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HARRISBURG - (8/9/05)

The House Game and Fisheries Committee and Senate Game and Fisheries Committee held a joint hearing to consider the financial condition of the Pennsylvania Game Commission.

House Members in attendance included Chairmen Bruce Smith (R-York) and Ed Staback (D-Lackawanna) and Representatives Mark Keller (R-Perry), Curt Sonney (R-Erie), Dan Surra (D-Elk), Keith Gillespie (R-York), Marc Gergely (D-Allegheny), Matt Good (R-Erie), Paul Costa (D-Allegheny), Mike Hanna (D- Clinton), Chris Sainato (D-Lawrence), Teresa Forcier (R-Crawford), Gordon Denlinger (R-Lancaster), James Shaner (D-Fayette), Sheila Miller (R-Berks), Rod Wilt (R-Mercer), Mike McGeehan (D-Philadelphia), Sam Rohrer (R-Berks), Richard Geist (R-Blair) and Karen Beyer (R-Lehigh). Senators in attendance included Chairman Joe Conti (R-Bucks) and Senator John Wozniak (D-Cambria).

Chairman Conti opened the meeting by welcoming the House Game and Fisheries Committee and members.

Vern Ross, Executive Director of the PA Game Commission (PGC), began his testimony by thanking the Committee "for this opportunity to provide an update on the Pennsylvania Game Commission's financial condition." Seven of the eight members of the Board were in attendance: John Riley, President, Roxanne Palone, Vice-President, Thomas Boop, Secretary, Russell Schleiden, Gregory Isabella, Von Hill and Dave Scheffler. Also testifying were Mike Schmit, Deputy Executive Director, Carl Roe, Director of Bureau of Administrative Services, and Dorothy Derr, Budget Examiner.

Ross thanked the General Assembly and Rendell Administration for ensuring that the Game Commission was authorized to receive $20 million from the voter-approved bond initiative. Ross said that Growing Greener 2 or GreenPA was a "win-win for Pennsylvania, for hunters and trappers and for our wildlife resources." The Commission plans on providing their priority list for those projects that they plan to fund in the first round of funding soon.

He explained that in 1998, the General Assembly approved the last license fee increase, which took effect on July 1, 1999; however, that fee increase was not sufficient to keep up with the rate of inflation from the previous fee increase, which had been approved in 1985. The majority of PGC's revenues come from the sale of hunting and furtaker licenses, which in 2004 accounted for just under $39 million of their total revenues. Additional funding is received from their share of the federal Pittman-Robertson program ($7 million and $9 million annually) and from the timber management program that works hand-in-glove with the wildlife habitat improvement program. The timber revenues have been approximately $465,000 less than projections for the past five years. Ross stated the PGC has been able to make some changes to get the program back on track.

The PGC's license revenues have been stable, but have seen increases in various license categories such as youth hunting, licenses which Ross attributed to expanded youth hunting opportunities. There have also been increases in bear license and muzzleloader stamp sales, as the hunting opportunities for both have increased.

Ross explained "shortly after becoming executive director, I saw that the new revenues of the 1998 fee increase would need to be stretched so that we could delay the need to return to seek another fee increase." The PGC started to implement internal cuts in the agency's budget while trying to impact as little as possible on public services and expectations. He added, "there was no way to prevent internal cuts from having some impact on the public. For example, cuts in overtime budgets eventually translate into fewer services, such as not having employees available for a public or school program, or results in longer response times, such as wildlife nuisance calls or responding to road-kills."

The Commission also eliminated the annual Game Take Survey for 2004-05 which will slightly erode the information used to make wildlife management decisions for small game and furbearers. Ross said the Pymatuning Wildlife Learning Center was slated for closure, but after working with area legislators, they were able to keep this tourist destination open on a limited basis throughout the summer. Ross explained "for the past four years, we have had a zero-growth Game Fund budget" but "inflation has taken more of a bite out of our revenues - such as gasoline increases, and the cost of vehicles." The Commission also had other mandated costs, such as contract salary increases, which will mean another $4 million plus over the next two years in addition to the $1 million increase last year. He said "unless PGC has a license fee increase soon, because of our license year structure, the long term effect will be a leaner 2006-07 and an even leaner 2007-08, which will require additional spending cuts that will further impact our ability to deliver programs and services to the public."

