FY 2018-2019 STATE BUDGET WRAPUP
Gov. Wolf signed HB 2121 into law on June 22, containing the $32.7 billion commonwealth spending plan for FY 2018-2019. The budget represents an increase of about $560 million, or 1.7 percent, compared to FY 2017-2018, with no tax or fee increases. For counties, the FY 2018-2019 budget comprises largely flat funding in most lines that impact them, with some small increases for home and community-based long-term care services, autism services and the Medical Assistance Transportation Program.
In conjunction with the budget, the General Assembly also adopted omnibus amendments to the Human Services Code (HB 1677, now Act 40 of 2018) and Fiscal Code (HB 1929, now Act 42 of 2018), containing language related to budget implementation. Among other provisions, language was amended into HB 1677 at the last minute to require the Department of Human Services (DHS) to seek federal approval to move nonemergency medical transportation services (the Medical Assistance Transportation Program, or MATP) to a statewide or regional full-risk brokerage model. While it is unclear why the change was made on such short notice, CCAP understands the legislature was informed that some agencies are misbilling for MATP, and thus having a brokerage model would give the Department more oversight on the process and improve billing practices in order to stay competitive.
Legislators were also told that a brokerage model would allow for transportation to cross county lines, and that counties could bid as the broker and therefore most arrangements could stay the same albeit with "improved" billing practices. The Senate fiscal note further suggests the shift would result in a $15 million savings in state funds due to a change in the way federal reimbursement could be claimed under the model. Under Act 40, DHS is tasked with developing program guidelines, and CCAP will be seeking more details and pushing for a county role in their development.
Additional budget details, including program narratives and a spreadsheet with a detailed analysis comparing line items in HB 2121 to FY 2017-2018 allocations, are available at www.pacounties.org by clicking on Budget News under the Government Relations tab.
AUDITOR GENERAL TO CONDUCT AUDIT OF SURE SYSTEM
Auditor General Eugene DePasquale announced in June his plans to conduct an audit of the Statewide Uniform Registry of Electors (SURE), the state's voter registration system, citing concerns around potential security threats during the 2016 election. The audit, which will be conducted as part of an interagency agreement with the Department of State, will review security protocols for the SURE system, determine whether records maintained in the SURE system are accurate and in accordance with the Help America Vote Act and Pennsylvania law, and evaluate the SURE system are accurate and in accordance with the Help America Vote Act and Pennsylvania law, and evaluate the process for input and maintenance of voter registration records. In addition, DePasquale and his team also plan to review both internal and external controls related to the SURE system, including examining how directives and guidance are issued to the counties by the Department of State regarding voter registration and list maintenance. The audit mirrors SB 762, legislation introduced by Sen. Kim Ward (R-Westmoreland), calling for the Auditor General to undertake a similar audit; that legislation was unanimously approved by the Senate in March, and has been referred to the House State Government Committee.
The audit will cover January 2016 through the end of the audit window, which DePasquale indicated will be completed in time for the state and counties to implement any recommendations prior to the 2020 election.
GOV. WOLF RENEWS OPIOID DISASTER DECLARATION
Gov. Tom Wolf announced in late June that he has renewed the state's opioid disaster declaration for another 90 days, the second time he has done so, to allow the initiatives introduced since the original declaration in January to continue. Among other efforts, these initiatives have included the creation of an Opioid Operational Command Center within the Pennsylvania Emergency Management Agency to monitor progress and implementation, as well as the creation of an online opioid data dashboard to incorporate real-time data and public health modeling.
In addition to renewing the disaster declaration, Gov. Wolf signed legislation introduced by Sen. Lisa Baker (R-Luzerne), SB 978, to give hospice staff the authority to properly dispose of unused prescription drugs following a patient's death. Previously, staff were required to return unused medication to the patient's family, which had in some cases led to unforeseen and undesirable outcomes. The Department of Human Services (DHS) also announced that it has received approval from the federal government for a waiver that will allow the agency to continue to receive federal Medicaid funding to be used in substance use disorder treatment facilities for individual treatment, drawing more than $55 million per year in federal funding to provide access to treatment for more than 12,000 individuals.
