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IFO PRESENTS INITIAL REVENUE ESTIMATES FOR COMING FISCAL YEAR
The state's fiscal picture for the current year is good, and the coming year is better than originally expected, the Independent Fiscal Office (IFO) indicated recently.
In its initial revenue forecast offered on May 1, the IFO projected that FY 2017-2018 revenues will meet budget expectations, assuming May and June General Fund revenues come in as anticipated. They nonetheless project an approximately $244 million shortfall for the year, attributed primarily to a federal court challenge to a $200 million transfer from the Pennsylvania Professional Liability Joint Underwriting Association, which the IFO did not anticipate would be resolved before the end of the current fiscal year.
For FY 2018-2019, the IFO is projecting that the state will have about $32.6 billion to spend, an increase of $640 million compared to the current year, assuming no other changes to programs or funding sources, or $440 million if the estimated FY 2017-2018 $200 million shortfall would be rolled over. Gov. Wolf called for a $32.9 billion budget in his February proposal, with about $303 million dedicated to new initiatives, along with a severance tax estimated to generate $249 million; the severance tax proposal is not included in the IFO estimates.
According to the IFO, strong wage growth is driving the improving revenue situation, with wages projected to grow by 4.3 percent in 2018 and by 4.2 percent in 2019. Personal income tax revenues are forecast to grow by 4.6 percent, and sales tax revenues by 3.7 percent, in FY 2018-2019; these two sources make up more than 74 percent of the state's annual revenues. This acceleration in economic growth, according to the IFO, is partly due to the impact of the recent federal tax reform, although the IFO cautioned that expected hikes in interest rates could temper their forecast.
The IFO's official revenue estimate will be released on June 15. The full initial estimate can be found at www.ifo.state.pa.us.
The 2018-2019 fiscal year begins July 1. House Appropriations Committee chairman Stan Saylor (R-York) has offered HB 2121 as a vehicle for the FY 2018-2019 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 May 21.
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STEPPING UP DAY OF ACTION
May 2018 marks the three-year anniversary of the Stepping Up Initiative, a national initiative of NACo, the Council of State Governments Justice Center and the American Psychiatric Association to help advance counties' efforts to reduce the number of adults with mental illness in prisons. More than 400 counties in 43 states - including 24 in Pennsylvania - have passed a resolution or proclamation to join the initiative and commit to creating a data-driven, systems-level plan to reduce mental illness in their jails and improve outcomes for people with mental illness.
To mark the anniversary, Stepping Up is hosting a national Day of Action on May 16, 2018. Counties are encouraged to hold an event or participate in local activities to share their progress, raise public awareness, and emphasize their commitment to creating change.
More information and a toolbox for the Day of Action are available at www.StepUpTogether.org. Expanding options for care and treatment of individuals with mental illness and developmental disabilities outside of the prison system is also a CCAP priority for 2018.
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CONGRESS TO CONSIDER OPIOID BILLS
The U.S. Congress is actively working on a number of opioid-related bills in an effort to finalize a legislative package by the end of May, following on an authorization of approximately $6 billion over two years to address the opioid epidemic included as part of February's federal budget agreement.
In April, the Senate Health, Education, Labor and Pensions Committee considered S. 2680, which would reauthorize funding outlined in the 21st Century Cures Act. The measure would also expand the ability of federal agencies to respond to the opioid epidemic, with an emphasis on research, treatment, recovery and prevention activities.
The House Energy and Commerce Subcommittee on Health also considered 34 separate bills in April to address the opioid crisis via changes to Medicaid and Medicare. That package included H.R. 4005, which would allow justice-involved individuals to receive federal Medicaid benefits for the 30-day period prior to their release, rather than being unenrolled from the program while they are in jail, as well as H.R. 1925, which would allow for more timely provision of addiction treatment services for juveniles released from county correctional facilities and smoothing the transition to community care. Most of the proposals, including H.R. 4005 and H.R. 1925, were ultimately approved by the subcommittee; two full committee markups on the opioid legislation have been scheduled, with one held May 9 and another to be held on May 17.