At the direction of the General Assembly, the PGC has implemented a Strategic Plan and has begun to explore other financial avenues, Ross said. For example, the Commissioners recently received IRS approval for the creation of the Wildlife For Everyone Endowment Foundation. As designed, the Foundation will be able to raise, receive, acquire and distribute funds and other property for education and research for the conservation of wildlife; to increase and improve habitat; and to promote our hunting and trapping heritage in Pennsylvania. Also they have found a willingness to create a Pennsylvania version of the federal Pittman-Robertson program, or the establishment of an inflationary indexed fee increase that will automatically adjust on an annual basis to keep up with the cost of living.

Chairman Smith began the question and answering period by stating that he had so many questions that he was not sure where to begin but stated he would abide by the Committee's policy of one question per legislator during the first round of questions. Chairman Smith was disappointed that Ross did not elaborate on the reserve fund as compared to other years. He added that the PGC is looking for a proposed hunting license increase, but that increase won't help the PGC realize an immediate impact. Although the purpose of this hearing is the fiscal impact, Chairman Smith questioned the Commission's decision on requiring social security numbers for licenses and commented how that would probably reduce the number of licenses sold. Chairman Smith stated he is aware that the Federal government passed a law requiring all states who sell recreational license to require a Security Numbers as part of the Deadbeat Dad Law, but added that the Fish and Boat Commission did not implement the requirement, nor did some other states. It was his understanding the PGC was not going to implement this, but then was informed of the requirement without notice prior to its implementation. He has heard from many hunters who say they will refuse to provide their Social Security Number. Chairman Smith wanted to know if the PGC would change its mind on this and what prompted them to enforce the law now. Ross responded that on March 18, 2005, he received a letter from the program development unit stating that the PGC must provide Social Security Numbers and was told they are not exempt and must enforce the law.

Senator Wozniak asked who does the PGC's financial investing. Derr remarked that per Commonwealth law, the Department of Treasury places their funds in the appropriate places. Senator Wozniak commented there are a number of different fees and wanted to know what a private hunting operation would charge to harvest an animal. Ross replied that it depends on the type of animal, if harvested, the size of the rack, etc. but that it could cost on average $7,000. Senator Wozniak then inquired who makes the decisions on what is timbered and do they get as much value as possible. Ross remarked the PGC has regional biologists, land managers, foresters and timberers who make those determinations based on what is good for the habitat.

Rep. Staback remarked he has heard there have been a variety of lawsuits regarding bad behavior on the part of Wildlife Conservation Officers (WCOs) and wanted to know if there is a reoccurring problem with the same WCOs. Schmit replied the Commission has an attorney who deals with these lawsuits and inferred that the costs to the PGC were minimal because the cases are handled by the Attorney General's office. He noted he could only recall one instance where the same WCO was sued twice and the incidents were not related. He also offered there are normally only three or four lawsuits per year and those are mostly related to law enforcement. There is an Employee Liability Suit Fund which was set up to handle the payouts due to lawsuits, he noted. Schmit could only recall one instance where the PGC had to pay more than the $250,000 covered by this Fund.

Rep. Denlinger asked for clarification on what the reserve fund balance is and what is needed. Ross replied there is close to $21 million in the reserve fund balance due to cuts the Commission made. The PGC needs $14 million in the reserve fund just to cover payroll expenses until the Commission begins to realize income from licenses this fall. Derr added the projected reserve fund balance is just over $9 million as of June 30, 2005, but reiterated they need about $14 million to cover payroll between now and October. When asked for a more detailed accounting of the reserve fund, Derr cited that in 01-02 the balance was $25.311 million; 02-03 $21.160 million; 03-04 $18.802 million; and 04-05 $12.703 million.

