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The Managed Long-Term Services and Supports (MLTSS) Subcommittee meeting was held on Wednesday, June 2, 2021. The primary agenda topics at the meeting included a summary of the follow-up from the COVID-19 listening session feedback, which was presented by Deputy Secretary of the Office of Long-Term Living (OLTL) Jamie Buchenauer, and the 2020 Home and Community-Based Services (HCBS) Consumer Assessment of Healthcare Providers and Systems (CAHPS) Areas for Improvement Plans from the three Community HealthChoices (CHC) Managed Care Organizations (MCOs). The following handouts were shared during the meeting:
The next MLTSS Subcommittee meeting is scheduled for Wednesday, July 7, 2021.
Capitolwire: After May’s $1.6 Billion Tax Revenue Collection Overage, PA is Sitting at $2.9 Billion in Excess Revenue With One Month to Go in the Current Fiscal Year
By Chris Comisac, Bureau Chief, Capitolwire
HARRISBURG (June 2) — Less than a week after the state’s Independent Fiscal Office forecast Pennsylvania would end its current fiscal year with a $3.16 billion revenue surplus, the state Department of Revenue announced the commonwealth is well on its way to reaching that mark.
General Fund revenue collections for the month of May came in far stronger than originally estimated – totaling $3.9 billion, which was $1.6 billion, or 65.4 percent, ahead of expectations – mostly due to a one-month delay of the collection deadline for personal income taxes (PIT), pushing the state’s year-to-date collections to $2.9 billion, or 8.5 percent, above estimate with one more month of collections to go.
“We are also nearly $2.9 billion above our estimate for the fiscal year as of today,” said Revenue Secretary Dan Hassell on Tuesday in a press release announcing May’s General Fund Revenue collections. “This is very positive news with one month to go in the current fiscal year.”
Last week, the IFO updated its revenue forecast for the current fiscal year, FY2020-21, indicating the state’s General Fund would end the year with $1.674 billion more than the agency had estimated in January, pushing the estimated General Fund total, once June’s collections are in, to $40.111 billion, which is $3.16 billion more than was expected when the budget was finalized in November. The IFO’s report also included the agency’s initial revenue estimate for the coming fiscal year,FY2021-22, with that figure being over $2.1 billion less than what the state is expected to collect during the current fiscal year.
PIT collections totaled $1.9 billion last month, which was $1 billion, or 111 percent, more than anticipated, due to the tax filing deadline extension until May 17, more than making up for the $571.8 million shortfall experienced in April by the PIT because of the deadline extension. Through 11 months of the fiscal year, the PIT has collected $14.9 billion, which is $747.7 million, or 5.3 percent, above estimate.
While May’s revenue collection results were mostly due to the PIT, the PIT wasn’t the only revenue source performing above expectations, with those performances in most cases directly tied to the billions in federal dollars pumped into the state as part of the various COVID-19 stimulus initiatives during the past year. The IFO last week indicated there have been nearly $78 billion in direct federal payments to individual Pennsylvanians (by way of unemployment benefits and stimulus checks) during Calendar Years 2020 and 2021, along with another nearly $79 billion in federal support to businesses, as well as the state government and the commonwealth’s local levels of governments.
Revenue collections from the state’s Sales and Use Tax (SUT) continued their strong performance over the past several months, with the tax – helped by heightened consumer demand due to both additional federal dollars in people’s pockets as well as the COVID-19 virus in decided retreat prompting more people to get out and engage in economic activity – producing $1.2 billion in May, a total that was $211.8 million, or 22 percent, above estimate. Year-to-date SUT collections total $11.6 billion, which is $741.7 million, or 6.8 percent, ahead of expectations.
May corporation tax revenue collections were $163.7 million, or 61.4 percent, more than anticipated, producing a monthly total of $430.1 million, of which $417.5 million came from the state’s Corporate Net Income Tax (CNIT). For the year thus far, corporation taxes have generated $5.6 billion, which is $892.2 million, or 18.9 percent, above estimate.
