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Number 20
October 2, 2015

www.pacounties.org

LEGISLATIVE BULLETIN

An e-newsletter of the County Commissioners

Association of Pennsylvania

Serving Counties Since 1886

In This Issue

Budget Impasse Continues

Housing Trust Fund Bill Gets Committee Nod

Counties Testify on Mental Health Policy

Senate Advances Assessment Bills

RETSL Bill Moves Forward

Local Tax Collection Law Updates Return to House

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BUDGET IMPASSE CONTINUES

Legislative efforts to adopt a short-term stopgap budget for FY 2015-2016 have ended, with Gov. Wolf's Sept. 29 veto of both SB 1000, the stopgap budget bill, and SB 1001, Fiscal Code amendments implementing the stopgap budget. SB 1000 generally would have funded most line items in the state's General Fund at about 33 percent (a few were funded higher, including children and youth at about 50 percent) of the amount originally provided in HB 1192, and would have allowed 100 percent of federal funds and state funds from dedicated sources, such as the Lottery Fund, to flow through. The bill was approved in both the Senate and House on party line votes, with Republicans voting in favor and Democrats voting in the negative.

Following the Governor's veto of the stopgap bills, House Majority Leader Dave Reed (R-Indiana) and Senate Majority Leader Jake Corman (R-Centre) announced the intention to hold a vote on the House floor on Oct. 7 on the most recent tax measures proposed by Gov. Wolf in September. According to a letter sent by the leaders to the governor, this would include an increase in the personal income tax from 3.07 to 3.49 percent, a limited expansion of the sales tax base while maintaining the current rate, applying new taxes to tobacco products and increasing the cigarette tax, and implementing a severance tax on natural gas (with an adjustment to provide $225 million in impact fee payments for 2015).

In the meantime, Pennsylvania enters the fourth month of its fiscal year without a state budget. While meetings continue between legislative leadership and the governor, reports as of this Bulletin indicate that the two sides remain far apart on the budget itself, as well as other issues under discussion such as state and school pension reform and changes to the state's liquor sales system, as well as the tax proposals mentioned previously.

Counties remain committed to assuring the commonwealth's most vulnerable citizens continue to receive critical human services during the budget impasse and are seeking appropriate state funding for these shared obligations. CCAP is documenting the impacts of delayed state payments and resulting cash flow issues, which is reported on the Budget News and Updates page of www.pacounties.org. Counties also continue to advocate for critical priorities, including taking any proposed rebalancing related to child welfare lines off the table and beginning a three-year restoration, consistent with the Governor's budget proposal, of the ten percent reduction to the line items in the Human Services Block Grant that affect core services across all 67 counties.

HOUSING TRUST FUND BILL GETS COMMITTEE NOD

On Sept. 29, the Senate Urban Affairs and Housing Committee unanimously reported HB 792, sponsored by former CCAP member Rep. Tom Killion (R-Delaware). The bill would provide additional funding for the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund. Also referred to as the state Housing Trust Fund, PHARE is currently funded through the Act 13 impact fees and is accessible only to counties impacted by shale gas drilling. Counties currently receiving PHARE funding have seen significant benefit, and have been able to implement innovative programs that have expanded affordable, accessible housing options. The money is often used for rehabilitation, blight demolition, and rental assistance.

House Bill 792 would expand the Housing Trust Fund statewide, and direct any state realty transfer tax revenue receipts in excess of what was budgeted for the fiscal year to the Fund. Of those revenues, 40 percent of the money would go to the Housing Trust Fund and the remaining 60 percent would go to the General Fund. The bill would not increase the realty transfer tax or otherwise redistribute budgeted realty transfer tax revenues. The bill is now before the full Senate.

COUNTIES TESTIFY ON MENTAL HEALTH POLICY

Members of the Pennsylvania Association of County Administrators of Mental Health and Developmental Services (PACA MH/DS), a CCAP affiliate, recently provided testimony before the Senate Public Health and Welfare Committee on mental health issues and the mental health involuntary commitment process.

Mary Jo Dickson, administrator for the Allegheny County Bureau of Adult Mental Health Services, told the committee that during FY 2014-2015, almost 4,500 Emergency Involuntary Examination and Treatments were authorized in her county, and of those, more than 3,500 resulted in admissions to psychiatric inpatient units. She noted the importance of appropriate mental health education, training and work experience requirements for county delegates, as well as training for emergency departments, mental health review officers and hospital staff. Further, Dickson said additional training must be offered on a regular basis to address the needs across the commonwealth and improve consistency in interpretation and implementation of the Mental Health Procedures Act.

