Sunday, February 9, 2020

PA Capitol Report: Wolf’s Budget Proposal Increases Spending, Debt, But Not Sales, Income Taxes

Because In Politics, Everything Is Connected To Everything Else: On February 4, Gov. Wolf officially kicked off the FY 2020-21 budget season with a proposal that increases spending by 7.6 percent over the current budget, but does not increase the sales or personal income tax.
He again proposed combined reporting for the corporate income tax and would lower the current 9.99 percent tax rate to 5.99 percent by 2025 and again proposed a severance tax on natural gas production to support his Restore PA infrastructure financing program.
Wolf also proposes several new fees, including a fee on municipalities to fund State Police services which now comes from road and bridge maintenance money and a $1/ton fee on municipal waste disposed in Pennsylvania to fund the shortfalls in the Hazardous Sites Cleanup Program.
Debt would increase, both under his Restore PA proposal and a new initiative to deal with lead and asbestos contamination in schools, daycare centers, homes and drinking water systems.
Minimum Wage
From previous announcements, the budget also included an increase in the minimum wage to $12/hour immediately rising to $15/hour.  The proposal would give an increase to about 1 million Pennsylvania workers.  Read more here.
Overtime Rule
Although technically not part of the budget, House Republicans reacted to the January 31 approval of final Department of Labor and Industry regulations expanding overtime coverage to 82,000 more workers by reporting a resolution out of Committee that will stop the regulation from going into effect until the Senate and House return to voting session March 16
The Senate and House could permanently block the expansion if they pass the resolution and the Governor doesn’t veto it.  Wolf has already said he wants the regulations, unless there is some agreement on a minimum wage increase like there was in the Senate.
Senate and House Republicans were predictably critical of the Governor’s proposal and Democrats liked it-- not hard to figure out.
Senate Republican leaders said they are encouraged that the proposal does not include broad-based tax increases.  However, they are concerned about $1.5 billion in additional spending and more than a billion dollars in new borrowing in the governor’s proposal. 
House Republicans also decried the increase in spending and debt and called for a spending slow down and living within our means.  Read more here.
But House Senate Are Spending More
Ironically, on the same day as the Governor’s budget address, the Associated Press reported the Senate and House had a near record surplus in their own operating budgets and spent more than they did the year before.
Their “reserve” is now $172 million for the year ending July 1, 2019, which they just let sit in an account.  And they spent $8 million more that year than the year before-- a total of $362 million for the 253 members of the Senate and House. You do the math.  Read more here.
January Revenues Up
On February 3, the Department of Revenue reported Pennsylvania collected $3.1 billion in General Fund revenue in January, which was $83.6 million, or 2.8 percent, more than anticipated.  Read more here.
More Budget Details
If you want more details on the Governor’s budget, follow these links--
Click Here for the Budget “Big” Book and other Office of the Budget supporting documents.
PennDOT To Shift Funding Away From Local Roads
The lack of a comprehensive solution to federal road funding from Congress and state funding declines caused by things like taking road money and funding the State Police are now taking their toll. Click Here to read a report on Transportation Funding issues.
[Yes, “toll” is a subtle reference to the ever-increasing debt funded by ever-increasing Turnpike toll increases to pay for statewide road and bridge repairs.]  
PennDOT said last week it will now have to shift $3.15 billion from local road projects to make improvements to interstate highways over the next nine years.  The move will no doubt spark opposition from lawmakers. Read more here.
Federal transportation funding authorization is set to expire in September and the U.S. Senate and House have been working on proposed reauthorization bills, along with the Trump Administration.
Property Tax Reform
After a bipartisan House-Senate work group delivered a report December 6 containing five options for reducing or eliminating school residential property tax, there has been no forward movement on the issue.
The report asked leadership in each caucus to count heads to see which one of the options would be something members could vote for, but that wasn’t done. 
On February 5, Sen. Mario Scavello (R-Monroe) stood on the floor of the Senate holding an 11-page list of home foreclosures due to the failure to pay taxes in just one county.
Meanwhile the Independent Fiscal Office issued its annual report on school property taxes showing the total of delinquent taxes increased from $535 million in 2017-18 to a projected $582 million in 2020-21.
Some in leadership still hope a vote could be held on the issue before the summer break, but others aren’t holding their breath.  Read more here.
The Senate Republic Policy Committee holds what it calls a public workshop on February 12 to review school property tax elimination efforts in Marysville, Cumberland County right across the river from Harrisburg.  Click Here to watch live.
Super Bowl Bet Losses
On February 4, the PA Gaming Control Board reported $30.7 million in wagers were placed on the Super Bowl through retail and online sportsbooks and with payouts of just over $34 million made. Almost 200,000 people logged onto online sports wagering sites in Pennsylvania.   Read more here.
Acting Secretary Vague
On February 7, Gov. Tom Wolf announced his intention to nominate Richard Vague, a managing partner of Gabriel Investments and chair of the Governor’s Woods Foundation, to serve as secretary of the Department of Banking and Securities.  Read more here.
Coronavirus Guidance
On February 7, the Department of Health issued updated guidance related to the coronavirus for Pennsylvanians who have returned from China in the last 14 days. The advice is to monitor yourself for any symptoms, self-quarantine and avoid exposing others and avoid unnecessary travel.  Read more here.  Also visit the Coronavirus webpage for more.
Only In Pennsylvania
For those who can’t get enough of Wilkes-Barre-born Mr. Peanut, plans are now being made for a “Peanut Gallery” honoring Mr. Peanut’s history.
In a totally unrelated development, turns out the groundhog that stars in the Super Bowl “Groundhog Day” Jeep commercial with Bill Murray is Poppy from Lancaster County.  She had a fan base even before the commercial.
And, good news, police have cleared the Philadelphia Flyers Mascot “Gritty” in allegations of assaulting a child.
The next major Pennsylvania holiday is Fasnacht Day 2020 - Feb. 25.
What’s Next
The Senate and House will hold agency-by-agency hearings on the Governor’s budget request from February 18 to March 5.
They will not return to voting session until March 16.
Other Announcements/News:
[Posted: February 9, 2020]

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