CCAP Trademarked Logo

 

        Number 4
 Febru
ary 19, 2016

LEGISLATIVE BULLETIN
An e-newsletter of the County Commissioners
Association of Pennsylvania

 

Serving Counties Since 1886
In This Issue
Join Our Mailing List
:: 717-526-1010
GOV. WOLF RELEASES FY 2016-2017 BUDGET 
 
On Tuesday, Feb. 9, Governor Wolf delivered his second budget address, announcing his $32.7 billion fiscal proposal for FY 2016-2017 before a joint session of the House and Senate.
 
The Governor's proposal also includes supplemental funding for FY 2015-2016 to bring the total current year budget, which currently stands at $23.4 billion following the Governor's partial veto of HB 1460, to $30.5 billion. This number reflects the "framework" budget that had been under consideration between the General Assembly and Gov. Wolf at one point during December's negotiations. The FY 2016-2017 proposal would be an almost eight percent increase compared to the FY 2015-2016 budget with proposed supplemental appropriations. The Governor indicated the numbers are driven by about $1.6 billion in mandated spending increases related to debt obligations, corrections, human services and pension payments, and the need to address the structural deficit estimated by the Governor at about $2 billion across the current and coming fiscal years.
 
The proposal includes $2.7 billion in new and increased taxes for FY 2016-2017, including an increase in the personal income tax (3.07 to 3.4 percent), an expanded base for the sales and use tax, and new and increased taxes on tobacco. The Governor also proposed a 6.5 percent natural gas severance tax, which would keep the current impact fee under Act 13 of 2012 in place and allow natural gas companies to use the amount paid in impact fees as a credit against the severance tax. One of CCAP's top priorities for 2016 remains maintenance of the shale gas impact fee, complete and as it is now, with the ability to grow with the industry and with the same distributions to impacted local governments, to all counties through the Legacy Fund, and to conservation districts and state agencies. All of the new tax revenues would be earmarked to address the state's structural deficit and mandated spending increases, and to provide an additional $500 million in funding to school districts and another $120 million in other spending increases.
 
For counties, highlights of the overall FY 2016-2017 proposal include a three-year restoration of the ten percent aggregate cut to seven line items in FY 2012-2013, which, while part of the Human Services Block Grant, impact core services across all 67 counties. The Governor included a $28 million (3.3 percent) supplemental appropriation for FY 2015-2016 that is intended to be the first year of the restoration, and an additional funding increase for FY 2016-2017 budget for what would be the second year if the supplemental FY 2015-2016 appropriation were enacted. This plan is consistent with counties' priority on human services funding. The priority also calls for expansion of the block grant beyond the current 30 counties; Gov. Wolf did not propose an expansion.

CCAP has assembled a number of budget resources on its Budget News and Updates web page, including a spreadsheet and more detailed analysis of the Governor's proposed funding levels for county line items.  
BUDGET HEARINGS TO BEGIN
 
The House and Senate Appropriations Committees will commence a three-week long series of budget hearings on Feb. 22, allowing state agencies to provide detail on Gov. Wolf's FY 2016-2017 commonwealth budget proposal. The Senate Appropriations Committee will start its hearings with the state Budget Office, the Independent Fiscal Office (IFO), and the Department of Health, while the House Appropriations committee begins with the IFO, Department of Revenue, and the Office of Open Records.
 
The House is scheduled to hold hearings Monday through Thursday until March 10, and the Senate panel will also be meeting Monday through Thursday but is scheduled for completion on March 8. A full schedule of appropriations hearings can be found on CCAP's Budget News and Updates web page and the hearings can be streamed live at www.pcntv.com.
SUPPLEMENTAL FY 2015-2016 BILLS PASS HOUSE
 
Even though the budget process for FY 2016-2017 has begun, many questions remain regarding the enacted FY 2015-2016 budget. In addition to reducing funding for public schools when he signed HB 1460 in late December, Gov. Wolf also exercised his line item veto to reduce funding for state prisons to about six months of funds, and cut several programs within the Department of Agriculture and other agencies.
 
The day after the Governor's budget address, the House of Representatives approved three bills that would provide funds for the remainder of the fiscal year for several of these programs. House Bill 1801, approved 116-65, would restore the $939 million for the state's correctional institutions that was line item vetoed, to bring current year funding to $1.9 billion, while HB 1803, approved 117-61, would restore $3.8 million in vetoed funding for hospital-based burn centers. House Bill 1802 would provide $1 million for Child Advocacy Centers, vetoed in HB 1460, to supplement the funding provided by the $10 increased fee on certified copies of birth records, which has generated almost $1.6 million for fiscal year to date; that bill passed on a 127-53 vote. All three bills now go to the Senate for consideration.
 
