Weekly Wrap

Since Governor Wolf presented his budget proposal on February 6, members of the House and Senate Appropriations Committee have combed through the details in preparation for this week. Budget hearings began on Tuesday, where members were able to question agency heads about their 2018-19 fiscal year budget and other issues relating to their department.

The Independent Fiscal Office (IFO) kicked off budget hearings in the House on Tuesday. Matthew Knittel, director of the IFO, discussed recent economic and revenue trends as well as the impact of the federal 2017 Tax Act. Through the month of January, the IFO estimates that revenues are up roughly $190 million over estimate. Moving to the federal tax law changes, Knittel laid out three ways in which the Act will impact revenues in the Commonwealth: (1) the tax cut will increase disposable income by $6 to $8 billion next fiscal year; (2) a cut of the corporate tax rate cut and broadening of the corporate income tax base; and (3) spending from gains in disposable income will expand the state economy and therefore enhance revenues. Similar remarks were made later in the day when the IFO had their Senate budget hearing.

The House Appropriations Committee also held a budget hearing on Tuesday with the Department of Revenue and the Pennsylvania Lottery. A lot of the discussion revolved around taxes, ranging from specific issues such as corporate taxes, the personal income tax, severance tax and tax collection. The new i-Lottery program and the expansion of the current lottery system was another topic raised throughout the hearing.

Moving to the Senate, on Tuesday the upper chamber began their morning hearing from Treasurer Joe Torsella. Although asking for a $4.3 million increase in their budget request, the Treasury Department viewed it as flat funding due to increases in costs. The Treasurer provided an update on the PA 529 College Savings Program and the Achieving a Better Life Experience (ABLC Program). The programs are being used by 220,000 and 1,110 families, respectively, and urged greater usage of these programs.

The Senate wrapped up the day with two education-related hearings. The first was with approved private schools and charter schools for the deaf and blind. Chairman Pat Browne (R-Lehigh) noted that Governor’s proposed budget for Approved Private Schools is $111 million and $52.3 million for Charter Schools for the Deaf and Blind. The second was with the Pennsylvania Intermediate Units (IU). The Executive Director of the Pennsylvania Association of Intermediate Units, Tom Gluck, told members that IUs plan to work closely with the Department of Education to design training to meet the requirements of the new Every Student Succeeds Act (ESSA) plan.

On Tuesday, in addition to budget hearings, the House Finance Subcommittee on Tax Modernization and Reform held a public hearing to analyze the personal income tax for businesses and taxpayers in the state. The National Federation of Independent Business (NFIB) stated that Pennsylvania, despite being the sixth largest economy in the nation, ranks 48th in creating new jobs, with tax policy being one of the main reasons for the lack of investment.

On Wednesday, the House Appropriations Committee held a public hearing in the morning on job creation. The Department of Labor & Industry, Department of Community & Economic Development (DCED) and the Pennsylvania Higher Education Assistance Agency (PHEAA) were all in attendance. The Committee focused on discussing minimum wage, apprenticeship programs and bridging the gap between schools and the workforce. Along the same lines, in the afternoon, the House held a hearing titled “ensuring stability of the Pennsylvania State System of Higher Education (PASSHE) with a focus on workforce development in the Commonwealth.” While the Governor proposed an additional $18 million for PASSHE, acting Chancellor Dr. Karen Whitney stated that there is over $40 million in required additional labor contracts next year, leaving a $22 million deficit that needs to somehow be filled.

In the upper chamber, the Senate started off hearing from Robert Torres, acting Secretary of the Department of State. Members peppered Torres with election-related issues such as voting system technology, the status of the new congressional map, and voter registration. Next, was the Auditor General. Auditor General DePasquale expanded on audit results of last year and what he sees coming up in the next fiscal year within his office. Children protection and the backlog of rape kits are two areas that will continue to receive attention. Also, DePasquale described his office’s new expanded authority to audit municipal authorities. Finishing up the day was Attorney General Josh Shapiro. The Committee heard how the heroin and opioid epidemic has been and will continue to be a pressing issue for the Attorney General. Furthermore, Shapiro described his office’s handling of data breaches, human trafficking and gun violence.

On the last day of budget hearings for the week, Department of Transportation Secretary Leslie Richards answered questions before the House Appropriations Committee. Secretary Richards laid out PennDOT’s future plans as it relates to REAL ID and autonomous vehicles. She also discussed mass transit issues and highway and driver safety. Cindy Dunn, Secretary of the Department of Conservation and Natural Resources (DCNR) was the last House budget hearing of the week. Secretary Dunn, who oversees the Commonwealth’s 121 state parks, was asked questions ranging from funding, personnel and oil and gas leases.

The Senate spent most of Thursday holding a budget hearing with PASSHE. Dr. Whitney voiced her support of the state system and its continued viability, even as members questioned the future of PASSHE. She noted that the four-year graduation rate at a PASSHE school is 41 percent, while the number nationally is only 28 percent. Up next was Pennsylvania State Police Commissioner Col. Tyree Blocker, who was questioned about the Governor’s proposed $25 per capita fee on PSP coverage to municipalities. Governor Wolf proposed this idea in last year’s budget as well. Senators also raised the topics of criminal history background checks, a pilot program for body cameras, and trooper hiring and retirement. Lastly, the Pennsylvania Emergency Management Agency (PEMA) and the Fire Commissioner took center stage. The opioid crisis was raised as well as the status of fire and EMS volunteers throughout the state.

A Look Ahead

Budget hearings continue next week. For a full list of hearings, see below:

In addition to budget hearings, the House Professional Licensure Committee will hold a public hearing on Monday on H.B. 1344 (Readshaw, D-Allegheny), which would establish a State Board of Medical Physicists. On Tuesday, the same Committee is scheduled to hold a public hearing on H.B. 1545 (Cutler, R-Lancaster), which would provide for regulations and licensure of medical imaging professionals.

In Other News

  • After the Pennsylvania Supreme Court released their version of the congressional map on Monday, Republicans filed a complaint in federal court arguing its legality.
  • With the original winning bid invalidated, a new winner was selected for the latest Category 4 casino.
  • ‘Jeopardy!’ host Alex Trebek will moderate a gubernatorial debate in October