BUDGET NEGOTIATIONS CONTINUE

Although both the House and Senate convened session days in mid-July, the Republican legislative leadership and the administration remain far apart in budget discussions, according to media reports. Both legislative chambers are scheduled to return to Harrisburg in late August, although members remain on a six-hour call in the event a budget agreement is reached prior to that.

Sticking points on the budget include the Governor's proposed increases in sales and personal income taxes to provide school property tax reductions; the Republican budget passed in late June in HB 1192, later vetoed by Gov. Wolf, did not include any tax increases. Reportedly, revenue discussions may be needed to break the stalemate and according to media reports, a severance tax on natural gas is the most likely way to do so. Senate Majority Leader Jake Corman (R-Centre) has told media he would not rule out a severance tax but did not support the governor's plan, saying that, to be considered, any such tax would have to contain provisions that would allow the industry to develop and continue to maintain job growth. Counties are seeking maintenance of the shale gas impact fee established under Act 13, in its current form, as a 2015 priority.

Media reports also indicate that House and Senate leaders on the Republican side will be seeking to negotiate a budget deal which can win a majority vote - 102 votes in the House, 26 votes in the Senate - from their respective caucuses. This will likely make it more difficult for any of the Governor's proposed tax increases to be approved.

On July 21, House Appropriations Chairman Bill Adolph (R-Delaware) introduced HB 1460, which contains identical line items to the Republican budget in HB 1192 that was vetoed by Gov. Wolf on June 30. It is expected that the bill will serve as a placeholder for procedural purposes as budget negotiations continue.

Without an appropriations bill signed into law, the commonwealth has lost its authority to spend funds and pay most of its bills and obligations for FY 2015-2016. A link to frequently asked questions outlining which funds may continue to be distributed and which may not are found on CCAP's Budget News and Updates page.

MOODY'S DEEMS NEW 911 FEE "CREDIT POSITIVE"

Act 12 of 2015, the recently enacted update to Pennsylvania's Emergency Telephone Act, has been applauded by Moody's Investor Service and been given a "credit positive" rating in Moody's weekly credit outlook report released on July 9. The report noted that increasing the 911 fees will eliminate more than $100 million in annual deficits the state's 67 counties have incurred for 911 call taking and dispatch obligations.

According to the state's annual 911 report, counties' 911 responsibilities in 2014 cost $292 million, yet the fee structure only accounted for $188 million. This required many counties to backfill the deficit with money from the counties' general fund budgets, which are generated through county property tax dollars. Further, the Legislative Budget and Finance Committee's (LBFC) 2012 report on 911 found that 24 counties funded their 911 operations solely on fee revenues in 2008 and by 2011 that number had dropped to seven. The new law raises the monthly fees for wireless, wireline, and VoIP to a uniform $1.65, and the Moody's report indicated their belief that the increase will generate at least the $105 million necessary to close the gap between costs and revenues.

FEDERAL TRANSPORTATION UPDATE

HOUSE MOVES LOCAL GOVERNMENT INVESTMENT BILL 

RESOLUTIONS ADOPTED AT NACO ANNUAL CONFERENCE 

VOTING MATTERS  

On July 17, each CCAP member was emailed a voting matters packet containing items to be considered at the Tuesday business meeting of the upcoming CCAP Annual Conference at the Omni William Penn in Pittsburgh. The agenda packet includes proposed policy resolutions, along with officer elections and site selection for the 2020 Annual Conference. The resolutions will be deliberated during the conference and then submitted by electronic ballot to the full CCAP membership within 10 days of the conclusion of the Conference for final adoption.