An unfortunate side-effect of the past year of COVID-19 and the deaths the virus has caused has been a boost in the revenue generated by the state’s inheritance tax. In May, the tax’s collections were $136 million, which was $53.5 million, or 64.8 percent, above estimate, pushing total collections for the last 11 months of the fiscal year to $1.2 billion, which is $216.5 million, or 21.1 percent, above estimate.
The real estate market has been on fire in most areas of the nation, and Pennsylvania has been no exception. In May, the realty transfer tax produced $56.9 million in revenue, which was $14.8 million, or 35.1 percent, above estimate. Year-to-date, the tax has brought it $575.1 million, which is $95.5 million, or 19.9 percent, ahead of expectations.
The state’s “sin taxes” – including cigarette, malt beverage, liquor and gaming taxes – also continued to perform well in May, totaling $191 million in revenue, which was $24.5 million, or 14.7 percent, above estimate, pushing the fiscal-year revenue total to $1.6 billion, which is $132.3 million, or 9.1 percent, more than anticipated.
Non-tax revenue was likewise above estimate last month, by a total of $45.6 million, or a whopping 377 percent, which the IFO attributed to higher-than-expected license and fee collections, as well as other miscellaneous collections. May’s $57.7 million in collections brings the year-to-date total to $1.1 billion, which is $42.8 million, or 4 percent, above estimate.
June begins what most hope will be the homestretch toward a finalized budget for FY2021-22, though reports emanating from the state Capitol suggest there are several areas of disagreement between Democrat Gov. Tom Wolf and the Republican-controlled General Assembly, including issues related to proposed tax and spending hikes (as well as the redirection of existing education and other spending), and the appropriation of the more than $7 billion in federal COVID-19 stimulus/relief funding distributed to Pennsylvania as part of the last federal stimulus initiative.
On May 29, 2020, Governor Wolf signed Act 24 of 2020, which allocated funding from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act to assist providers with COVID-19-related costs that were incurred between March 1, 2020 and November 30, 2020. Providers that accepted Act 24 funding agreed to provide documentation to the Department of Human Services (DHS) and were required to submit an Act 24 cost report through a web-based portal between December 9, 2020 and April 30, 2021.
The Office of Long-Term Living (OLTL) is urging providers to take the following actions:
DHS knows how important this funding has been to providers to cover COVID-19-related costs such as labor, Personal Protective Equipment (PPE), and testing supply costs and is encouraging providers to submit their cost reports by the June 11, 2021 deadline. DHS is obligated to report how these funds were used to the Pennsylvania legislature and return all unused funds to the U.S. Department of the Treasury. Providers that fail to submit a cost report or return their funding by the established deadline will be deemed by DHS to have no COVID-related expenses; DHS will proceed to recoup the Act 24 funding that was distributed to these providers. Questions and concerns can be directed to OLTL.
RCPA members in the Behavioral Health and Drug and Alcohol Divisions recently participated in a survey to gauge their organization’s readiness and potential impacts as the current Alternative Payment Agreements/Arrangements (APAs) are set to end on June 30, 2021.
This is the second RCPA APA survey, as the last one conducted in the late summer of 2020 was instrumental in discussions related to the continuation of the payment agreements/arrangements at a previous expiration deadline. The data we collected will once again be instrumental in our discussions and efforts with DHS and our HealthChoices Behavioral Health Managed Care Organizations regarding strategic fiscal considerations for RCPA members.
To view the survey summary overview and individual question analysis, please visit this link.
If you have any questions, please contact your RCPA Policy Division Director.
Thursday, June 3, 2021
Start time: 9:00 am
End time: 12:00 pm
This meeting will be held virtually via Zoom. The public is invited to call in to this meeting using the following information:
You are invited to a Zoom webinar:
When: June 3, 2021, 09:00 am Eastern Time (US and Canada)
Topic: PA State Board of Vocational Rehabilitation Quarterly Meeting
Please visit here to join the webinar.
