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Number 25
December 12, 2014

www.pacounties.org

LEGISLATIVE BULLETIN

An e-newsletter of the County Commissioners

Association of Pennsylvania

Serving Counties Since 1886

In This Issue

Gov.-Elect Wolf Names Top Staff, Transition Committee Leaders

Mid-Year Budget Briefing Presented

Redistricting Changes Take Effect

U.S. House Approves $1 Trillion Spending Agreement

DPW Now Officially DHS

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GOV.-ELECT WOLF NAMES TOP STAFF, TRANSITION COMMITTEE LEADERS

On Dec. 10, Gov.-elect Tom Wolf announced that he has chosen several of the key staff for his administration. Mary Isenhour, who served as senior strategist on Wolf's campaign team, will be secretary of legislative affairs, while John Hanger, former secretary of the state Department of Environmental Protection, will serve as Secretary of Planning and Policy. In addition, Obra Kernodle has been named deputy chief of staff and director of the Office of Public Liaison, joining Katie McGinty, who was named chief of staff shortly after the election. Kernodle was deputy of legislative affairs in Philadelphia mayor Michael Nutter's administration prior to his role as deputy campaign manager and political director for the Wolf campaign.

In the meantime, the heads of the transition review committees, tasked with reviewing each state agency and sharing their findings with the Gov.-elect, were announced on Dec. 11. Among them is Erie County Executive Kathy Dahlkemper, who will serve as co-chair of the Transportation committee. Other local government representation includes Bethlehem mayor Bob Donchez as chair of the Drug and Alcohol Programs committee, as well as Lancaster mayor Rick Gray as chair of the Revenue committee. The full list of committee chairs is available on CCAP's gubernatorial familiarization web page. Media reports have indicated that Gov.-elect Wolf intends to announce his full transition team very shortly, which transition team chair John Fry noted could involve hundreds of people.

CCAP's gubernatorial familiarization web page also has a number of other resources about the transition, with additional details about transition team members as well as information on county government to share with the teams. A CD with these resources can be requested at PACountiesGR@pacounties.org.

MID-YEAR BUDGET BRIEFING PRESENTED

Budget Secretary Charles Zogby offered the commonwealth's annual mid-year budget briefing on Dec. 3, providing an overview of the state's financial climate since the beginning of the 2014-2015 fiscal year.

Overall, Zogby indicated this is the toughest fiscal situation the state has ever faced, with a looming structural budget deficit nearing $2 billion. Despite that, Zogby reported that fiscal year revenues to date have outpaced projections by $109 million and that he expects the state to end the current fiscal year with a $1 million balance. He identified several challenges for the FY 2015-2016 budget, including growth in mandated spending areas (including an additional $910 million in medical assistance costs and $466 million in pension costs) that will occur absent cost containment, spending or service cuts, or reforms. In addition, he noted the expiration of the majority of commonwealth union contracts in June 2015, the loss of $2 billion in one-time gap-closing options that were used to balance the FY 2014-2015 budget, and other long-term obligations that need to be addressed such as post-employment benefits. During the briefing, Zogby suggested several options that could be used to close the budget gap including state employee pension reform and changes to the current state-owned liquor store system.

Gov.-elect Tom Wolf and Montgomery County Commissioner Josh Shapiro, who is vice chair of Wolf's transition team Budget Deficit and Fiscal Stabilization Task Force, responded to Secretary Zogby's briefing, pointing to the multiple one-time fixes used to balance the FY 2014-2015 budget as the reason for the expected shortfall. Wolf said he fears the budget crisis may be larger than it has been portrayed, but he is committed to working with legislators to solve it. He indicated he was not prepared yet to offer specifics beyond those recommendations he supported in his campaign, including imposing a severance tax on natural gas and not delaying payments to meet Pennsylvania's obligations to state and school employee pension systems.

REDISTRICTING CHANGES TAKE EFFECT

Legislative redistricting for the 2015-2016 session took effect on Dec. 1, meaning that many counties will see changes to their local delegations as a result, in addition to changes as a result of the Nov. 4 election.

