From Second and State: Capitol Wrap – Week of June 2

by Buchanan Ingersoll & Rooney PC

The House and Senate will reconvene on Monday, June 9, 2014. Here is what happened in Harrisburg this week:

Not Yet – Budget Bill Remains Elusive

It’s budget month, but the budget bill has yet to be introduced. Rep. Bill Adolph (R-Delaware), chair of the House Appropriations Committee, signaled this week that the budget debate might not begin in the House until the week of June 16, at the earliest. In response to a question posed by Rep. Joe Markosek (D-Allegheny), Adolph said the General Appropriations (GA) bill could be introduced in the House on Monday, June 9, saying that “difficult” and “troubling” revenue reports from the state have slowed the negotiation process between the Republican legislative leaders and the governor, which in return have slowed the introduction of the GA bill.

As of now, there is approximately a one billion dollar hole in the state budget.

The GA bill is chief legislative vehicle for the budget process. The bill is governed by a special House Rule, which says that the budget must be on the House Calendar for  approximately10 days before any debate can begin. The 10 days are intended to give members and staff the opportunity to review the bill and prepare amendments for consideration on the floor. If introduced the next week, Markosek noted that the debate will not begin in earnest until “pretty darn close to the end of the fiscal year.” He’s right. In Pennsylvania, the constitution requires the budget be enacted by June 30.

Also unclear is whether the GA bill will be introduced first by the House or the Senate.  Stay tuned.

Streamlined Business Financing Bill Advances

Since taking office, Gov. Corbett has made streamlining the state’s business financing programs a priority, but legislation to implement the plan has yet to pass. The governor’s latest proposal, in the form of H.B. 1550 (Milne, R-Chester) would establish a business financing authority. It was reported out of House Commerce Committee with amendments, given first consideration and re-referred to House Rules Committee.  This bill would consolidate eight different financing programs, currently governed by four different entities, into one authority. According to the bill’s sponsorship memo, this new authority would create a single point of contact with a single application for businesses seeking capital to grow their businesses.

According to the Department of Community and Economic Development, the change could generate about $1.1 billion in resources for low-interest loans, which would be governed by a 15-member board consisting of the cabinet secretaries from community and economic development, agriculture, banking and budget, as well as 11 members of the private sector. Of those 11 members, seven would be selected by the governor, and the remaining four would be selected by the House Speaker, the Senate President Pro Tem and the two minority caucus leaders.

The current economic development programs that would be impacted by the consolidation proposal are: the Small Business First Program; the Community Economic Development Program; PA Industrial Development Authority Program; PA Disadvantaged Business Authority Program; Machinery and Equipment Loan Program; First Industries Program; the Second Stage Loan Guarantee Program; and the Export Financing Program.

Internet Gaming Solution to Budget Deficit?

Internet gaming was one solution to plugging budget holes explored this week at a Senate Community, Economic and Recreational Development Committee hearing this week. Senate President Pro Tem Joe Scarnati indicated that iGaming could be “a lot less painful than some of the other choices that are going to be out there at the end of June.”

Econsult Solutions Inc., an economic policy consulting firm, told the committee that Pennsylvania would see direct tax revenues of $68 million in the first year and at least $110 million annually thereafter. The firm also said that iGaming would compliment the existing casino industry, saying that iGaming could lead internet players to brick and mortar casinos and could capture a market that is currently participating in illegal online gaming.

New Jersey has a 15-percent tax on internet gaming, which is a higher tax than land-based casinos.

“The governor has expressed concerns with the expansion of any type of internet gaming, particularly with respect to access of gaming for minors or other individuals,” said Jay Pagni, spokesman for Gov. Corbett. Sen. Tommy Tomlinson (R-Bucks) echoed those concerns at the meeting, to which Pennsylvania Gaming Control Board executive director Kevin O’Toole responded that he didn’t “think that they’re insurmountable challenges” but added that more research would be needed to determine how to best address those kinds of concerns with confidence.

On the Governor’s Desk: Basic Ed Funding Commission

A bill that would create a commission to analyze basic education funding is headed to the governor’s desk. The Senate passed H.B. 1738 (O’Neill, R-Bucks) by a vote of 47 to 1 to create a Basic Education Funding Commission to address fiscal concerns, similar to the Special Education Funding Commission. According to the bill, members of the commission would be “tasked with developing a formula that takes into account each school district’s market value, personal income aid ratio, equalized millage rate, geographic price differences, enrollment levels, local support and other factors.”

Smaller Government?

Momentum is gaining for a constitutional amendment to reduce the size of the General Assembly as well as the judiciary.

Two bills are currently moving through the legislature. The first, H.B. 1234 (Smith, R-Jefferson), would reduce the size of the House of Representatives from 203 members to 153 members. It has passed the House but still requires Senate approval to secure passage by the General Assembly in one legislative session. The second, S.B. 324 (Vogel, R-Lawrence). which needs approval in both chambers, would reduce the size of the state Senate from 50 members to 45 members. In addition, the bill was amended in committee to eliminate the Office of Lieutenant Governor and reduce the size of the Pennsylvania Supreme Court from 7 justices to 5 justices and the Pennsylvania Superior Court by eliminating two judges.

Both bills were reported from the Senate State Government Committee this week.  If the bill is approved by the Legislature during this session, a second, identical bill must be approved during the 2015-16 legislative session, and then voters would decide in the form of a referendum. If approved by the voters, the amendment will be incorporated into the state constitution.

Medicaid Expansion

The House Human Services Committee met in an off-the-floor meeting Wednesday to consider H.B. 1492 (DiGirolamo, R-Bucks). This bill represents what has been discussed in the media and around the capitol as “Medicaid expansion.” The bill would provide Medical Assistance coverage for anyone at or below 133 percent of the federal poverty line. After much debate, including a motion by Rep. Eli Evankovich (R-Westmoreland) to re-refer the bill to the House Health Committee, the bill was amended to allow the Commonwealth to continue to negotiate with the federal government on the Healthy PA Plan. If the federal government were to approve the State’s proposal to move covered persons to a private option plan, enrollees would be transitioned to a low-cost private coverage plan. The amendment was approved 13-10, and the bill was reported to the floor with a vote of 12-11, with Representatives Joe Hackett (R-Delaware) and Tom Murt (R-Montgomery) joining Democrats voting in the affirmative.

In Other News

  • H.B. 2009 (Culver, R-Northumberland was reported from the Senate Banking and Insurance Committee and is now on second consideration in the senate. The bill modernizes the credit union code.
  • The House passed H.B. 2049 (Simmons, R-Lehigh), allowing school bus drivers to administer epi-pens.
  • Gov. Corbett is lending his support to Rep. Mike Tobash’s (R-Berks) hybrid pension bill.
  • The Senate Transportation Committee unanimously reported out S.B. 1384 (Gordner, R-Columbia), the Highway Captial Budget Project Itemization Act for 2014-2015.
  • We got ahead of ourselves earlier this week when we reported that three gas royalty bills were to be reported from Senate Envionrmental Resouces and Energy Committee, when in fact they had been pulled from the agenda. We will keep you posted on further developments on these bills. Apologies to Sen. Gene Yaw (R-Bradford), who is the prime sponsor of those bills.
  • Due to the resignation of Rep. Ed Nielson, (D-Philadelphia), Rep. Ryan Bizzarro (D-Erie), has been appointed to the House Insurance Committee.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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