Or One tap mobile:
US: +13126266799 / 81331762385# or +19292056099 / 81331762385#
Or Telephone:
Dial (for higher quality, dial a number based on your current location):
US: +1 312 626 6799 or +1 929 205 6099 or +1 301 715 8592 or +1 346 248 7799 or +1 669 900 6833 or +1 253 215 8782
Webinar ID: 813 3176 2385
International numbers available here.
CART and sign language interpreters will be available during this meeting via Zoom. Those using a screen reader can connect via CART Link.
The agenda for this meeting is below. Anyone who would like to make public comment prior to the meeting may submit their comments via email.
Additional auxiliary aids and services are available upon request to individuals with disabilities. Please send your request here.
STATE BOARD OF VOCATIONAL REHABILITATION PUBLIC AGENDA — JUNE 3, 2021
9:00–9:20
Welcome & Opening Remarks, Jennifer Berrier, Acting Secretary, Labor & Industry
9:20–9:40
Executive Director’s Remarks, Shannon Austin, Executive Director, OVR
9:40–9:50
Deputy Director’s Remarks, Jeremiah Underhill, Deputy Executive Director, OVR
STAKEHOLDER REPORTS
9:50–10:10
10:10–10:20
BREAK
TOPICS FOR DISCUSSION
10:20–10:40
Update on OVR Policy Workgroups
10:40–11:00
Unemployment Compensation, Bill Trusky, Deputy Secretary for UC Programs
11:00–11:20
OVR/BSE MOU Trainings & Toolkit, Carole Clancy, Director, Bureau of Special Education
11:20–11:30
Impact of OVR/BSE MOU on OVR Customers & Families, Cindy Duch, Director of Parent Advising, PEAL Center
OVR BUREAU DIRECTOR REPORTS
11:30–11:50
11:50–12:00
PUBLIC COMMENT
12:00
ADJOURNMENT
Additionally:
The SFY 20-21 Q3 report required by the Work Experience for High School Students with Disabilities Act (Act 26 of 2016) is now available. A copy of the report is here. It can also be found on OVR’s website, in the Act 26 Information tile.
Capitolwire: New IFO Report Indicates PA Should End FY 2020–21 With a Sizable Revenue Surplus, But With Direct Federal Payments Ending, Things Look to be Far Different for the FY 2021–22 Budget Now in Development
By Chris Comisac, Bureau Chief, Capitolwire
HARRISBURG (May 27) – Pennsylvania’s current fiscal year should wrap up on a very positive revenue note, but the coming fiscal year could be a rocky one to negotiate for state lawmakers preparing a state budget, according to the latest revenue updates released Wednesday afternoon by the Independent Fiscal Office.
Thanks to nearly $78 billion in direct federal payments to individual Pennsylvanians during Calendar Years 2020 and 2021, along with another nearly $79 billion in federal support to businesses, as well as the state government and the commonwealth’s local levels of governments, the IFO forecasts the state’s General Fund will end with $1.674 billion more than the agency had estimated in January.
What makes that upward adjustment to $40.111 billion even more impressive is that when the IFO forecast in January the state’s General Fund would end Fiscal Year 2020-21 with $38.437 billion, that total, after applying estimated tax refunds and expected state expenditures, produced a revenue surplus of $1.481 billion.
And while there are more state expenditures to rectify than had been contemplated by the IFO in January, the total revenue surplus from which those additional expenditures will be deducted now appears as though it will be more than $3.1 billion.
It’s important to note the IFO’s revenue estimates and overall General Fund forecasts differ from those used by the state Budget Office. Revenue collections for May won’t be released until the start of June next week, but the figures for the month are expected to be in excess of estimate by a sizable amount given that the deadline for personal income tax (PIT) return filing was delayed from April 15 until May 17. That pushed into May a significant portion of PIT collections that would have been received by the state in April. Even with those delayed payments, Pennsylvania’s General Fund collections in April managed to stay slightly ahead of estimate, with the Fund, through April, having $1.3 billion more than expected.
So, while the state might not end the current fiscal year on June 30 with a surplus of more than $3.1 billion, things do appear to be trending in a positive direction.