There are 55 state House districts that either added or lost counties as a result of redistricting and 26 state senate districts that were adjusted (including Senate districts for which elections were not held this year). In addition, 26 new House members and seven new Senate members will be sworn in Jan. 6. In the House 22 members were elected to fill seats of resigning legislators, while four defeated incumbents. In the Senate (for which only half of the 50 seats were up for election) six vacant seats were filled and one incumbent was defeated. A list of all changes in the House and Senate for the 2015-2016 session, including new legislators and redistricting changes, is available on CCAP's Legislative Action Center.

The first official session day of the new session for both the House and Senate is Jan. 20, also the day of the gubernatorial inauguration. The General Assembly has also announced that the Governor's budget address is scheduled for Tuesday, March 3; in the first year of a new administration, the governor has the option to deliver his budget proposal the first Tuesday in March rather than the traditional first Tuesday in February.

With the new session about to begin, CCAP is encouraging counties to meet with their new representatives and reconnect with returning legislators. While members are home in their districts, this is a great time to share legislative priorities and establish relationships for the new year. These opportunities could include a visit to see the activity in the county 911 Public Safety Answering Point, or a visit with county human services to discuss programs such as the Human Services Block Grant, child protective activities, mental health and substance abuse programs, and others. Other suggestions include a trip to view bridges in need of repair or a tour of the county prison to discuss health care costs, mental health issues and space issues.

Additional resources for connecting with legislators are available on CCAP's Legislative Action Center, or counties can contact Government Relations staff at PACountiesGR@pacounties.org for more information.

U.S. HOUSE APPROVES $1 TRILLION SPENDING AGREEMENT

The U.S. House narrowly passed a $1.1 trillion omnibus spending package by a 219-206 vote, just hours before the short-term Continuing Resolution (CR) expired at midnight on Dec. 11. The omnibus represents an agreement announced earlier in the week by the chairs of the U.S. House and Senate Appropriations committees to fund most of the federal government through September 2015. The majority of the members of the Pennsylvania House delegation voted in favor of the measure, with Congressmen Mike Doyle (D-14), Scott Perry (R-4) and Allyson Schwartz (D-13) casting the state's only no votes.

The bill still requires Senate action, and with the CR expiring on Dec. 11, Congress also approved a two-day CR that evening to give the Senate time to pass the omnibus package. As the Bulletin goes to press, Senate Majority Leader Harry Reid said the Senate would take up the long-term omnibus as soon as Friday and seek a vote as quickly as possible. President Obama has indicated he will sign the omnibus agreement.

About $521 billion of the negotiated spending plan is dedicated to defense, with the remaining $492 billion allocated for non-defense spending. However, the agreement will fund the Department of Homeland Security only through February 2015, providing time for Congress to address President Obama's plan to curb deportation for millions of illegal immigrants, without threatening to close the entire government.

The legislation includes $374 million to fully fund the Payments in Lieu of Taxes (PILT) program for FY15, a goal sought by NACo. The permanent extension of the program had expired in June and, without a mandatory authorization, counties would not have received important payments that offset tax revenue losses due to the presence of tax-exempt federal land.

Although it had been a subject of negotiation, the final budget deal does not include any riders which would prohibit the Environmental Protection Agency from moving forward with its proposed Waters of the U.S. regulations. At the same time, riders attached to the spending bill would provide a one-year extension of the Internet Tax Freedom Act, which bans state and local governments from enforcing existing sales tax laws on remote or online sales. NACo has a long-standing priority to reverse this policy.

DPW NOW OFFICIALLY DHS

On Nov. 24, the state Department of Public Welfare (DPW) officially became the Department of Human Services (DHS), following the enactment of HB 993 as Act 132 of 2014 in late September. The legislation, introduced by Rep. Tom Murt (R-Montgomery), reflects the importance of having the agency name accurately reflect the services and the mission of county and state human service entities. Many of the services provided by DHS are for those who are truly in need, including children, the aging population, and those with mental or developmental disabilities.

CCAP and its members supported the bill, noting that coordinating the name of the state oversight agency with those of federal and county agencies, which are often referred to as offices or departments of "human services," helps consumers and constituents understand the nature and type of services being provided and how they relate to local and national provider agencies.

While the department has changed its sign and developed a new logo, other items such as stationery, office signs and badges will change gradually as they are replaced to keep costs at a minimum during the transition. The DHS website can now be accessed at www.dhs.state.pa.us.

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