Friday, December 29, 2017

Elections, Budget Will Dominate 2018 Legislative Politics And Session

With the Governor, all of the House and half the Senate up for grabs in 2018, election year politics can’t help but color every action of the General Assembly, budget deliberations especially.
Add the fact House Speaker Mike Turzai (R-Allegheny) and Sen. Scott Wagner (R-York) have both announced they are running for the Republican nomination for Governor, and the plot thickens, as they say.
In the Senate, Republicans have 18 seats up for re-election and so far have two of their members retiring-- Sen. Stewart Greenleaf (R-Bucks), long-time Chair of the Senate Judiciary Committee, and Sen. Scott Wagner (R-York), as noted running for Governor.  
Republicans up for reelection include: Tomlinson (R-Bucks), Majority Chair of the Consumer Protection Committee; McIlhinney (R-Bucks), Majority Chair of the Law & Justice Committee; Browne (R-Lehigh), Majority Chair of the Appropriations Committee; Baker (R-Luzerne), Majority Chair Health & Human Services Committee; Mensch (R-Montgomery); McGarrigle (R-Delaware), Eichelberger (R-Blair), Majority Chair Education Committee; Stefano (R-Fayette), Majority Chair of the Game & Fisheries Committee; Corman (R-Centre), Senate Majority Leader; Aument (R-Lancaster); Vulakovich (R-Allegheny); Scavello (R-Monroe), Majority Chair Community, Economic & Recreational Development Committee; Rafferty (R-Montgomery), Majority Chair of the Transportation Committee; Bartolotta (R-Beaver); Folmer (R-Lebanon), Majority Chair State Government Committee; and Brooks (R-Crawford).
Senate Democrats have 7 seats up with no announced retirements so far.  Democratic districts include: Tartaglione (D-Philadelphia); Haywood (D-Philadelphia); Williams (D-Philadelphia), Minority Chair State Government Committee; Yudichak (D-Luzerne), Minority Chair Environmental Committee; Boscola (D-Lehigh), Minority Chair Consumer Protection Committee; Blake (D-Lackawanna); and Fontana (D-Allegheny).
The House lost two members to other positions December 31-- Rep. Brandon Neuman (D-Washington) to be a county judge and Scott Petri (R-Bucks) Majority Chair of the Gaming Oversight Committee, will become head of the Philadelphia Parking Authority.
Three House members-- all Republicans-- said they are not running for re-election so far-- John Taylor (R-Philadelphia), Majority Chair of the House Transportation Committee, Eli Evankovich (R-Westmoreland) and Lewis (R-Chester).
Three other House Republicans are running for other seats-- Rep. Kristin Phillips-Hill (R-York)-- for Sen. Wagner’s seat; Rep. Ryan Mackenzie (R-Lehigh)-- to fill Dent’s Congressional seat; and Rep. Stephen Bloom (R-Cumberland)-- running for Barletta’s Congressional seat.
Gerrymandering Cases
The wildcard in the upcoming election season are challenges in federal and state courts to the way the state drew its Congressional districts.  Both courts have promised decisions quickly in time to have an impact, or not, on 2018 Congressional races.
Commonwealth Court Judge Kevin Brobson issued a 130-page report Friday saying in his view the Democratic voters suing to invalidate the current Congressional districts have no proven it unfairly favors Republicans.
The report was ordered by the PA Supreme Court, but it is not clear what the justices will do with it. The Court has scheduled oral argument on the case for January 17.
Technically, Pennsylvania will have three open Congressional seats.  A special election to fill Republican Tim Murphy’s seat in Western Pennsylvania will be held on March 13, Republican U.S. Senate candidate Lou Barletta said he will not be running for his Congressional seat that stretches from Harrisburg to Wilkes-Barre and Congressman Charlie Dent in the Lehigh Valley announced he was retiring at the end of his term.
State Tax Cuts On Top Of Federal Tax Cuts
State lawmakers have already announced plans to introduce legislation to cut state personal and corporate taxes and make other changes in response to federal tax changes. In addition, implementing the provisions of the homestead property tax referendum passed by voters last November will be a hot topic, especially in this election year.
Rep. Seth Grove (R-York) circulated a co-sponsor memo just before Christmas proposing to piggyback on federal tax cuts by cutting Pennsylvania’s Personal Income Tax from 3.07 percent to 2.8 percent and the corporate net income tax from 9.99 percent to 4 percent and “end corporate welfare.”
It’s another attempt by conservatives to shrink the size of government.
Sen. Lisa Boscola (D-Lehigh) said she plans to introduce legislation allowing owners of homestead residential properties to deduct their real estate taxes from their state income tax since federal changes limited that deduction.
House Majority Leader David Reed (R-Indiana) and Sen. David Argall (R-Schuylkill), prime sponsor of Senate Bill 76 the school property tax replacement bill, have both said implementing the homestead exemption property tax referendum will be a catalyst for restructuring Pennsylvania Tax Code.
Of course neither the Independent Fiscal Office or Governor’s Budget Office revenue projections so far include any state tax cuts or the impact from federal tax changes or local property tax replacement proposals.  
Revised IFO revenue estimates are due in late January.
With the Independent Fiscal Office saying the state faces a nearly $1 billion budget shortfall in FY 2018-19 funding and the Governor’s Budget Office saying no, no  revenue increases or supplemental appropriations are needed in the coming year, we’ll have to wait to see what reality brings.
Everyone is holding their breath that revenue counted as part of the budget, including from the sale of casino licenses-- $238.5 million and the expanded Sales Tax-- $43.5 million--  and a new tax on fireworks-- $31.7 million -- $313.7 million in all, will actually be collected.
Then there’s the legal challenge to the transfer of $200 million to the General Fund from the Professional Liability Joint Underwriting Association Fund now working its way through court.  Court action successfully thwarted a similar transfer last year, we’ll see what happens this year.
The FY 2018-19 budget season formally kicks off on February 6 with the Governor’s Budget Address.
With Republicans talking about tax cuts to one-up the Governor, the IFO saying there will be a $1 billion deficit to make up, the Governor’s Office saying the state’s structural deficit is all but gone and election year politics affecting everything, this budget season is shaping up to be a real humdinger!
The Senate and House open the new legislative session January 2, but don’t get down to real work until the week of January 22.
Welcome to 2018!
(Written By: David Hess)
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