Rep. Surra questioned what accounted for the $5 million loss in projected revenue from timber projections in years 03-04. The PGC Chief Forester responded that two of the years proceeding 03-04 were very wet years which had an effect on timber companies being able to harvest the timber. In some circumstances, the PGC simply would not allow the timber companies on state game lands because it would harm the habitat. He further added they contract with timber companies for three-years and during that time the timber company has the discretion of harvesting. The PGC doesn't tell them how much or when to cut the timber.

Rep. Forcier wanted to know when the PGC would be providing a priority list of projects under the Growing Greener II plan to the Committee. Ross commented the Commission is still working on that plan but expects to submit it to the chairman within a month. Ross reminded the members spending under the plan is restricted.

Rep. Costa inquired who is responsible for responding to road-kill. He noted he had an incident that took intervention from the Chair in order for a carcass to be removed from the road. Ross remarked they work with the Department of Transportation (PennDOT). Roe added they contract with private contractors in four counties who help pick up and dispose of dead deer. Schmit noted that the PGC does not have to be the ones to get the deer, but the reporting and collection of data does aide them in their planning. Schmit also stated that a carcass is not only a hazard and a nuisance, but it can be a health hazard as well. Schmit asserted the PGC would be willing to work with boroughs, townships and counties in order to remove the carcasses.

Rep. Wilt stressed his disappointment with the Commission's decision to limit service at Pymatuning while expanding the reserve fund. He argued the Commission makes it hard for him to sell a fee increase to his constituents while the Commission is decreasing the services the hunters and the public would receive. Ross reiterated the Commission has fixed costs such as payroll and gasoline increases. He added it is difficult to project the financial situation and therefore must make difficult decisions on where to reduce spending and/or defer spending. Chairman Smith agreed it will be a tough sale to say the hunting programs are reduced while asking for an increase in fees.

Rep. Miller commented the private farmers are no longer receiving the Game News as a small token of appreciation for allowing hunters to hunt on their private land. She argued this was a bad decision, as was gating certain access roads, which limits hunters' access to state game lands. Ross countered they are encouraging hunters to buy the Game News for the farmers. Schmit noted over 300,000 cooperatives were receiving Game News for free, which cost the Commission over $128,000 a year.

Rep. Good asked how the Growing Greener II funds would help the Commission pay for infrastructure needs. Ross reiterated the PGC has a backlog of projects that need to be done and the funds will have very little affect on the backlogs. Roe added that over $150,000 for engineering activity was cut this past year in order to save money.

Rep. Keller asked if Game News can be accessed via the website. Ross replied part of it is available. Rep. Keller noted that a hunting license costs $19 once a year, but with the other fees for additional stamps it could cost around $30-$35. He wanted to know if there is still enough value there. Roe countered the value is still there and it is a great buy, especially when you take inflation into consideration and compared to other states.

Rep. Sainato asked about efforts being done to attract young hunters. Ross noted the biggest loss in hunters is World War II veterans - over 1,500 per year. Ross added the Commission offers special programs and hunting days for youth, such as the Youth Gobbler Hunt. He argued that youth are busy with sports and work, thus the need for Sunday hunting.

Rep. Beyer asked what the complement of employees was in 1998 and what is projected now. Ross explained that in 1998 there were 669 employees and presently there are 669 employees. The complement is 732; however there has been a hiring freeze for the past three years with some positions never being filled. Roe added that in 1998 there were 234 employees in Harrisburg and now there were only 183. The Commission has been moving more employees to the field.

Rep. McGeehan heard there were cuts in youth education programs and expressed his concern because the kids in his area would not be exposed to wildlife. He wanted to know if the Commission has looked into wildlife observation as a means to increase revenue. Ross remarked that either a wildlife or habitat stamp is required to enter state parks in Montana and Wyoming and commented this is something that could be looked into further. With respect to education, Ross added, PGC staff is already stretched thin but they do their best to provide educational programs in light of the hard budget decisions.

