In this Email Update:

State budget finalized

This week the legislature and the governor completed all of the various bills associated with the 2016-17 Fiscal Year budget to complement the budget bill, which became law without the governor’s signature at midnight, Monday night. The Senate approved the state budget by an overwhelming vote of 47-3.

The 2016-17 Fiscal Year budget package recognizes the economic reality facing the Commonwealth of Pennsylvania. We are looking at modest economic growth over the coming year offset by significant and painful obligations, such as escalating public pension premiums, federally mandated increases for human service programs and increasing corrections expenses.

The budget maintains Pennsylvania’s core programs and services and provides significant additional money for early, basic and secondary education, all without increasing income taxes or the state sales tax, which are two critical components of our efforts to eliminate school district property taxes.

Below is a breakdown of how your tax dollars will be spent in 2016-17.

The largest costs to state taxpayers include education, welfare/human services and corrections. The legislature accounts for less than 1 percent of the state budget.

Since 2008-09, state spending for public school pensions, welfare/human services programs, corrections, debt service, state police and courts have contributed to the increases in state budgets.

More information on the state budget can be found on my website at www.SenatorArgall.com/Budget.

Below is a graph to show you each increase.

However, several state programs and agencies have had their funding reduced by more than $10 million since 2008-09.

Below is a graph to show you each decrease.

Cost-saving reforms in budget package

The budget-related bills approved this week include several cost-saving reforms, including how we pay for the Pennsylvania State Police (PSP), which receives funding out of funds primarily used for fixing state roads and bridges. Over the last several years, the burden of funding PSP operations has grown at a rapid rate. Part of the funding for our state troopers comes from the state’s general fund ($256M in 16-17), however, they also get the majority of their funding from the Motor License Fund. This fund receives its funding from taxes collected on the sale of gasoline as well as other fees paid by motorists. PSP will receive $801 million out of the Motor License Fund this year. However, under the budget package, over the next ten years, the state police will have their funding from the Motor License Fund reduced to $500 million – an overall reduction of $300 million.

One major cost for the PSP includes providing coverage to municipalities at no cost. According to the State Police, more than 50 percent of the state’s municipalities, or 1,287 of 2,561, rely on the PSP for their policing needs. According to a 2012 report issued by the Center for Rural Pennsylvania, a legislative research agency, the PSP provides coverage on a full- or part-time basis for 67 percent of the state’s municipalities. The PSP does not charge municipalities for their coverage.

The map below highlights which municipalities have their own police coverage compared to reliance on PSP.

Source: Keystone Crossroads. More information can be found here.

Also, another cost-saving measure was included in a budget-related proposal. Specifically, a new reform proposal was included to allow for administrative partnerships between two or more school districts in order to share administrative services and personnel. The program will be a pilot, which will provide assistance to facilitate the sharing of administrative functions between districts.

Over the next several months, as Chairman of the Senate Majority Policy Committee, I will be reviewing other measures to reduce the overall burden on taxpayers.

Senate cost-savings

I think it’s important for lawmakers to lead by example. I’d like to highlight several cost-saving measures in the Senate over the past several years.

Staffing and payroll:

From June 25, 2015 to July 6, 2016, the Senate has reduced the total number of employees from 821 to 773, a reduction of 48 employees, or 5.85 percent.

As part of the Voluntary Retirement Incentive Program (VRIP), 47 staff members elected to participate with a total savings of $2,397,533. With the VRIP payout totaling $999,344, the overall savings equaled $1,398,189.

Highmark’s Indemnity Plan was eliminated and the Senate is now using the PPO Plan, which included significant savings, as well as increasing copays for prescriptions. The total estimated savings over the next three years is anticipated to total $5-6 million.

Senate technology:

• Senate purchases one generation older smartphones, saving more than $5,000.
• Unused smartphones must be returned if not used within two months, saving $1,000/month.
• Websites for Senators and committees were converted to WordPress, a free service.
• Use internal staff to create wireless networks in Capitol and district offices, saving over $10,000.
• Restructured contracts on computer equipment, printers and routers, resulting in savings over $20,000.
• Created constituent services platform using internal staff, saving over $50,000.

Miscellaneous costs:

From 2013 to 2016, the Senate has saved hundreds of thousands of dollars by reducing following expenses:

• Parking cards -- $89,600
• Garage parking contract -- $138,421 by year 5
• In-house printing -- $285,400
• Cheaper paper -- $11,000
• Contracted cleaning personnel -- $500,000

Savings over the past several years:

• Senators and staff pay percentage of health benefits.
• Tuition reimbursement eliminated.
• Paystubs now available online, reducing costs by $13,000.
• Various Senate contracts combined with Republicans and Democrats.
• Over $1.3 million in salary costs from retirements or resignations of employees who were not replaced.

Pennsylvania ranks 10th nationally…in highest property taxes + more stats

According to the Tax Foundation, a Washington D.C. think-tank that collects national and state data on tax policies, Pennsylvania ranks 10th in the nation among states with the highest property tax burden.

