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HOUSE, SENATE SELECT 2018-2019 LEADERSHIP
The House and Senate convened the week of Nov. 12 to choose their leadership for the 2019-2020 session. Formal elections for Speaker of the House and Senate President Pro Tempore will be held by their respective bodies on Jan. 1 when the General Assembly returns to swear in legislators and begin the new session.
On the House side, Rep. Mike Turzai (R-Allegheny), was selected to continue as Speaker of the House, while Rep. Bryan Cutler (R-Lancaster) was elected as majority leader, following the retirement of Rep. Dave Reed (R-Indiana). Rep. Kerry Benninghoff (R-Centre) moves from his prior position as majority Policy Committee chair to fill the majority whip position vacated by Rep. Cutler, while former CCAP member Rep. Donna Oberlander (R-Clarion) moves from her current position as caucus secretary to become majority Policy Committee chair. Rep. Stan Saylor (R-York) continues as majority chair of the House Appropriations Committee, and Rep. Marcy Toepel (R-Montgomery) will remain as majority caucus chair. Former Northumberland County commissioner Kurt Masser will continue as caucus administrator and Rep. Mike Reese (R-Westmoreland) joins the House Republican leadership team as caucus secretary.
In the Democratic caucus, a number of members were newly elected to leadership. Following the retirement of current Appropriations Committee chair Joe Markosek (D-Allegheny), Rep. Matt Bradford (D-Montgomery) will take the reins in 2019. Rep. Frank Dermody (D-Allegheny) was re-elected as minority leader, while Rep. Mike Sturla (D-Lancaster) and Rep. Neal Goodman (D-Schuylkill) remain as minority Policy Committee chair and caucus administrator, respectively. Rep. Jordan Harris has been named the new whip for the caucus, replacing retiring Mike Hanna (D-Clinton), Rep. Joanna McClinton was elected as the caucus chair, replacing Dan Frankel (D-Allegheny), and Rep. Rosita Youngblood was re-elected as caucus secretary; all three represent Philadelphia.
In the Senate, the leadership teams of both caucuses remain largely unchanged. On the Republican side, Sen. Jake Corman (R-Centre) was elected to a second term as majority leader, with Sen. Joe Scarnati (R-Jefferson) chosen to continue as President Pro Tempore and Sen. Pat Browne (R-Lehigh) selected to continue as chair of the Appropriations Committee. Sen. Bob Mensch (R-Montgomery) will remain as majority caucus chair while Sen. John Gordner (R-Columbia) was re-elected as caucus whip and Sen. Dave Argall (R-Schuylkill) will continue as chair of the policy committee.
For the Senate Democrats, Sen. Jay Costa (D-Allegheny) will remain as Senate minority leader, and Sen. Vince Hughes (D-Philadelphia) will continue as Appropriations Committee chair. Sen. Wayne Fontana (D-Allegheny) was re-elected as caucus chairman and Sen. Lisa Boscola (D-Northampton) will remain as policy committee chair.
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2017-2018 SESSION IN REVIEW
As the 2017-2018 legislative session approaches its official sine die adjournment on Nov. 30, CCAP has provided a summary of legislative activity over the past two years that has impacted county government. The Session in Review summary also shows how counties have impacted the legislative process through their participation in local advocacy efforts on a wide variety of issues as well as testimony before legislative committees. To learn more, go to www.pacounties.org, click on the Legislative Action Center, and look for the report under 2017-2018 Session in Review.
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IFO RELEASES FIVE-YEAR BUDGET OUTLOOK
On Nov. 15, the state's Independent Fiscal Office (IFO) released its annual long-term economic and budget outlook for the next five years, through FY 2023-2024. While better-than-expected corporate tax and sales tax collections, as well as gaming expansion revenue, have caused the IFO to revise its revenue estimates upward for the current fiscal year, the agency also projected that economic and demographic factors imply the state faces a long-term fiscal imbalance.
The IFO has added $300 million to its official revenue estimate released in June 2018, largely due to the strength of sales tax revenues and corporate net income tax gains. The increase in revenue estimates is also predicated on the assumption that $200 million will be transferred from the state's Joint Underwriting Association, a legislative directive that is currently the subject of a court challenge.
