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BUDGET HEARINGS BEGIN
The House and Senate Appropriations Committees commenced a three-week series of budget hearings on Feb. 21, giving an opportunity for state agencies to provide detail on the Governor's proposed FY 2017-2018 commonwealth budget. Both the House and Senate began their hearings with an overview from Matthew Knittel, director of the state's Independent Fiscal Office, who confirmed there is broad consensus that the FY 2017-2018 shortfall is between $2.5 and $3 billion and noted that the IFO believes addressing this deficit will require permanent changes on the expenditure or revenue side. The IFO is also projecting a 1.8 percent growth rate in General Fund revenues, somewhat slower than surrounding states, with significant weakness in revenue streams such as the corporate net income tax, personal income tax and sales and use tax. Further, the Office is examining the Governor's $1.1 billion in revenue proposals, planning to release its report at the end of March.
Several items of importance to counties have been discussed during the hearings to date, including a county priority to prevent substance abuse and drug overdose, specifically the opioid crisis. The impacts of the crisis were noted by several agencies, including the State Police and Attorney General (and former Montgomery County commissioner) Josh Shapiro. Corrections Secretary John Wetzel further noted that the Department's Vivitrol treatment program, which has benefits for dealing with opioid addiction, was recently expanded to give $11.5 million in grants to 11 counties to replicate the program. Secretary Wetzel also praised a program in Union County that provides support for individuals exiting a correctional facility, saying that it is one of the most successful in the country.
The House Appropriations Committee held its hearings with Aging Secretary Teresa Osborne, Health (DOH) Secretary Dr. Karen Murphy and Drug and Alcohol Programs (DDAP) Acting Secretary Jennifer Smith, who also discussed the impacts of the opioid epidemic in their respective areas. Their hearings focused primarily, though, on the proposed restructuring of the existing departments of Aging, Health, Human Services and Drug and Alcohol Programs into a single Health and Human Services agency, projected to save more than $90 million. Counties will be evaluating the impacts of the proposal and other related cost-savings measures, since many county human services programs fall under the jurisdiction of these departments.
Also of note, the Judiciary's Administrative Office of Pennsylvania Courts told the Senate Appropriations Committee that it was requesting increases above the governor's proposal, most of which is to do with pension costs and health care obligations, but also includes a request for full funding of county court reimbursement grants, which help counties
defray their costs of supporting courts, within the joint state/county system of funding courts in Pennsylvania.
Finally, during the House hearing with PennDOT, Secretary (and former Montgomery County commissioner) Leslie Richards praised the efforts of Northampton County for its county-focused bridge bundling program.
The House Appropriations Committee will hold its hearing with the Department of Human Services (DHS) on March 7, while the Senate Appropriations Committee will hold a joint hearing with DHS, Aging, DOH and DDAP on March 8.
Additional information and analysis of the Governor's budget proposal is available on CCAP's Budget News and Updates web page, including a spreadsheet of the proposed funding levels for county line items.
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DOS SECRETARY DISCUSSES ELECTIONS
Among the budget hearings held in the last several weeks, both the House and Senate Appropriations Committees met with the Department of State (DOS), where much of the discussion with Secretary of the Commonwealth Pedro Cortés centered around election security and integrity. Counties are responsible for voter registration and the conduct of elections, including the certification of election results and voter registration totals to DOS. Counties also bear the entire cost of primary and general elections, with the exception of special elections.
Cortés reassured committee members that the commonwealth and its counties administer accurate and fair elections, including maintenance of systems and assurance of a secure voting process. Sec. Cortés also provided an update on the state's Online Voter Registration system, which allows citizens to register and update their election registrations, as well as the Statewide Uniform Registry of Electors (SURE) system and the Electronic Registration Information Center (ERIC) system. Both committees further addressed looming costs to upgrade voting machines in the counties, currently the focus of a task force created under SR 394 of 2016, as well as legislative proposals surrounding early voting, no-excuse absentee ballot initiatives, and the costs associated with special elections.