That’s a good thing, since there’s around $1 billion in state Department of Human Services spending, in excess of approved appropriations, that will have to be paid, and having a surplus makes that easier to do. And whatever is left over may be needed to address what the IFO says will be a decidedly different story in Fiscal Year 2021-22.
The IFO initial General Fund revenue estimate for FY2021-22 is built on the expectation that once there’s an end to the massive amount of COVID-19 federal spending – much of it direct payments to individuals in the form of unemployment benefits and stimulus payments – the state’s economy, and the revenues generated from various sources, will revert back to the former path it was on prior to COVID-19.
While that doesn’t sound problematic, it is forecast by the IFO to result in FY2021-22 General Fund revenue retreating to $37.96 billion, a decline of $2.152 billion compared to FY2020-21.
That’s bit of a problem since the IFO in January projected state expenditures would hit $37.975 billion in FY2021-22, and the $37.96 billion in General Fund revenue forecast by the IFO for FY2021-22 isn’t the final amount of revenue that would be available, as tax refunds (normally around $1.3 billion) would still have to be deducted. There’s also the matter of the considerable amount of one-time revenues and expenditure offsets – approaching $5 billion – used to construct the FY2020-21 state budget, with at least a portion of that adding to the hole to be filled in FY2021-22.
Additionally, this all assumes the General Assembly doesn’t approve plans to generate additional expenditures or revenue, both of which Gov. Tom Wolf would like to do as part of the FY2021-22 budget he proposed in February.
While it remains unclear how much of a hole will have to be filled for the FY2021-22 budget to balance, it will be a daunting figure.
Of course, the state lawmakers developing the budget always seem to find ways of moving money around to fill holes, and with some amount of FY2020-21 surplus likely to be available after all the bills are paid, and potentially some amount of the $7 billion in federal COVID-19 stimulus available for budget stabilization (though lawmakers have been warned about using those federal dollars to pay for recurring expenditures), it’s not outside the realm of possibility that the hole – whatever it ends up being before the budgeteers get to it – could be made smaller or erased as has been repeatedly done in the past.
Not factored into the IFO’s revenue forecast is the more than $13 billion in federal funds from the latest round of stimulus, of which, as already noted, roughly $7 billion is coming directly to state government (the rest of which is flowing to local governments throughout the state), and has yet to be appropriated for anything.
IFO director Matt Knittel said that money could have some impact on the state’s economy, though not nearly the same effect that the nearly $78 billion in direct payments made to individual Pennsylvanians who injected quite a lot of that money directly into the state’s economy.
The IFO forecast also does not contemplate the impact of additional stimulus initiatives, such as plans to direct more federal dollars to infrastructure or other items that could provide more direct payments to Pennsylvanians.
“Bear in mind, there’s a lot of moving parts for the revenues … it’s more complicated than usual,” said Knittel at the outset of his presentation Wednesday, noting the difficulty in determining what will occur when federal dollars are no longer being injected into the state’s economy and the effect that will have on the behavior of Pennsylvanians who no longer have access to those additional federal dollars, as well as the tax shifting that could occur as businesses not only react to those dollars but also potential tax changes being considered at the federal level (with the Biden administration suggesting a repeal or at least a trimming of the business tax reductions made during the Trump administration).
The IFO report identified one of the big wildcards as employment, as the state is still well over 400,000 jobs short of where it was pre-COVID-19.
Knittel warned it’s unlikely all those Pennsylvanians currently unemployed – roughly 900,000 potential workers as of April (which excludes most high school and college students) – will find a job when their unemployment benefits run out, particularly if they wait until September when the extra federal unemployment benefit is scheduled to end.
He said many businesses have already adjusted to the current economic climate and labor market, filling some jobs with workers earning higher wages, and finding other ways to improve productivity – through such things as automation and using other forms of technology – to replace the jobs that employers can’t currently fill.
It’s possible those who wait until the fall to begin looking for jobs may find there are more people looking for jobs than there are available jobs, said Knittel, a situation that will put negative pressure on wages and ultimately impact state revenues based on personal income and consumer spending.