Looking forward, though, the IFO projects Pennsylvania could be facing a potential budgetary shortfall of about $1.5 billion in FY 2019-2020, driven primarily by non-discretionary and mandated spending such as pension payments, correctional facilities, human services and debt, or up to $1.7 billion assuming some growth in discretionary spending. Much of the impact on expenditures comes from the expiration of a number of one-time funding measures, which mainly affect the Department of Human Services, as well as increased debt obligations.
Over the next five fiscal years, revenues are expected to grow 3.1 percent annually, compared against spending projected to grow at four percent annually, assuming moderate growth of historical cost drivers and a state economy operating at its long-term potential. However, the IFO acknowledged projections that suggest in the next three years a recession is more likely to occur than not, and recommended lawmakers consider recession scenarios as they plan for FY 2019-2020 and beyond.
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PUBLIC COMMENT PERIOD ON OPPORTUNITY ZONE REGULATIONS
A public comment period on proposed regulations for federal Opportunity Zones is now open through Dec. 28. Opportunity Zones were established under the 2017 federal Tax Cut and Jobs Act, and provide tax incentives for investors to put their unrealized capital gains into an Opportunity Fund that is dedicated for investing in the designated Opportunity Zones, with a 10-year commitment. The proposed regulations, issued by the U.S. Department of Treasury and the IRS, clarify what gains qualify for deferral, which taxpayers and investments are eligible, the parameters for Opportunity Funds, and other guidance to aid taxpayers in participating.
Within the regulatory submittal, the Treasury Department encouraged feedback by listing specific questions for which it seeks public comment and input. Following the public comment period, the Treasury Department plans to issue further guidance on the program. Comments can be submitted either to the IRS or on the regulations.gov website, entering IRS REG-115420-18.
Each state was permitted to designate up to 25 percent of the eligible areas in their states as Opportunity Zones. Pennsylvania's 300 designated tracts were approved by the Treasury Department in June, and additional information can be found at dced.pa.gov, by selecting Qualified Opportunity Zones under the Programs & Funding tab.
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RURAL RESOURCE GUIDE ON OPIOIDS RELEASED
The White House Office of National Drug Control Policy (ONDCP) and the U.S. Department of Agriculture (USDA) have released a Rural Resource Guide to help rural communities address substance use disorder and opioid misuse.
The guide is a one-stop resource for federal funding and partnership opportunities, organized by category, to help improve federal interagency coordination and reduce redundancy in the federal government's response to the crisis in rural areas. This is the second tool announced in USDA's Community Opioid Misuse Toolbox, with the first being an interactive community assessment tool that helps local leaders review how and why the opioid epidemic is impacting their regions.
The Toolbox will ultimately provide a full suite of resources designed to support grassroots strategies for addressing the opioid crisis at the local level, and can be found at www.usda.gov/topics/opioids
The National Association of Counties serves as a member of USDA's Rural Opioid Working Group, convened in May 2018. Preventing substance abuse and drug overdose has also been an ongoing CCAP priority.
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PENNDOT COMMUNITY ASSISTANCE GUIDE
The Pennsylvania Department of Transportation (PennDOT) has released its 2018-2019 Community and Local Government Assistance guide
which compiles transportation resources in one centralized location for local leaders. The guide includes a summary of PennDOT Municipal Services Units (MSU), the role MSUs play as a liaison between PennDOT and local government, and contact information for the MSU in each PennDOT District.
In addition, the guide features due dates, report requirements and helpful links for different state and federal programs and funding sources allocated to municipalities, such as county liquid fuels, Act 13 highway bridge improvement, Act 44 county maintenance, Act 89, county $5 fee for local use, and Highway Transfer Turnback Program funds.
Other resources in the guide include grant and loan application information and contact information for all planning organizations (MPOs/RPOs) across the commonwealth, as well as highlights about PennDOT Connects, a holistic approach encompassing community needs from the beginning of the transportation planning process.
More information can be found at www.penndot.gov by searching "community assistance guide," as well as CCAP's Transportation Funding Analysis and Resources web page.
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BID LIMIT THRESHOLDS, DA SALARIES
As counties are preparing their 2019 budgets, CCAP often receives questions about the updated judicial salaries for the coming year, on which district attorney salaries are based, as well as the annual adjustments to bid limit thresholds and telephonic quote thresholds under the County Code. These benchmarks are typically published in the Pennsylvania Bulletin some time in December for the following year, and CCAP will email counties directly with the information as soon as it is available, as well as including it in a future edition of the Legislative Bulletin.
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