PennLive.com reported Saturday the proposed budget Gov. Wolf will unveil Tuesday are expected to include “double-digit increases in the state’s personal income tax and sale tax rates; large cuts in school property taxes and a key business tax rate; and significant new boosts in state funding for public schools and colleges.”
PennLive.com reported the personal income tax may be increased 20 percent from 3.07 percent to 3.7 percent; the sales tax from 6 percent to 6.6 percent, a 10 percent increase with possible changes to the items now exempt from the sale tax. At least part of these revenues, PennLive.com said, would go toward school property tax reductions.
Gov. Wolf said last week he would drop the Corporate Net Income Tax from 9.99 to 4.99 percent, close the so-called Delaware tax loophole and eliminate the Capital Stock and Franchise Tax on businesses.
He also proposed a 5 percent severance tax and fee on natural gas production.
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February 28, 2015
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February 27, 2015
Analysis: 5 Things To Look For In Gov. Wolf’s Budget Address Next Week
When Gov. Tom Wolf presents his first budget to the General Assembly March 3, environmental advocates will be looking to see if he will at least make a downpayment on reversing the 12 year almost steady decline in state environmental funding which has so far claimed over $2.4 billion.
Given the $2.3 billion General Fund deficit, no one is expecting miracles, but will there be some steps in the right direction?
Here are five things to look for-- hope for-- in the Governor’s budget proposal--
IFO Estimates Act 13 Drilling Fee Revenue Down In 2014 To $220.4 Million
The Independent Fiscal Office this week released an update on the Act 13 drilling impact fee revenue saying in 2014 the fee is estimated to generate $220.5 million, down slightly from $225.7 million in 2013. IFO said that equates to a 2.1 percent effective tax rate.
The effective tax rate, calculated by IFO, has been decreasing steadily since the fee was first imposed from an effective rate of 5.3 percent in 2011, 4.6 percent in 2012, 2.5 percent in 2013 to 2.1 percent in 2014.
Wolf Sends Obama Letter Asking For Federal Action To Prevent Oil Train Accidents
Gov. Tom Wolf Thursday wrote a letter to President Barack Obama to express concern and call for action to improve the safety of transportation of crude oil by rail in Pennsylvania. Each week, roughly sixty to seventy trains carrying crude oil from North Dakota’s Bakken region travel through the Commonwealth destined for Philadelphia or another East Coast refinery.
CBF, Stroud Water Center Applaud Introduction Of New Stream Buffer Bill
On Wednesday, Sen. John Rafferty (R-Montgomery) introduced Senate Bill 560 which would authorize municipalities to adopt regulations requiring riparian buffers and the Department of Environmental Protection to enforce a 100 foot stream buffer requirement.
WPCAMR: Film About Operation Scarlift Mine Reclamation Program Now Online
The Western Coalition for Abandoned Mine Reclamation made available at film on YouTube produced by the Department of Environmental Resources in 1970 to describe the impact of Operation Scarlift in cleaning up Pennsylvania’s abandoned mines, putting out mine fires and deal with mine subsidence damage.
DEP Citizens Advisory Council Hearing March 27 On Act 54 Mining Impact Report
The Citizens Advisory Council to the Department of Environmental Protection announced Thursday it will hold an additional public hearing to accept testimony on the 2008-2013 Underground Coal Mining Impact Report required by the state’s Bituminous Mine Subsidence and Land Conservation Act (Act 54).
The hearing will take place on March 27, 2015, from 1:00 p.m. to 3:00 p.m. at DEP’s California District Mining Office, Monongahela Conference Room, 25 Technology Drive, California Technology Park, Coal Center, PA 15423.
PA Parks & Forests Award Winners Announced, Awards Banquet May 5The PA Parks and Forests Foundation Thursday recognized the outstanding service, programs and exemplary work being done in state parks and forests with the announcement of its 2015 award winners.
Senate Democrats Friday outlined their liquor modernization plan-- Senate Bill 15-- a day after the House passed a liquor privatization plan.
"No banker would back it and no business would implement it," Sen. Jim Brewster (D-Allegheny) sponsor of the Senate Democratic proposal said about the House plan (House Bill 466 (Turzai-R-Allegheny)). "The plan that passed the House takes the wrong approach at precisely the wrong time -- it makes zero business sense and there are better alternatives.
"Under valuing a profitable asset and selling it off at fire-sale prices is no way to proceed."
Sen. Brewster was vice-president of operations at Mellon Bank and has decades of experience in private business.
He said the modernization plan produced by Senate Democrats, introduced as Senate Bill 15, has the potential to produce an extra $150 million annually. The state's liquor system generated $320 million in liquor taxes, $124 million in sales taxes and $80 million in net profits last year on more than $2.24 billion in sales.