Relatedly, the U.S. House of Representatives approved a comprehensive opioid legislative package, H.R. 6, on June 22; the U.S. Senate has advanced several proposals through the committee process, although the timeline for a full Senate vote on a comprehensive package remains unclear. NACo has provided a legislative analysis outlining all of the bills moving through Congress addressing the opioid epidemic, including the projected county impacts.
LAW SIGNED TO RESTRICT EMINENT DOMAIN FOR PRESERVED LAND
A new law sponsored by Rep. Warren Kampf (R-Chester) will provide additional protections against use of eminent domain against land preserved for open space purposes, effective immediately. Act 45 of 2018, formerly HB 2468, prohibits local governments, authorities, public utilities and other entities with eminent domain powers from taking any land subject to a conservation easement, without first obtaining the approval of the orphans' court. The court may approve the taking only if it determines there is no other reasonable or prudent alternative to using the proposed tract of land.
A condemnation approval is not required for an underground public utility facility that does not permanently impact open space benefits, for a state agency, or for a project subject to approval by a federal agency if the state Public Utility Commission or Federal Energy Regulatory Commission has reviewed and approved it. In addition, the court's approval is not needed for emergency projects where the taking is deemed reasonably necessary to protect life or property.
Act 45 mirrors existing law under the Administrative Code requiring state and local government, agencies and authorities to request approval from the state's Agricultural Lands Condemnation Approval Board before using eminent domain powers on lands being used for productive agricultural purposes.
U.S. SUPREME COURT ISSUES MULTIPLE KEY RULINGS
The U.S. Supreme Court handed down a number of landmark decisions in June that have the potential to impact state and local government.
In a 5-4 decision, the Court ruled in South Dakota v. Wayfair on June 21 that states and local governments can require internet retailers to collect sales taxes, even if the online company has no physical presence in the state. However, the Court left the decision up to each state over whether to enforce sales tax collection on remote purchases, noting that to require a vendor to collect sales tax, the vendor must still have a "substantial nexus" with the state. Although Pennsylvania local governments do not have the authority to levy sales taxes (except for special levies in Allegheny County and Philadelphia), Pennsylvania's tax is both a sales and use tax, meaning that if the item is purchased for use in Pennsylvania and the six percent levy is not collected at sale, the purchaser is still responsible to pay the six percent use tax. Some large retailers already collect sales tax on products they sell directly, and the Court's decision for use in Pennsylvania and the six percent levy is not collected at sale, the purchaser is still responsible to pay the six percent use tax. Some large retailers already collect sales tax on products they sell directly, and the Court's decision offers standing for the state to enforce broader compliance, potentially impacting state revenue collections.
On June 27, the Court ruled in another 5-4 decision in Janus v. AFSCME Council 31 that requiring non-union members to pay fair share fees to the union that represents their bargaining unit violates the First Amendment and is therefore unconstitutional. Based on that ruling, the Court indicated that no further fair share fees should be deducted from employee pay as of the date of the decision. However, the ruling generally does not impact other aspects of labor law; for instance, a non-union member in a bargaining unit represented by a union is still entitled to such representation, and dues deductions for union members are not affected.
EXTENSION OF PUBLIC COMMENT PERIOD ON OVERTIME REGULATIONS SOUGHT
The state Department of Labor and Industry has submitted proposed regulations to increase over the next four years the salary level used to determine overtime eligibility, raising the threshold from the federal minimum of $23,660 annually to $47,892 by 2022. The regulations were published in the Pennsylvania Bulletin on June 23, with public comment to be accepted until July 23. CCAP joined with several other state organizations to request that the Department extend the public comment period for an additional 60 days to give stakeholders sufficient time to analyze the proposed regulations and potential budgetary impacts as they relate to their own job descriptions and personnel policies. That request has been acknowledged by the agency, but as this Bulletin went to press no extension has been granted.
In mid-July, each CCAP member will be emailed a voting matters packet with items to be considered at the Tuesday business meeting of the upcoming CCAP Annual Conference at the Wyndham Gettysburg and Gateway Campus in Adams County. The agenda packet will include proposed policy resolutions, along with information on officer elections and site selection for the 2023 Annual Conference. The resolutions will be deliberated during the conference and then submitted by electronic ballot to the full CCAP membership within 10 days of the conclusion of the Conference for final adoption.