Discussions on the FY 2016-2017 budget continue among the General Assembly and the administration, with the July 1 start of the fiscal year now less than a week away.

 

As negotiations progress, Gov. Wolf indicated early in the week of June 20 his belief that the state budget can be balanced without an increase in the state's personal income tax or sales tax, which had been part of his budget proposal in February. He has also reduced his request for additional funding for public schools from $350 million to $250 million. At the same time, the Governor renewed his call to address the state's deficit with sustainable revenues rather than one-time sources and delayed payments.

 

In addition to the appropriations bill that will outline how funds are allocated to various state programs, several issues that have been longstanding elements of the overall negotiations have seen movement. In early June, the Governor signed into law Act 39 of 2016, allowing expanded sales of wine and beer across the commonwealth. According to fiscal notes attached to the legislation, the expansion could generate $150 million in new revenue for the state. The following week, the state House of Representatives approved an amendment to SB 1071 to reform the state and public school employee pension systems by putting new hires into a hybrid defined benefit/defined contribution plan, with the intent of reducing the state's payments over the long term. The Senate voted to non-concur on the House amendments, though, sending the bill to conference committee. It is uncertain whether further work on SB 1071 will occur concurrent with the budget process.

 

On June 22 the House approved an amendment to HB 2150 to expand gambling by legalizing internet gaming and allowing slots in airports and in off-track-betting parlors, together anticipated to generate $150 to $200 million in new revenues. A broader amendment which would have also authorized video-gaming terminals in establishments with liquor licenses failed during the bill's floor consideration. In addition, the House approved legislation to establish a tax amnesty program, allowing the state's delinquent taxpayers to file tax returns in exchange for reduced penalties and interest on past-due taxes. When a similar program was last offered in 2010, the state collected approximately $250 million, and some estimates indicates the new bill could collect as much as $150 million.

 

While media reports had speculated that the House of Representatives could put an appropriations bill forward the week of June 20, as of the publication of the Bulletin no legislative proposal had been released. Both the House and Senate have canceled planned session days for June 24-26, anticipating a return to Harrisburg on Monday, June 27,

although the House Appropriations Committee is scheduled to meet late Sunday evening. When details become available, CCAP will be providing information and analysis on its Budget News and Updates web page. 

The Independent Fiscal Office (IFO) released the updated official revenues estimates for FY 2015-2016 and FY 2016-2017, which follows the initial revenue estimate published in May and precedes the June 30 budget deadline for FY 2016-2017. The estimates, required by statute, are a guidepost for adoption of the commonwealth budget.

 

According to the report, the unrestricted General Fund revenues for FY 2015-2016 are estimated at roughly $31.0 billion, a $406 million increase, or 1.3 percent, over FY 2014-2015. The unrestricted General Fund revenue estimates for FY 2016-2017 total $31.7 billion, a $662 million increase, or 2.1 percent, over the current fiscal year. Part of the increase in the next fiscal year includes the recent changes to the Liquor Code to expand sales of wine and beer, approved by the Governor in early June. The projected increase in General Fund revenues, excluding the Liquor Code projected revenues, reflects a decrease of $31 million from the initial revenue projections issued in May 2016 due to weaker wage and salary withholding payments.

Legislation to change the state's policy of terminating Medicaid benefits during incarceration to one of suspension was highlighted at a June 23 press conference at the Cumberland County Prison.

 

The change, contained in Senate Bill 1279 , introduced by Senator Pat Vance (R-Cumberland), chair of the Senate Public Health and Welfare Committee, will allow Medicaid benefits to be restored at the time an inmate is released, ensuring continuity of treatment, access to medications and therapy services, and improved chances against recidivating. Under the current system, individuals receiving medical assistance lose benefits immediately upon incarceration, and benefit restoration following release can take weeks, causing damaging interruptions in care. The bill is part of CCAP's comprehensive behavioral health reform priority .

 

Department of Human Services (DHS) Secretary Ted Dallas and Department of Corrections Deputy Secretary Chris Oppman joined Sen. Vance at the press conference in support of SB 1279. In addition to the bill's change in suspend versus terminate, DHS is ensuring individuals who were not enrolled in Medicaid prior to incarceration have immediate access to benefits, if eligible. DHS will shorten applications, provide access to electronic enrollment options in county jails and state correctional institutions, and will expedite applications for individuals released from the corrections system, currently occurring within five days.

On June 15, the state's Public Utility Commission posted detailed information about the 2016 distribution of impact fees under Act 13 of 2012. The total distribution is $187.7 million, down from the 2015 distribution of $223.5 million.

Spreadsheets outlining the distributions to counties with spud wells, as well as Legacy Fund distributions to all counties for open space purposes, are available at www.act13-reporting.puc.pa.gov and are also posted on CCAP's Shale Gas/Act 13 Analysis and Resources web page. Distributions are expected to be made to local governments on or around July 1; impact fee funds for at-risk bridge purposes are typically distributed separately around August.

The House State Government Committee recently reported SB 1154 , which represents a first step in reforming the civil service system and will provide much needed options for counties as they work to fill key staffing positions in county government.

 

For years, counties have shared their frustrations with the antiquated rules and procedures for civil service hiring. Senate Bill 1154, sponsored by Sen. Randy Vulakovich (R-Allegheny), would make three changes to that system that will benefit the counties as well as the state. First, the legislation would permit applicants to be notified by email (currently, applicants must be notified by U.S. mail). Second, it would allow a county to expand on the "rule of three," permitting a county to consider a wider group of candidates and resulting in better choices. Finally, SB 1154 would allow for vacancy based hiring, meaning that specific open jobs would be advertised instead of a general listing of job titles.

 

The bill was unanimously reported by the committee and as of publication of the Bulletin was before the full House, positioned for a floor vote as early as June 27 .

The Senate Urban Affairs Committee recently reported SB 1282, legislation introduced by Sen. Scott Wagner (R-York) which would prohibit the collection of recording fees for individual parcels when a condominium declaration is amended.

When a condominium association files an amendment to its declaration with the recorder's office, typical practice is for each parcel to be indexed to reflect the change in the parcel history, in addition to the filing of the amendment. Individual indexing enables the owner to find all filings related to the property within that property's records, without having to separately research the filings related to the community. However, Senate Bill 1282 bill would impact county recorder of deeds' offices by prohibiting the collection of the fees associated with indexing the information to each individual parcel, resulting in a disincentive to counties to index the information.

 

The bill was reported from committee with one negative vote (Sen. John Blake, D-Lackawanna), and is now before the full Senate for consideration.

On June 23, the House of Representatives held a press conference announcing that the recommendations from the House Resolution 659 Task Force and Advisory Committee on Opioid Prescription Drug Proliferation have been completed. The report acknowledges approval by the House of several pieces of legislation, including HB 1737 , providing for the proper disposal of unused prescriptions; HB 1698 , providing insurance coverage of abuse-deterrent opioids; HB 1699 , setting a seven-day limit on the prescription of opioids in emergency departments; and HB 1805 , requiring prescribers and dispensers to undergo continuing education in pain management, addiction and prescribing practices In addition, HR 590 , directing the Department of Drug and Alcohol Programs to establish a task force on access to addiction treatment through health plans, was approved by the House in May.

 

The House has also established the PA Heroin, Opioid Prevention and Education (PA-HOPE) Caucus, which shares the focus of addressing the opioid crisis. The PA-HOPE Caucus is expected to issue its findings and recommendations in the near future.