The House and Senate Appropriations Committees wrapped up a three-week series of budget hearings on March 9, gathering detail from state agencies on the Governor's proposed FY 2017-2018 commonwealth budget.

 

The Department of Human Services (DHS) appeared before both committees in the final week of hearings; the Senate also heard from the Departments of Health, Aging and Drug and Alcohol Programs in conjunction with DHS, given the Governor's proposal to consolidate the four agencies. In his written testimony, DHS Secretary Ted Dallas indicated that the consolidation is intended to allow coordination and enhanced program effectiveness for the people served, provide one point of access for individuals that need health and human services, and improve customer service by eliminating confusion as to where each program is housed. In addition, the proposal is expected to reduce duplication and administrative overhead, yielding savings of more than $90 million. Throughout the hearings, Sec. Dallas noted the important role that counties play in the delivery of human services, and that DHS is partnering with CCAP during the process. Several legislators asked questions regarding the leadership of the consolidated department, to which the agencies responded that no decisions have yet been made. However, planning meetings are underway and the four secretaries are confident they can have a structure and framework in place by July 1, with the full consolidation to be an ongoing process.

 

Another key focus during these budget hearings was addressing the commonwealth's opioid crisis, which is a top county priority for 2017. In particular, legislators highlighted the impact on children and youth who are caught in the cycle with addicted parents; the House Children and Youth Committee is scheduled to take up HB 235 on March 22 to establish a task force on the issue.

 

Other committee discussions touched on the Community HealthChoices program, which provides managed care for long-term supports and services, examining delays in enrollments in the aging waiver experienced under the independent enrollment broker Maximus. Further, Sec. Dallas shared that the Governor's budget includes $26.5 million to serve more individuals with intellectual disabilities and autism, and establishes a new Community Support Waiver for individuals with ID and autism who are living with family members. Committee members and agency heads also noted the difficulty of planning for funding given the uncertainties with changes to the Affordable Care Act at the federal level (see story below for more detail on this issue).

 

House Appropriations Chair Stan Saylor (R-York) had previously introduced HB 218 as a vehicle for the FY 2017-2018 appropriations bill while negotiations among legislative leaders and the Governor continue. As introduced, the bill contains line items largely representing FY 2015-2016 allocations, acknowledging that with FY 2016-2017 revenues not meeting projections, use of the FY 2016-2017 allocations would not represent a balanced budget. House Bill 218 was advanced by the House Appropriations Committee on March 13 as a procedural move, and the full House is expected to take the bill up the week of March 20 to mark another step in the process. Rep. Joe Markosek, Democratic chair of the House Appropriations Committee, has also introduced HB 365, an appropriations bill that reflects the Governor's proposal.

 

Relatedly, the Senate Health and Human Services Committee is planning a series of hearings on the proposed consolidation of the state's health and human services agencies. The first is planned to be held at the Capitol on March 29, with additional hearings to be scheduled in the eastern and western parts of the state.

 

Regularly updated information on the Governor's budget proposal, including a spreadsheet and narrative analysis of the proposed funding levels for county line items, legislative analyses, media reports, and related materials can be found on CCAP's Budget News and Updates web page.

On March 22, the House Human Services Committee is scheduled to consider legislation sponsored by committee chair Rep. Gene DiGirolamo (R-Bucks) that will provide for continued human services funding in the event of a state budget delay. The bill, HB 398 , specifically defines "essential services" to include the line items in the Human Services Block Grant, as well as county child welfare funding and any other funds for which the county provides services on behalf of the commonwealth, and requires funding for essential services to continue at current levels if a state budget is not enacted by July 1 in any given year. Assuring that state funds are provided without interruption for critical human services in the event of future budget delays is part of counties' 2017 priority on human services funding and system reform.

In early March, Gov. Tom Wolf announced several steps being undertaken to combat the opioid crisis in Pennsylvania, and outlined new medication rules for how opioids, particularly buprenorphine, often used as part of medication assisted treatment, can be prescribed under the Medicaid program. The directive, to be implemented by the Department of Human Services (DHS), seeks to clamp down on a practice where some providers have written prescriptions for cash, without either an office visit or some other appropriate treatment, coordination, care and counseling. Instead, under the rule, providers prescribing buprenorphine to Medicaid recipients will be required to be enrolled in the Medicaid program, and are prohibited from accepting cash payments from Medicaid recipients. Further, the changes add several auditing and review actions by DHS to further assure providers are meeting quality standards and authorization guidelines.

 

Counties continue to advocate for increased state resources to expand capacity at the county level for the prevention of substance abuse and drug overdose, as well as coordination, collaboration and continued partnership with the commonwealth to provide prevention, intervention and treatment programs through county drug and alcohol programs. More information on CCAP's 2017 Legislative Priority on preventing substance abuse and drug overdose can be found on CCAP's Priorities website.

In the midst of the House and Senate Appropriations Committees budget hearings, House Republicans launched a new program, State Employees Achieving Savings (SEAS), designed to seek input from state government employees on ways to achieve cost savings and address the $3 billion deficit facing the state by the end of FY 2017-2018.

 

The effort, led by Rep. Marguerite Quinn (R-Bucks), allows state workers to submit recommendations electronically, which will be reviewed by the House Appropriations Committee and considered for implementation. Submissions to the webpage may be made anonymously, and those submitting remarks may provide contact information for additional follow-up as recommendations are reviewed.

 

A similar program was implemented under the Ridge administration in the 1990s, known as the Improve Management and Cost Control Task Force (IMPACCT), which resulted in roughly $581 million in savings to the commonwealth. House Republican members also noted similar initiatives have previously been deployed in both private and public sectors as a strategic means to achieve cost savings.

The volume of natural gas produced in calendar year 2016 increased by almost 11 percent compared to calendar year 2015, according to the Independent Fiscal Office's recently released Natural Gas Production Report for fourth quarter 2016. The gains were driven by wells spud in 2014 and 2015, which accounted for 42 percent of production in 2016. However, while the number of producing wells in 2016 also increased by nine percent, the number of new wells spud decreased by more than a third. The ten highest producing counties accounted for 92 percent of horizontal well production and 87 percent of producing wells, with the largest increases in production among those counties in the southwest region of the state and declines in four counties in the northeast region. The full report can be viewed at www.ifo.state.pa.us .

 

Producers are to remit impact fees to the Public Utility Commission by April 1, based on the number of 2016 wells. Payments will be made to local governments around July 1; the PUC will not release estimated or actual payment numbers prior to June 15.