Juniata Valley Behavioral and Developmental Services administrator Chris Wysocki provided the committee with an overview of the Mental Health Procedures Act and explained that involuntary commitment is a last resort because it rarely results in a recovery-oriented outcome and is very expensive. Wysocki also noted that funding is needed to address current deficiencies for community-based, recovery-oriented services, as are clear guidelines interpreting existing law and ongoing collaboration between the state, counties and other stakeholders. For their full testimony, visit the CCAP Testimony and Advocacy webpage.

The committee also heard from hospital and health care representatives, as well as Dr. Dale Adair, Medical Director and Chief Psychiatric Officer for the Office of Mental Health and Substance Abuse Services at the Department of Human Services. A video recording and all written testimony can be found on the Senate Public Health and Welfare Committee's web page.

SENATE ADVANCES ASSESSMENT BILLS

The Senate recently approved several bills providing clarifications to provisions related to the county assessment system. Senate Bill 898 and SB 899, both introduced by Sen. Scott Hutchinson (R-Venango), would amend the Second Class County Code and County Consolidated Assessment Law (CCAL), respectively, to clarify requirements to adjust property tax rates after a countywide reassessment. Under current law, if the results of a county-wide reassessment would result in an increase in the revenue collected from property taxes, a local government must decrease the tax rate to a rate that would yield the same total revenue as the year prior to the reassessment, and then can adjust rates by up to a ten percent increase in revenues. The two bills would clarify that each individual property tax rate must be made neutral following a reassessment, not just the total revenue. In addition, rates set by referendum would also have to be readjusted in a revenue neutral fashion, with future changes in those tax rates as otherwise provided for by law. Both bills were unanimously approved by the Senate.

The Senate also approved SB 785, introduced by former CCAP member Sen. John Eichelberger (R-Blair), which would correct a technical error in the CCAL, by a 46-1 vote. Historically, all buildings on a parcel were considered taxable, but now, due to a Commonwealth Court interpretation of the statute in Pedersen v. Monroe County Board of Assessment Appeals (2014), only those buildings "permanently attached to land or connected with water, gas, electric or sewage facilities" may be subject to real estate taxation. Unless clarified by SB 785, the Pedersen case has the potential to affect assessments, and ultimately all property taxpayers, by not capturing the full value of real estate.

All three bills now go to the House for consideration.

RETSL BILL MOVES FORWARD

The Senate Local Government Committee unanimously reported to the full Senate HB 909, legislation introduced by Rep. Chris Ross (R-Chester) to make changes to the Real Estate Tax Sale Law. Specifically, HB 909 would allow county tax claim bureaus to recover at upset sale costs incurred by the county for property rehabilitation and maintenance. Recovery would be prior to other distributions under the law. The change would assist counties in addressing safety and maintenance of the property, or other improvements reasonably necessary to improve the property's sale-ability.

LOCAL TAX COLLECTION LAW UPDATES RETURN TO HOUSE

The Senate has approved legislation making several changes to Act 164 of 2014, which established basic and continuing education for tax collectors, sending it back to the House for a concurrence vote.

Act 164 mandates basic training and continuing education for tax collectors, which had previously been offered on a voluntary basis by the state Department of Community and Economic Development. The Act also requires tax collectors running for office to file a criminal background check with their nominating petitions and to name a deputy to serve in the event of an incapacitation. As amended by the Senate, HB 823, introduced by Rep. Keith Greiner (R-Lancaster), would extend the deadline for tax collectors to complete the basic training until January 1, 2017, and reduce the mandatory continuing education to two hours in each four-year term, rather than the six hours previously required.

The bill also contains several clarifying measures sought by CCAP related to administration of the Act, including an exemption from the education and training requirements for county treasurers collecting taxes on behalf of a municipality during a vacancy. In addition, HB 823 specifies that the approval of a deputy by the tax collector's surety needs to be filed only with the taxing districts served by the collector, and not with the office of the clerk of the court of common pleas. The bill further directs tax collectors currently running for office who will take office in January 2016 to submit their background checks with the municipalities for which they are elected, with the procedure of filing the background check with the nominating petitions or papers to take effect for subsequent elections.

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