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Authors Posts by Jack Phillips

Jack Phillips

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Mr. Phillips is responsible to assist the association with health policy, which primarily includes member communication and advocacy with the Governor’s office, General Assembly, and state regulatory agencies. Mr. Phillips was most recently at the Pennsylvania Department of State as Director of Legislative Affairs.

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Over the weekend, the House failed to pass SB 1071, which is the hybrid pension bill, by a vote of 52/149 with no support from the Democratic Caucus and over 60 Republicans. After the vote, numerous meetings were held among leadership. Once the meetings concluded, the House floated the possibility of forging ahead with some type of stopgap measure that would fund education and human services. However, the governor and Senate leadership indicated that a stopgap budget was a non-starter.

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House Republican leaders told Governor Wolf he has 24 hours to prove that he has enough votes in the House to pass a spending and tax proposal he supports. If he cannot show he has the votes, House Republican leadership said they will propose a stopgap funding bill to end the state government’s five-and-a-half month budget stalemate.

According to House Majority Leader Dave Reed, he wants to hold final votes this weekend. As of today, the governor, both caucuses in the Senate, as well as House Democrats, support the $30.8 billion budget as well as the $1 billion-plus tax plan. The House Republican majority wants a pared down $30.2 billion budget which would include smaller spending and tax increases.

It should be an interesting day at the Capitol. The governor must have all 83 (Rep. Louise Bishop resigned on Wednesday) of the House Democrat Caucus be in favor of the budget – to date, not all members of the Democrat Caucus have supported the governor’s budget proposal. In addition, the governor would have to pick up between 20 and 30 Republican votes, depending on whether members of his own caucus go against him.

Stay tuned! RCPA will continue to provide updates on the budget. RCPA encourages members to continue to contact the governor and state legislators to inform them why it’s necessary for them to pass a state budget sooner rather than later. Questions, contact Jack Phillips.

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This article from Capitolwire is a good and extensive overview of what is going on with the budget here in Harrisburg. Health and Human service budget line items are still fluid until the House and Senate negotiate a final budget deal. RCPA will provide updates on any budget deal, and RCPA encourages members to continue to contact the governor and state legislators to inform them why it’s necessary for them to pass a state budget sooner rather than later. Questions, contact Jack Phillips.

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According to sources, it appears the caucuses have a framework in place for the 2015/16 state budget. The proposed plan would spend an additional $350 million for basic education, an additional $50 million for special education, and a 5 percent increase in funding for higher education.

In the potential budget deal, there will be additional property tax relief. Terms were still being negotiated on how the additional education funding will be distributed. Additionally, officials are trying to impose caps on how much school districts can raise property taxes in the future.

The potential budget deal would include:

  • An increase in state spending up to $30.7 billion; that would be a 6 percent increase from last year’s approved budget.
  • $500 million in slot-machine gambling revenue that is currently passed along to homeowners as school property tax cuts. That money would be diverted into a restricted account to pay for public school employee pension obligations.
  • The loss of the slot-machine money for school property tax cuts would be replaced by about $2 billion expected from a state sales tax increase to 7.25 percent, up from the current 6 percent. The rate would rise to 8.25 percent in Allegheny County, where it is currently 7 percent, and to 9.25 percent in Philadelphia, where it is currently 8 percent.

The proposed budget would not include a new tax on Marcellus Shale; however, a cigarette tax and a tax on banks were still being discussed as potential revenue enhancements. Currently, there has been no specific mention of dollar amounts for health and human services, or providers being reimbursed by the Commonwealth for interest payments being made on loans that providers took out to continue health and human services.

Despite a possible agreement, legislators are still cautious about any last minute hiccups that might derail a potential budget deal. The budget deal could blow up if the governor and legislators cannot come to terms on how new money for schools and property tax cuts would be distributed to each district, and how to further limit the ability of school boards to raise taxes as part of the package of new money.

Some of the other budget highlights include:

  • On pensions, the traditional pension benefit would survive, but newly hired public school and state government employees would get a diminished traditional pension benefit, plus a new, 401(k) style plan with a 2 percent contribution. According to estimates, this plan would save the state $12.5 billion in the coming decades.
  • Changes to the state-controlled wine and liquor system were still under discussion, although the sides have agreed to make it part of an overall budget deal.

RCPA will provide updates on any budget deal, and encourages members to continue to contact the governor and state legislators to inform them why it’s necessary for them to pass a state budget sooner rather than later. Contact Jack Phillips with any questions.

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In conjunction with the United Way, RCPA forwarded its members a survey regarding how a late state budget was affecting their businesses. United Way did a summary of the survey results, and a quick snapshot of the findings reveal:

  • 152 organizations report staff impacts – layoffs, hour reduced, benefits reduced, etc.
    – 45 individuals have been laid off or furloughed from F/T employment
    – 50 individuals have been laid off or furloughed from P/T employment
    – 522 employees had hours reduced
    – 73 people are working without pay
    – 510 people lost access to employee benefits
  • 70 percent of the respondents have between $20,000 and $250,000 per organization that is delayed as a result of the impasse. 19 responded that they are owed more than $1 million each.
  • 64 organizations estimated their interest costs through October. They responded in categories; the chart is included in the findings summary linked above. Another 19 shared interest amounts in the comments section that were lower than the base threshold.
  • Only 24 percent believe they are eligible for the interest payment relief proposed by the administration.
  • A high number of respondents (42%) are not able to access additional lines of credit at this time.

RCPA encourages members to use the survey summary results to contact the governor and your state legislators to inform them why it’s absolutely necessary for them to pass a state budget sooner rather than later. Please contact Jack Phillips with any questions.

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Last week, the State Senate passed two funding bills, SB1000 and SB1001, on party-line votes. These bills would authorize short-term funding for health and human service providers as well as education. The funding would be retroactive to July 1, the start of the current 2015/16 Fiscal Year, and would last until the end of October, 2015

After passing the Senate chamber, the two short-term budget bills were sent to the House. The bills are scheduled for final passage on Thursday, September 24, and then they will be sent to the governor for his signature.

According to the governor and Democrat leadership, the stopgap budget bills do not solve the problem. Democrats argue that the budget passed by Republicans in June was ineffective and the governor had every right to veto it. Furthermore, they assert that passing short-term funding bills based upon the vetoed budget is unwise, when the governor has proposed something comprehensive and even better. Democrats also contend that an approved stopgap would make it less likely for negotiations with Wolf, who has said he will veto the stopgap, to produce a full budget.

Republicans maintain that passing temporary funding for schools and human service agencies makes sense and negotiations would not stop just because stopgap funding was approved. Republicans are asking why those who need state dollars should be forced to wait for at least some funding while the Republicans and the governor work on a permanent budget.

RCPA has been, and continues to be, concerned about the effects of a late state budget on health and human service providers. The state budget stalemate between the General Assembly and Governor Wolf is having real and lasting effects on these providers and the people they serve across the Commonwealth.

RCPA supports the stopgap funding. The association has been in contact with the General Assembly and the governor’s office, encouraging them to pass and sign the stopgap funding bills into law, so health and human service providers can continue services to the most vulnerable individuals throughout Pennsylvania.

In anticipation of both bills’ final passage in the House, RCPA is strongly encouraging members to contact the governor today, to encourage him to sign the stopgap bills, as was done by Governor Rendell in 2003 and 2009, until a compromise can be reached on a permanent spending plan for FY 2015/16.

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