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Number 3
February 6, 2015

www.pacounties.org

LEGISLATIVE BULLETIN

An e-newsletter of the County Commissioners

Association of Pennsylvania

Serving Counties Since 1886

In This Issue

IFO Releases Revised Revenue Estimate

Purely Public Charity Amendment Discussed

Senate Committee Chairs Re-named

Long-Term Care Report Presented to House Panel

Congress Hears Local Concerns with Waters of the U.S. Proposal

Gov. Wolf Budget Address March 3

2015 County Priorities to be Announced

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IFO RELEASES REVISED REVENUE ESTIMATE

The state's Independent Fiscal Office (IFO) provided some positive news in late January, releasing a mid-year update of its revenue estimate for FY 2014-2015 that is $250 million higher than the estimate issued at the beginning of the year. The revised estimate of $30.2 billion is also $26 million higher than the official estimate recertified by the Governor in September.

Matthew Knittel, Director of the IFO, noted that Pennsylvania households are expected to save between $3 and $3.5 billion on gasoline purchases this fiscal year, allowing them to increase spending on consumer goods and ultimately increasing sales tax revenues. The revised estimate also includes increases in corporate net income tax collections based on strong final payments in 2013. However, the revised estimate also reflects a decrease in expected transfers from the Oil and Gas Lease Fund and casino license fees, as well as decreases in personal income tax revenues related to concerns about wage growth and the strength of annual payment.

The IFO reminded the public that the economic and policy factors affecting FY 2014-2015 are carried forward to next fiscal year, and the absence of one-time transfers from FY 2014-2015 to FY 2015-2016 will restrain overall growth in FY 2015-2016. The preliminary revenue outlook put forward by the IFO for FY 2015-2016 indicates a growth rate of about 1.3 percent. In its five-year economic and budget outlook released in November, the IFO predicted the state will face a shortfall of $1.85 billion in FY 2015-2016, including $171 million related to the current fiscal year and $1.679 billion related to the coming year.

The Revenue Trends report and five-year outlook can both be found at http://www.ifo.state.pa.us.

PURELY PUBLIC CHARITY AMENDMENT DISCUSSED

The Senate Finance Committee held a hearing on Feb. 4 on Senate Bill 4, a constitutional amendment intended to provide the General Assembly with the authority to determine the qualifications for "institutions of purely public charity" pursuant to Article VIII, section 2 of the Pennsylvania Constitution.

While CCAP remains neutral on SB 4 and its underlying issue of whether the authority to define a purely public charity should rest with the courts or the legislature, the CCAP Board has adopted a policy statement that the Association would resist any efforts, judicial or legislative, to make charitable exemptions more broadly available or easier to obtain. Property taxes are the only form of local tax revenue available to counties, and the predominant revenue source for municipalities and school districts. Each exemption granted becomes a burden that must be borne by other taxpayers, and therefore the exemption for institutions of purely public charity should be available to, and only available to, those institutions that truly meet appropriate tests of granting services to the public on a charitable basis. CCAP submitted written comments to the committee, which can be found by clicking on Government Relations, then Testimony and Advocacy, at www.pacounties.org.

During the hearing, Auditor General Eugene DePasquale shared the findings from a report his office released in December, which looked at 10 counties and estimated that potential tax liabilities of exempt properties could be $1.5 billion (in addition to charitable institutions the total includes taxes not paid by government entities, churches, schools, and universities). He urged the committee to carefully consider the potential fiscal impact of broadened exemptions on local governments, school districts, and the charities themselves.

Law professors Dr. Nicholas Cafardi (Duquesne) and Katherine Pearson, (Penn State Dickinson) also discussed the legal ramifications of the proposed amendment, arguing that the amendment would not change the courts' role to interpret the constitution or its right to define what constitutes a purely public charity. Instead, they felt SB 4 could serve to encourage the courts to give deference to the legislature's standards for purely public charities.

Constitutional amendments must be approved by the General Assembly in two consecutive sessions and then approved by voter referendum. The amendment proposed in SB 4 was previously approved by the General Assembly in the 2013-2014 session, and if approved during the current 2015-2016 session would then be put before the electorate in the next statewide election. Finance Chair John Eichelberger (R-Blair) indicated that the proposal is likely too late for placement on the May primary ballot.

