In the House budget that was passed on 9/13/17 no money was taken from VLAP or 911. THANK YOU to everyone that contacted their House member!
House R propose to take $25 million from volunteer firefighters ;the Volunteer Loan Assistance Program. I am Hearing that there is not strong consensus within the House R caucus for this plan. If you are opposed contact your House member DHK
Capitolwire: House GOP workgroup says it has a plan to balance the budget and protect taxpayers.
Gov. Tom Wolf's administration, House Democrats and Senate Republicans see the proposal differently.
HARRISBURG (Sept. 5) - After a six-week process, a workgroup of state House Republicans says it has found more than enough money to pay for both last year's budget deficit and this year's additional spending without raising any new taxes.
The more than $2.4 billion in funds would come mostly in the form of transfers from various state special funds that, according to the workgroup, have "inordinately high" account balances.
"We have scoured for the last six weeks special or restricted funds, and the first part of that $2.4 billion revenue stream we are accessing $1.2 billion of surplus tax money already paid by the taxpayers over the years - funds that have been held in what is effectively known as 'a shadow budget,'" said Rep. Joe Emrick, R-Northampton, during a press conference Tuesday.
The state's operating budget contains 218 such funds, most having both a balance for yearly operating expenses and a reserves balance (some also have investment fund balances as well), and the workgroup's plan is to tap 41 of them. Of that total, the GOP legislators said 34 have been used in a similar fashion in the past, so precedent already exists for what they are proposing to do this budget year.
"Out of these 218 special or restricted funds, there are more than 400 different accounts holding, when this process started, just over $12 billion worth of revenue," said Emrick.
When choosing the accounts from which to transfer funds, Emrick said the workgroup employed five criteria: "The five criteria we used were (1) that the money we would rededicate would have no impact on the operations of those funds; (2) that there were no legal or other restrictions to those funds which would prohibit us from taking that money; (3) the revenues into these funds more than support the expenses that they distribute each year; (4) that the funds would have historically high fund balances that were taxpayer dollars paid into them - this included an extensive three-year lookback at each one of these funds; and (5) that there were no [federal] matching funds attached which would prohibit us from taking [them]."
The transfers are, in some cases, fairly significant.
There's a $50 million transfer from the Hazardous Sites Cleanup Fund, which has a total market value (all of its accounts, before considering incoming and outgoing funds) of $86.2 million, with $27.9 million of incoming funding and about $52.7 million of outgoing disbursements for the current fiscal year.
Another $72.7 million would come from the Environmental Stewardship Fund, which provides for farmland preservation, open space protection, abandoned mine reclamation, watershed restoration and protection, water and sewer infrastructure, and the improvement and conservation of state and community parks and recreational facilities. The fund has a total market value of $118.9 million, with an expected $125.2 million of incoming funding and about $124.7 million of disbursements for the current fiscal year.
There's a proposed $75 million transfer from the Recycling Fund, which finances the planning, processing, resource recovery and recycling of solid waste, the revenue for which is mostly generated by a fee on all waste disposed in landfills or processed by resource recovery facilities. The fund has a total market value of nearly $103 million, with roughly $41 million of incoming funding and $52 million of disbursements anticipated this fiscal year. Last year, $9 million was transferred from this fund to the General Fund.
Lawmakers are again looking for some cash from the state's Underground Storage Tank Indemnification Fund, which exists to help underground storage tank owners meet their financial responsibility for regulated tanks within the state. An owner or operator of a regulated tank must ensure that there will be adequate money available to pay for corrective actions and any related third-party liability in the event of a leak from the tank.
The workgroup proposes transferring $100 million from the nearly $210 million ending balance within the fund, which is expected to have approximately $66.4 million coming into it and $66.2 million being disbursed from it this year. A $100 million loan was made from the fund to the General Fund for the 2003-04 Fiscal Year, with the plan to pay back the loan by 2014. However, by 2014, about $67.5 million of the borrowed $100 million remained unpaid. The state then renegotiated that repayment schedule so the Commonwealth now has until 2029 to pay off the remaining balance, with payments of no less than $7 million annually.
Another $100 million would come from the Keystone Recreation, Park and Conservation Fund. Also known as Key 93, it's a special fund, composed of monies from the sale of specific bonds and 15 percent of the revenues from the state's Realty Transfer Tax, for increased acquisitions, improvements and expansions of state and community parks, recreation facilities, historic sites, zoos, public libraries, nature preserves and wildlife habitats. The fund has a total market value of $170 million, with an expected $95 million of incoming funds and disbursements for the current year.
Then there's $120 million from the Multimodal Transportation Fund, which exists to provide funding for passenger rail, rail freight, ports and waterways, aviation, bicycle and pedestrian facilities, road and bridges and other modes of transportation. It's primarily funded by money from Motor Vehicle Fees, as well as a portion of the Oil Company Franchise Tax and a transfer from the Pennsylvania Turnpike Commission, and has a total market value of nearly $190 million. For the current year, it is expected to have incoming funds totaling $143.9 million and disbursements of exactly the same amount.
