The chaotic state budget process is again moving in fits and starts in Harrisburg. And, again, the public is left to wonder how our environment will bear the brunt of political trade-offs on what should be purely fiscal decisions.
The Governor’s Office published its semi-annual Regulatory Agenda in the August 19 PA Bulletin starting on page 4922. The Agenda contains an agency by agency list of regulations under consideration and new proposals and their status.
The regulatory agenda shows DEP proposing permit fee increases for at least 6 programs-- Noncoal Mining, Oil and Gas, Water Quality/NPDES Permits and Air Quality programs and finalizing fee increases for the Drinking Water and Radiation Protection.
The Department of Environmental Protection's Wednesday announced the expanded agricultural inspections program for clean water management in Pennsylvania's part of the Chesapeake Bay Watershed not only exceeded federal expectations for number of acres inspected, but also found that a majority of farms are complying with state erosion and sediment control and manure management planning requirements.
Local partners and the Department of Environmental Protection Monday dedicated a new addition to the Pioneer Tunnel Coal Mine tourism site in Schuylkill County that represents a big piece of regional history: a 35-foot headframe from a local coal mine.
On Friday, House Appropriations Committee Majority Chair Rep. Stan Saylor (R-York) issued this statement in response to calls for House Republicans to raise taxes-- “Legislators in the House Republican Caucus continue to work on a revenue package to fully fund the state budget.
“While I appreciate that Rep. Carol Hill-Evans (D-York) wants to increase Pennsylvanians’ utility bills that will hurt seniors and low-income families and Auditor General Eugene DePasquale wants to legalize and tax marijuana, I and the Republican Caucus do not believe that is the direction we should be taking Pennsylvania, and our constituents agree.
“Despite a disengaged governor, we were able to pass a budget that funds priorities such as education, while keeping spending growth in check.
“We in the House Republican Caucus are carefully reviewing our options and working with members to create a solution to the problem caused by the governor’s overspending.
“We have been meeting in Harrisburg continually and have been in communication with our Democratic colleagues.”
The Department of Labor and Industry reported Friday Pennsylvania’s unemployment rate was unchanged in July at 5.0 percent. This was the second consecutive month with no change.
The Commonwealth’s rate remained above that of the United States, which was down one-tenth of a percentage point from June to 4.3 percent. Over the year, the Pennsylvania rate declined by one-half of a percentage point.
Pennsylvania’s civilian labor force was down 18,000 over the month to 6,456,000. Resident employment decreased by 16,000, while the unemployment count was down 1,000.
Pennsylvania’s nonfarm jobs count was up 29,000 to a record high of 5,953,800 in July. Eight of the eleven supersectors added jobs with the largest movement in manufacturing (up 8,300). For a second consecutive month, both professional & business services and leisure & hospitality rose to new record high levels.
Total nonfarm jobs in Pennsylvania were up 1.0 percent from July 2016, while jobs in the United States were up 1.5 percent. Six supersectors in the commonwealth added jobs over the year, with three adding more than 20,000. The largest increase over the past 12 months was in education and health services (up 27,600), while the largest decline was in government (down 13,500).
“All of us should be deeply concerned about the current situation with our state budget. Yesterday, Treasury released a short-term loan of $750 million to the General Fund as a temporary solution to revenue shortfalls and to keep Pennsylvania’s state government functioning.
“Most worrisome is once the $750 million loan is repaid by the mandatory August 23 deadline Treasury forecasts the state’s general fund balance will fall below zero by August 29 and hit negative $1.6 billion by mid-September. This type of borrowing is like getting a bank loan to buy groceries and could prove calamitous for everyone in the Commonwealth.
“Costs are already getting added to the state budget including $141,000 in interest on the temporary loan. That is money that does not help a single Pennsylvania resident.
“Much is at risk: Funding for our schools, daycare for working families, health care for our most vulnerable citizens and protection of our air, water and land.
“Considering these dire conditions, I will monitor this situation and work with Treasurer Joe Torsella on potential options for the fiscal future of the commonwealth. It is important to note that both I and Treasurer Torsella must approve any debt taken on to address this shortfall. All – and I mean all – options will be on the table.
“And all options must be on the table. As Senate Appropriations Chair Sen. Pat Browne (R-Lehigh) said in his budget newsletter recently: ‘In the absence of a timely revenue package, it is possible the Commonwealth will be unable to secure a loan from an outside financial institution for short-term borrowing. If the Commonwealth is unable to secure sufficient funding from the State Treasurer or a financial institution, it will become necessary to temporarily suspend Commonwealth payments until there is sufficient revenue or to permanently suspend some payments if no revenue package is enacted.’”
The PA Compensation Rating Bureau, an independent nonprofit in Philadelphia that helps set workers’ comp premiums in the state, filed a request with the Department of Insurance on August 15 seeking a 6.06 percent increase in what is called the “loss cost,” which is directly reflected in premium changes.
If approved by the Department, the increase would apply to policies written or renewed after November 1.
State Treasurer Joe Torsella Wednesday announced the release to the General Fund of the full amount of a $750 million loan from Treasury’s Short Term Investment Pool (STIP) to pay the Commonwealth’s bills Torsella authorized on August 3.
He also said the General Assembly “should not be assumed that Treasury will continue to backstop the General Fund unless a responsible revenue package is enacted to balance the budget, or underlying financial conditions improve.”
“Today’s announcement regards the details of a troubling development: the Commonwealth’s need for a $750 million loan from Treasury’s STIP,” said Torsella. “This amount represents an unprecedented borrowing need this early in the fiscal year.”
The STIP loan was released in full to the General Fund on August 15. The Commonwealth has until August 23 to pay back the loan, at an interest rate of 85 basis points.
Treasurer Torsella also released a statement regarding future projections for the General Fund and Treasury’s position on short-term lending.
“While this short-term borrowing will be repaid by August 23, we forecast that without some action, the General Fund balance will again fall below zero by August 29th.
“Treasury continues to project a need for Commonwealth borrowing of as much as $3 billion to fund budgeted operations for approximately 2/3rd of the fiscal year. It is important for policymakers to understand that this is not a gradual decline in some distant future: the General Fund balance is projected to fall to $1.6 billion on or about September 15.
“Treasury’s Short Term Investment Pool is not a Rainy Day Fund; it is neither intended nor managed to be a back-stop to the General Fund. As an investment fund, it is governed by law mandating only ‘prudent’ investments.
“An overly concentrated loan by the Pool to the General Fund—at a time when the underlying budget is $2.2 billion out of balance, revenues are declining, and we are still without an enacted revenue package—would represent a substantial investment risk.
“We know of no historical precedent for an extended loan to the General Fund in a period without an enacted revenue package that is certified to cover expenses.
“To state the obvious, my fiduciary duty as Treasurer requires me to ask how the General Fund could pay back a loan when approved expenditures exceed expected revenues by $2.2 billion.
“Accordingly, it should not be assumed that Treasury will continue to backstop the General Fund unless a responsible revenue package is enacted to balance the budget, or underlying financial conditions improve,” said Torsella.
Gov. Wolf said earlier in the week his Office was working to avoid another credit downgrade from Standard and Poor’s credit rating service, something he said is likely to occur if the state’s budget issues are not resolved soon.
Wolf said House Republicans need to get back to Harrisburg and finish the budget.
As of Wednesday, there was no indication when House Republican leadership planned to bring members back into session, other than the already scheduled week of September 11.