SENATE COMMITTEE CHAIRS RE-NAMED

Several new Senate committee chairs have been named since the original announcement of chairmanships in January. Sen. Scott Hutchinson (R-Venango) will take over as chair of the Local Government Committee, after Sen. Dominic Pileggi (R-Delaware) declined the chairmanship. As a result, Sen. Ryan Aument (R-Lancaster) takes over Sen. Hutchinson's former post as chair of the Communications and Technology committee. Sen. Aument was originally assigned to chair Intergovernmental Operations, a committee which will now be led by former Delaware County Council member Sen. Tom McGarrigle (R-Delaware). The list of both House and Senate committee chair assignments is posted to the CCAP Legislative Action Center and a complete listing of Senate committee chairs and committee members is available at www.pasen.gov.

LONG-TERM CARE REPORT PRESENTED TO HOUSE PANEL

The House Aging and Older Adult Services Committee met on Feb. 4 to hear a presentation regarding the final report of the Pennsylvania Long Term Care Commission. The Commission was created by an executive order of former Gov. Tom Corbett, convening a group of stakeholders involved in long-term care services and supports to study the current delivery system and to make recommendations for ensuring Pennsylvania's system is person centered, efficient, effective and fiscally accountable. Commission members, along with Department of Human Services staff and volunteers who served as advisors to the Commission, met for nine months. Former CCAP President and Berks County Commissioner Christian Leinbach was a Commission member, and represented the interests and concerns of counties, including the provision of county-based services as well as the unique interests of county-based long-term care providers, which serve as a crucial safety net for clients without the resources to pay for care.

The informational hearing featured comments from several members of the Commission, including representatives from the Pennsylvania Homecare Association, PA LIFE Providers Alliance, Pennsylvania Association of Area Agencies on Aging, Leading Age PA, and Pennsylvania Health Care Association. The panelists provided suggestions for areas that the committee should address, including staffing, regulatory challenges and excessive paperwork requirements. The panelists shared that the report breaks new ground, while recognizing the fiscal challenges faced by the state. It establishes a road map for a policy direction for the future that emphasizes the need to improve care coordination and looks to create a comprehensive way of providing supports and financing for older adults and those with disabilities.

There is no indication whether the Wolf Administration plans to utilize the recommendations in the report to define a policy direction for the commonwealth.

CONGRESS HEARS LOCAL CONCERNS WITH WATERS OF THE U.S. PROPOSAL

On Feb. 4, the House Committee on Transportation and Infrastructure and the Senate Committee on Environment and Public Works held a joint hearing in Washington D.C. on the state and local implications of the proposed Environmental Protection Agency and U.S. Army Corps rule to define "Waters of the U.S." National Association of Counties (NACo) first vice president Sallie Clark, an El Paso County, Colorado commissioner, offered testimony on NACo's behalf, sharing serious concerns with the expanded federal oversight and with the vague language in the proposed rule that would create uncertainty and delays without meaningful environmental benefit. In addition, she pointed to an inadequate consultation process with state and local governments, and ongoing delays with the current permitting process. She emphasized the importance of the local, state and federal partnership in crafting practical rules and implementing Clean Water Act programs on the ground.

NACo had submitted comments to the agencies last November calling for the proposed rule to be withdrawn until further analysis and more in-depth consultation with state and local officials could be completed. CCAP also submitted comments in November asking that the proposal be withdrawn and modified after careful consideration of all comments submitted. CCAP's comments highlight the vagueness of the definition, and argue that Pennsylvania already has a strong regulatory framework in place to protect all waters of the commonwealth, so an expansion of federal jurisdiction would only add a layer of permitting and paperwork without any benefit to the state's water quality. In addition, an expansion of the "Waters of the U.S." definition would remove decisions to the federal level, whose staff are not actively in the field and dealing with these issues every day in the same way as are counties.

GOV. WOLF BUDGET ADDRESS MARCH 3

While the Governor typically presents his budget proposal for the upcoming fiscal year to the General Assembly the first Tuesday in February, newly inaugurated governors have the option to move their budget address to the first Tuesday of March. As such, Gov. Tom Wolf is scheduled to deliver his budget address on Tuesday, March 3.

2015 COUNTY PRIORITIES TO BE ANNOUNCED

On Wednesday, Feb. 11, CCAP officers will unveil county 2015 legislative priorities with a press conference at 2 p.m. at the state Capitol in Harrisburg. Fact sheets, talking points and other materials providing more detail on the priorities will be available at www.pacounties.org under What's New beginning on Feb. 11.

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