According to their analysis, Pennsylvania property tax rate is 1.46 percent (statewide average of total real estate taxes paid/total home value).

Here is the top 10 list:

1. New Jersey at 2.11 percent
2. New Hampshire at 1.99 percent
3. Illinois at 1.98 percent
4. Wisconsin at 1.74 percent
5. Vermont at 1.70 percent
6. Texas at 1.67 percent
7. Nebraska at 1.65 percent
8. Ohio at 1.58 percent
9. Connecticut at 1.53 percent
10. Pennsylvania and Michigan at 1.46 percent

The state with the lowest property tax burden is Hawaii at .28 percent. In addition to New Jersey in 1st place at 2.11 percent and Ohio in 8th place at 1.58 percent, our other neighboring states rank as follows: New York at 14th with 1.38 percent; Maryland at 22nd with 1.00 percent; Delaware at 44th with .55 percent; and West Virginia at 46th with .53 percent.

You can see the full rankings here.

A similar study in 2015 found Pennsylvania ranked 13th nationally, however, the state’s overall percentage dropped from 1.54 percent to 1.46 percent. Read that prior report here.

This is why eliminating school district property taxes remains my number one goal in the legislature –homeowners are overburdened with property taxes and the reports listed above prove it!

The Tax Foundation also compiled state rankings with sales and income taxes.

Pennsylvania ranks 33rd nationally for overall sales tax burden on residents. Pennsylvania is one of 45 states to collect a statewide sales tax. Thirty-eight states collect a local sales tax – Pennsylvania does not collect a local sales tax. Read that report here.

Pennsylvania ranks 44th nationally in states that collect an income tax. Read more about this here.

Local residents attend meetings in Lower Heidelberg and Tilden Townships to discuss state issues

This past Tuesday and Wednesday, I joined Representative Jim Cox and Representative Jerry Knowles (via phone) for two breakfast meetings with residents from Hamburg, Lower Heidelberg Township, Perry Township, Shoemakersville, Sinking Spring, Spring Township, Tilden Township and Windsor Township. I appreciate the ongoing discussion on important state issues.

With Representative Jim Cox in Lower Heidelberg Township on Tuesday.

With local residents in Tilden Township on Wednesday.

Legislation to establish restricted fund for ATV activities sent to governor

Legislation that would ensure that funds received through the registration, certification and enforcement of all-terrain vehicles (ATVs) in Pennsylvania are used specifically to support ATV activities received final approval and was sent to the governor for his signature and enactment into law.

Senate Bill 648 requires that monies generated through ATV-related operations are placed in a restricted account to be used for a variety of purposes including the construction and maintenance of ATV trails and acquisition of equipment, supplies and interests in land.

Currently, the Department of Conservation and Natural Resources (DCNR) does not separate expenditures related to ATV and snowmobile operations. As a result, these funds are being disproportionately allocated between user groups. While ATV operations contribute $1.4 million of the $1.6 million in the current fund, 80 percent of the total funding is allocated to expansion of snowmobile trails.

Nine additional bills received final legislative approval this week and were sent to the governor.

House Bill 325 clarifies and updates the Auctioneer Licensing and Trader Assistant Registration Act and eliminates the Auction House license.

Senate Bill 533 establishes a uniform procedure for the disposition of contraband left in the possession of probation and parole agencies.

Senate Bill 514 amends the Generic Equivalent Drug Law to provide for the substitution of an interchangeable biological product for a brand name biologic.

House Bill 806 amends the Clean and Green law to prohibit the application of use values that result in assessments higher than fair market value.

House Bill 871 allows for the de-titling of vehicles which are recycled by a scrap metal processor.

House Bill 967 establishes an agricultural pilot program for industrial hemp research.

Senate Bill 1227 transfers the responsibilities of the Public Employee Retirement Commission with regard to pension legislation to the Independent Fiscal Office and the Office of the Auditor General.

Senate Bill 1221 reforms the Pittsburgh Intergovernmental Cooperation Authority.

Senate Bill 1267 enhances the Pennsylvania Department of Transportation’s Municipal Signal Partnership Program known as Green Light-Go.

Senate passes measure expanding nurse practitioners’ authority

The Senate approved a bill this week that would amend the state’s Professional Nursing Law to provide for the licensure of certified nurse practitioners by the State Board of Nursing.

Currently, nurse practitioners must be affiliated with, and pay a fee to, a physician. Under Senate Bill 717 nurse practitioners would still be required to practice for 3 years and 3,600 hours under a collaborative agreement with two physicians. After completing the transition-to-practice period, nurse practitioners could have full practice authority without the affiliation requirement. This is especially important for rural health access in many of our communities.

The bill now goes to the House of Representatives for consideration. The Senate approved and sent to the House two additional bills this week.

House Bill 568 amends the Pennsylvania Construction Code Act providing for the review of updated sections of codes. The bill returns to the House for concurrence on Senate amendments.

Senate Bill 1229 addresses the process used by the Department of Corrections prior to the closure of a state prison and corrects technical issues related to the distribution of Pennsylvania Breeding Funds.

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