The lawmaker said the Senate Democratic modernization plan would:
— Remove the cap on the number of stores that can operate on Sunday and extend the permitted hours of operation from 9 a.m. to 9 p.m.;
— Improve opportunities to partner with grocery stores to increase the number of stores-within-a-store;
— Offer customer-service programs to improve customer experiences in stores;
— Sell lottery tickets within wine & spirits stores;
— Require final determinations on store lease arrangements within 90 days;
— Join with other states on purchasing arrangements to help secure the very best price;
— Fashion demand reforms such as allowing beer distributors to sell smaller quantities than cases, and permits for direct wine shipments to homes.
"We have a valued asset in our wine-and-spirits stores and they can be a tremendous resource for our taxpayers for years to come if we modernize and adapt," Sen. Brewster said. "The last thing we should do is sell off an asset for a below-market price in an attempt to serve an ideological impulse.
"The Senate Democratic plan would improve convenience, create better access, provide service and delivery options while preserving thousands of jobs."
The House-passed privatization plan, which involves selling 1,200 licenses, has been sold as a way of plugging the $2.3 billion budget hole created by the Republicans and former Gov. Tom Corbett. However, according to a Republican fiscal analysis, the plan will only raise a small portion of $2.3 billion in one-time revenue in 2015-16.
A sponsor summary of the bill is available.Sen. Brewster is Minority Chair of the Senate Law and Justice Committee which oversees liquor regulation.
Gov. Tom Wolf Friday unveiled a package of legislative and budgetary actions to provide choice and protections for seniors as they age. Gov. Wolf, the Department of Human Services and the Department of Aging are committed to increasing opportunities for seniors to receive care in a home or community-based setting.
“My actions today are just the first step in rebalancing our long term care system and increasing opportunities for home care workers,” said Gov. Wolf. “This package is designed to provide choices for seniors, efficiencies in home- and community-based care delivery, and protections so that seniors receive the high quality level of care that they seek in their homes.”
This initiative is comprised of the following combination of budget, legislative and executive actions:
-- Expand Services for Older Pennsylvanians and Reduce Long Term Care Costs. The upcoming 2015-2016 budget expands home- and community-based long term care programming by allowing more than 5,500 additional individuals to obtain care in their home this year. With this expansion, more than 50 percent of residents receiving long term care will do so in a home or community setting. For every month a resident receives care in the community as opposed to a nursing facility, the Commonwealth is able to save $2,457 per month. In expanding home- and community-based services to more than 5,500 residents, the Commonwealth is offsetting more than $162.2 million in nursing care costs.
-- Phase in Medicaid Managed Long Term Care. DHS in partnership with PDA will pursue the implementation of managed long term care through engaging stakeholders to ensure that the system is person-centered, breaks down barriers, and fills in the gaps that currently exist in the long term care services and supports system. This initiative, which was recommended by the Pennsylvania Long Term Care Commission, will result in a more strategic care delivery system and improved health outcomes for seniors.
-- Improve Long Term Living Waiver Enrollment and Service Plan Development Process. The current process of enrollment into the Commonwealth’s Medicaid-sponsored home- and community-based care services is a paper process and has numerous areas of duplication and inefficiencies that delay services being provided to these consumers. DHS and PDA are currently developing a work plan to automate and streamline this process so that services are delivered in timely manner and unnecessary nursing home stays are prevented.
-- Home Modifications through Selective Contracting. A major barrier to individuals remaining in their homes is accessibility. Under the DHS home- and community-based services waivers, enrolled consumers are eligible for modifications to their homes to prevent admissions to nursing homes, and allow individuals to age in place. Unfortunately, current program barriers occasionally make it difficult for modifications to be made in a timely manner, forcing consumers into nursing care while waiting for the modifications to be made. DHS is proposing to establish a coordinated program to manage the home modifications across all of the home- and community-based waivers, through a comprehensive selective contracting model that will establish a team of specialists to allow for more timely services, improved quality and greater accountability for waiver consumers.
-- Implement Online Homecare Registry. According to PHI PolicyWorks (PHI), Pennsylvania’s direct care workforce in 2013 consisted of 194,670 workers. Between 2012 and 2022, the direct care workforce is projected to grow by 33 percent. PDA is currently working to develop an online tool to make it easier for workers to find stable employment opportunities and for consumers to find competent care.
-- Ensure Seniors have Choices about Where to Age. Ensuring that the home care sector is able to attract qualified and competent caregivers so that seniors have the option to age at home or community-based setting is a top priority of the Wolf Administration. Governor Wolf is signing Executive Order 2015-05 to form the Governor’s Advisory Group on Participant-Directed Home Care and direct the Secretary of the Department of Human Services to regularly meet and discuss issues of mutual concern with a representative for Direct Care Workers. These actions will ensure that home care workers have a voice in shaping the future of their industry in Pennsylvania and seniors have choices about where to receive care.
