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BUDGET HEARINGS CONCLUDE
The House and Senate Appropriations committees have wrapped up several weeks of budget hearings with the state agencies, gathering detail on the Governor's proposed FY 2019-2020 commonwealth budget.
Department of Drug and Alcohol Programs secretary Jennifer Smith discussed the opioid crisis with the Senate committee on March 4, noting that while Pennsylvania has come a long way in expanding treatment capacity and the number of outpatient providers, there is still more work to be done. In addition, she noted the importance of housing, transportation and employment as critical factors to recovery, as well as a cooperative approach that involves the Centers of Excellence, the Single County Authorities, treatment providers and health systems. Working with community stakeholders to address substance abuse in all its forms is a county priority for 2019.
Both committees ended their series of hearings with the Governor's budget secretary, Jen Swails. Several members asked questions about the governor's proposal to provide $15 million to counties for voting systems, and Swails noted that it is intended to be the first year of a five-year proposal that would total $75 million, or about half of the expected costs for counties to purchase new machines. In addition, she shared that the administration is hopeful additional federal funding would also be available. Questions were also raised about the timeline and whether financial support could be provided to counties immediately instead of by reimbursement, as were concerns about training needs that come along with updating voting machines.
Each of the four Appropriations Committee chairs has introduced bills as potential vehicles for the FY 2019-2020 budget, containing line items largely representing FY 2018-2019 allocations as a placeholder while negotiations among legislative leaders and the Governor take place ahead of the July 1 start of the fiscal year.
Regularly updated information on the Governor's budget proposal, including a spreadsheet and narrative analysis of the proposed funding levels for county line items, legislative analyses, media reports, and related materials can be found on CCAP's Budget News and Updates web page.
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U.S. HOUSE PASSES ELECTION REFORM BILL
On March 8, the U.S. House approved H.R. 1, a sweeping measure designed to provide both election and campaign finance reform, on a party line vote.
The legislation, titled the For the People Act, was introduced by Rep. John Sarbanes (D-Md.) and is a signature measure for the new House Democratic majority. Among other elements, the bill contains reforms that would impact many aspects of election administration, from changing voter registration practices to increasing election security. For instance, the bill would require voter-verified paper ballot voting machines to be in place by 2022, although Pennsylvania is already required to move to voter-verified paper ballot systems by the April 2020 primary under a private settlement agreement between the Department of State and the Stein campaign.
Grants would be provided by the Election Assistance Commission to replace, improve and maintain voting systems, as well as to implement automatic voter registration and for poll worker recruitment and training. Voters would be permitted to vote in federal elections up to 15 days early, with polling places open at least four hours each day and located near public transportation. In addition, H.R. 1 would expand voting by mail, prohibiting states from imposing additional requirements to request an absentee ballot, and implement same-day voter registration nationwide.
Although H.R. 1 passed the House hurdle with a 234-193 vote, Senate Majority Leader Mitch McConnell has indicated he will not bring the measure up for a vote in that chamber.
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LEGISLATIVE INTRODUCED TO DELAY MATP BROKERAGE MODEL
Sen. Lisa Baker (R-Luzerne) recently introduced legislation, SB 390, that would delay the transition of the Medical Assistance Transportation Program (MATP) to a statewide or regional brokerage model.
At the last minute as the FY 2018-2019 budget was being finalized last June, language was tucked into what became Act 40 of 2018 to require the Department of Human Services to seek federal approval to move nonemergency MATP services to a statewide or regional full-risk brokerage model. Since Act 40 was signed into law, counties have raised numerous concerns about access, flexibility and a lack of understanding of local needs and resources, which could potentially increase costs long-term or hinder this critical service for individuals who rely on the service.
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STATE'S YEAR-TO-DATE COLLECTIONS AHEAD OF ESTIMATE
The Department of Revenue's monthly collections report for February shows that although the state's general fund revenue collections for February were just shy of estimates, fiscal year-to-date General Fund collections remain 1.4 percent above estimates and about 5.7 percent ahead of the prior fiscal year after eight months.
The biggest driver of tax revenues for February were corporation tax revenues, as they have been for the entire fiscal year, while sales and use tax collections were also slightly ahead of estimate. While personal income tax collections continued to underperform, April is typically the largest collection month for that revenue stream. March has historically been the state's largest revenue collection month of the year for business-related taxes.
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IFO REPORT SHOWS INCREASE IN NATURAL GAS PRODUCTION
Natural gas production was up nearly 18 percent in the fourth quarter of 2018 compared to the same quarter a year earlier, a recent report of the state's Independent Fiscal Office (IFO) showed. The IFO report also indicated that for calendar year 2018, total production was up 14.2 percent from the prior year, the largest year-over-year increase since 2014.
In addition, there was an almost ten percent increase in the total number of producing wells in 2018 compared to the prior year, and average production per well was also up by more than 30 percent from 2017 to 2018. More than one-third of all production for fourth quarter 2018 came from wells spud in 2016 or 2017, while wells spud in 2015 or earlier showed declines in production.
Wells in four counties, Susquehanna, Washington, Greene and Bradford, made up two-thirds of statewide production in 2018. Pennsylvania remains ranked second only to Texas in a state comparison of gross natural gas production from all well types. The full report is available at www.ifo.state.pa.us.
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COURT DECISION ON STRIPPER WELL IMPACT FEES TO STAND
The state Supreme Court has turned down a request by the Pennsylvania Independent Oil and Gas Association (PIOGA) to reconsider its Dec. 28 decision regarding payment of impact fees by drillers operating certain "stripper" wells.
At issue was the Court's overturning of a Commonwealth Court decision which said that language in Act 13 of 2012 exempting vertical natural gas wells from impact fees that are "incapable of producing more than 90,000 cubic feet of gas per day during any calendar month" meant that if production dipped during just one month, a company would be exempt from fees. The Pennsylvania Public Utility Commission (PUC), in appealing the Commonwealth Court ruling to the Supreme Court, argued that such an interpretation could leave Act 13 open to abuse by allowing operators to limit production one month each year to avoid paying impact fees. The Supreme Court, for its part, also relied on the legislative intent to come to its decision - that is, that the legislature structured the impact fee to provide a revenue stream to help local governments address drilling-related needs. With the denial of PIOGA's request, PUC's order remains in effect, requiring drillers who meet the production thresholds for even one month of the year to pay impact fees, including payment of an estimated $22.3 million in prior years' fees.
The Supreme Court did grant the reconsideration motion of the drilling company involved and remanded that portion of the case to Commonwealth Court to reconsider issues that apply specifically to that one company.
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NACO INTRODUCES BROADBAND SPEED TEST APP
The National Association of Counties (NACo) has partnered with the Local Initiatives Support Corporation and the Rural Community Assistance Partnership to develop TestIT, a smartphone app which aims to provide more accurate information about national broadband availability. That information will then be used to identify areas with low connectivity to help ensure adequate funding for broadband infrastructure. The TestIT app does not store personal data and allows any user to test connections in as many places, and as many times, as they would like. Rural broadband expansion is a top county priority for 2019.
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VOTING MATTERS
CCAP members will elect the two CCAP representatives to the NACo Board of Directors at the business meeting to be held during Tuesday's closing session of the CCAP Spring Conference. The Conference takes place March 24-26 at the Hilton Harrisburg, and features meetings of standing policy committees, which any CCAP member may attend and observe, and numerous educational sessions.
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