Rep. Gergely questioned whether it is a good move to cut doe licenses by 160,000. He noted that in some areas doe licenses are already sold out and the decrease will cost over $1 million in lost license fees. Ross remarked the number of doe licenses is not based on the need of money rather it is determined by biologists and what is good for the deer population.

Rep. Geist thanked Joe Neville, Legislative Department in the PGC, and the Commission for their help with an issue he had.

Rep. Gillespie stated the Commission used to auction off guns, but that is no longer done and wanted to know why, as that was a source of revenue. Ross remarked the PGC sells outdated equipment and vehicles for revenue. Schmit added the legislature removed the Commission's authority to confiscate guns if allegedly used in a violation and now the PGC must return the guns and is not allowed to auction them off.

Rep. Rohrer commented that the projected revenue from oil and gas sales will decrease dramatically and wanted to know whether the Commission expects the price of oil or production to decrease. Ross asked their Chief Geologist to respond, who said there was an upfront payment of $2 million from an oil company for the lease of a parcel of land and explained this is not normal. The PGC has a lease structure set up based on a rental fee imposed until the oil and gas wells are drilled and production begins. Once the well is in production, the lease revenues decrease because revenue is received from royalties. He added that revenue is collected from rental fees, production and the location of the wells. He also noted the projections are based on future market prices and not just past figures.

Senator Conti requested the Commission inform the Committee and the Senate Appropriations Committee on how they intend to spend the Growing Greener II funds and the habitat improvement funds. Ross responded he will do so, and noted they spent $7.2 million on habitat improvement across the state, such as planting clover in openings in order to attract more wildlife.

Senator Wozniak wanted to know what a person should do if they hit a deer or other animal. Schmit stated a person should not swerve to miss an animal and stated an accident should be reported to the individual's insurance company. A person is under no legal obligation to report the incident; however, the PGC would prefer to be notified or at a minimum it be reported to the local police. A person is allowed to take the deer home to consume it, but they must report it to the Game Commission within 24 hours to receive a permit so the incident is recorded. And lastly, if the animal is hurt, it is recommended that a person do not kill it because of the possibility of harming another person. Chairman Smith commented his first reaction to asking a person to call the PGC is that the PGC eliminated the toll-free number due to budget reasons. Secondly, since the PGC is reducing its overtime for employees, how long would a person have to wait for a response? Schmit responded that due to budget reasons in the late 1990s the toll-free services were cut, then in 1998 when they received a fee increase they were able to restore the toll-free line, but now due to their financial crisis the toll-free line had to be eliminated once again. With respect to the overtime, Schmit noted the overtime budget has been reduced by $300,000, but still has over $900,000 in the budget. Overtime is not used to pickup dead deer; however, it would be used to help injured deer.

Rep. Staback stated archery sales seem to be declining and wanted to know if allowing bear to be hunted in archery season would help the sales. Ross offered the best time to hunt more mature and larger bucks is during archery season. The Commission is looking into adding bear, which it has authority to add.

Rep. Gillespie asked how much the PGC makes from the sale of road-kill. Schmit responded only a few thousand dollars a year. Derr added that the sale of non-reusable property brought in a little over $1,000 last year and the sale of skins and guns brought in over $32,000.

Rep. Surra explained how he was questioned by a hunter about certain regional directors receiving a huge increase in salary and wanted to know if that was true. Roe reported that the Governor's Office of Administration sets the salary increases based on contractual obligations. The salaries are also based on a step increase, meaning a person's job classification could change which would increase their salary. At one point it was acknowledged that the PGC requested the Administration review the regional directors' job descriptions and salaries due to their increased work load and responsibilities. Rep. Surra argued it was this request and the resulting reclassification that lead to the huge increase the hunter had questioned him about.

