Employees, said the union is challenging the legality of dividing most state workers’ jobs into “critical” and “non-critical” classifications.

Those in the non-critical group are targeted for furloughs, while those performing critical functions will work and be paid as usual.

“It gets into not only are (the classifications) unfair, but the issue of why can’t we make everybody a critical classification and continue the operations of the commonwealth,” said Fillman, whose union represents 45,000 state employees, including 16,000 who may be furloughed.

Republicans said they continue to be frustrated that Rendell’s $27.3 bilion budget and its myriad of proposals. “Every time you get close, he wants something new,” Rep. John Perzel, R-Philadelphia, told The Associated Press.

Greg Fajt, Rendell’s chief of staff, said he remained upbeat about the prospect for a settlement. “Everyone at the table’s an honorable person,” he said. “We had great dialogue, and we’re going to continue to talk.”

Also last Friday, Rep. Ron Buxton, D-Dauphin, whose district includes Harrisburg and other communities in which large numbers of state workers live, filed a bill that would authorize payment of state employees from Monday through July 30.

Rendell has said he would not sign such a measure without indications a complete deal was nearly in place.

Meanwhile the Department of Insurance said the state’s budget impasse would mean the furlough of nearly its entire staff, which would have an adverse affect on insurance consumers and businesses.

“The thousands of consumers who come to the department daily with questions, comments and complaints will have to be put on hold while they are triaged according to need,” said Acting Insurance Commissioner Joel Ario. “Unfortunately, that is the reality we will face if the budget impasse forces us to furlough 85 percent of our staff.”

He said that the cutbacks would also affect employees who review insurance rates and forms, license agents and analyze the financial solvency of insurance companies.

“If the furloughs of our expert staff become necessary, consumers and businesses could suffer,” Ario added.

Source: Some Associated Press reporting was used in this story.

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