“This package will also provide home care workers with the opportunity to meet and contribute to discussions about improving wages and employment conditions,” added Gov. Wolf. “As the workers on the front lines of delivering care to seniors and our most vulnerable, they should have a voice in the future of their industry in Pennsylvania.”Over the next few months, DHS Secretary Ted Dallas and PDA Secretary Teresa Osborne will work with key stakeholders to develop an action plan that addresses the current income and health barriers that prevent seniors from being able to age in place.
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February 26, 2015
The House Thursday passed House Bill 466 (Turzai-R-Allegheny) that would replace the state liquor store system with a privately owned wine and spirits system, by a vote of 114 to 87.
“This has been a topic of discussion in the General Assembly for decades,” House Majority Leader Dave Reed (R-Indiana)said. “This bill would provide consumers the convenience that they have requested for years, while eliminating a state-run monopoly that has prevented any competition from the private sector.”
House Bill 466 is nearly identical to the legislation passed by the House in March 2013. It includes a series of reforms for beer, liquor and wine sales across the Commonwealth. The bill allows beer distributors to expand their businesses to sell liquor and wine, as well as beer. It also allows private wine wholesalers to sell products to Commonwealth customers.
The Liquor Control Board would still operate state stores until there are twice as many retail stores compared to current state-operated outlets.
“This bill represents the beginning of a discussion which will include members of the House, Senate and Gov. Tom Wolf,” Rep. Reed added. “Although a very similar bill passed the House last session, it never came to the Senate floor for a vote. I look forward to discussions with Senate leadership and the governor on the best approach to selling wine and liquor in way that is efficient for our Commonwealth, but that also improves the convenience to consumers.”
Pennsylvania’s current liquor system was created more than 80 years ago, in 1933, following the repeal of Prohibition. The Commonwealth is one of only two states, joining Utah, which has a complete monopoly over wholesale and retail operations.
The House passed a similar liquor reform bill in 2013 by a vote of 105 to 90. The bill died in the Senate Appropriations Committee.
A summary and House Fiscal Note are available.
House Democrats Thursday unanimously opposed a Republican plan-- House Bill 466 (Turzai-R-Allegheny)-- to privatize the state’s wine and spirits stores, saying it does not address consumers’ wants, would cost taxpayers more in the long term, do little to help Pennsylvania’s current fiscal crisis, and risk thousands of jobs.
Liquor Control Committee Minority Chair Paul Costa (D-Allegheny) rebutted backers of the bill who claim that putting all liquor sales in the private market is what Pennsylvanians want. In fact, consumer polling tells another story and the bill’s cumbersome formula for private licensing would set up a system people don’t want.
A 2014 poll done by Franklin & Marshall that included an explanation of privatization and alternative plans found that more than half of respondents (57 percent) preferred to make the state wine and spirits stores more convenient or leave them the way they are.
Rep. Costa said the Republican scheme would birth a complex system of private stores selling a hodgepodge of products with only a few fully stocked with liquor, wine and beer. Selection would diminish in many areas of the state, while big distributors would eventually put smaller, family-owned businesses out of business and then charge higher prices. Consumers would lose out.
“Pennsylvanians want convenience, selection and good pricing,” Rep. Costa said. “The majority are not demanding privatization or anything close to what’s in this bill. House Democrats support a plan that provides better convenience, selection and prices through package reform, longer store hours, better locations and flexible pricing. These practical steps for consumer convenience would provide at least $125 million in additional annual revenue for the state.”
Democratic Leader Frank Dermody (D-Allegheny) said the bill pushed through the House by Republicans would produce just a fraction of the upfront revenue its supporters have promised and would sacrifice the reliable long-term revenue generated by Pennsylvania’s state-operated stores.
State wine and spirits stores earn $80 million a year in pure profit for the General Fund, revenue that the state would no longer receive under a privatized system.
Rep. Dermody said a fiscal analysis on the bill shows the one-time revenue gain over two to four years from new licensing pales in comparison to projected long-term profit losses. Within 20 years, the net loss to the Commonwealth would be more than $3 billion.
In addition, the bill would put some 4,000 state store workers out of work, adding to the state’s unemployment rate and overall unemployment costs.
“This bill simply does not make good financial sense,” Rep. Dermody said. “Selling off a profitable asset while the state is facing a huge structural budget deficit signals that some legislators are not in touch with reality and it raises doubts about their ability to help lead Pennsylvania through its current fiscal crisis.”