Rep. Denlinger wanted to know why they decided to implement the Social Security Numbers law now. Ross responded they asked the Attorney General's office for a ruling on this, but after not receiving a response the Commission decided to go ahead and implement it. Rep. Denlinger asked if there was a reason they didn't wait for an answer. Ross explained they have been working with the Department of Public Welfare on this and that was one of the reasons they decided to move forward with this and the fact that they have to comply with Federal law. Ross also added that online sales have increased and he believes one reason it has increased is because people are more comfortable with providing their Social Security Numbers in this fashion rather than having to give it to a clerk where it is written in a book where other customers can view it.

Rep. Good wanted to know when fines were last increased. Ross replied legislation was passed a few years ago which provided for a sliding scale. Schmit added the revenue from fines has decreased since then by about 25%. Chairman Smith commented it was his legislation that provided for the sliding scale because there were instances where a hunter would kill an anterless deer by mistake. The new law would allow the district justice to have some leeway in determining how much a person would be fined.

Rep. Gergely asked what plans the PGC has to help hunters. Ross offered that one-stop point of sales and computerized systems will not only save money for the PGC, but make it easier for hunters to purchase licenses.

Senator Conti commented on how he enjoys watching the deer in his backyard, but added that farmers see deer as the cause of crop damage.

Rep. Surra requested that he be given information on how many people received salary increases and step ups.

Chairman Smith ended the meeting by stating he was bothered by the fact that the Committee was blindsided by the financial crisis and the requirement of Social Security Numbers. He added that they cannot continue to blindside the Committee and expect the Committee to give them their license increase. He said they need to get the word out on their financial crisis not only to them, but to the public. He also noted how he didn't even have the chance to comment on the reduced number of pheasants released this year and how that will impact hunters.

Lastly, Chairman Smith pointed out that the state could save $5 million a year by combing the Fish and Boat Commission and the Game Commission. However, the sportsmen did not want the merger. He noted the Fish and Boat Commission already got their increase, and now the PGC wants one. It is the PGC's responsibility to keep the sportsmen informed, he concluded.

Report prepared by Teresa Irvin Copenhaver, PA Legislative Services


Testimony by PGC Executive Director, Vern Ross
HARRISBURG - Pennsylvania Game Commission officials today delivered a presentation to a joint meeting of the Senate and House Game and Fisheries committees regarding the agency's financial situation.

Today's joint meeting was the culmination of a series of updates regarding the agency's growing need for additional revenues, and followed meetings between agency senior managers and Reps. Bruce Smith (R-York) and Edward Staback (D-Lackawanna), who serve as Republican and Democratic chairmen of the House Game and Fisheries Committee, respectively. Sen. Joe Conti (R-Bucks), who chairs the Senate Game and Fisheries Committee, opened the meeting and joined other House and Senate members in asking questions.

"The last license fee increase approved by the General Assembly in 1998, which took effect on July 1, 1999, did not keep up with the rate of inflation and, given fixed costs and stable license sales, the agency's revenues will continue to fall behind the cost of doing business and result in future cuts in programs and services," said Vern Ross, Game Commission executive director.

According to Game Commission estimates, agency revenues from a general adult hunting license in 1985 was $12.75, and revenues from a general adult hunting license in 1999 was $19. However, by 1999, using the Consumer Price Index to determine the rate of inflation, the agency's revenues from a general adult hunting license should have been $19.68. For the 2005 license year, continuing to use CPI for inflation, a general adult hunting license should cost $23.19.

"As the members of this committee know, the majority of our revenues come from the sale of hunting and furtaker licenses," Ross said. "In 2004, all license fees accounted for just under $39 million of our total revenues. Additional funding is received from our share of the federal Pittman-Robertson program, which amounts to between $7 million and $9 million annually. Another major source of funding is from our timber management program."

In 2004-05, timber revenues amounted to $14.9 million.

Ross noted that while the overall license revenues have been stable, there have been increases in various license categories due to expanded hunting opportunities approved by the agency's Board of Game Commissioners. For example, youth hunting licenses sales have increased from 100,845 in 1998, to 109,644 in 2004.