The House Agriculture Committee also considered HB 1589, which would transfer about $25.7 million from the Race Horse Development Fund, including $4 million for county fairs that had been line item vetoed in HB 1460. The bill was reported 16-9 on a party line vote, with Republican members voting in favor, and it is now before the full House.
HOUSE HOLDS INFORMATIONAL MEETING ON SEVERANCE TAX PROPOSALS
 
The House Environmental Resources and Energy Committee recently held an informational meeting to review and discuss two severance tax proposals with the bill's sponsors. Rep. Kate Harper (R-Montgomery) explained that her HB 82 would implement a 3.5 percent severance tax on top of the existing impact fee under Act 13 of 2012. The revenues from the severance tax levy would be directed to the Public School Employees Retirement Fund. In contrast, HB 1536, introduced by Rep. Scott Petri (R-Bucks) would levy a five percent severance tax, eliminating the current impact fee. However, Rep. Petri's proposal would transfer $120 million each year for distribution to local governments and $80 million to the Marcellus Legacy Fund, with both funds using the same formula as under Act 13, including distributions to all counties for environmental purposes and at-risk bridges. Other transfers would mirror the current distributions to state agencies and the $7.5 million to county conservation districts.
 
The bills are just two of many that have been introduced this session. Gov. Wolf has also offered a severance tax plan as part of his FY 2016-2017 budget proposal. Counties seek to maintain the impact fee structure under Act 13 of 2012, with the current distributions and ability to grow with the industry, as a 2016 priority.
IFO RELEASES 2015 IMPACT FEE ESTIMATE
 
Impact fees for 2015, now being collected, are projected to be $185.5 million, $38 million (17 percent) less than the $223.5 million collected last year, according to a recent report by the state's Independent Fiscal Office. Factors contributing to the decline include a switch to a lower fee schedule due to the drop in natural gas prices, as announced by the Public Utility Commission (PUC), and a significant drop in the number of new wells spud in 2015. It should be noted these are projections only; 2015 impact fees are not due to the PUC until April 1, and the PUC will not release actual totals until at least June 15, with distribution by July 1. The full report can be found at www.ifo.state.pa.us.
RESOLUTION SEEKS TO REVIEW ACCESS TO ADDICTION TREATMENT
 
At its Feb. 10 meeting, the House Human Services Committee unanimously reported HR 590, authored by Rep. Stephen Kinsey (D-Philadelphia). The resolution recognizes the epidemic of drug-related addiction and its impacts, as well as limited treatment resources including reduced funding for single county authorities. To assist the General Assembly in identifying available and needed resources, the Department of Drug and Alcohol Programs (DDAP) would be required to establish a task force that would identify methods and procedures to assist consumers in accessing treatment for drug-related addictions, including compliance with current laws. The resolution now goes to the full House.
FINAL PIPELINE TASK FORCE REPORT PRESENTED
 
Department of Environmental Protection Secretary John Quigley has unveiled the final report of the Governor's Pipeline Infrastructure Task Force, providing 148 recommendations from 12 work groups. The Governor created the Task Force to identify best practices for pipeline siting, permitting and safety.
 
Chester County Commissioner Kathi Cozzone served on the Task Force and chaired the County Work Group, on which Washington County Commissioner Harlan Shober and Sullivan County Commissioner Donna Iannone also participated. That work group submitted 12 recommendations to the Task Force, touching on issues from pipeline siting and mapping to public education to improving communication among all stakeholders. Several of the counties' recommendations were among the top dozen determined by vote of the Task Force, including identifying barriers to sharing rights-of-way, establishing early coordination with landowners, and educating landowners on pipeline development issues. Other top recommendations established by the Task Force include enhanced training for emergency responder agencies, minimizing impacts of stream crossings, and protecting exceptional value and high quality waters. In addition, the Task Force members prioritized adequate agency staffing for reviewing pipeline projects and implementation of an electronic permitting system for Chapters 102 and 105, as well as expansion of the PA One Call system to include all classes of pipelines, a measure that CCAP called for as part of pipeline safety priorities in prior years.
 
Secretary Quigley noted that those recommendations falling within the purview of state agencies will be further assessed and evaluated for possible implementation. The report is available at www.dep.pa.gov, by clicking on Pipeline Infrastructure Task Force under Top Pages.

About Us          Terms of Service          Privacy Policy

  

Contact Us: Douglas E. Hill Executive Director, CCAP