The biggest transfer is from the Public Transportation Trust Fund: $357 million. The fund provides dedicated dollars for public transportation throughout the state with the majority of its funding derived from a portion of the state's Sales and Use Tax and a transfer from the Pennsylvania Turnpike Commission; additional funding comes from motor vehicle fees, the Lottery Fund and vehicle code fines.
The fund has a total market value of $506.7 million (including a beginning balance this year of more than $200 million), with a projected $1.34 billion of incoming funding and $1.35 billion of disbursements this year.
In addition to those funding transfers, the workgroup proposes to use $400 million in budgetary lapses (of a total of at least $1.2 billion the GOP lawmakers said goes unspent from year to year) to address the entirety of the $1.5 billion Fiscal Year 2016-17 deficit which was rolled over into the current fiscal year.
Another $100 million in recurring special/restricted account funding would be redirected to the General Fund, although the workgroup could not provide details on the source of that funding during its Tuesday press conference.
Among other items, the House GOP, just like the Senate's revenue proposal, is looking to take $200 million from the nonprofit Pennsylvania Professional Liability Joint Underwriting Association (JUA). It was created by the General Assembly to provide insurance to healthcare providers. Lawmakers had planned on doing the same last year, but were stopped by a federal lawsuit by the JUA, which has said it will fight additional attempts to dissolve the entity.
Most tax credits - but not the House GOP-favored Educational Improvement Tax Credit Program (EITC) and Opportunity Scholarship Tax Credit Program (OSTC) - would get trimmed this year to the tune of $28.3 million, but the workgroup indicated that figure would increase next year to something closer to $60 million, reducing the amount of dollars that could be used by the tax credit programs going forward.
The House GOP Caucus plans to discuss the proposal next Monday and see if the votes exist within the caucus to pass it, said Steve Miskin, spokesman for House Majority Leader Dave Reed, R-Indiana. He said no whip counts have been taken.
Members of the group have already given presentations to the regional House GOP caucuses, said Rep. Stephen Bloom, R-Cumberland.
Rep. Mike Tobash, R-Schuylkill, emphasized the importance of criteria in deciding which funds could be tapped. A key criteria is the size of the fund in comparison to the administrative agency's budget, he added.
The proposal includes reducing each of the four legislative caucus surpluses by $5 million and a 50-percent cut to tax credits with the exception of the Educational Improvement Tax Credit as a way to share the fiscal pain, said Tobash.
Reaction to the proposal
While House Republicans will try to determine next week if there's enough support within their own caucus to pass their proposal, the plan got a cool reception from their Democratic colleagues in the House as well as Wolf's office.
"For the last six weeks, a group of Republicans from central Pennsylvania tried to identify restricted receipts money in non-General Fund accounts," said House Minority Leader Frank Dermody in a press release. "Now that we have their product, Democrats in the House will give it careful review. There are a host of unanswered questions."
"At the outset of our review I question the legality of raiding accounts that are restricted by law for special purposes," Dermody continued. "Then there's the larger question of whether their math is correct. Is this money truly available in the amounts they claim?"
He said he's concerned the proposal "would lead to destructive cuts in programs and services that Pennsylvanians need to have, such as education, health care and a half billion dollars cut in transportation."
While Dermody said he appreciated the workgroup's effort and promised continued review of it, he added: "Our perennial budget problems of the last decade resulted from the overuse of one-time gimmicks and faulty revenue estimates. Fantasy budgeting won't cut it anymore; it's time for a reality check. House Democrats believe that an honest budget solution must include the use of recurring revenue sources such as a severance tax on gas drillers and a higher minimum wage for Pennsylvania's workers, among other steps. We are committed to working in a bipartisan way with Republicans to do the job that must be finished."
Wolf's spokesman J.J. Abbott was more negative in his reaction, arguing in a statement "there is even less clarity" about what the House Republican Caucus will support to balance the budget.
Arguing the plan doesn't address Pennsylvania's fiscal challenges, Abbott said, "Raiding these funds will mean cuts to programs. There is no way around it. Taking funds from 9-1-1 centers and volunteer firefighters means less funding to improve public safety response in local communities. Shifting money from public and multimodal transportation sets back progress in municipalities small and large across Pennsylvania."
He went on to identify the proposed transfers of funding from the Public Transportation Trust Fund, the Key 93 fund and the Hazardous Sites Cleanup Fund, arguing that in each case, the transfers would handicap the ability of the state to address the issues those funds were created to tackle.
"This is not complicated. These funds support essential commonwealth programs," stated Abbott. "If the money is not there, every Pennsylvanian will be negatively impacted."
Senate Republicans, who have been chastising their House counterparts for the last month-plus to do something to balance the budget, are, like the others, taking a wait-and-see approach to the workgroup's plan, but are hesitant about what they see are potential negative impacts.
"We will await action by the House, and if that is completed in the near future, the Senate will analyze the specific details of the plan," wrote Senate GOP spokeswoman Jenn Kocher in a text.
"While the leaders are open to new ideas that are passed by the House, we are fearful that the new House plan would harm agricultural, environmental and transportation projects across the commonwealth while not addressing long-term budgetary concerns," said Kocher.
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Capitolwire Staff Writers Robert Swift and Carley Mossbrook contributed to this story.