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Season's Greetings
From the Officers and Staff of CCAP
Dear ,
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FOCUS ON TRANSPORTATION FUNDING FOR 2013
As the beginning of the 2013-2014 legislative session approaches, transportation funding is beginning to get more attention from the General Assembly and the Governor's office. In a recent discussion with Capitol reporters, Gov. Corbett indicated that a transportation funding package is on his list of priorities for 2013 to address an estimated $2.5 billion in needed road and bridge repairs, and he will release a proposal in early 2013 with an objective of completing a transportation funding solution concurrent with the June budget deadline.
The Governor's office has not released details of what the proposal will contain, although he has signaled part of the solution will be to utilize Pennsylvania's new public-private partnership law, Act 88 of 2012, which allows private companies to build and operate transportation infrastructure and then share revenue generated with the state.
Corbett has also said that his plan will follow the basic parameters of a 2011 reportreleased by his Transportation Funding Advisory Commission, which recommended, among other things, lifting the cap on the oil franchise tax and raising license and registration fees. In addition, the commonwealth may be able to take advantage of updates to federal highway law that make it easier to pay for bridge repairs.
Counties, which have responsibility for more than 4,000 county-owned bridges and have a significant interest in fixed-route and demand response transit systems, have selected transportation and infrastructure as a priority issue for several years.
Legislators have also put transportation funding on their agenda for the upcoming session. Sen. John Rafferty (R-Montgomery), chair of the Senate Transportation Committee, notes that he is drafting a proposal which would raise $1.6 billion to $2.2 billion for transportation needs during the next fiscal year. Senate Majority Leader Dominic Pileggi (R-Delaware) and Senate Minority Leader Jay Costa (D-Allegheny) shared on a recent PCN call-in program that they both believe there is a need to find additional revenue sources to fund transportation, although they will not consider broad based taxes to improve Pennsylvania's transportation infrastructure.
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MID-YEAR BUDGET BRIEFING
On Dec. 5, commonwealth Budget Secretary Charles Zogby presented a mid-year status reporton the state 2012-2013 budget, indicating that budget assumptions approved last June are meeting anticipated benchmarks. However, the positive news was once again overshadowed by a growing concern with several economic factors and statutory obligations that will create difficulties for the upcoming budget process.
His current budget analysis predicts a year-end balance for FY 2012-2013 of $478 million, up from a projected $293 million when the plan was adopted in June. Included is about $100 million in unspent funds from FY 2011-2012, and a steady revenue picture that is projected to result in an $85 million surplus in revenue collections.
Looking ahead to the FY 2013-2014 budget, the Secretary shared his opinion that it will be the most difficult budget so far for Gov. Corbett, possibly requiring state employee furloughs. Repeating the governor's commitment to balance the budget without a tax increase, Zogby identified, absent any changes to current programs, an estimated $1.3 billion in additional costs for medical assistance, pensions, debt service payments and corrections, all before any increase in aid to public schools or colleges. The Secretary's presentation and more details on the budget briefing are available under Budget News and Updates at www.pacounties.org.
The governor is scheduled to present his FY 2013-2014 budget proposal before a joint gathering of the Senate and House on Tuesday, Feb. 5.
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SELECT COMMITTEE ON PROPERTY TAXES ISSUES REPORT
The House Select Committee on Property Tax Reform, created under HR 774 of 2012, has released its final report containing recommendations for changes to the current system of local property taxation.
Rep. Tom Quigley (R-Montgomery), who chaired the Select Committee, noted in the report's introduction that the committee did not attempt to find a silver bullet for property tax reform, but instead sought common ground on initiatives or actual legislation that can be acted on in short order when the General Assembly reconvenes in 2013. Over a two month period, the committee held six public hearings on current legislative proposals, cost drivers and other local government budget issues, property valuation and reassessment issues, principles of taxation and school budgets, public debt collection and public pension systems. CCAP provided testimony to the committee, which can be found on the Government Relations page of www.pacounties.org.
