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Govt. Affairs

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Discussions between House and Senate leadership and the governor continue; the two sides have not yet reached an agreement on a new budget proposal. The governor has proposed raising the state’s 6 percent sales tax to 6.6 percent – a 10 percent increase – and the personal income tax from 3.07 percent to 3.7 percent – a 20 percent increase – to raise about $4 billion. (Philadelphia’s 8 percent sales tax would remain unchanged.)  Much of the money raised in the governor’s proposal would go toward funding the governor’s proposed property tax-relief plan, worth $3.8 billion, for all 500 school districts in Pennsylvania.  The governor has also proposed a new 5 percent tax on natural gas drillers, plus a per-cubic-foot fee on gas, which together would raise roughly $1 billion for public education.

Republican leadership are open to raising new revenue, but are not supporting the governor’s plan to raise the state’s personal income and sales taxes. Yesterday, the state senate announced session days for Monday, Tuesday, and Wednesday next week. If no budget agreement is reached, it is unclear what actions the state senate will take while they are in session.

In the meantime, we ask you, your employees, and the families that you serve, to continue to contact your legislators and the governor, to tell them know it is imperative to fully fund human service programs in a timely fashion, and if they do not, how it will affect your business and the services you provide to the most vulnerable residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget. Additionally, we encourage our members to send in letters to the editor.

Contact Jack Phillips, RCPA Director of Government Affairs with any questions.

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As most, if not all of you are aware, the General Assembly passed an on time version of their state budget yesterday, and it was quickly vetoed by the governor.

The Republicans in the House and Senate were able to pass the general appropriations bill and the accompanying code bills necessary. The House and Senate also made history by passing a bill which will privatize the state liquor store system, and being able to pass a pension reform bill. They used the privatization and pension reform bills, as well as one-time fixes, to provide the necessary revenue for their budget. The governor vetoed the general appropriations bills and the code bills, and he is determining whether he will sign or veto the privatization and pension bills.

In his press conference last night, the governor conveyed his belief that the Republicans used shoddy math and smoke and mirrors to pass a balanced budget. He also believes that the general appropriations bill that was sent to him did not include enough funding for education; therefore the Governor used his veto power.

So, where does that leave providers? It leaves a lot of providers in the unenviable position of trying to plan their budgets without the certainty of when state funding will be forthcoming, or how much state funding will be available for programs. Please see Budget FAQs for further information on how the budget impasse will affect providers.

The governor has asked Republican and Democrat leadership to sit down with him at the negotiation table, starting today, to find common ground on education funding, an extraction tax, property tax reform, and other revenue enhancement proposals. During this negotiation process, between the Governor and the four leadership caucuses, RCPA will continue to meet with elected officials to advocate for additional human service funding.

RCPA will continue to update the membership regarding the ongoing budget negotiations. We ask you, your employees, and the families that you serve, to contact your legislators and the governor to tell them why it is imperative to fully fund human service programs in a timely fashion, and if they do not, how it will affect your business and the services you provide to the most vulnerable residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget.

Additionally, we encourage our members to send in letters to the editor; feel free to use this as a template for one of your own. Contact Jack Phillips, RCPA director of government affairs, with questions.

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Last week, Senator Chuck Grassley (R-IA), together with Senator Ron Wyden (D-OR) and Senator Bob Casey (D-PA), introduced S. 1604, Transition to Independence Medicaid Buy-In Option, bipartisan legislation which would, as stated in Senator Grassley’s press release, “create a demonstration project to encourage states to improve opportunities for individuals with disabilities to obtain employment in the community, gaining self-determination, independence, productivity, and integration and inclusion.”  Ten states, over a period of five years, would receive bonus payments for meeting benchmarks which are outlined in the bill’s technical summary. We will continue to monitor and set up applicable meetings. Contact Jack Phillips, RCPA Director of Government Affairs with questions.

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As of today, it appears that budget talks between the Governor and the General Assembly have stalled. Republican legislative leaders say they are ready to start moving a budget this weekend to approve before the fiscal year ends.

The Republicans in the House and Senate continue to look at pensions and privatizing/modernizing the state liquor store system for revenue. The governor is still looking for property tax reform, possible personal income tax increases, and an extraction tax.

Senate President Pro Tem Joe Scarnati has indicated that the Republican budget would not contain a tax increase and more details will emerge as the budget moves forward. The Republican budget bill would rely on revenue from liquor privatization, and savings from public pension reform, but the proposed budget would not reduce the amount the state contributes to the pension systems. Republicans might also be looking at new recurring revenue by changing how the Commonwealth levies a Gross Receipts Tax (GRT) on Medicaid Managed Care Organizations. The Federal Centers for Medicare and Medicaid Services (CMS) has told Pennsylvania the way the Commonwealth levies the GRT is inconsistent with applicable federal statutory and regulatory requirements. The Commonwealth was given until November 30, 2016, to make the necessary changes to its GRT.

Some additional details of the proposed Republican budget include: no additional dollars to the wait list or the county human block grant program. Please do not panic! While the Republicans will pass a budget by June 30, it has come to our attention that the governor is planning to veto the entire Republican budget. If the governor holds onto this veto pledge, then there will be a late state budget. The governor and Republican leadership will have to go back to the negotiation table to find common ground, because Republicans do not have the required votes to override the governor’s veto. During that negotiation process, RCPA will continue to meet with elected officials to advocate for additional human service funding.

RCPA will continue to update the membership regarding the ongoing budget negotiations. We ask you, your employees, and the families that you serve to contact your legislators and the governor to tell them it is imperative to fully fund human service programs and to pass an on time budget, and if they do not, how it will affect your business and the services you provide to residents of the Commonwealth. When communicating with elected officials, please use the RCPA policy papers regarding RCPA budget priorities and the effects of a late state budget.

Contact Jack Phillips, RCPA Director of Government Affairs, with questions.

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As of today, budget talks are still ongoing. The General Assembly is looking at pensions, online gaming, and privatizing/modernizing the state liquor store system for revenue. The governor is still looking for property tax reform, possible personal income tax increases, and an extraction tax. If the governor and the General Assembly cannot come to an agreement, the General Assembly has indicated that they will pass and send the governor an on-time budget by the June 30 deadline.

If this occurs, one of two things can happen. One, the governor signs the budget bill on time and the General Assembly will go home for the summer, or two, the governor receives the bill and within ten days he may to decide to sign the bill, line item veto parts of the bill, or veto the bill entirely. If the governor decides to use his veto power, then there will be a late budget and the governor and General Assembly will go back to the negotiation table.

In a late budget scenario, our providers will not be able to plan effectively. Member providers may not have sufficient cash balances to provide services to clients, pay staff, and to pay day-to-day expenses. In most instances, when there are state funding delays, providers have to draw against their lines of credit. In today’s tough economic environment, providers are not as financially strong as they were the last time the Commonwealth had a late state budget, so providers will have more difficulties staying solvent.

RCPA is asking members to use the RCPA policy paper and contact your legislators and the governor to tell them it is imperative to pass an on time budget, and if they do not, how it will affect your business and the services you provide to residents of the Commonwealth.

Questions? Contact Jack Phillips, RCPA director of government affairs.

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