IFO PRESENTS INITIAL REVENUE ESTIMATES FOR COMING FISCAL YEAR            

The state's fiscal picture for the current year is better than originally expected, and the coming year will continue that positive trend, according to the Independent Fiscal Office (IFO).

In its initial revenue forecast offered on May 20, the IFO projected that FY 2018-2019 revenues will exceed budget expectations by $886 million, assuming May and June general fund revenues come in as anticipated.

Looking forward, for FY 2019-2020 the IFO is projecting that the state will have about $35.8 billion to spend, an increase of $994 million compared to the current year, assuming no other changes to programs or funding sources. Gov. Wolf called for a $34.1 billion budget in his February proposal, along with a $4.5 billion bond initiative, funded through a shale gas severance tax, for Restore PA that would provide funding over four years for an array of infrastructure projects, including rural broadband and transportation. Restore PA and its severance tax proposal are not included in the IFO estimates.

According to the IFO, four revenue sources have driven the surge in FY 2018-2019 general fund revenue, including the corporate net income tax (CNIT), projected to grow at a rate of 17.9% for FY 2018-2019, exceeding the IFO official estimate of $318 million; the non-motor vehicle sales and use tax (SUT) collections, which are set to exceed official estimates by $245 million due to higher than anticipated collections from marketplace vendors; non-withheld personal income tax (PIT) collections at $121 million above IFO official estimates; and licenses and fees revenue which are projected to exceed IFO's official estimate by $88 million, primarily the result of collecting $78 million more than anticipated in fees related to gaming expansion.

The IFO's official revenue estimate will be released by June 20. The full initial estimate can be found at www.ifo.state.pa.us.

The 2019-2020 fiscal year begins July 1. House Appropriations Committee chairman Stan Saylor (R-York) has offered HB 790 as a vehicle for the FY 2019-2020 budget; although the bill has seen some procedural movement in the House, no formal legislative budget proposals have yet been introduced. The House and Senate return to session the week of June 3.

CHANGES TO CAMPAIGN FINANCE REPORT FILING   

Legislation was approved by the House of Representatives on May 14 that would change the way campaign finance reports are filed with county boards of elections.

Specifically, HB 633, introduced by former CCAP member Rep. Mark Keller (R-Perry), would require all campaign finance reports that must be filed with the Secretary of the Commonwealth (for candidates for statewide, legislative and judicial offices, as well as political committees) to be filed only using the state's electronic filing system. The bill does not change the requirements for filing campaign finance reports by other candidates.

At the same time, the bill removes the corresponding requirement that reports filed electronically with the state also be filed with the county board of elections. On the House floor, Rep. Bob Freeman (D-Northampton) offered an amendment to instead require county voter registration offices to obtain at the request of an individual any campaign finance report filed electronically with the state. That amendment was adopted unanimously, and the bill was approved by the same vote, sending it to the Senate for further consideration.

BROADBAND INFRASTRUCTURE EFFORT MOVES FORWARD

Legislation offered by former CCAP member Rep. Pam Snyder (D-Greene) that would offer an additional tool to address broadband expansion is under consideration in the House.

House Bill 305 calls for an inventory of state-owned assets that the commonwealth could then leverage for the development of mobile broadband services. The bill was amended by the House State Government Committee at the suggestion of former CCAP member Rep. Jeff Wheeland (R-Lycoming) to include an option for counties to add county-owned assets to the inventory if they would be interested in being part of the state's effort. The bill and amendment won the unanimous approval of the committee.

Rep. Snyder also has introduced HR 64 to establish a legislative task force on the delivery of high-speed broadband services and to have the Joint State Government Commission conduct a study on the delivery of high-speed broadband service in underserved areas.Rural broadband expansion is a county priority for 2019.

Rep. Jim Struzzi (R-Indiana) recently introduced HR 268 to study the impact of behavioral health treatment needs and capacity on hospital emergency rooms and patient health. The study, which would be conducted by the Joint State Government Commission, would also look at the impact that federal and state laws and regulations have on the ability of the health care system to treat both behavioral and physical health issues. In addition, it would review the practice of psychiatric boarding, or holding of patients in emergency rooms for more than 24 hours without transferring them to an inpatient unit.

Under the resolution, the Commission would be required to create an advisory committee of stakeholders to offer input. When the bill was brought before the House Health Committee for consideration on May 14, Rep. Mike Schlossberg (D-Lehigh) offered an amendment that adds representatives of two CCAP affiliates, the Pennsylvania Association of County Drug and Alcohol Administrators (PACDAA) and the Pennsylvania Association of County Administrators of Mental Health and Developmental Services (PACA MH/DS). The amendment, and the resolution as amended, were unanimously reported by the committee. 

Several bills crafted by the Local Government Commission's Assessment Reform Task Force have recently advanced in both the House and Senate. The bills are part of counties' assessment reform priority.

The House Local Government Committee gave its unanimous approval to report three bills at its May 6 meeting, including HB 1032, introduced by Rep. Lee James (R-Venango) to add two Certified Pennsylvania Evaluators (CPEs, the designation which much be obtained by county assessors who are responsible for valuing property) to the State Board of Certified Real Estate Appraisers and HB 1033, sponsored by committee chair Rep. Dan Moul (R-Adams), which would clarify that third-party contractors hired to complete countywide reassessments must be certified as CPEs. Rep. Garth Everett's (R-Lycoming) HB 1034 was also reported to improve proper and timely submission of building permits to county assessment offices.

In the Senate, the Consumer Protection and Professional Licensure Committee reported two companion bills, also by unanimous vote, on May 1. Those included SB 491, Sen. Judy Ward's (R-Blair) legislation mirroring HB 1032, and SB 492, legislation identical to HB 1033 offered by former CCAP member Sen. Scott Martin (R-Lancaster).

All of the bills now go before their respective chambers for further consideration.

Legislation to ensure accurate information is provided to counties about room rentals made through online hosting platforms, for purposes of enforcing the hotel tax, has been reported by the House Tourism and Recreational Development Committee.

Counties in Pennsylvania are permitted to levy a hotel tax of up to five percent, with the revenues being designated for tourism promotion efforts. While relatively straightforward to enforce for traditional hotels, room rentals made by individuals through online platforms such as Airbnb have proven more challenging because these online platforms are reluctant to share the names of their hosts. To address this, HB 787, introduced by Rep. Doyle Heffley (R-Carbon), would require online hosting platforms to register with the state, and to provide a list of hosts or hotels registered with that platform, prior to allowing room rentals in Pennsylvania. The state would then be required to share each registered platform's list of hosts and hotels with county treasurers on a quarterly basis. The proposal offers a uniform, statewide solution that would provide the information needed to enable the state and counties to make hosts aware of their obligation to collect the proper taxes and would create a more level playing field for county hotel taxes, regardless of how room rentals are executed.

Before reporting HB 787, the committee adopted an amendment to remove licensed realtors from the definition of online hosting platform, which has the effect of exempting them from the requirement to register with the state. The bill was reported with one negative vote and now goes to the full House.

Ahead of the NACo Annual Conference in Clark County, Nev. (Las Vegas) July 12-15, NACo members are invited to submit policy resolutions and platform changes to be considered by NACo's membership at the conference. The NACo resolutions process provides members the ability to participate in national policy decisions affecting county governments by proposing changes to NACo's platform or policy resolutions which, if approved, will be added to the platform for one year. All resolutions and platform changes must be submitted electronically to resolutions@naco.org by June 12. More information is available at www.naco.org.