Democratic Whip Mike Hanna (D-Centre) said making the current, already profitable system more convenient, an idea Gov. Tom Wolf has embraced, would give consumers more options and give the state more money to help balance the budget.
Rep. Hanna said the Liquor Control Board’s net profit over the past decade totaled more than $1 billion. With growing income and low operating expenses, the system is a solid moneymaker for the state.
“House Democrats cannot support closing our profitable retail and wholesale system on the cheap for a quick buck because it will have disastrous long-term consequences,” Rep. Hanna said. “Rather than make the rash and risky decision to privatize, we should make our current system more convenient and innovative. A business asset should never be sold or transferred until you’ve maximized its value. We have not done that to this point, especially while former Gov. Corbett held the reins.”
Minority Appropriations Chair Joe Markosek (D-Allegheny) noted only about $167 million of House Bill 466’s projected revenue through licensing fees would be available in the first year, so the bill would do little to help close the state’s more than $2 billion budget gap.
Meanwhile, the privatization study commissioned by former Gov. Corbett concluded it would cost Pennsylvania approximately $1.4 billion over five years to fully divest from wholesale and retail liquor operations.
“Privatization clearly is not the solution to our fiscal problems nor is it a solution for consumers,” Rep. Markosek said. “Consumers will most likely see higher prices for wine and liquor, as businesses will pass on the various licensing and renewal fees, and less selection.”
The Democratic legislators also said Pennsylvanians would be sacrificing safety because state-owned liquor stores provide more complete protection against underage alcohol purchases than privatized liquor distributors.
By making alcohol more readily available in grocery stores and a variety of small corner stores, it becomes more available to minors and those who abuse alcohol.The Democrats said the bill would have many harmful ramifications on individual lives, as well as municipal budgets due to an increase in necessary law enforcement and EMS services.
Gov. Tom Wolf Thursday announced his administration has identified $109 million in projected cost savings and efficiencies within the first two weeks of the creation of the Governor’s Office of Transformation, Innovation, Modernization and Efficiency (GO-TIME).
Gov. Wolf is also confident that given this progress, the office will exceed the $150 million mark mandated by his executive order for FY 2015-16.
“Since the launch of GO-TIME, agencies and state employees have submitted 157 ideas to make government work more efficiently,” said Governor Wolf. “I’m heartened to know that so many people and leaders across departments share our commitment to creating a government that works.”
GO-TIME leverages inter-agency coordination and collaboration to maximize efficiency, modernize state government operations, and provide the highest quality services. The Executive Order signed by the governor tasked state agencies with finding cost savings for the 2015-16 fiscal year from efficiency and innovative initiatives to help address Pennsylvania’s $2.3 billion deficit.
The $109 million in projected savings will be achieved through the application of more efficient procurement processes, modernizing technology used to manage public works projects, and streamlining and consolidating administrative functions across departments.
Initial GO-TIME savings were found in the following ways:
— Improving Procurement Strategies ($100 million). Commonwealth agencies spend more than $3 billion per year on categories of goods and services. By conducting a thorough examination of existing contracts, applying commercial best practices and reintroducing reverse auctioning to procurement, the Department of General Services (DGS) has begun working with agencies to be more strategic about how resources are spent, particularly in these categories under review: Energy; IT hardware and software; Professional services; Telecommunications; Office equipment purchases; and Consumables
— Modernizing Technology Used to Manage Public Works Projects ($3 million). The Department of General Services administers the construction of all state-funded buildings and non-highway infrastructure, representing more than $1 billion worth of investment in the Commonwealth. However, the systems used by the department to manage these projects are decades old, largely paper-based, and a source of unnecessary frustration and cost for the Commonwealth and for the contractors who perform the work. By deploying one of the new construction contract enablement systems, consistent with up-to-date commercial standards, the Administration expects to realize an additional $3 million in annual savings.
— Streamlining and Consolidating Administrative Functions across Departments ($6 million).
— Multi Agency Transformation opportunities ($5 million). The Commonwealth currently manages 28 disparate mailrooms which results in duplication of effort and equipment such as vehicles, delivery stops and postage equipment. There are considerable opportunities to centralize, consolidate, and streamline all aspects of the mail operation as well as to implement USPS and contracted package delivery best practices, including pre-sort mail.
— Consolidation of HR services ($1 million). Savings will be realized through the consolidation of the Department of Health within the Department of Human Services human resources offices and the consolidation of the State Civil Service Commission’s human resources within the Governor’s Office of Administration.In addition to better coordinating and broadening employee input, GO-TIME initiatives may also include pursuing new opportunities to partner with the private sector and better leveraging collective buying and purchasing power. While these processes are under review, it is anticipated that they will save millions over time.
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