Sec. Cortés also appeared before the House State Government Committee for an informational hearing to offer an overview of the agency's functions, including those related to elections and voter registration. Noting the concerns with election integrity last November, he pointed to the county role in exercising due diligence to verify voter registrations. In addition, the Secretary again highlighted the need to update voting systems technology in Pennsylvania, which could cost in excess of $100 million.
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| EPA, ARMY CORPS ORDERED TO REVISIT WOTUS RULE
Surrounded by farmers, housing developers and county leaders from across the country, including Berks County commissioner Christian Leinbach and Chester County commissioner Terence Farrell, President Trump signed an executive order on Feb. 28 requiring the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) to review and reconsider the Waters of the U.S. (WOTUS) rule that was finalized in 2015. During his campaign, the President cited the WOTUS rule as one of the regulations included in his first 100 days' top priority of repealing a number of regulations put in place during the prior administration.
The term "Waters of the U.S." is a key phrase used in the federal Clean Water Act (CWA) to determine what waters fall under federal CWA oversight as opposed to state oversight. Both the National Association of Counties (NACo) and CCAP submitted comments on the proposed rule in 2014, highlighting the vagueness of the definition and calling for the agencies to withdraw and revise the rule in order to address state and local concerns. CCAP argued that Pennsylvania already has a strong regulatory framework in place to protect all waters of the commonwealth, so an expansion of federal jurisdiction would only add a layer of permitting and paperwork without any benefit to the state's water quality.
Since issuance of the final WOTUS rule in 2015, it has been challenged in courts by several groups, with a nationwide stay put into effect in 2016 until those appeals could be addressed. The executive order now requires EPA and the Corps to seek a balance between keeping the nation's navigable waters free from pollution while at the same time promoting economic growth, minimizing regulatory uncertainty and showing due regard for the roles of Congress and the states. The agencies are to rely on a 2006 U.S. Supreme Court opinion for guidance to determine which waterways fall under the federal Clean Water Act. The order could lead to a rewrite of the regulation or a complete repeal, either of which is likely to take months or even years.
Media reports indicate that the President is expected to sign another executive order in the coming week that would start the process of repealing the EPA's Clean Power Plan, which sets limits on carbon dioxide emissions from power plants.
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SENATE COMMITTEE APPROVES TABOR
On Feb. 8, just prior to Governor Wolf's budget address, the Senate Finance Committee reported two bills designed to provide for caps on state spending. One bill, SB 173, introduced by Sen. Camera Bartolotta (R-Washington), would provide for an amendment to the state Constitution to assure that total state spending in a given year does not exceed the prior year's spending as adjusted by the lower of the change in personal income or inflation. The other, SB 7, offered by Sen. Mike Folmer (R-Lebanon), would statutorily implement the same spending limits. With either proposal, in the event of a declared emergency the General Assembly could exceed the limits by a 2/3 vote of both chambers, or on other occasions if requested by the Governor at least 30 days in advance and approved by a 2/3 vote of both chambers. Both bills were reported with Republican members voting in the affirmative and Democratic members voting in the negative, and are now before the full Senate for further consideration.
While controlling spending and reducing taxes are laudable goals, the realities of our society and economy argue that artificial budget caps are not responsible long-term public policy, tying the hands of policy makers in their ability to be responsive to ever-changing conditions. In addition, caps and limitations cannot be done in a vacuum without consideration for the ripple effect they would have on local governments. In fact, the General Assembly already has tools at its disposal to balance the budget, to craft a fair tax policy and to impose caps on state spending increases, through decisions it makes during the budget process, all without placing artificial caps like those imposed by SB 173 and SB 7. An open and deliberative budget process, without artificial restrictions, is the best way to respond to changing needs and demands arising from our citizens, from the economy, and from state, federal and court mandates.
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VOTING MATTERS
CCAP members will elect the two CCAP representatives to the NACo Board of Directors at the business meeting to be held during Tuesday's closing session of the CCAP Spring Conference. The Conference takes place March 26-28 at the Hilton Harrisburg, and features meetings of standing policy committees and numerous educational sessions. General session speakers include Budget Secretary Randy Albright, Secretary of the Commonwealth Pedro Cortés, state Supreme Court Justice Max Baer, and Congressman Tim Murphy.
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