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Despite ongoing media reports that a deal would be reached on a transportation funding proposal after the legislature returned from the two-week election break, action again failed to materialize during the week of Nov. 11. Still, discussions among legislative leadership and the administrative continue, and a vote on the Senate-passed SB 1 or comparable legislation is still anticipated during the fall session. The window of opportunity is swiftly narrowing, however; there are just six days of joint session remaining before the holiday recess along with a handful of days with either the House or Senate in session.

Media reports have indicated that negotiators may be closing the gap toward an agreement on the overall level of funding, potentially somewhere close to the Senate's $2.5 billion version. However, few details on revenue elements or fund distribution have surfaced, apart from a general presumption that the primary funding source is removal of the cap on the oil franchise tax.

Prevailing wage amendments, centered on raising the threshold on transportation projects from $25,000 to $100,000, are also reportedly part of the negotiations.

In the meantime, HB 106, sponsored by Rep. Mike Carroll (D-Luzerne), to allow biennial vehicle registration, was reported from the House Transportation Committee on Nov. 13. The proposed change was a recommendation of the Governor's Transportation Funding Advisory Committee report, estimated to provide annual savings of $5 million to PennDOT and total yearly customer postage savings of $1.5 million. During the committee meeting, it was acknowledged that the bill could be a possible vehicle for a comprehensive transportation funding proposal if it is brought before the full House.

Both funding and modernization solutions for transportation and infrastructure and prevailing wage reform are CCAP legislative priorities.

The House Finance Committee recently heard testimony on two transportation proposals, HB 762 (introduced by Rep. Eli Evankovich, R-Westmoreland), and HB 1630, (sponsored by Rep. Brad Roae, R-Crawford). The similarly-drawn bills provide a dedicated revenue source for roads and bridges by shifting vehicle sales tax receipts from the commonwealth's general fund to the Motor License Fund.

House Bill 762 would require all revenues, interest, and penalties generated by the sales and use tax on the retail sale of on-road vehicles and trailers to be transferred to the Motor License Fund incrementally over a four-year period, reaching 100 percent by FY 2017-2018. House Bill 1630 would do the same, but over a ten-year period.

The bills do not address mass transit funding, with the bills' sponsors indicating that the proposals are not comprehensive transportation funding measures but could be part of the funding solution. Discussion also focused on how the revenues lost from the general fund would be resolved; the sponsors indicated that transportation is a primary governmental function and by shifting money, the commonwealth would be reprioritizing the dollars where most needed. The bills were not brought up for a vote after the hearing, and it is unclear what role, if any, they may have as part of the negotiations on an overall transportation funding package. 

According to a release issued by the Department of Revenue, the commonwealth collected $2.09 billion in General Fund revenues for October, which was 1.4 percent or $29 million more than anticipated. The total year-to-date revenue collections total $8.2 billion, which is $41.8 million, or 0.5 percent, more than estimates. Tax revenues increased by 2.7 percent, with the largest increases in the sales and use tax and the personal income tax. Corporate net income tax and inheritance tax revenues also increased as well.

Also, on Nov. 14, the Independent Fiscal Office (IFO) held its annual presentation on the commonwealth's economic and budget outlook for the current year and over the next five years; the presentation and full report are available at www.ifo.state.pa.us.

The Office noted that it was making no changes to its FY 2013-2014 estimate, but concludes that, assuming current policies and services are held constant, the commonwealth has a structural deficit of around $839 million for FY 2014-2015, increasing up to $2.1 billion in FY 2018-2019. The IFO conclusion is based on its estimate of 3.1 percent average annual growth in revenues, coming mostly from personal income and sales taxes, and 4.1 percent average annual growth in expenditures, driven largely by mandatory pension contributions, debt service and health care inflation. In addition, the general fund balance carried forward from prior years is expected to be exhausted by the end of FY 2013-2014.

How the economic projections of the IFO will factor into the overall budget debate for FY 2014-2015 is not yet known, although the IFO made clear that policymakers will face difficult choices in balancing future budgets.

The Governor will release his proposed budget plan for the 2014-2015 fiscal year in just a few months, and state agencies are already submitting their budget requests. The Governor's Budget Office is expected to hold its mid-year budget briefing for the 2013-2014 fiscal year sometime in December. 

CCAP policy committee members will meet Nov. 24 in conjunction with the CCAP Fall Conference, Nov. 24 to 26 at the Hotel Hershey, to develop their 2014 work plans and to set legislative and policy priorities for 2014. A date for the formal announcement of the priorities at the State Capitol will also be finalized during the conference.

The Conference also includes a membership voting session on Tuesday, Nov. 26. The agenda includes votes on the Association's 2014 action plan and 2014 dues schedule. The voting information was emailed to the full CCAP membership on November 14.