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PA SENATE APPROVES JRI LEGISLATION
The Senate has unanimously approved a package of legislation introduced by Judiciary Committee chair Sen. Stewart Greenleaf (R-Montgomery) to implement the second phase of Pennsylvania's Justice Reinvestment Initiative (JRI), sending the bills to the House for consideration. The JRI is a comprehensive effort involving the Department of Corrections, the Pennsylvania Commission on Crime and Delinquency (PCCD), other state agencies, legislators, counties and other stakeholders, aimed at reducing the prison population through criminal justice reform and alternatives to incarceration that offer better outcomes.
Specifically, SB 1070 will create a County Adult Probation and Parole Advisory Committee to advise PCCD on funding, standards and training for county adult probation and parole departments. The bill will also seek to redistribute savings achieved by other legislation to assist in improving these programs, which counties utilize to support community supervision options for non-violent offenders. Senate Bill 1071 will streamline the process for placement in the intermediate punishment program, which provides community alternatives for non-violent offenders by diverting them from jail and by incorporating drug and alcohol treatment to assist in changing behaviors. In addition, the legislation updates the current sentencing process to a simpler placement that would be similar to the Department of Corrections motivational boot camp model. Finally, SB 1072 will amend the Crime Victims Act to provide better information and compensation to victims.
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PA ANNOUNCES CLEAN AIR, EMISSION REDUCTION PROGRAMS
On May 10, Department of Environmental Protection Secretary Patrick McDonnell and Department of Health Secretary Dr. Rachel Levine announced Pennsylvania's Driving PA Forward plan to create $118 million in new grant and rebate programs, funded by Pennsylvania's share of the penalty paid by Volkswagen to settle allegations of cheating on EPA emissions tests. The programs are intended to support efforts to reduce vehicle and equipment emissions, with a goal of replacing older diesel engines with new technologies to cut nitrogen oxide emissions by up to 27,700 tons.
Driving PA Forward will operate eight grant and rebate programs over the next five years, which will be targeted toward areas of the state with the worst air quality. The funding will be used to help reduce diesel emissions, including exhaust controls, upgraded engines and new engines and vehicles. Specifically, about $16 million overall will be allocated to fund a competitive grant program for class 8 local freight truck and transit bus repowers and replacements. Another $30 million will be allocated to fund rebates for class 4 to 7 local freight trucks, port drayage trucks, class 4 to 8 school buses and shuttle busses. Other funding will be available to supply ocean going vessels with electric shore power, and for other equipment such as forklifts, airport ground support equipment, port cargo handling equipment, ferries and tugs.
About $9 million will be available as match funding for diesel emission reduction projects, making Pennsylvania eligible for additional federal dollars. Another $10 million will fund a competitive grant program for electric vehicle fast-charging equipment and hydrogen fuel cell vehicle supply equipment.
Programs are anticipated to open throughout 2018. More information can be found at http://www.depgis.state.pa.us/DrivingPAForward/.
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INCOMPATIBLE OFFICES
The House State Government Committee recently reported legislation that would make state and federal legislators ineligible to serve concurrently as solicitors for local governments. Current law prohibits state and federal lawmakers from serving in another civil office while holding their legislative office. As originally introduced, HB 1970, sponsored by Rep. Justin Walsh (R-Westmoreland), would have expanded the list of incompatible offices to also prohibit legislators from serving as a solicitor of a municipality or municipal authority. The committee adopted an amendment to apply the prohibition to service as a solicitor to any local government, and reported the bill as amended, by a 13-11 vote. The bill now goes before the full House for consideration.
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NACO RESOLUTIONS PROCESS OPEN
Ahead of the NACo Annual Conference in Davidson County, TN (Nashville) July 13-16, 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 with 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 13. More information is available at www.naco.org.
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