Friday File


June 24, 2016

The Calm Before the Storm

 
The Pennsylvania General Assembly met to advance some budget-related bills over the past few days but put the heavy lifting off until next week. Unlike the impasse that lasted for over seven months last year, there is a consensus that the budget negotiations will wrap up in a timely fashion. Things might drift past the June 30 deadline by a few days, but neither party wants to face the voters in an election year and explain yet another season of deadlock. Legislative leaders and staff are working quietly this weekend to unleash the storm of legislation next week.

Governor Wolf made things a bit easier with a public pronouncement that he would accept the legislature’s package of revenue enhancements. This is significant since no one seems interested in a broad-based sales or income tax increase. Instead, look for a combination of increases in tobacco taxes and some new income from gaming sources.

The Governor also opened the door for substantial changes to the state’s pension problems. Two version of pension reform have emerged. Both would transfer risk from the state by introducing 401K style plans into the mix. Both would chip away at the state’s $60 billion pension obligation over time. The differences between the Senate’s “side-by-side-hybrid” plan and the House’s “stacked hybrid” plan are being parsed by the accountants and legislative staffs in search of common ground. The Governor’s position on pension reform is: “I’ll sign either version.”  This means that it is up to a Conference Committee to hammer out a package that can pass muster in both Houses. Word has it that the issue will be resolved early next week.

Meanwhile, the Senate is embroiled in discussions about HB 1947, a bill that would adjust Pennsylvania’s statutes of limitations to allow victims of child abuse to bring their cases forward. The bill passed the House by a wide margin but faces challenges from the insurance industry and the Catholic Church who are investing heavily in protecting their interests. In the aftermath of horrendous incidents involving priests and church administrators, the Sandusky scandal, and Bill Cosby, advocates are hoping that the legislature has gotten the message that “enough is enough.”