I am pleased to send you my Session Wrap Up e-newsletter. This e-newsletter features events and legislative activities from the Session Week of March 8, 2021.
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Senators Unveil Legislation Addressing Bridge Tolling Plan
I was among a group of Republican Senators who hosted a press conference on Thursday to discuss our legislation addressing a recently announced plan to impose tolls on nine bridges in Pennsylvania. The Senators, whose districts would be impacted by PENNDOT's Pathways Major Bridge Public-Private Transportation Partnership (P3) Initiative, called for passage of legislation to reform the P3 statute and void PENNDOT's plan to toll the bridges. Video
Committee Studies Carbon Dioxide Management Technologies
The Senate Environmental Resources & Energy Committee studied the deployment and utilization of carbon dioxide management technologies as part of an informational briefing on Wednesday. Video
The committee reviewed the technology, as well as the costs associated with the capture, transport and storage of carbon dioxide, which could play a key role in decarbonizing many industry sectors in Pennsylvania and around the world.
Senate Appropriations Committee Budget Hearings
The Senate Appropriations Committee held four days of public hearings, Monday, March 8, through Thursday, March 11, on the Governor's proposed Fiscal Year 2021-22 budget running.
Independent Fiscal Office (IFO)
The COVID-19 pandemic had a devastating impact on the state's economy, workers and families, according to IFO Director Matt Knittel and Deputy Director Brenda Warburton. Overall, the state lost about 470,000 jobs in a variety of fields — ranging from service and hospitality industries to positions in higher education — with younger workers (ages 14 to 24) displaced at higher rates than all others. Knittel said the IFO projects that it will likely take six years for the state to recoup those 470,000 jobs.
With the state struggling to revive its economy and stem job losses, Senate Republicans hammered the Governor's proposed 46.3 percent increase in the Personal Income Tax. The IFO is currently studying the impact of the Governor's proposal on the 850,000 business owners who pay that tax. Knittel expects to have the report completed by early April.
He declined to offer his opinion on whether the Governor's radical expansion of the tax forgiveness program and a liberal interpretation of "poverty" violate the uniformity clause of the state Constitution. However, Knittel said the changes – if enacted — would increase the program from $250 million to $2.8 billion.
While avoiding specific references to the Governor's various tax proposals, Knittel stressed that tax rates impact decisions made by business when they consider relocation and that "higher taxes are not conductive to economic growth."
Video of the hearing.
Revenue Secretary Dan Hassell faced several questions about the $950 million difference in revenue estimates by the Administration and the Independent Fiscal Office, but adamantly denied that the Governor intentionally "lowballed" his estimates to prop up his tax increase proposals.
Senate Republicans remain concerned about the Governor's proposal to impose a progressive tax system in direct violation of the Pennsylvania Constitution's Uniformity Clause, which allows "poverty provisions" for PIT. Secretary Hassell defended the fact that a family of four earning $84,000 would be in "poverty" under the Governor's proposal — even though that is $20,000 over the state median income of $62,000.
Senate Republicans and Department officials clashed on the Governor's Shale Extraction Tax proposal and the impact it would have on the industry and the state's economy. Department officials maintain the tax will raise $300 million, even as they noted the dramatic decrease in revenues from the existing impact fee — from $251 million in 2018 (paid in 2019) to $200 million in 2019 (paid in 2020). Under questioning, Secretary Hassell admitted that he is unaware of any business or industry in Pennsylvania that has paid more to the state under a special fee.
Along similar lines, Secretary Hassell claimed to be unaware of the "carbon tax" that would be imposed under the Governor's edict that Pennsylvania join the Regional Greenhouse Gas Initiative.
On the Governor's proposal to legalize recreational marijuana, Secretary Hassell acknowledged that the associated tax and banking issues would be more significant than those posed by the current medical cannabis marketplace. However, he added that he believed the Governor's proposal to be more about criminal justice reform than revenue generation.
Department of Conservation and Natural Resources (DCNR)
Republican members of the Senate Appropriations Committee urged the Department to open access to natural gas land-locked leases that have been turned back. It is estimated that DCNR is sitting on 500,000 acres that could be drilled without surface disturbance and questioned why that land cannot be leased.
Senate Republicans emphasized that Pennsylvania cannot have clean energy, such as solar and wind power, without mining and fossil fuels. They said that point needs to be made to ensure that Pennsylvania has a safe energy grid.
Stressing the need to provide high-speed internet to rural areas and close the digital divide, members urged the department to repeal its ban on broadband infrastructure on state game lands. Senate Republicans also pressed for installing more industrial solar panels on state park lands, rather than locating them on prime farmland and sought assurances that funds from the registration, certification and enforcement of ATVs go to grants and programs for all-terrain vehicles.
Senate Republicans questioned Department of Human Services (DHS) Secretary Teresa Miller about the numerous ways the pandemic and changing demographics will affect the delivery of services and costs to taxpayers. Lawmakers also urged the Secretary to use funding from the new federal stimulus for one-time costs – not to backfill programs that will increase costs to taxpayers when that funding disappears.
Governor Wolf's budget would increase spending for DHS by nearly $760 million next year. Secretary Miller said supplemental spending for her Department increased by more than $900 million in the current year's budget. Senate Republicans raised concerns about these cost increases and the effect of these expenses on other parts of the budget.
The cost of implementing the Community HealthChoices managed long-term care program has nearly tripled in recent years, despite the Commonwealth's move away from a fee-for-service model. Secretary Miller claimed that costs would have been even higher today under the previous capitated payment model.
Regulations on the state's COVID-19 rental assistance program last year resulted in many renters and landlords declining to participate. With new funding on the way from the federal government, Secretary Miller pledged to avoid the same kind of onerous regulations that caused the original program to fail many Pennsylvanians who desperately needed the assistance.
Despite Governor Wolf's vetoes of legislation to require able-bodied Medicaid recipients to meet commonsense work requirements in order to continue receiving benefits, Secretary Miller said that she hoped to see 100 percent of these individuals find employment.
Video of the morning session.
Video of the afternoon session.
The Administration's plan to require Pennsylvania to join the Regional Greenhouse Gas Initiative (RGGI) drew strong opposition during the Appropriations Hearing on the Department of Environmental Protection's (DEP) proposed budget.
Senate Republicans strongly urged the DEP and Wolf Administration to better engage with local communities, elected officials and economic development boards that will be most significantly impacted by the Commonwealth joining RGGI. Implementation of RGGI will shut power plants down and have a devastating economic impact on jobs and communities, making it more difficult to fund solar power, wind power and other energy initiatives.
DEP Secretary Patrick McDonnell was questioned about his Department's position that RGGI has popular support, given the bipartisan opposition by the legislature and other groups and the $300 million price tag.
The Department of State's proposed budget includes a $4.5 million increase for the Statewide Uniform Registry of Electors (SURE), including $2.3 million for continued system upgrades to assist in election modernization. Members sought assurances the upgrades would be completed on time and be effective, unlike several other IT projects undertaken by the administration.
Acting Department Secretary Veronica Degraffenreid was directed to provide details on the use of risk-limiting audits — a method of ensuring that election results match voter selections reflected on paper ballots. Information requested includes the exact audit parameters and other factors that would influence the accuracy of the audit.
Under the Voting Machine Debt Service Act passed by the General Assembly in 2019, a total of $90 million of financing was available for counties to purchase new voting equipment in 2020. The hearing included discussion of the total amount of grant funding requested by the counties and how much has been reimbursed to the counties to date.