While the bulk of the report's discussion and recommendations focus on school property taxes, there are a few relevant items for counties and municipalities as well. The committee recommended the state constitution be amended to allow a homestead or farmstead exclusion of up to 100 percent of the property value (the current limitation is 50 percent of median value). Other recommendations include providing more diversified taxing options to local governments, a concept supported by the CCAP platform, and requiring the State Tax Equalization Board to develop a "best practices" guide to make the property valuation system more efficient and equitable. The committee also suggested further study on providing property tax relief based on various levels of income, and incentivizing intergovernmental cooperation or consolidation. Finally, the committee recommended statutory changes that would allow local governments to make the best use of available debt collection tools.
The committee is seeking to re-establish itself by another resolution in the 2013-2014 session to monitor the progress of future property tax reform efforts, conduct future hearings and issue additional recommendations.
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ACT 13 AT-RISK BRIDGE FUNDING
The state Department of Transportation (PennDOT) has indicated that on January 2, 2013, counties will be receiving their allocations of the Act 13 Marcellus Shale Legacy funding that was deposited into the Highway Bridge Improvement Restricted Account in the Motor License Fund. These funds, which amount to 25 percent of the state share of impact fee receipts under the Act, are designated by the Act for use in the replacement or repair of locally owned, at-risk, deteriorated bridges. Every county will receive an allocation which, in accordance on the Act's statutory formula, is proportional based on relative population, with no county receiving less than $40,000.
PennDOT and CCAP worked together to define an "at-risk deteriorated bridge" as one that is structurally deficient or is posted with weight restrictions. Counties, at their discretion, would be permitted to apply the funds to any bridge project on the county Transportation Improvement Plan (TIP), including both county and municipal bridges. Although the Act requires PennDOT approval for projects undertaken with the funds, the agency considers using the funds for TIP projects as satisfying the Act's at-risk requirements (all TIP bridges are structurally deficient) and as having acquired PennDOT approval (the TIP is already approved by PennDOT).
PennDOT guidance recommends that each county work with its respective Metropolitan or Rural Planning Organization (MPO/RPO) to plan the use of its allocated Act 13 Impact Fee funds on the bridges included on the TIP. All projects should also utilize the Linking Planning and NEPA process.
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JUDICIAL SALARIES FOR 2013
On December 8, the Administrative Office of Pennsylvania Courts published in the Pennsylvania Bulletin the automatic cost-of-living adjustments for judicial salaries that will take effect on January 1, 2013. The listing sets the annual salary of a judge of the court of common pleas at $173,271. The full time district attorney salary is set in law at $1,000 less per year, so for 2013 the district attorney salary will be $172,271.
The full listing of judicial salaries from the Pennsylvania Bulletin is available at www.pabulletin.com.
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LAND BANKS AUTHORIZED TO FLIGHT BLIGHT
A new law will offer counties and municipalities another tool to convert vacant, abandoned and tax-delinquent properties into productive use. Under Act 153 of 2012, a county or municipality can create, by ordinance, a land bank, a public body similar to a redevelopment authority with a separate board to govern its operation. Initial membership of the board is established by the ordinance, as are the manner in which they will be selected, the manner in which public input will be sought and policies by which low-income, owner-occupant households would be given the chance to negotiate payment of their delinquent taxes.
The land bank can acquire tax-foreclosed, abandoned properties by donation or purchase, by transfer from tax claim bureaus, or by conveyance from a redevelopment authority, but it does not have eminent domain powers. A land bank may also eliminate liens or property tax claims so the property may be sold free of these burdens in the future; however, if the land bank receives any revenues that can be attributed to them, it must still distribute those revenues to the appropriate taxing jurisdiction.
A land bank would then manage and rehabilitate its properties with the goal of returning them to productive use, using funding from sources such as grants, loans, fees for services or bond issues. The land bank may rank its priorities for use of real property it conveys, including purely public spaces, affordable housing, retail and industrial activities and conservation areas.
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