"Much of this increase in youth license sales can be attributed to the expanded youth hunting opportunities we have been offering," Ross said. "Specifically, the Board created a youth spring gobbler season, initiated in 2004; a youth pheasant hunt, initiated in 2002 and expanded in 2005; a youth waterfowl hunt, initiated in 1996 and expanded in 2005; special antlerless deer harvesting opportunities, 1998 and expanded in 2001; a youth squirrel hunt, initiated in 1996 and expanded in 2004; and youth field days, established in the early 1990s."

Also, as part of the license fee increase approved in 1998, the General Assembly created a junior combination license that packages regular license privileges with archery, flintlock and furtaking opportunities for $9, compared to the regular junior license price of $6.

Ross added that the agency has realized increases in bear license and muzzleloader stamp sales, as hunting opportunities have increased for both categories. In 2000-01, we sold 104,279 bear licenses and 137,737 muzzleloader stamps. In 2004-05, we sold 132,181bear licenses and 200,193 muzzleloader stamps.

"Shortly after becoming executive director, I saw that the new revenues of the 1998 fee increase would need to be stretched so that we could delay the need to return to seek another fee increase," Ross said. "To begin addressing this, we started to implement internal cuts in the agency's budget. Our goal was to not impact public services and expectations. However, there was no way to prevent internal cuts from having some impact on the public.

"For example, cuts in overtime budgets eventually translates into fewer services, such as not having employees available for a public or school program, or results in longer response times, such as wildlife nuisance calls or responding to road-kills.

"Also, for the past four years, we have had a zero-growth Game Fund budget. During that time, inflation has taken more of a bite out of our revenues - such as gasoline increases, and the cost of vehicles - and we have been cutting other costs to keep a zero-growth Game Fund budget while trying to maintain services to the public."

In addition to the increased costs of doing business, Ross pointed out that the agency also has other mandated costs beyond senior managers' control, such as contract salary increases, which will mean another $4 million plus over the next two years in addition to the $1 million increase last year.

"This means that, unless we have a license fee increase soon, because of our license year structure, the long term effect will be a leaner 2006-07 and an even leaner 2007-08, which will require additional spending cuts that will further impact our ability to deliver programs and services to the public," Ross said.

Ross also noted that, at the direction of the General Assembly, the agency put in place a meaningful Strategic Plan that lays out the core programs and services that should and must be provided to the public by the agency. However, due to its financial situation, the agency is unable to fund many of its programs to meet goals.

"Also at the direction of the General Assembly, we have begun to explore other financial avenues," Ross said. "For example, the Board of Game Commissioners recently received IRS approval for the creation of the Wildlife For Everyone Endowment Foundation. As designed, the Foundation will be able to raise, receive, acquire and distribute funds and other property for education and research for the conservation of wildlife; to increase and improve habitat; and to promote our hunting and trapping heritage in Pennsylvania."

Ross noted that the Foundation will be separate and independent from the Game Commission with a separate Board of Directors.

"Also, in discussions with some members, we have found a willingness to create a
Pennsylvania-version of the federal Pittman-Robertson program, or the establishment of an inflationary indexed fee increase that will automatically adjust on an annual basis to keep up with the cost of living," Ross said. "In review, I believe that you will find that the Game Commission has been an excellent steward of hunters and trappers dollars and of Pennsylvania's wildlife and habitat. We already do a lot for all citizens with hunters' dollars, but would like to be able to expand our programs. With increased resources, we can bring programs up to previous levels and do more to manage wildlife and serve all Pennsylvanians."

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PGC Timber Revenues

Year Projected Revenue Actual Revenu

00/01 16,000,000 14,502,653

01/02 11,000,000 12,307,643

02/03 12,000,000 12,039,166

03/04 12,000,000 7,383,012

04/05 10,600,000 14,901,798



Totals: $61,6000,000 $61,134,272

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