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February 6, 2024

Government Affairs & General Updates 2/6

1. Pennsylvania governor to deliver budget while seeking money for higher education and public transit Gov. Josh Shapiro is set to deliver a second budget proposal to Pennsylvania lawmakers on Tuesday with a firmer grasp on how he wants to pursue several top priorities, his state in a relatively strong fiscal position and lessons learned from last year’s ugly budget fight. Most details of the Democratic governor’s budget plan for the 2024-25 fiscal year, which starts July 1, remain under wraps. But Shapiro has made it clear he will seek more money for higher education and public transit agencies and possibly underfunded public schools. He also wants to spend more money to attract major companies and seems ready to revisit the controversial item that helped sow a protracted budget fight last year: creating a new private school voucher program. Shapiro’s first budget proposal disappointed many allies who felt it wasn’t bold enough. This year, he’s returning with bigger proposals based on recommendations from his task forces or appointees. Whatever Shapiro proposes will require passage from the Democratic-controlled House and the Republican-controlled Senate. Read More                                                                                                                                                                                                                                                      2. Raising taxes on the table as Pa. weighs how to pay for education court ruling Pennsylvania likely needs billions of dollars to shore up its public schools following a landmark court ruling, but lawmakers are entering a new state budget cycle with few concrete proposals. In the coming months, the General Assembly and Democratic Gov. Josh Shapiro will debate the state’s next spending plan behind closed doors, and will ultimately be forced to put their ideas for finding revenue on the record. Shapiro will kick off those talks on Feb. 6, when he delivers his budget address. The deadline to deliver a completed spending plan is June 30. The answer could involve sales or income tax increases, but Republicans say those pitches must come with concessions from Democrats, like property tax relief. Nearly a year ago, a Commonwealth Court judge ruled that the system Pennsylvania uses to fund its public schools is unconstitutionally inequitable. She ordered it to be overhauled but didn’t say precisely how; that’s up to the legislature, executive branch, and educators. Since then, the state has reconvened a bipartisan legislative commission to study the issue. After a series of statewide hearings, the panel approved a report — without support from its Republican members — that proposed pouring billions of new dollars into the K-12 education system. Read More                                                                                                                                                                                                                                      3. Pennsylvania’s 7.8% workers’ compensation cut takes effect in April Pennsylvania workers’ compensation rates will be going down for employers beginning April 1. Insurance Commissioner Mike Humphreys on January 23 approved an overall decrease in loss costs of 7.88 percent, more than doubling last year’s decrease of 3.33 percent. Humphreys approved the Pennsylvania Compensation Rating Bureau’s (PCRB)’s annual loss cost filing. The primary driver of the downward trend is the continued decrease in claim frequency at -6.1 percent, closely mirroring last year’s 6.2 percent figure and maintaining a consistent descending trajectory over the past few years, according to PCRB. PCRB said another factor contributing to the decrease is fewer large claims in the most recent policy years. “While the economic impacts from the pandemic have caused some disruption, the Pennsylvania workers compensation system has fared well, and remains strong,” said Brent Otto, PCRB’s chief actuary, in announcing the commissioner’s approval of the filing. The loss costs and related rating values will take effect on new and renewal policies effective April 1, 2024. Read More                                                                                                                                                                                                                                                                                                                            4. Pot industry representatives urge state lawmakers to plan to move quickly if the state legalizes adult recreational use of marijuana. Representatives of the marijuana industry on Monday warned lawmakers that if the state legalizes adult recreational use of marijuana it will be important to quickly allow existing dispensaries and growers to sell to that new market so that illicit competitors don't get a head start. They also urged lawmakers to take action to ban the sale of Delta-8 and Delta-9 THC products which have emerged as an unregulated competitor to the state's medical marijuana program and suggested that the state should establish a free-standing office to oversee the new industry. Republican lawmakers on the House Health Committee's Subcommittee on Health Care voiced their opposition to legalizing marijuana, pointing to concerns about the sale of cannabis products with high THC levels and suggesting that the state should wait for federal action on the issue. But Democrats asserted that with so many neighboring state's already having moved to legalize adult recreational use of marijuana, the state needs to consider how it could also regulate the industry in a way to best protect the public. In his first budget address, Gov. Josh Shapiro had pointed to a possible Jan. 1, 2025 launch of adult recreational marijuana sales, forecasting that the move would translate into tax revenue of $14.5 million in 2024-25; $64.1 million in 2025-26; $132.6 million in 2026-27; and $188.8 million in 2027-28, according to an analysis by House Democrats. That was based on the estimate that the state would tax wholesale transactions at a rate of 20%. Shapiro is set to deliver his second budget address later today.                                                                                                                                                                                                        5. PA Capitol protest against state investing in Israel bonds ends with arrests Police took into custody more than 100 people protesting the Pennsylvania state government's investments in Israel on Monday, shutting down a demonstration on the steps of the Capitol Rotunda, The Associated Press reported. A spokesperson for the Department of General Services, which includes the Pennsylvania Capitol Police, said 126 people were taken into custody at what he described as an unpermitted, unauthorized demonstration. They were ordered to disperse before being arrested, issued citations for trespassing and then released, said spokesperson Troy Thompson. The protestors, many wearing T-shirts that said "divest from genocide," clapped and chanted during the protest, which organizers said was targeted at the state Treasury Department's investment in Israel bonds.                                                                                                                                                                                                                                                     6. Senate panel approves CRIZ bill. By a party-line vote, A Senate committee approved legislation Monday to pave the way for Erie to participate in a decade-old program to boost economic development and job creation in specially designated sections of Pennsylvania municipalities. The Republican-controlled Community, Economic and Recreational Development Committee voted 9-5 in favor of Senate Bill 1014 to create a City Revitalization and Improvement Zone (CRIZ) in Erie. The CRIZ program has focused on redevelopment of abandoned properties. The Erie provision in an amendment sponsored by Committee Majority Chairman Chris Gebhard, R-Lebanon, refers to a third-class city with a population between 92,000 to 95,000, but Erie is clearly the intended beneficiary. CLICK HERE to read more.                                                                                                                                                                                                         7. Senate approves resolution extending I-95 disaster declaration. The Senate on Monday approved a resolution to extend the emergency declaration covering the repairs of an I-95 bridge that collapsed in Philadelphia last June. Ahead of the vote, Sen. Jimmy Dillon, D-Philadelphia, said that officials believe this is the last extension that will be needed to complete the work. The existing emergency declaration would have expired by the end of this month. House Resolution 279 extends that declaration another 90 days. The resolution was approved by the Senate by a 47-1 vote. The House approved the resolution by a 179-24 vote in December. log

Government Affairs & General Updates


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